K92 Mining (TSX: KNT) late last night announced that it is seeing certain production issues at its flagship Kainantu operation in Papua New Guinea. The company has seen negative developments as a result of the ongoing pandemic, as well as an incident on site that is set to reduce operations in the near term.
In regards to Covid-19, the company indicated that it has seen a number of cases identified through its containment measures, while also indicating that the Government of Australia has announced temporary restrictions that will negative impact its operations. In an attempt to reduce a growing caseload, the Government of Australia has introduced restrictions on travel between Papua New Guinea and Australia, including the suspension of movement for expatriate fly-in fly-out workforces across the resource sector. This includes a full suspension of travel for a period of two weeks.
The restriction is expected to reduce staffing levels at the Kainantu mine over the short term, with the company stating that it is not to “significantly” impact production, with a larger impact being felt by non-production activities, however specifics were not provided.
What will impact production however is an incident that involved an underground loader, which is now preventing backfilling operations. Stoping operations at the mine have been stopped for approximately two weeks, with production from four high grade stopes to be pushed to the second quarter, resulting in lower grade stockpile being used during the current quarter. This is not expected to have an impact on 2021 production guidance however.
K92 Mining last traded at $6.50 on the TSX.
Information for this briefing was found via Sedar and K92 Mining. The author has no securities or affiliations related to these organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
