Below I present my largest position in my portfolio. I invested in K92 Mining for the first time around 2018. At that time, the share price was still 30 cents. Today at just under 12 euros. Since the first purchase, I have built up my main position over time and also hold a trading position that I build up and reduce depending on price fluctuations... 👍🏼
👉🏻 General introduction:
K92 Mining has emerged as one of the most exciting mid-tier gold producers in recent years. The Canadian company operates the high-grade Kainantu gold mine in Papua New Guinea - a project characterized by its exceptionally rich ore deposits and low production costs.
Over the past five years, K92 has written an impressive success story. After recommissioning in 2016, the mine was steadily expanded: the Stage 2 expansion followed in 2020, and production and resources have increased continuously since then. Despite short-term setbacks, such as a temporary production stop in 2024 following an accident, the long-term growth path remained intact. The management's declared goal is to develop the mine into a mid-tier 1 producer in the medium term.
👉🏻 Strong operational momentum:
In the second quarter of 2025, K92 achieved record revenues of USD 96 million - an increase of over 100% compared to the previous year - and a gross margin of around 69%. Cash costs were only USD 786 per ounce, well below the gold price level, while AISC (all-in sustaining costs) was around USD 1,450. The special feature here is that K92 Mining also includes all expansion costs for the ongoing Stage 3 expansion. As soon as this is completed, the AISC will also fall to below USD 1,000 per ounce. This makes K92 one of the cheapest producers in the world! With a production of approx. 180 thousand ounces for 2025, you can calculate the annual net profit at the current gold price.
In addition, K92 holds over USD 180 million in cash and is debt-free! 💵
👉🏻 Exploration strength and future potential:
Measured and indicated resources have increased by over 1,100 % since 2017. In addition to the existing Kora and Judd deposits, other zones within the 830 km² license area show considerable potential. With Stage 4, K92 is targeting production of over 300,000 ounces of gold equivalent per year in the medium term.
The other exploration targets include the Arakompa deposit, the Wera system and the Blue Lake Porphyry project. The latter alone contains inferred resources of 14.6 million ounces AuEq (gold equivalent). In other words, the potential is massive...
👉🏻 Current valuation and my conclusion:
The company is currently valued at a market capitalization of around CAD 5 bn, which is relatively high for a medium-sized producer. However, the P/E ratio is currently around 16 and the forward P/E ratio is a moderate 12. A dividend / share buyback has already been promised between the lines for 2026.
I still consider the company to be significantly undervalued, especially in view of its current earnings power and the Stage 3 and Stage 4 development plan.
Other positive catalysts include
-> Potentially further rising gold price / or gold price remains at a high level (> USD 3,500)
-> Huge exploration potential (existing license area)
-> M&A activities
I will continue to hold on to my shares. I still see 200-300% potential here over the next 2-3 years. If the Blue Lake Porphyry project materializes, even considerably more. 😊
