K92 Mining has started expansion work at its Kainantu Gold Mine in Papua New Guinea, with plans to double production from 200,000t to 400,000t per annum.
Based on a preliminary economic assessment completed in January this year, the total capital expenditure for this year is projected to be $30m.
The expenditure consists of $12m in expansion capital, $8m in sustaining capital and $10m in capital development.
Production from Kainantu Gold Mine is projected to be 68-75,000oz of gold equivalent this year and 115-125,000oz next year.
K92 Mining recently purchased two Caterpillar AD45 Low Profile trucks for underground operations as part of the expansion.
The first truck is expected to be received before the end of this month and the second one shortly thereafter.
K92 CEO John Lewins said: “This expansion will double plant and mining capacity and increase production to an average of over 120,000oz [gold equivalent] per annum over the next 13 years, with potentially more to come as we ramp up our exploration efforts.
“The company is committed to a major programme of exploration with three diamond drill rigs operating underground and major development focused on expanding the Kora/Kora North resource with a target of five million [ounces] by the end of 2019.”
K92 has already invested almost $3m on mobile plant, fixed plant and the camp in the first quarter and plans to continue to fund expansion capital and sustaining capital from production cash flow.
By the end of this year, the Kainantu Gold Mine expansion project is expected to increase the number of jobs at the mine from the current 650 to 750 and further to 800 by the end of next year.