Additionally, a strong start at a new mining front stoked hopes for a substantial lift in production for 2022.
"The fourth quarter delivered our strongest quarter to date at the Kainantu gold mine, with record production, record mill throughput, record mine throughput, above budget processing recoveries and an excellent start to stoping activities at Judd, our new mining front," K92's CEO and director John Lewins said.
The Q4 production stood at 36,145 ounces of gold equivalent, which is up from 24,121oz in Q3. The Q4 production consisted of 33,220oz gold, 1,048,100 pounds of copper, and 28,218oz silver.
Full 2021 production hit a record of 104,196oz AuEq, or 95,055oz gold, 3,375,528lbs copper, and 70,792oz silver. It beat guidance of 96,000-102,000oz AuEq, which was lowered in November from 115,000-135,000oz due to COVID-19-related staff shortages.
"Excluding five consecutive days of downtime due to scheduled plant maintenance, the mill operated at an average throughput of 1,146 tonnes per day, exceeding stage-two expansion design throughput of 1,100t/d," the Canada headquartered miner said.
"Multiple daily records were set during the quarter, with 21 days exceeding 1,300t/d throughput and a daily record of 1,538 tonnes set on October 24, 2021," the company added.
K92's Q4 production beat BMO Capital Markets and consensus estimates of 29,000oz by 25%, BMO analyst Andrew Mikitchook said.
"After a challenging year due to the COVID-19 pandemic and the workforce issues it created, K92 finished 2021 on a high note, setting up for an improved 2022, supported in particular by a new mining area in the Judd J1 vein that showed positive initial results in Q4," Mikitchook said.
K92's stage-2A expansion plan, which is targeted to be commissioned in Q3 2022, was intended to lift nameplate throughput by 25% to 500,000 tonnes per annum. The plant expansion had an estimated capital cost of US$2.5 million.
With this in mind, BMO forecast that Kainatu's 2022 production should rise 43% year-on-year to 149,000oz AuEq.
"Catalysts for [K92] include a resource update at Kora and an initial Judd resource which management has previously guided to expect this quarter. Drill results from Kora, Judd, and Blue Lake, and a [definitive feasibility study] for the stage-three expansion are further catalysts for the stock," Mikitchook said.
K92's market capitalisation was C$1,749 million and cash were US$55 million. The company last traded on January 12 at C$7.38.
