K92 Mining to increase Kainantu throughput by 25%

Plant achieved record quarterly material movements despite short-term challenges related to the COVID-19
K92 Mining to increase Kainantu throughput by 25% K92 Mining to increase Kainantu throughput by 25% K92 Mining to increase Kainantu throughput by 25% K92 Mining to increase Kainantu throughput by 25% K92 Mining to increase Kainantu throughput by 25%

K92 Mining has reported a record quarterly plant throughput of 87,621t processed at its Kainantu gold mine in Papua New Guinea in the September 2021 quarter, which is a 35% increase compared to the September 2020 quarter.

In September, the processing plant achieved Stage 2 expansion design throughput, increasing to an average of 1,100t/d with a single day record of 1,408t processed on September 22.

As a result of the existing plant performance and the mill's ability to deliver a product size that is notably finer than required, the Stage 2A expansion to increase annual throughput by 25% from 400,000t/y (1,100t/d) to 500,000t/y (1,370t/d) has been approved. Commissioning of the Stage 2A expansion is scheduled in the September 2022 quarter.

The company noted that the processing plant achieved these record quarterly material movements despite the short-term challenges related to the COVID-19 pandemic. In the first six months of 2021, Papua New Guinea experienced record levels of COVID-19 cases, which resulted in significant short staffing due to COVID-19 related absenteeism in addition to enhanced quarantine control measures and an increase in quarantine length. In addition, travel was suspended between Australia and Papua New Guinea from mid-March to mid-May.

These operational challenges had a significant impact on underground development and the mining sequence in the September 2021 quarter as it delayed access to the higher-grade stoping areas at the Kainantu mine's Kora deposit. This resulted in below budget material movements and gold head grades in addition to sub-optimal process plant blending. The company addressed these challenges via a 50% increase in development metres in the September 2021 quarter compared to the June 2021 quarter, which increased access to more stoping areas at Kora. It also ramped up mining at a new, major mining front in the Judd vein system, which is located approximately 150-200m from existing infrastructure at Kora, which makes it efficient to access.

In the second half of the quarter, the company began flat backing at the J1 vein, which provided a considerable boost the underground productivity. Production stoping at Judd is planned for the December 2021 quarter, and the company expects this to provide a notable boost to operational flexibility and material movements.

A new twin incline development resumed in late May, following the lifting of travel restrictions between Papua New Guinea and Australia and the improvement of the COVID-19 situation in Papua New Guinea. The advance of the twin incline development was approximately 16% above budget in the September 2021 quarter. As of September 30, the 6m x 6m #2 incline has been advanced by 638m and the 5m x 5m #3 incline has been advanced by 680m.

John Lewins, CEO and director of K92 Mining, said: "Achieving Stage 2 design throughput of 1,100t/d in September, a doubling from Stage 1, is a major operational accomplishment and one that is particularly impressive as it was achieved shortly after a particularly challenging COVID-19 environment in the first half of 2021.

"The strong performance of the process plant, achieving daily records well in excess of 1,100t/d and at a notably finer product size has led to the formal approval for the Stage 2A expansion, increasing throughput by another +25% to 1,370t/d. The capital cost for the plant expansion is estimated to be US$2.5 million, with commissioning in Q3 2022. Several key components have already arrived on site.

"While the headwinds from COVID-19 have persisted for longer than expected, we remain pleased that the operation continues to progress on multiple fronts. Over the past year, Judd has emerged from an exploration target to a new, major mining front, with production stoping planned to start in Q4, providing a notable boost to operational flexibility. The exploration success at Judd was also a key driver for approving the Stage 2A expansion.

"On exploration, the infill program at Kora is nearing completion for our updated resource estimate later this year and Stage 3 expansion definitive feasibility study in the first half of 2022. Currently there are five underground rigs on Kora and one underground rig on Judd. By the beginning of November, we expect to have at least two thirds of our underground drill rigs on Judd, marking a major pivot from infill to step-out drilling for the remainder of 2021 and into 2022.

"We are also very pleased with the development performance of the twin incline, achieving +16% above budget advance during the Q3. In the first half of 2022, the twin incline advance is expected to be sufficiently close to the resource at Kora, enabling drill platforms from the twin incline to commence testing Kora Deeps."

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