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K92 Mining Announces Significant De-Risking Milestone - Awarding Lump Sum Fixed Price Contract for the Design and Construction of the 1.2 mtpa Stage 3 Process Plant
VANCOUVER, British Columbia, July 24, 2023 (GLOBE NEWSWIRE) -- K92 Mining Inc. (“K92” or the “Company”) (TSX: KNT; OTCQX: KNTNF) is pleased to announce that the
About this update from K92 Mining, Inc.
[{"type":"text","content":" VANCOUVER, British Columbia, July 24, 2023 (GLOBE NEWSWIRE) -- K92 Mining Inc. (“K92” or the “Company”) (TSX: KNT; OTCQX: KNTNF) is pleased to announce that the Board of Directors has authorized the Company’s award of the engineering, procurement, construction and commissioning (“EPC”) Lump Sum Contract for the 1.2 million-tonnes-per-annum (“mtpa”) Stage 3 Expansion Process Plant to GR Engineering Services Limited (“GRES”) following a tender process. The EPC Lump Sum Contract award amount is US$81 million and is fixed price / lump sum, significantly de-risking potential cost increases to K92. In addition to the award of the contract, all process plant long-lead item contracts have already been awarded on a fixed price (excluding freight), to CITIC HIC Australia Pty Ltd for the SAG and ball mills, Jord International Pty Ltd for the filter press, and Metso Outotec Australia Limited for the tank flotation cells, flash flotation cells and high-rate thickeners. Following the award of the EPC Lump Sum Contract and the placement of orders for the long lead items, the forecast cost of the 1.2 mtpa Stage 3 Process Plant is within 10% of the capital cost outlined in the Kainantu Integrated Development Plan (“IDP”) Definitive Feasibility and Preliminary Economic Assessment cases (see September 12, 2022 press release – K92 Mining Inc Announces Robust Kainantu Gold Mine Integrated Development Plan), and importantly approximately 94% of the forecast capital cost has been fixed. This significantly mitigates K92’s cost inflation risk for the largest growth capital cost item for the Stage 3 Expansion (the 1.2 mtpa Stage 3 Process Plant), representing over half of the forecast growth capital (inclusive of attributable EPCM costs) as outlined in the IDP. Approximately 6% of the remaining unfixed price capital cost is for projects led by K92, including bulk earthworks and long-lead item freight logistics. The mitigation of the Process Plant’s inflation risk as noted above has notably strengthened the Company’s self-funding position for the Stage 3 Expansion. With the award of the long-lead items and the EPC contract, commissioning of the 1.2 mtpa Stage 3 Expansion Process Plant is targeting the end of Q1 2025. The mobilization of the construction contractor is forecasted for early 2024, with bulk process plant earthworks to be completed prior. The...