K92 Mining Secures US$15 Million Loan and Offtake Deal

  • Signing of a loan agreement with Trafigura for 15 million US dollars for the expansion of the Kainantu gold mine.
  • Off-take agreement covering 100% copper/gold concentrate production on industry competitive terms with no minimum quantity requirements.
  • Ongoing relationship with Trafigura, our removal partner since operations began in Kainantu.

VANCOUVER, British Columbia, July 02. 2019 (GLOBE NEWSWIRE) — K92 Mining Inc. (“K92“or the”Company”) (TSXV: KNT; OTCQB: KNTNF) is pleased to announce that K92 and Trafigura Pte Ltd. (“Trafigura“), a global commodities market leader, have entered into a loan agreement under which Trafigura will provide a US$15 million loan (the “Ready”) to K92 and an off-take agreement for Trafigura to purchase 100% of K92’s copper/gold concentrate produced at the Kainantu gold mine in Papua New Guinea.


US$15 million loan

  • Two-year term loan with a three-month repayment grace period followed by twenty-one repayment installments.
  • Competitive interest rates.
  • No coverage conditions.
  • The proceeds will be used primarily for the expansion of K92’s Kanantu gold mine located in Papua New Guinea.
  • The loan is initially unsecured;
  • The loan includes resolutive conditions relating to the creation of security over the assets of K92 and its subsidiary, K92 Mining Limited; once these obligations have been fulfilled, the conversion right mentioned below expires.
  • During the initial period preceding the provision of the guarantee, the agreement provides that in certain circumstances of default, Trafigura may accelerate the repayment of the loan. Subject to a grace period, if the loan is not repaid, Trafigura may convert all or part of the loan into ordinary shares of K92 at a conversion price equal to US$1.3794 per share (the “Conversion right”).
  • Drawdown under the Loan is subject to a number of conditions precedent customary for transactions of this nature, including receipt of acceptance from the TSX Venture Exchange.

Direct debit agreement

  • Nine-year term ending February 11, 2028 or to a minimum of 165,000 dry metric tons (“Minimum MTD”) of concentrate was delivered, whichever is later. If Minimum DMT was delivered during the nine-year period, then K92 is only required to sell 50% of K92’s annual production until the end of the term of the agreement.
  • Industry competitive conditions against all measures at London Metal Exchange spot prices.
  • Attractive payment terms that provide upfront payment upon delivery of concentrates to port of shipment and provision of certain shipping documentation.
  • Competitive transport costs.

John Lewins, Managing Director and Director of K92, said: “We are extremely pleased to announce an important strategic financing and extraction agreement that continues our partnership with Trafigura, our extraction partner since the start of operations at the Kainantu mine. These agreements reinforce our strong relationship with Trafigura and reflect its confidence in the project and in the ability of the K92 team to meet its objectives and obligations in terms of production and ongoing expansion.

The loan from Trafigura allows K92 to continue the timely expansion of the Kainantu mine to double current capacity to 400,000 tonnes per year, increasing annual production to an average of 120,000 gold equivalent ounces. The off-take agreement guarantees long-term off-take on industry-competitive terms and provides security and confidence in revenue from the sale of our products. »

On behalf of the company,

John Lewins, President and CEO and Director

For more information, please contact the company at +1-604-687-7130.

CAUTION REGARDING FORWARD-LOOKING INFORMATION: This press release contains certain “forward-looking statements” under applicable Canadian securities laws. Forward-looking statements are necessarily based on a number of estimates and assumptions which, while believed to be reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results to differ. and future events 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 anticipated benefits of loan and off-take agreement, intended use of proceeds, expectations of future cash flows, proposed plant expansion, potential resource expansion and the generation of additional drill results that may or not happen. The 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, foreign exchange rates, taxation, estimation, timing and amount of future exploration and development, capital and operating costs, availability of financing, receipt of regulatory approvals, environmental risks, title disputes, plant failure, equipment or processes to operate as designed, accidents, labor disputes, claims and limitations of insurance coverage and other risks of the mining industry, changes in regulations national and local government of mining operations, 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. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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