K92 Mining Inc.

Thank you for standing by. This is the conference operator. Welcome to the K92 Mining 2024 First Quarter Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 0. I would now like to turn the conference over to David Medlack, President and CEO. Please go ahead.

Thank you, Operator, and thanks everyone for attending K92 Money's 2024 First Quarter Results 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 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.

Well, thank you, Dave, and welcome, everyone. As always, we begin with safety, K92's number one priority. Now, K92 has historically operated one of the best safety records in PNG as well as the broader Australasian region as shown in this chart. And as we stated in our previous conference call, we take the increased lost time injury frequency rate we achieved in 2023 very seriously. Multiple actions have been taken. Two independent safety audits have completed, the first in the second half of 2023 and the second in April of this year. While overall our systems were found to be comparable with other operations in Australia and the Asia-Pacific region, opportunities to improve safety were identified and many improvements have already been realized. Additional safety technologies have been progressively introduced, such as in-cab monitoring and the implementation of our proximity detection and collision avoidance system, which is nearly complete. Further enhancements and systems beyond this are also planned. I think culturally there are multiple positive leading indicators, including a significant increase in job safety assessments for several consecutive quarters. As part of our expansion process, management and supervisory capabilities have been enhanced and expanded, including to provide a major focus on safety and training. In Q1, there were no lost time injuries, and I'm pleased to highlight that this is now the third consecutive lost time injury free quarter. I'd like to reiterate that K92 relentlessly pursues our goal of achieving zero harm among our workforce. So I'd now like to provide an update on the non-industrial incident that occurred on the mining lease on March the 10th and which resulted in a deceased employee as well as the issuance of a Form 29 by the Mineral Resources Authority or MRA. I know that the Form 29 required a temporary suspension of underground activities on March the 13th as it was initially incorrectly interpreted as a mine accident. On April the 8th, we announced that the MRA had vacated the Form 29 through letter and the operations were resuming imminently. This letter followed a presentation that was delivered by the Independent Safety Auditor to the MRA, which highlighted that our underground safety management plan was good, conformed to criteria in ISO 45001, and had been implemented. The safety auditor also noted that no substandard document process or systems were found and that the underground safety management plan was comparable to other operations in Australia and Asia. Since restarting, operations ramped up in April and have now returned to normal and we're pleased with the focus and motivation of our workforce. In terms of the proximity detection and collision avoidance system, installation is nearing completion, as noted in the prior slide. Lastly, in late April, the coroner's report confirmed that the incident is non-industrial. It is deemed not to be a mine accident, and it is a jurisdiction of the Royal Papua New Guinea Constabulary or the police. On ESG highlights, K92 is extremely proud of its positive impact on women's empowerment. The five female graduates shown on the slide are within a larger group of outstanding female leaders and future leaders in our company. They work in a range of roles within the company, including but not limited to mining engineering, sustainable agriculture and livelihoods, finance and community affairs. Some of the female graduates are also previous scholarship recipients, including the inaugural Women in Mining Scholarship. Our women's empowerment programs are wide ranging, focusing on education and healthcare training and awareness, business development, developing our workforce, and partnering with academia and are designed to deliver long-term and diverse positive impacts. K92 is extremely proud of the positive impact that we're having in Papua New Guinea, and we look forward to announcing our latest sustainability report in the next couple of months. Now, moving on to operational performance, during the quarter, Kadantu Goldmine slightly exceeded budget with 27,462 ounces gold equivalent produced, even with the temporary suspension of underground operation for the final 22 days of the quarter due to that non-industrial incident. During the quarter, a total of 130,632 tons were processed at a head grade of 7.2 grams per ton gold equivalent, and cash cost $934 an ounce, all in sustaining cost $1,366 an ounce. As annotated on the chart, all in-sustaining costs have been elevated for the past few quarters as the company continues to make considerable investment in that Stage 3 expansion, particularly in 2024, with costs then expected to decline considerably after delivering Stage 3 expansion next year. I think it's important to highlight that the non-industrial incident had a moderate impact on our Q1 production of about 3,000 to 4,000 ounces, and we expect a moderate impact in Q2 as previously disclosed. Q1 was on track prior to the incident to be our best first quarter on record, and there's certainly a lot of positives to build on going forward. As outlined in our operational guidance earlier in the year, the second half of the year is expected to be our strongest. So we reiterate our 2024 guidance. In terms of key operational quarterly physicals, K92 has demonstrated the ability to sequentially expand the operation for several years, with physicals in Q1 clearly impacted by the temporary suspension of underground operations for the majority of March, as well as the completion of the twin incline. In Q1, a major positive in terms of operational physicals was realized with a process plant delivering multiple records earlier in the quarter. A new monthly throughput record was achieved in January, averaging 1,843 tons per day, or 35% greater than the Stage 2a design throughput. A new weekly throughput record was achieved in January, averaging 2,149 tons per day, which is 50% greater than the Stage 2a design. And finally, A new daily record throughput was achieved on the 21st of January of 2,389 tons processed, 74% greater than that stage 2a design. So the process plant has clearly demonstrated that with the tons in front of it from the mine, it is extremely capable and provides significant optionality going forward. I think the records also highlight the potential of the stage 3 process plant. which has used the same design parameters as a Stage 2a process plant and is therefore potentially capable of significantly greater throughput than the 1.2 million tonne per annum nameplate design. With that, I'll now turn over to our Chief Financial Officer, Justin Blanchet, to discuss our financial results for the first quarter.