K92 Mining Q4 Earnings Call Highlights

K92 Mining (TSE:KNT) executives highlighted record production, revenue growth, and the commissioning of the company’s Stage 3 process plant expansion during the company’s fourth-quarter 2025 financial results conference call. Management also provided 2026 production and spending guidance and outlined a larger exploration program aimed at expanding resources near the Kainantu operation and across its broader land package in Papua New Guinea.

Safety update and ESG recognition

President and COO David Medilek opened the call and introduced CEO John Lewins, CFO Justin Blanchet, and VP of Exploration Rob Smillie. Lewins began with safety, calling it the company’s “highest priority,” and addressed a fatal contractor incident disclosed in a February 6 release. The incident occurred during roadwork activities near the Kumian camp in a designated contractor area roughly 1.5 kilometers northeast of the process plant and 8 kilometers northwest of the underground mine.

Lewins said initial investigations by both the contractor and Papua New Guinea’s Mining Regulatory Authority had been completed, mitigation measures were implemented, and a “progressive managed restart” of contractor surface activities had started. He added that minimal impact to the project construction timeline was expected.

For the fourth quarter of 2025, Lewins said K92 recorded no lost-time injuries, marking 10 consecutive lost-time-injury-free quarters. He also said a new integrated safety management and compliance system was being rolled out and noted an increase over the past two years in field-level risk assessments, hazard identification, safety observations, and safety technologies.

On ESG, Lewins said the company received another industry award at the PNG Investment Week Conference in Sydney in December, marking its fourth consecutive year of recognition for community initiatives. He said the PNG CORE Award recognized K92’s adult literacy program, which since 2021 has supported more than 1,000 adult learners across eight local communities.

Q4 operational results and Stage 3 plant commissioning

Operationally, Lewins reported fourth-quarter production of 47,178 ounces of gold equivalent at the Kainantu Mine. On a byproduct basis, he cited cash costs of $768 per ounce of gold and all-in sustaining costs (AISC) of $1,619 per ounce of gold. On a co-product basis, he reported cash costs of $920 per ounce of gold equivalent and AISC of $1,716 per ounce of gold equivalent.

Lewins said mill throughput totaled a record 186,198 tonnes in the quarter with a head grade of 8.0 grams per tonne gold equivalent and a “moderate positive” gold and copper reconciliation versus the latest independent mineral resource estimate.

He also highlighted a key project milestone: the official inauguration of the new 1.2 million tonnes per annum Stage 3 process plant on October 16. Lewins said first saleable concentrate production occurred in early October and commissioning was completed in December. He said the plant was delivered “safely, efficiently, and importantly under budget,” and has performed “extremely well,” with all mine material processed exclusively through the new plant since late October.

For the quarter, he reported overall metal recoveries of 94.3% for gold—above the recovery parameters in the updated definitive feasibility study—and 93.9% for copper, which he said was in line with the study.

On mining activity, Lewins cited record total material mined of 404,205 tonnes and record quarterly mine development of 2,787 meters, a 12% increase from the third quarter. He said October development reached a record 1,027 meters, supported by several infrastructure improvements including the commissioning of a new 10.3-megawatt primary power station, upgrades to underground service water supply, and additional ventilation from a Phase 2 ventilation upgrade.

Financial results, liquidity, and cost commentary

CFO Justin Blanchet reported fourth-quarter 2025 revenue of $176.8 million, up 47% from the prior-year period. The company sold 40,031 ounces of gold at an average realized price of $3,955 per ounce, compared with 48,851 ounces at $2,564 per ounce a year earlier. He said gold inventory at December 31, 2025 totaled 14,032 ounces (concentrate and doré), up 6,119 ounces from September 30 due to timing of sales.

For the full year, Blanchet reported record revenue of $595.2 million, up 70% year over year. K92 sold a record 159,787 ounces of gold at an average price of $3,296 per ounce, compared with 141,159 ounces at $2,356 per ounce in 2024.

Cost of sales in the fourth quarter was $46.6 million versus $32.6 million in the prior-year quarter (or $36.7 million versus $23.8 million excluding non-cash items). Blanchet attributed the increase primarily to higher tonnes mined and processed as activity ramped up for the Stage 3 expansion. For the full year, cost of sales was $156.9 million versus $142.2 million (or $126.4 million versus $106.8 million excluding non-cash items), with Blanchet noting higher total costs but lower unit costs per tonne.

Cash flow from operating activities before working capital changes was $99.6 million in Q4, up from $72.0 million in the prior-year quarter. For the year, Blanchet reported record operating cash flow before working capital changes of $329.3 million, compared with $170.4 million in 2024.

Blanchet also noted a net $9.4 million write-down of property, plant, and equipment in the fourth quarter, primarily related to the old process plant, and said the adjustment could be reversed if the old plant is recommissioned in the future.

As of December 31, 2025, K92 reported record cash and cash equivalents of $230.9 million, working capital of $262.3 million, and a net cash position of $181.6 million. Blanchet said Stage 3 and Stage 4 expansion projects are fully funded and added that the company also has access to an undrawn $60 million credit facility.

He also discussed downside protection via put option contracts extending to the end of 2026, allowing for 10,000 ounces of gold per month at a strike price of $3,500 per ounce. Blanchet emphasized the puts were “not a hedge,” describing them as insurance that preserves exposure to upside pricing.

2026 guidance and expansion plans

Lewins provided 2026 production guidance of 190,000 to 225,000 ounces of gold equivalent, with production expected to be weighted to the second half of the year as additional mining fronts come online and key expansion enablers are completed.

Growth capital spending is forecast at $100 million to $108 million in 2026, including:

• $25 million to $28 million for Stage 3 expansion capital (primarily paste fill plant and river crossings)
• $75 million to $80 million for Stage 4 expansion capital and accelerated growth capital

Lewins said Stage 3 expansion capital was 95% spent or committed as of the end of January, and management is bringing forward several Stage 4 projects into 2026 to accelerate development.

He reiterated that Stage 3 supports 1.2 million tonnes per annum throughput, which he associated with a 300,000-ounce gold-equivalent annualized run rate, and that Stage 4 is expected to expand throughput to 1.8 million tonnes per annum, targeting commissioning in late 2027. He also noted the idled Stage 2A plant (600,000 tonnes per annum) provides additional optionality for future expansion beyond Stage 4.

Lewins discussed underground and surface infrastructure intended to support the ramp-up, including the completion of the twin incline internal ramp system and the first material pass. He said the Puma ventilation incline achieved breakthrough to surface in late February, helping increase underground primary ventilation from 200 cubic meters per second to about 350 cubic meters per second, which he said meets initial Stage 3 requirements. Additional ventilation gains are expected following mid-year electrical commissioning of two primary fans, with Lewins stating ventilation could increase to more than 600 cubic meters per second and potentially be expanded further.

Exploration ramp-up and resource growth focus

VP Exploration Rob Smillie outlined a record 2026 exploration budget of $31 million to $35 million, more than 50% higher than 2025. He said the company was operating seven underground drill rigs at Kora and Judd and multiple surface rigs at Arakompa, Maniape, and Wera, with additional surface rigs expected to arrive in the second quarter.

Smillie summarized drill results reported in February from 101 diamond drill holes at Kora South and Judd South, including high-grade intercepts at the K2 Vein and early results from Kora Deeps. He also described drilling at Judd, including “bonanza” intercepts near upper mine infrastructure and early results from Judd Deeps, which he said has defined mineralization over roughly 450 meters of strike and remains open.

At the Arakompa vein system, Smillie said drilling with five active rigs has expanded the bulk tonnage zone and added geological understanding. He also said the company is beginning to drill test the Maniape vein system west of Arakompa and continues early-stage drilling at the Wera vein system, a large low-sulfidation epithermal gold system about 10 kilometers southwest of Kora and Judd. Smillie said K92 aims to release additional Arakompa results in the second quarter and cut off new data in the near term for a maiden resource targeted for mid-2026.

During the Q&A, management said 2026 is expected to be “back-end loaded” primarily due to tonnage increases rather than higher grades, and provided an expected grade range of roughly 6.5 to 7.5 grams per tonne. Executives also said the new plant’s gold recoveries have been running around 94% versus a study assumption of 92.6%, and that the plant has demonstrated capacity to operate above its 1.2 million tonne per year annualized rate on a daily basis, with ramp-up constrained more by underground mining progress than by processing capacity.

About K92 Mining (TSE:KNT)

K92 Mining Inc owns and operates the high-grade Kainantu Gold Mine in Papua New Guinea which is currently operating at a design annualized production rate of approximately 120,000 oz AuEq per annum and is expected to produce at a run-rate of +300,000 oz AuEq per annum following its Stage 3 Expansion.