K92 Mining Secures US$15 Million Loan and Offtake Agreement with Trafigura

• Executed Loan Agreement with Trafigura for US $15 million for expansion of the Kainantu Gold Mine.
  
• Offtake Agreement covering 100% production of copper/gold concentrates at competitive industry terms with no minimum quantity requirements.
• Continuing relationship with Trafigura, our offtake partner since the start of operations at Kainantu.

VANCOUVER, British Columbia, July 02, 2019 -- K92 Mining Inc. (“K92” or the “Company”) (TSXV: KNT; OTCQB: KNTNF) is pleased to announce that K92 and Trafigura Pte Ltd. (“Trafigura”), a market leader in the global commodities industry, have entered into a loan agreement pursuant to which Trafigura will provide a US $15 million loan (the “Loan”) to K92 and an offtake agreement for the purchase by Trafigura of 100% of K92’s copper/gold concentrate produced at the Kainantu gold mine located in Papua New Guinea.

KEY TERMS

US $15 Million Loan

• Two-year term Loan with three-month repayment grace period followed by twenty-one repayment installments.
• Competitive interest rates.
• No hedging conditions.
• Proceeds to be used primarily for expansion of K92’s Kainantu Gold Mine located in Papua New Guinea.
• Loan is initially unsecured;
• The Loan includes conditions subsequent in relation to the provision of security over assets of K92 and its subsidiary, K92 Mining Limited; once these obligations are satisfied, the Conversion Right referred to below expires.
• During the initial period prior to the provision of security, the agreement provides that in certain circumstances of default, Trafigura may accelerate repayment of the Loan. Subject to a grace period, if the Loan is not then repaid, Trafigura may convert all or any portion of the Loan into common shares of K92 at a conversion price equal to US$1.3794 per share (the “Conversion Right”).
• Drawdown under the Loan is subject to a number of customary conditions precedent for transactions of this nature, including receipt of TSX Venture Exchange acceptance.

Offtake Agreement

• Nine-year term ending February 11, 2028 or until a minimum of 165,000 dry metric tonnes (“Minimum DMT”) of concentrate has been delivered, whichever is later. If Minimum DMT has been delivered during the nine-year period, K92 is then only required to sell 50% of K92’s annual production until the end of the term of agreement.
• Competitive industry terms in relation to all metrics at London Metals Exchange spot prices.
• Attractive payment arrangements which provide for upfront payment on delivery of concentrates to port of dispatch and provision of certain shipping documents.
• Competitive transport charges.

John Lewins, K92 Chief Executive Officer and Director, stated, “We are extremely happy to announce a major strategic funding and offtake agreement which continues our partnership with Trafigura, our offtake partner since the start of operations at Kainantu mine. These agreements reinforce our strong relationship with Trafigura and reflect its confidence in the project and in the ability of the K92 team to meet its goals and obligations in terms of production and the current expansion.

The loan provided by Trafigura allows K92 to continue with the timely expansion of the Kainantu mine to double current capacity to 400,000 tonnes per annum, increasing annual production to an average of 120,000 ounces of gold equivalent. The offtake agreement secures a long-term offtake at competitive industry terms and provides security and confidence in relation to income from sale of our products.”

On Behalf of the Company,

John Lewins, Chief Executive Officer and Director

For further information, please contact the Company at +1-604-687-7130.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. All statements that address future plans, activities, events, or developments that the Company believes, expects or anticipates will or may occur are forward-looking information, including statements regarding the anticipated benefits from the Loan and the Offtake Agreement, the anticipated use of proceeds, expectations of future cash flows, the proposed plant expansion, potential expansion of resources and the generation of further drilling results which may or may not occur. Forward-looking statements and information contained herein are based on certain factors and assumptions regarding, among other things, the market price of the Company’s securities, metal prices, exchange rates, taxation, the estimation, timing and amount of future exploration and development, capital and operating costs, the availability of financing, the receipt of regulatory approvals, environmental risks, title disputes, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, claims and limitations on insurance coverage and other risks of the mining industry, changes in national and local government regulation of mining operations, and regulations and other matters. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.