Arakompa starts to look like K92’s next ore source

K92 Mining (TSX: KNT; US-OTC: KNTNF) may have outlined another gold-silver-copper ore source within trucking distance of its Kainantu plant in Papua New Guinea, as new assays push the Arakompa deposit closer to a first resource.

The sixth set of drill results, released Friday, covers 33 holes, all hitting mineralization, the company said. The results extend a high-grade vein system and filled-in broad shallow mineralization only 4.5 km from the plant. The AR1 deposit, about 380 km northwest from the capital Port Moresby, now stretches about 300 metres vertically and 400 metres along strike from roughly 100 metres depth.

“Arakompa is continuing to evolve from a satellite exploration target into a potentially meaningful near-mine growth opportunity for the company,” Canaccord Genuity Capital Markets Mining Analyst Peter Bell said in a note on Friday. “The combination of high-grade veins with broader near-surface mineralization is encouraging and suggests Arakompa could deliver both grade and scale in the upcoming resource estimate expected in the coming weeks.”

Hole KARDD0076 assayed 11.9 metres grading 14 grams gold per tonne, 9 grams silver and 0.18% copper starting at 144.6 metres downhole, including 1.7 metres of 91.55 grams gold, 44 grams silver and 0.35% copper. Hole KARDD0106 returned 10 metres grading 15.11 grams gold, 4 grams silver and 0.06% copper from 102 metres, including 4 metres of 36.5 grams gold, 6 grams silver and 0.09% copper.

Both sit inside much wider mineralized runs, including 99 metres of 2.76 grams gold, 4 grams silver and 0.09% copper in KARDD0076 and 140.1 metres of 1.21 grams gold, 2 grams silver and 0.03% copper in KARDD0106.

K92’s Toronto-listed shares dropped nearly 5% on Friday afternoon at $22.74 apiece. The company has a market capitalization of $5.6 billion (US$4 billion).

Growth oriented

While Arakompa sits close to the company’s mill, it remains outside the current mine plan and now shows both narrow high-grade veins and longer, shallower widths that could add tonnes as well as grade in a maiden resource due mid-year.

“Drilling continues to demonstrate a large, near-surface mineralized system,” CEO John Lewins said in the press release. “Importantly, surface sampling indicates that mineralization extends to surface along Arakompa’s known 2-km strike length.”

The parallel AR2 vein adds another potential source of growth. Hole KARDD0084G hit 4.7 metres grading 41.46 grams gold per tonne, 4 grams silver and 0.38% copper. Hole KARDD0104 returned 6.8 metres of 15.11 grams gold, 6 grams silver and 0.04% copper. Hole KARDD0090 cut 3.4 metres of 20.21 grams gold, 5 grams silver and 0.03% copper.

Those are the kind of hits that can quickly lift an early resource when they sit this close to existing infrastructure, Canaccord’s Bell noted.

The broader mineralized envelope is notable too since it is thought able to support near-term resource growth. K92 reported 105.4 metres grading 2.17 grams gold, 2 grams silver and 0.06% copper in KARDD0084G, 106.5 metres of 2.11 grams gold, 3 grams silver and 0.07% copper in KARDD0090, 137.35 metres of 0.95 gram gold, 3 grams silver and 0.08% copper in KARDD0094 and 177.55 metres of 0.9 gram gold, 2 grams silver and 0.08% copper in KARDD0100.

Producing comparables

The benchmark remains Kora and Judd, the deposits that feed Kainantu. Proven and probable reserves there total 6.18 million tonnes grading 6.7 grams gold, 19 grams silver and 1% copper for 1.32 million oz. gold, 3.7 million oz. silver and 61,000 tonnes copper.

Measured and indicated resources stand at 8.1 million tonnes grading 7.8 grams gold, 21 grams silver and 1.2% copper for 2 million oz. gold, 5.3 million oz. silver and 96,000 tonnes copper. Inferred resources add 16.5 million tonnes grading 5.7 grams gold, 27 grams silver and 1.5% copper for 3 million oz. gold, 14.3 million oz. silver and 248,000 tonnes copper.

Porphyry prospect

K92 is also probing a porphyry target south of the veins. Hole KARDD0077 returned 1,151.2 metres grading 0.11 gram gold, 2 grams silver and 0.16% copper, while KARDD0093G cut 800.7 metres of 0.14 gram gold, 1 gram silver and 0.17% copper. The company has assigned a second rig to that target.

Workers also drilled some intervals of potassic alteration on the porphyry target, suggesting they may be getting closer to a potassic core, Canaccord’s Bell suggested. “This would be a lower grade bulk tonnage target, apart from the veins,” he said.

“We note that Arakompa is not yet in the mine plan, but the target is becoming increasingly relevant given its proximity to infrastructure, growing scale and potential to support incremental resources alongside Kora/Judd,” Bell said. “We would expect the market to focus on the upcoming resource update for Arakompa as the next major catalyst.”