K92 Mining Inc. Releases Strong 2020 Q1 Financial Results

VANCOUVER, May 14, 2020 - K92 Mining Inc. (“K92” or the “Company”) (TSXV: KNT; OTCQB: KNTNF) is pleased to announce results from its financial statements for the three months ended March 31, 2020.

First Quarter 2020 Highlights:

Safety

• Strong safety record continues, with no lost time injuries and one of the best safety records in the Australasia region since start of operations.
• Proactive and focused management of COVID-19, with no confirmed cases amongst employees. K92 continues to operate and has strong preventative and response plans.

Production

• Q1 production of 19,240 oz of gold, 339,993 lbs copper and 6,937 oz silver for a total of 19,934 gold equivalent (“AuEq”) oz, representing the second highest quarter on record.
• Record material movements of 125,500 tonnes and record underground development of 1,560 metres, increasing from Q1 2019 by 110% and 215%, respectively.
• Commenced long hole stoping at Kainantu with the first stope from the K1 vein.
• Record tonnage of 47,313 tonnes treated, a 76% increase from Q1 2019.
• Cash costs of US$708/oz gold and all-in sustaining costs of US$886/oz gold.

Financials

• Sold 18,747 ounces of gold, 306,993 lbs of copper and 7,165 ounces of silver for revenues of US$27,633. Gold equivalent concentrate inventories increased by 746 ounces during the quarter, to 4,913 ounces.
• EBITDA of US$9.8 million or US$0.05 per share and operating cash flow (before working capital adjustments) of US$12.5 million or US$0.06 per share.

Growth

• High-grade drill results continue to be reported at Kora North, which will contribute to our upcoming resource expected in May 2020 and Stage 3 Expansion PEA.
• Record stockpile of 17,982 tonnes built ahead of the plant expansion commissioning.

For complete details of the annual audited consolidated financial statements and associated management’s discussion and analysis, please refer to the Company’s website or profile on SEDAR (www.sedar.com). All amounts are in U.S. dollars unless otherwise indicated.

John Lewins, K92 Chief Executive Officer and Director, stated, “The first quarter demonstrated the tremendous growth potential of the Kainantu Mine, both operationally and through exploration. Operationally, the completion of infrastructure projects and fleet expansions in prior quarters delivered record material movements and development rates. The development rates, importantly, are consistent with the advance rates required long-term and material movements have built stockpiles for over one month of process plant production. Production from our first long hole stope on the K1 vein also commenced during the quarter and represents a major milestone. Long hole stoping to date has performed well, and we are very encouraged by the enhanced operational flexibility that comes with this mining method.

On exploration, we continued to deliver high-grade step-out and infill results from both underground and surface drilling at Kora North. Since the latest resource estimate in Q4 2018, step-out drilling has consistently intersected the structure along strike to the South, to depth and up-dip. Mining has also steadily delivered positive grade and tonnage reconciliations. We look forward to providing our updated resource estimate in the near-term and a Preliminary Economic Assessment (“PEA”) on the Stage 3 Expansion shortly thereafter.

Most importantly, I would like to acknowledge the outstanding commitment of our workforce and the strong support from Government during the COVID-19 pandemic environment.”

Notes:

1. Gold equivalent for 2020 based on the following prices: gold $1,500 per ounce; silver $17.75 per ounce; and copper $2.70 per pound. Gold equivalent for 2019 based on the following metal prices: gold $1,300 per ounce; silver $16.50 per ounce; and copper $2.90 per pound.
   
2. The Company provides some non-international financial reporting standard measures as supplementary information that management believes may be useful to investors to explain the Company’s financial results. Please refer to non-IFRS financial performance measures in the Company’s management’s discussion and analysis dated May 14, 2020, available on SEDAR, for reconciliation of these measures.

K92 has not based its production decisions on mineral reserve estimates or feasibility studies, and historically such projects have increased uncertainty and risk of failure. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Updated Guidance

The Company is withdrawing its full-year 2020 production guidance as a result of timing uncertainty related to international travel for commissioning of our Stage 2 Plant Expansion due to the COVID-19 National State of Emergency declared in Papua New Guinea on March 20, 2020. Once clarity on timing is reached, we will provide updated guidance. The Kainantu Mine continues to operate at the Stage 1 plant throughput with modifications made to mine sequencing already implemented to increase cash flow. There are no confirmed cases of COVID-19 within our workforce and we are encouraged by the progressive relaxing of restrictions in PNG.

Conference Call Information

A conference call to discuss these results will be held on Friday, May 15, 2020 at 10:00 am Eastern time. Listeners may access the conference call by dialing toll-free 1-800-319-4610 within North America or +1-604-638-5340 from international locations.

Listeners may also access the conference call live and for replay via webcast at the following URL:

http://services.choruscall.ca/links/k92mining20200515.html

Qualified Person

K92 mine geology manager and mine exploration manager, Andrew Kohler, PGeo, a qualified person under the meaning of Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has reviewed and is responsible for the technical content of this news release. Data verification by Mr. Kohler includes significant time onsite reviewing drill core, face sampling, underground workings, and discussing work programs and results with geology and mining personnel.

For further information regarding the Kainantu Gold Mine, please refer to the technical report dated January 8, 2019, and entitled, "Independent Technical Report, Mineral Resource Estimate Update and Preliminary Economic Assessment of Kora North and Kora Gold Deposits, Kainantu Project, Papua New Guinea," available on SEDAR.

On Behalf of the Company,

John Lewins, Chief Executive Officer and Director

For further information, please contact David Medilek, P.Eng., CFA at +1-604-687-7130.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. All statements that address future plans, activities, events, or developments that the Company believes, expects or anticipates will or may occur are forward-looking information, including statements regarding the realization of the preliminary economic analysis for the Kainantu Mine, expectations of future cash flows, the planned plant expansion, production results, cost of sales, sales of production, potential expansion of resources and the generation of further drilling results which may or may not occur. Forward-looking statements and information contained herein are based on certain factors and assumptions regarding, among other things, the market price of the Company’s securities, metal prices, exchange rates, taxation, the estimation, timing and amount of future exploration and development, capital and operating costs, the availability of financing, the receipt of regulatory approvals, environmental risks, title disputes, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, claims and limitations on insurance coverage and other risks of the mining industry, changes in national and local government regulation of mining operations in PNG, and regulations and other matters. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. For information on risks, please refer to the Company’s Management Discussion and Analysis for the year ended December 31, 2019. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.