K92 bucks market trend and closes oversubscribed financing for $16.6 million
By Kevin Silva
Despite some future optimism for gold equities in the coming months, overall market activity as of late has been rather lethargic.
The oft-discussed GDXJ rebalancing and other factors have led to an environment in which share prices have been stagnant and investor interest low.
Citing the fact that the best opportunities often present themselves in difficult markets, K92 Mining Inc. (TSX.V: KNT) has bucked the overall market trend by announcing the closing of an oversubscribed financing for total gross proceeds of $16,554,600.
The fact the deal went oversubscribed in a tough environment is a testament to the quality of the project fundamentals and the progress the team has made onsite, while also benefiting from the strength of the syndicate of agents involved led by Clarus Securities and including CIBC World Markets, Eventus Capital and Haywood Securities.
K92 President, Bryan Slusarchuk, notes, “It’s great to see this type of strong demand. The financing not only puts the company in great shape to accelerate and intensify onsite, but also has added an incredible new group of institutional investors to the company’s shareholder roster. K92 is currently in production at the Irumafimpa deposit and has also commenced an underground drive towards the Kora Deposit. In addition to what is currently known about these two deposits, institutional investors seem quite obviously enthused about the expansion potential in between and beyond.”
K92 has had a host of recent news releases, including an announcement that the first exploration hole completed from the underground drive targeting an extension of the Kora deposit intersected 5.4 metres at 11.68 g/t Au, 25.5 g/t Ag and 1.33 % Cu, including 0.75 metres at 71.94 g/t Au, 168.7 g/t Ag and 8.51 % Cu. This intersection occurred approximately 500 metres along strike and 150 metres down dip from the closest point of the currently defined Kora Deposit.
After announcing what is interpreted as the Kora extension discovery, K92 put out more good drill results from drilling at Irumafimpa. Referring to the news release describing these results issued on June 19th, K92 Chief Executive Officer, Ian Stalker, states, “The latest grade control drilling results include some of the widest that we have seen to date at Irumafimpa, with 8.2 metres at 24.65 g/t AuEq recorded in hole GCDD0074 and 4 metres at 60.57 g/t AuEq recorded in hole GCDD0071. Importantly in both places these intersections commence less than 20 metres from the drill cuddy.”
The K92 team has established itself as a contrarian group, of sorts, from inception. The company acquired this Kainantu Gold Mine from Barrick Gold during the last big gold market downturn, when many were fleeing the sector. After completing the purchase from Barrick, K92 rehabilitated and enhanced the underground and the processing facilities and commenced production at Irumafimpa. Now, in addition to the production, the company is focused on the expansion potential.
Slusarchuk reminds us, “The world’s largest gold company did not own this asset for the production profile that they saw at Irumafimpa. While that profile can be attractive to us as a much smaller company than Barrick, the upside here is through expansion, exploration and unlocking the potential that we see within this rich geological endowment.”
While the summer months represent relaxation for many, you can bet that the K92 team — buoyed by recent exploration success and high-grade drill results coupled with the closing of this financing — will be busy onsite indeed.