K92 Mining TSE: KNT reported record mining and processing activity in the second quarter of 2026, alongside revenue of $205.2 million and a record $349.4 million cash balance, as the company advanced its Stage 3 and Stage 4 expansion projects at the Kainantu mine in Papua New Guinea.
Chief Executive Officer and Director John Lewins said Kainantu produced 46,093 gold-equivalent ounces during the quarter. Mill throughput reached a quarterly record of 225,965 tonnes, while head grade was 6.7 grams per tonne gold equivalent. Gold recovery was 93.8%, exceeding the updated definitive feasibility study parameter for the ninth consecutive quarter.
Record physicals support expansion ramp-up
Underground operations recorded 426,012 tonnes of material mined and 228,254 tonnes of ore mined, both quarterly records. Lewins attributed the increase to the ramp-up of a second mining front, improved material movement capacity following the June completion of a second material pass, and prior completion of the internal ramp and Puma Vent Incline surface breakthrough.
Total mine development reached a record 3,326 meters, up 35% from a year earlier and 11% above the 3-kilometer quarterly development rate required for the Stage 3 expansion. The company achieved 1,150 meters of development in May and subsequently reported a monthly record of 1,220 meters in July.
Lewins said the July development result exceeded the Stage 4 expansion requirement of 1.2 kilometers per month, even before completion of several planned enabling projects and the expected arrival of another jumbo drill late in the fourth quarter. He said the performance positions the company to exceed Stage 4 development requirements beginning in early 2027.
K92 reiterated its 2026 production guidance. Management expects second-half production to be strongest as mine physicals and plant throughput increase, additional infrastructure projects enter service, and a higher-grade stoping sequence is scheduled for the fourth quarter.
Revenue and cash position rise
Chief Financial Officer Justin Blanchet said quarterly revenue increased 113% year over year to $205.2 million. The company sold 46,682 ounces of gold at an average selling price of $4,493 per ounce, compared with 28,864 ounces at $3,166 per ounce in the prior-year period.
Cost of sales was $64.7 million, compared with $32.4 million a year earlier. Excluding non-cash items, cost of sales was $49.8 million, compared with $26.2 million in the prior-year quarter. Blanchet said the higher costs reflected significantly greater mining and processing activity associated with the Stage 3 ramp-up.
Cash flow from operating activities before working-capital changes was $105.1 million, up from $47 million in the prior-year quarter. As of June 30, K92 had $349.4 million in cash and cash equivalents, working capital of $396.7 million, and net cash of $310 million. The company also had $60 million available under undrawn credit facilities and repaid $5 million of loan principal during the quarter.
On a by-product basis, K92 reported cash costs of $859 per gold ounce and all-in sustaining costs of $1,376 per ounce. Blanchet said cash costs increased from the prior-year period largely because of lower head grades, partly offset by higher by-product credits. He said the company expects economies of scale to put downward pressure on costs as operations ramp up and Stage 3 is completed.
The company’s gold-price protection program covers 10,000 ounces per month through the end of 2026 at a strike price of $3,500 per ounce. Blanchet said the put options provide downside protection without limiting exposure to gold prices above the strike price.
Infrastructure projects near key milestones
K92’s Stage 3 expansion is designed to support throughput of 1.2 million tonnes per year and annual run-rate production of 300,000 gold-equivalent ounces. Stage 4 is intended to increase run-rate output to more than 400,000 gold-equivalent ounces, with expanded plant commissioning targeted for late 2027.
Among the projects expected to support the ramp-up, K92 plans to complete electrical commissioning of its primary ventilation fan upgrade during the current quarter. The project is expected to increase ventilation capacity from 350 cubic meters per second to more than 600 cubic meters per second, with potential expansion above 700 cubic meters per second through benching of the Puma Vent Incline.
The company is also progressing road and river-crossing upgrades intended to support a new 60-tonne Volvo haul-truck fleet. Phase 1, including three river crossings and selected road widening, remained on track for completion during the quarter, while Phase 2 road improvements are planned for completion by year-end.
Meanwhile, K92 said the tailings filter plant is practically complete and produced its first filter cake in late April. The broader paste-fill system is expected to redirect about 60% of tailings underground and support higher mining rates. Commissioning of surface paste-fill facilities is expected this quarter, while the underground paste plant is planned to be commissioned in the fourth quarter.
Exploration advances at Kora, Judd and Arakompa
Vice President of Exploration Rob Smillie said K92 had 16 rigs operating or being commissioned across its exploration programs, including underground drilling at Kora and Judd and surface drilling at Arakompa and Wira. A heli-portable rig is planned to begin drilling at Mati late in the third quarter.
At Arakompa, K92 released 33 new holes in June and has now reported results from 100 holes in its maiden surface drilling program. Smillie said drilling has defined two high-grade lodes, AR-1 and AR-2, as well as bulk-tonnage zones and a prospective porphyry system to the south.
- AR-1 drilling included 11.9 meters grading 14.3 grams per tonne gold equivalent, 10 meters grading 15.21 grams per tonne, and 14.5 meters grading 17.33 grams per tonne.
- AR-2 results included 4.7 meters grading 41.9 grams per tonne gold equivalent and 3.4 meters grading 20.31 grams per tonne.
- Porphyry step-out drilling included 1,151.2 meters grading 0.3% copper equivalent and 800.7 meters grading 0.33% copper equivalent.
K92 is planning a maiden resource estimate for Arakompa in the second half of 2026. Smillie said the Kora and Judd systems also remain open in multiple directions, while surface drilling at Judd North is expected to begin in late third quarter.
Lewins also highlighted the company’s sustainability efforts, including the June publication of its 2025 sustainability report. He said 91% of K92 employees and permanent contractors are from Papua New Guinea and that the company had paid $139 million in taxes and royalties in 2025. Corporate tax paid in the first half of 2026 was approximately $121 million, surpassing the full-year 2025 amount, according to Lewins.
About K92 Mining (TSE:KNT)
K92 Mining Inc is engaged in the production of gold, copper and silver at the Kainantu Gold Mine in the Eastern Highlands province of Papua New Guinea, as well as exploration and development of mineral deposits in the immediate vicinity of the mine. The Company declared commercial production from Kainantu in February 2018, is in a strong financial position, and is working to become a Tier 1 mid-tier producer through ongoing expansions. A maiden resource estimate on the Blue Lake copper-gold porphyry project was completed in August 2022.
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