Kainantu Gold Mine & Project Beaver Creek September 2018
2 FORWARD LOOKING STATEMENT This Presentation is not a prospectus or an advertisement and is being provided for information purposes only and does not constitute or form part of, and should not be construed as, an offer or invitation to sell or any solicitation of any offer to purchase or subscribe for any Warrants in Canada, the United States or any other jurisdiction. Neither this Presentation, nor any part of it nor anything contained or referred to in it, nor the fact of its distribution, should form the basis of or be relied on in connection with or act as an inducement in relation to a decision to purchase or subscribe for or enter into any contract or make any other commitment whatsoever in relation to any securities of the Company. No representation or warranty, expressed or implied, is given by or on behalf of the Company, its directors and affiliates or any other person as to the accuracy or completeness of the information or opinions contained in this Presentation and no liability whatsoever is accepted by the Company, its directors and affiliates or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. No person should treat the contents of this Presentation as advice relating to legal, taxation or investment matters, and must make their own assessments concerning these and other consequences of investing in securities of the Company, including the merits of investing and the risks. Prospective investors are advised to consult their own personal legal, tax and accounting advisors and to conduct their own due diligence and agree to be bound by the limitations of this disclaimer. Certain statements, beliefs and opinions in this Presentation (including those contained in graphs, tables and charts) are forward-looking, which reflect the Company’s or, as appropriate, the Company’s directors’ current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this Presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No person should place undue reliance on forward-looking statements, which speak only as of the date of this Presentation. Examples of forward-looking information include metal price assumptions, cash flow forecasts, projected capital and operating costs, metal or mineral recoveries, mine life and production rates. . Trading in the securities of the Company should be considered highly speculative. The geological data in this Presentation is based on a technical report prepared in accordance with National Instrument 43-101 (“NI 43-101 ”) by Anthony Woodward, MAIG. Readers are encouraged to review the full text of that report, which is available under the Company’s profile on SEDAR. (www.sedar.com). Risk Factors There are a significant number of legal, political, environmental, or other risks that could materially affect the potential development of the Kainantu project, many of which are beyond the control of the Company, including, but not limited to: • All of the exploration licenses comprising part of the Kainantu project are subject to renewal applications with the PNG government. There is no assurance that renewals or extensions will be granted on terms acceptable to the Company, or at all. • Prior operators of the Kainantu project have failed to operate it economically. There are inherent risks involved with mineral e xploration and mining. • There are significant political, regulatory and country risks involved in undertaking business in PNG. • No definitive agreement has been reached with local landowners as to the compensation to be paid for use of their land forming any part of the Kainantu project. Any planned mining operations could by stalled by protests or legal actions. • Resource estimates may prove to be inaccurate. • Reduction in the long term market price of gold and copper would negatively impact on the economic viability of the Kainantu pro ject. • Exploration and mining activities are subject to environmental and other requirements that may increase costs and restrict operations. • There is no feasibility study on the project and there is no certainty that the proposed operation will be economically viable.
K92 MINING INC 3 • Operates the High Grade Kainantu Mine in Papua New Guinea with an average grade of +12 g/t AuEq and ~0.5 Moz AuEq M & I and ~2.5 Moz AuEq Inferred Resource • Current Production Rate ~50,000 ozs AuEq per annum • Q2 Production – 10,485 ounces of gold and 128,634 pounds of copper • Q2 Cash Costs - $590/ AuEq oz & AISC - $792/AuEq oz • Short Term Growth • PEA completed on expansion to ~110,000 ozs per annum • Further updated Kora North Resource due August 2018 – Target 1.2 Mozs AuEq • $15 million capex – work commenced • Medium Term Growth • Underground exploration drilling – Target 5 Mozs AuEq by mid 2019 • Feasibility on expansion by end 2019 • Substantial Land Package with multiple Porphyry and High Grade Vein Targets
PNG Major Mines and Projects 4 Simberi Lihir Frieda River I N D O N E S I A Ok Tedi Kainantu Ramu Porgera Wafi - Golpu Panguna Lae Current & Past Producer Hidden Valley Development & Exploration Tolukuma Port Moresby INDIAN OCEAN 250km PACIFIC OCEAN Misima A U S T R A L I A
KAINANTU GOLD PROJECT 5 INITIAL MINERAL RESOURCE ESTIMATE AND EXPLORATION LICENSES Located in the Eastern Highlands Province of Papua New Guinea, 180km northwest of Lae Notes 1. AuEq. Resource using long-term metal prices of US $1240/oz Au, US $23/oz Ag, and US $3.13/lb Cu (as per May 2017 NI 43-101 technical report) 2. Above table from the NI 43-101 Independent Technical Summary Report, May, 2017 4 Exploration Licenses 1 Mining Lease 3. Qualified Person, Anthony Woodward MAIG, Nolidan Mineral Consultants 2 Mining Easements 4. Figures have been rounded as appropriate 1 Lease for Mining Purposes 405 km 2 Total Land 5. Excludes Koa Northern Extension
KAINANTU GOLD PROJECT 6 INFRASTRUCTURE Access Sealed all weather road from Lae – Madang unsealed road to site • including 3 bridges Airstrip capable of handling Dash 8 aircraft located adjacent to • mine turnoff Site Facilities Main Offices including Technical Services, separate office blocks • for Plant, Exploration, Occ Health & Safety, Community Relations, Engineering and Procurement Plant, Mine & General Workshops • Warehouse and associated procurement offices • Exploration coreshed • Power 22 kVA line from PNG Power – hydroelectric facility at Yonki Dam • Full back up power installed •
KAINANTU GOLD PROJECT 2018 7 • Guidance for 2018 • Production between 42,000 and 46,000 gold equivalent ozs (H1 – 20,500 AuEq oz) • Cash cost expected to be US$530 to US$560 per AuEq oz (H1 2018 – US$574/ AuEq oz) • AISC costs expected to be US$720 to US$780 per AuEq oz (H1 2018 – US$768/ AuEq oz) • Expanding Mining Fleet with LHD’s (3), Drill Rigs (2), Trucks (3) • Install Gravity Recovery Section • Complete updated PEA on expansion of Plant and Mining Capacity to 400,000 tpa producing +100,000 ozs AuEq per annum and commence implementation • Complete further resource update for Kora North in October 2018 – current M & I 686kt @ 14.5 g/t AuEq containing 320,500 ozs, Inferred 1.1 Mt @ 15.2 at AuEq containing 571,000 ozs • Continue extended exploration program aimed at extending the known Kora mineralization and evaluating Judd Vein system • Commenced drilling on high priority Porphyry targets
KAINANTU GOLD PROJECT KORA 8 KORA NORTH EXTENSION “DISCOVERY’ HOLE Initial Drilling – KMDD0009 Kora Irumafimpa 500 m Eutompi Less than 3m and 5 g/t Au Eq Selected Historical Drill > 3m wide and 4 g/t Au Eq Holes O K92 Completed Drill Hole Partially mined out 107BD06 108BD06 25 m @ 2.00 g/t 9.3 m @ 4.29 g/t Au, 88 g/t Ag and Au, 27 g/t Ag 4.2% Cu and 1% Cu KMDD0009 5.4 m @ 11.68 g/t Au, 25.5 g/t Ag and 1.33% Cu Kora Drive under development BKDD0023 6.4m @ 5.52 g/t Au 8m @ 3.7% Cu
KAINANTU GOLD PROJECT GEOLOGY 9 LONG SECTION - KORA K2 TO THE SOUTH & KORA NORTH GC MODEL Kora - Eutompi Lode System Resource MDL >2g/tAu Irumafimpa North Kora Resource Blocks Model blocks coloured by gold grades
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