K92 Mining Inc. will go ahead with an expansion of the Kainantu gold mine in Papua New Guinea, doubling capacity to 400,000 tonnes a year, the company said in a March 13 news release.
K92 projected gold production at Kainantu of between 68,000 and 75,000 ounces of gold equivalent in 2019 and between 115,000 and 125,000 ounces of gold equivalent in 2020.
The gold miner said it would rely on cash flow and a possible debt financing, which is under negotiation, to fund the expansion.
Capital costs related to the expansion would be about US$15 million over the next year.
In a recent preliminary economic assessment, K92 pegged the net present value of the expansion project at US$559 million after taxes. The study outlined a project with a 13-year mine life and total production of about 1.3 million ounces of gold and 60,000 tonnes of copper from the Kora and Kora North deposits.
All-in sustaining costs are expected at between US$780/oz and US$820/oz of gold equivalent in 2019 and to drop to under US$700/oz of gold equivalent in 2020.