K92 Mining Inc.

Thank you for standing by. This is the conference operator. Welcome to the 2022 fourth quarter and annual financial results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, You may signal an operator by pressing star and zero. I would now like to turn the conference over to David Medlik, president. Please go ahead.

Thank you, operator. Thanks, everyone, for attending K92 Mining's fourth quarter and 2022 annual results conference call. We hope you and your families are doing well. In addition to myself, we have on the line John Lewis, 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 to 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, and welcome, everyone. I think before we start the formal review of results, I need to start by recording on behalf of everyone at K92 that it is with profound sadness that we record the recent passing of our chairman and friend, Tukey Angus. Tukey was a deeply respected business advisor to the mining industry and an admired leader and a mentor to many. Within K92, he was a big part of our success. He'd been chairman since the inception of the company and its acquisition of the K92 project in 2015. He was an extraordinary director and chairman, very much a team player, bringing an incredible wealth of experience and of course that sense of humour and charm. Tuki also had a strong passion for philanthropy and helping others which was evident in so many things that he did in all of these actions. His contributions to the mining industry were far reaching. He'll be missed, long remembered by us all and we extend our condolences to his family. So moving on. During the fourth quarter, Kenantu took yet again another step forward, achieving multiple records, including record ore tons processed, record tons mined, record ore tons mined, record development advance, and our second highest quarterly production ever, and strong all-in sustaining and cash costs. For 2022, the company met its production guidance and beat its cost guidance for both cash cost and all-in sustaining cost. In the fourth quarter, we delivered multiple growth catalysts, including the 10-year extension of the mining lease, the approval of stage three and stage four expansion development by K92's board of directors, and some very exciting drill results within the Cora, CoraScythe and JuddScythe paint systems, which I'll discuss later in the presentation. On the safety front, we recorded no lost time injuries for the fourth quarter and we're proud to continue to operate with one of the best safety records in the Australasia region with a strong focus on occupational health and safety and continuously improving our safety systems. On the ESG front, I'm pleased to announce that K92 was the recipient of the award for outstanding women's contribution in the resource sector at the Papua New Guinea Mining and Petroleum Investment Conference in Sydney in early December. The award was in recognition of our adult literacy program. We started in 2019 with just age students and have now graduated over 200, 90% of those being women. The support for this program has been simply outstanding. and we're expanding even further this year. Beyond our literacy program, we provide business and training, skill training, and are really pleased to see how new businesses in our community are being created as a result of this. And while in Papua New Guinea in February, with our VP of Government Community Affairs, Philip Samar, and local director, Daisy Taylor, we awarded the scholarships for the 2023 Mining Tertiary Program. Now, each recipient was presented with a medal honouring senior Papua New Guinean leaders within K92. This program annually awards students in their third year of study in the fields of mining, metallurgy and geology. In 2022, the program was extended to include women in mining. The right image shows this year's recipient, Vanessa Tan. The scholarships cover all tuition, accommodation and other costs for the final year, as well as a living allowance. In addition, all recipients will be provided with entry into a two year graduate training program following the hopefully successful completion of their studies. I'd like to offer my congratulations to this year's recipients. The image on the left is from our meeting with government officials while we were in Garoka, which included the governor of the Eastern Islands Province, as well as a new local member. And while there, K92 pledged 50,000 kina to support funding efforts to rebuild a part of the student accommodation at the Garoka campus, which was damaged as a result of the earthquake in September 2022. That earthquake damage has been disruptive for many students who were previously based on the campus and may have to travel daily to university for studies. So this was something that we felt was really important that we should contribute towards. Also on the ESG front, I'm pleased to report the construction of the dedicated 22kV power line to site has been completed. A power line is expected to significantly increase the reliability of clean hydroelectric power distribution to site. Reducing utilization of the backup diesel gensets, which are from reducing our operating costs, is important in reducing our greenhouse gas emissions. And at K92, we continue to look for opportunities to make a difference and mitigate climate change. Moving on to our operational performance during the quarter, we produced 35,538 ounces gold equivalent with 121,686 tons processed at a head rate of 9.98 gram per ton gold equivalent. This compares with Q4 2021, a 22% increase in ore process. For the year, production was 122,806 ounces gold equivalent, meeting our production guidance range of 115 to 140,000 ounces gold equivalent for 2022. Cash costs at $538 per ounce were better than the guidance range of $560 to $640, and all-in sustaining costs at $864 an ounce were also better than our guidance range of $890 to $970 an ounce. In terms of our key operational physicals, Kenantu delivered record or processed, records or mined, and records development meters. As noted in previous conference calls, increasing our development rates continued to remain a focus for the quarter. and so that we could catch up on our development that has been impacted by COVID-19. I'm pleased for the development advance rates that we achieved in the last quarter and that we now continue to see in 2023 year to date. In terms of our outlook for 2023 and performance year to date, I think it's important to highlight that the operation has experienced unexpected operational challenges at the process plant and also at the mine. In late February, we press released that the process plant had experienced eight days of combined downtime in February due to a milk trunnion bearing failure and also an electrical fire in the cable tray. I'm pleased to report that after completing the maintenance and repairs, the process plant has performed very strongly, sequentially setting daily records, as you can see in the chart there, with the latest record being 1,815 tons processed on March 11th. To put that into perspective, Stage 2A expansion process plant design throughput is 1,370 tons per day. Also important to note, the process plant has not yet had the benefit of the stage 2a rotation expansion, the additional two rougher cells that we put in that basically double our rougher capacity, and that's planned to commission in the second quarter. At the underground mine in the second half of the quarter, we also encountered more challenging ground conditions than expected, which slowed down our mining rate and limited access to some of our higher grade areas. While this is generally not a serious problem for the operation because we can source additional ore tons from other mining areas, However, due to development rates being below budget for several quarters during COVID-19, as shown previously on the operating physicals, we don't have sufficient backup areas. So we've had to supplement mill feed from some of our lower rate stockpiles. As a result, we do expect the first quarter to be normally below budget, second quarter potentially moderately low budget. 2023 production will still however be with the guidance strengths that we've provided. I think it's important to highlight there have been several positive developments underway to improve our operating flexibility in the near term. Firstly, recent development rates as we've shown are performing well with records set in Q4 and strong development advance year to date. Development is obviously a leading indicator for operational flexibility and we expect to start benefiting from the strong advanced rates near term with two new sub-levels currently being established. Secondly, multiple pieces of new equipment have recently arrived and more is on the way. New equipment is both replacing the less productive equipment and also increasing the size of our fleet. Thirdly, during the second half of the year, we'll be accessing the ore body at depth from the twin incline, opening up an entirely new mining front, which is serviced by a large twin incline. All of these points, in addition to the process plant that is performing strongly, position the company for a strong second half of 2023. And of course, our budget showed that we'd be mining higher grades in the second half of the year as well. So we were expecting a significantly higher second half of the year. I'll now turn it over to our Chief Financial Officer, Justin Blanchet, to discuss the financial results for the third quarter.