K92 Mining Inc.

Thank you, Operator, and thanks everyone for attending K92 Mining's first quarter 2022 conference call. We hope you and your families are doing well. In addition to myself, we have on the line John Lewins. Chief Executive Officer and Director, and Justin Blanchett, Chief Financial Officer. I would also like to remind everyone that after the remarks from management, the call will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes and risk disclosure in our MD&A and slide two of the webcast presentation. Also, please bear in mind that all dollar amounts mentioned in the conference call are in United States dollars unless otherwise noted. Now, I'll turn it over to John to provide you with an overview.

Thank you, David, and welcome everyone. In the first quarter, we delivered strong operational performance and continue to significantly strengthen our financial position. with a record cash balance, record revenue, and also low all-in sustaining and cash costs. The mining process plan performed well, achieving a second consecutive quarter of stage two run rate, and we certainly seen a compression of our unit costs as a result of that. In the latter part of the quarter, we also benefited from the progressive weaving of our COVID-19 restrictions, and that's continued into this quarter. Lastly, We continue to progress with our organic growth, delivering an excellent Kora resource update and also a maiden resource at Judd. In addition, we reported some very exciting drilling results at Kora site and Judd site showing that the known system still has enormous potential. On the safety front, we recorded one lost time injury here in the quarter. And on a year-to-year basis, lost time injury frequency rate continues to trend downward. And we're very proud to operate with one of the best safety records in the Australasian region. And we continue to have that strong focus on occupational health and safety and look to continuously improve our safety systems. On ESG, I'm pleased to report that earlier this year we approved a significant increase year on year of approximately 100% on our community development budget. It covers a wide range of initiatives, which includes, but is not limited to, investment in transport, infrastructure, healthcare, education, agriculture, regional commerce, and sporting infrastructure. Just returned from Papua New Guinea and I'm really pleased to see how we are progressing with those various programmes. Also, while I was in P&G, I was pleased to see K92 receive recognition in the national newspaper. highlighting the positive impact that K92's growth is having on local landowner joint ventures. And we're pleased to really have received that recognition, but also that the Stage 2A and Stage 3 expansions, we're going to see even more benefits to the community. I'd also like to highlight that K92 has placed a major focus on the greenhouse gas emissions. For its ESG report, the 2021 emission inventory and TCFD gap analysis is well underway now. and a greenhouse gas emission forecast for the Stage 3 and Stage 3A expansions is also being completed alongside our studies. Kenantu is a very green line. The carbon intensity is a fraction of the global average per ounce. And from these projects, we'll look to improve our disclosure, reduce our carbon footprint and develop our carbon targets going forward. For further information on our ESG activities, I'd recommend reviewing our latest ESG report, which is found on our website. And we're certainly very proud of the positive impact that K92 has had, we believe, in PNG. So moving on to operational performance. During the quarter, we produced 28,188 ounces of gold equivalent. and we processed just under 100 000 tons at a head rate of 9.7 gram per ton gold equivalent compared to q1 2021 mill throughput and production increased 36 and 49 respectively i think a major positive continues to be a strong performance of the mill in march Record average mill throughput was achieved of 1,219 tons per day on average. That's about 10% above our stage two run rate. And importantly, 45% of the days in quarter were above 1,300 tons per day. What makes the performance even more impressive is that we've not yet installed the additional secondary crushing rotation cells for the stage two expansion. In terms of the key operation, quarterly physicals, near-record mill throughput and total material mined was achieved, and development was comparable to the prior quarter. I think it's important to highlight the strong performance was achieved during the COVID-19 Omicron wave, which came through P&G during the quarter, and that did result in some short staffing and absenteeism. COVID has been a factor now for two years for the whole industry, since really the first quarter in 2021. And I'm really proud of how our team on site has continued to push ahead and deliver the strong results to reporting again today. I'm also pleased to report that our control measures once again held up during that wave. And in the latter part of the quarter, as I mentioned, we've been able to start easing our COVID-19 restrictions. So we no longer require quarantine of any incoming personnel. And that obviously results in a significant cost saving and improvement in the productivity of our personnel. Our mitigation systems continue to remain vigilant through testing, screening procedures, additional medical personnel on site, multi-temperature checkpoints around the site and camp, and obviously a focus on hygiene. We currently have no confirmed COVID-19 cases on site. I think in terms of 2022, it's important to remind investors that our guidance is based on the second half of the year being stronger than the first half, driven primarily by higher throughput rates for the commissioning of various components of Stage 2 expansion and some of the scope sequencing. I'll now turn the call over to our Chief Financial Officer, Justin Blanchet, to discuss the financial results for the first quarter.

Thank you, John. And hello, everyone. During the first quarter, we had revenue of $52.4 million, a 78% increase from prior year. we sold 26,471 gold ounces at an average price of $1,769 compared to 21,879 ounces at an average price of $1,735 in the prior year. As of March 31, 2022, There are 4,848 gold ounces in inventory, including both concentrate and dore. A decrease of 2,299 gold ounces when compared to December 31st due to timing of sales. Cost of sales was 22.5 million compared to 20.9 million in the prior year, or $17.7 million compared to $17.1 million when you exclude non-cash items. The increase can be attributed to an increase in operational activity as we mine 100,124 tons as compared to 55,883 tons in Q1 2021, meaning on a per ton basis costs are lower than prior year. Q1 2022 cash flow from operating activities before changes in working capital was $22.7 million compared to $7.7 million in the prior year. As of March 31, 2022, we had $79.9 million in cash and cash equivalents while spending $9 million in expansion capital for the quarter and having our strongest working capital balance to date of $92.1 million. The company has no debt on the balance sheet. As John mentioned, during the first quarter, the Kanantu gold operations produced 24,152 ounces of gold, 1,524,827 pounds of copper, and 28,142 ounces of silver. or 28,188 ounces of gold equivalent. We sold 26,471 ounces of gold, 1,247,967 pounds of copper, and 24,899 ounces of silver, or 29,798 ounces gold equivalent. We incurred a cash cost of $536 and an all-in sustaining cost of $788 per gold ounce, which was significantly below our selling price of $1,769 per ounce. Our Q1 2022 cash cost per ounce decreased to $536 from $745 in the prior year. The decrease in cash cost was primarily due to the successful ramp-up of the 400K expansion, allowing the company to achieve better economies of scale and a 21% increase in gold ounces sold. It's important to note that after commissioning the stage two plant expansion in late third quarter 2021, we have seen a significant compression in our total unit cost per ton processed. We continue to see downward pressure on costs via economies of scale as operations ramp up. I will now turn the call back to John to continue with the rest of the presentation.