K92 Mining Inc.

Thank you, operator, and thanks, everyone, for attending K92 Mining's second 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 for 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 united states dollars unless otherwise noted now i'll turn it over to john to provide you with an overview well thank you david welcome everyone

The second quarter, we took another step forward, delivering on multiple records, including record cash balance, record mine production, record mill throughput, while also achieving strong all-in sustaining and cash costs. This was the first quarter where we achieved throughput significantly above that stage two run rate, where we averaged 1196 tons per day against a stage two run rate of 1100 tons per day. Subsequent to the end of the quarter in July, the process plant actually achieved multiple new daily throughput records, which were substantially higher than the Stage 2a expansion run rate of 1370 tons per day. Importantly, these record throughputs were achieved without the installation of the new flotation cells, which will double our rougher capacity, which were only planned for the fourth quarter. And that really highlights the upside potential beyond even our Stage 2a design. Lastly, we continue to make significant progress in our organic growth through exploration, delivering a 10.8 million ounce gold equivalent maiden inferred resource at Blue Lake at a discovery cost of less than a dollar an ounce. We had high-grade drill results at Cora and Judd, and I'm pleased to report there are now four surface diamond rigs operating at Cora South, Judd South, with a fifth on the way. And in addition, we have the six diamond rigs operating underground. So we're really excited about the exploration and believe this is only the tip of the iceberg, both in relation to the high-grade vein systems, but also in relation to the porphyry targets. On the safety front, we recorded one lost time injury during the quarter. We remain proud to operate with one of the best safety records in the Australasian region. We have a strong focus on occupational health and safety and also continuously improving our safety systems. On the ESG front, I'm pleased to report that we recently completed multiple community projects, including refurbishment of the Kanantu Police Station, and refurbishment of the Kanantu High School Library. Other projects, including upgrading of community roads, various agricultural projects, training and education initiatives remain ongoing. While I was in Papua New Guinea last month, K92 received recognition for our industrial training program. K92 provides practical work experience to the largest number of mining engineers, metallurgy and geology university students of any mining company in PNG. Developing that workforce skills domestically is a major focus and we highlight that our workforce is one of the lowest percentages of expatriates of any mine in the country. The program is one of many community and social programs and I encourage you to read our sustainability report for more information. Our 2021 sustainability report is planned to be published shortly and we're very proud of the positive impacts that K92 has had in Papua New Guinea. Greenhouse gas emissions and climate change is another key focus for K92. I'm very pleased to announce that we've completed our 2021 greenhouse gas emissions inventory and TCFD gap analysis. The findings, in addition to our greenhouse gas emissions forecast, which is underway, will be a key tool in K92's emission targeting and goal setting going forward. 2021 greenhouse gas emissions inventory was completed by WSP consultants and shows that K92 delivers low carbon production with an emission intensity which is approximately 60% below the global gold sector average. The results also highlight a near-term opportunity to massively reduce our emissions. referring to the emissions build-up pie chart shown here. Upgrades to the grid for our direct power distribution from Yonki Dam and improvements to our distribution reliability can potentially reduce by almost two-thirds our combined Scope 1 and Scope 2 location-based emissions. And I'm pleased to report we're working in collaboration with P&G Power to upgrade this and that is actually already underway. This is expected to make a major positive impact towards reducing our emissions intensity. And most importantly, it's not long dated. The potential to realize this is over the next 12 to 24 months. Moving on to our operational performance, during the quarter we produced 26,085 ounces gold equivalent with 108,850 tons processed at a grade of 8.2 grams per ton. If we compare this to the Q2 2021 mill throughput, our mill throughput increased 44% and our production increased 59% respectively. A major positive continues to be the strong performance of the mill. In the second quarter, as I've noted, average mill throughput was 1196 tons per day, which is 9% above stage two run rate. In June, the plant achieved a record monthly average of 1251 tons per day. And in June, following the installation of our new TC1000 crusher, multiple daily records were achieved, including 1638 tons processed on July the 6th. 1642 on the 14th and 1609 on the 12th. As I've previously mentioned, what makes this even more impressive is that we have not yet installed the additional rougher flotation cells, which are the important part of that stage 2a expansion. In terms of our key operational quarterly physicals, Kenantu delivered record mill throughput, record mine material. Development also increased significantly, 19% quarter on quarter, and was the second highest quarterly development advance rate to date. Development was certainly impacted by COVID-19, and it remains a major near-term focus as we expand the mine and increase our near-term operational stop sequencing flexibility. I'm pleased to report that in June, near-record development advance was achieved, and with the new jumbo and loader recently arrived in country, we obviously see that continuing. Plans to add more equipment over the coming months are also underway. In terms of 2022, I think it's important to remind investors our guidance is based on the second half of the year being stronger than the first, driven primarily by increased throughput rates and also by higher grade stop rates from our stop sequencing. So this puts us now well positioned to achieve our production guidance of 115 to 140,000 ounces gold equivalent. So I'll now turn the call over to our Chief Financial Officer, Justin Blanchet, to discuss our financial results for the third quarter.

Thank you, John. And hello, everyone. During the second quarter, we had revenue of $37.4 million, a 5% increase from prior year. We sold 23,674 gold ounces at an average realized selling price of $1,783 per ounce. compared to 18,939 ounces at an average realized selling price of $1,754 per ounce in the prior year. As of June 30, 2022, there are 3,012 gold ounces in inventory, including both Concentrate and Dore, a decrease of 1,836 gold ounces when compared to March 31, due to timing of sales. Cost of sales was $23.2 million compared to $20.9 million in the prior year or $18.5 million compared to $15 million excluding non-cash items. Cost of sales is higher due to increased tons mined and processed in 2022 and an inflationary impact from both the COVID-19 pandemic and the war in Ukraine. The successful ramp-up of the Stage 2 expansion has allowed the company to achieve better economies of scale and lower unit costs, with mining activity increasing from 72,000 tons in Q2 prior year to 114,471 tons in Q2 2022. In Q2 2022, cash flow from operating activities before changes in working capital was $10.5 million compared to $15.2 million in the prior year. As of June 30, 2022, we had $81.7 million in cash and cash equivalents, while spending $10.7 million in expansion capital for the quarter and having our strongest working capital balance to date of $94 million. Subsequent to quarter end, the company completed a bought deal financing for gross proceeds of Canadian $50 million. The company has no debt on the balance sheet. As John mentioned, during the second quarter, the Kenantu Gold Operations produced 22,934 ounces of gold, 1,229,961 pounds of copper, and 25,224 ounces of silver or 26,085 ounces gold equivalent. We sold 23,674 ounces of gold, 1,349,816 pounds of copper and 27,033 ounces of silver. We incurred a cash cost of $617 and an all in sustaining costs of $893 per ounce gold, which was significantly below our realized gold selling price of $1,783 per ounce. When comparing to prior year, our cash costs decreased from $736 per ounce. The decrease in cash costs was primarily due to the successful ramp up of the 400K expansion, allowing the company to achieve better economies of scale and a 25% increase in the amount of gold ounces sold. It is important to note that after commissioning the Stage 2 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.