K92 Upsizes Senior Secured Credit Facilities, Enters Offtake Agreement with Trafigura

K92 Mining and its Papua New Guinea subsidiary, K92 Mining Limited (K92 PNG), have entered into two separate credit facilities with Trafigura. The credit facilities replace the previous loan agreement with Trafigura announced in September 2023 and upsize, on an aggregate basis, the 2023 loan facility amount from $100 million to $120 million, with an accordion feature to increase the aggregate amount available under the credit facilities to $150 million. The key terms of the credit facilities are set out below._x000D_
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The credit facilities may be used for general corporate purposes, working capital purposes, and capital expenditure. No hedging is required for the credit facilities. All conditions precedent for advance of $100 million under the Canadian credit facility have been satisfied, with the remaining $20 million subject to a Condition Precedent under K92’s control and expected to be satisfied later this month, with the funds for the additional $20 million available January 1, 2025. The Accordion Feature will become effective by mutual agreement between K92 and Trafigura. The 2023 loan facility has been terminated and the parties have entered into an agreement to release all security therewith. The credit facilities further strengthen K92’s strong financial position, with $73.4 million in cash and treasury bills and no debt as at March 31, 2024._x000D_
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In addition, K92 PNG and Trafigura have entered into a new offtake agreement for the purchase by Trafigura of 100% of K92 PNG’s copper/gold concentrates produced at the Kainantu Gold Mine in Papua New Guinea, replacing the amended offtake agreement announced on September 26, 2023 which did not come into effect. Key terms of the new offtake agreement remain substantially the same as the amended and restated offtake agreement. The new offtake agreement has received regulatory approval in Papua New Guinea subject to compliance with certain conditions, including but not limited to, K92 PNG observing the conditions of its gold export license._x000D_
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“The closing and upsizing of the loan to up to $150 million is an important financial de-risking milestone for delivering the stage 3 and 4 expansions, which will transform K92 and the Kainantu Gold Mine into a Tier 1 Mid-Tier Producer,” John Lewins, CEO and director of K92, said. “Importantly, this boost to liquidity enables K92 to confidently continue to rapidly advance multiple high priority exploration targets concurrently. We would also like to acknowledge our relationship with Trafigura, which has been our offtake counterpart since the start of operations at the Kainantu Gold Mine. These agreements further reinforce our strong relationship. The new offtake agreement also secures long-term competitive terms and provides security and confidence in our income from the sale of our concentrate product.”