Kainantu - which has been in commercial production since 2018 - was expected to produce 115,000 to 140,000 ounces of gold equivalent this year, K92 said. Output last year was 104,196oz AuEq.
BMO Capital Markets analyst Andrew Mikitchook noted the guidance included some "conservatism" amid the ongoing COVID-19 concerns and said K92's outlook was below BMO's earlier forecast of 149,000oz, which was spurred on by a strong 2021 December quarter from the miner.
"In terms of COVID-19, it continues to be a factor to societies and industries globally, and, as a result, we have incorporated a contingency in our production guidance range by extending its lower bound," K92's CEO and director John Lewins said.
"It is also important to highlight that our resiliency to the pandemic has significantly improved over the past year, with over 65% of our workforce having received their first vaccine dose and COVID-19 control measures on site have proven durable to date," he added.
Last year, K92 was forced to lower its guidance in November from 115,000-135,000oz to 96,000-102,000oz due to staff shortages related to the pandemic.
Other 2022 guidance from K9 included cash costs of US$560-$640/oz, all-in sustaining costs of $890-$970/oz, growth capital of $41 million-$47 million, and exploration of $12 million-$15 million.
Mikitchook said BMO was updating its model on K92 to reflect the new guidance, including moving its production outlook lower.
"Our new estimates are $567/oz cash cost and $925/oz AISC, a 9% and 8% increase respectively. The increase is due in part to our moderately lower production estimate, as well as the slightly increased capital spending forecast," he said.
K92 said it planned a "major pivot" in drilling focus in 2022 to resource growth from what was previously largely infill-drilling.
"The resource update for Judd and Kora is planned to be announced together this quarter, and our stage-three definitive feasibility study and updated preliminary economic assessment are progressing well and planned for Q2 publication," Lewins said.
He also flagged the company's plan to commission its stage-two A expansion in the third quarter of 2022, which would increase throughput by 25% to 500,000 tonnes per year.
On January 25, K92 traded on the TSX at C$7.03. The company had a market capitalisation of C$1,564 million.
