"This resources declaration is the fifth largest known mineralized porphyry in Papua New Guinea in terms of pre-mined contained gold equivalent ounces, after the world famous Golpu, Panguna, Ok Tedi and Frieda River porphyry deposits," K92's vice president for exploration Chris Muller said.

The company's CEO and director John Lewins said that nearly all holes intersected mineralization and there was 16,475 metres of drilling to define the resource, implying an average discovery rate of about 650oz AuEq per metre drilled.

"Importantly, we believe Blue Lake is only the tip of the porphyry iceberg at Kainantu and have gained a tremendous amount of knowledge for our porphyry exploration programmes going forward.

"In Papua New Guinea, porphyries tend to cluster and there are five other porphyry targets proximal to Blue Lake, with A1 being of the highest priority," he said.

The project is about 4 kilometres southwest of K92's producing high-grade Kora and Judd intrusion-related gold-copper deposits at the Kainantu mine.

Canaccord Genuity Capital Markets analyst Michael Fairbairn called Blue Lake a "monster maiden resource" and CG has lifted their price target for K92 from C$11 to C$12 (US$8.60 to US$9.40).

The company's share price, up 2% day on day, closed the 10 August session at C$8.48.

"While we have been bullish on the company's greater exploration potential, and specifically the porphyry potential at Blue Lake dating back to our initiation report, the maiden 10.8 million oz, 0.61g/t inferred AuEq resource materially exceeded our expectations," he said.

National Bank of Canada Financial Markets were also impressed with the maiden resource estimate, calling it on a "massive scale".

"Though early, we are encouraged by the potential opportunities at depth that could lift the resource grades and further enhance Blue Lake's commercial viability.

"The readthrough for more mineralized porphyries is also not lost on us, heightening our expectation for resource expansion given that there are five other proximal porphyry targets," NBF said.

NBF targets a C$10.50 share price for K92.

The company has a market capitalisation of C$1.93 billion.