Mine Offtake Agreement

VANCOUVER, British Columbia, July 02, 2019 (GLOBE NEWSWIRE) — K92 Mining Inc. („K92“ or the „Company“) (TSXV: KNT; OTCQB: KNTNF) is pleased to announce, that K92 and Trafigura Pte Ltd. („Trafigura“), a leader in the global raw materials industry, has entered into a loan agreement under which Trafigura K92 provides Trafigura with a $15 million loan (the „loan“) and an acquisition agreement for the purchase of 100% of K92 copper-gold concentrate at the Kainantu gold mine in Papua New Guinea by Trafigura. As far as product quality is concerned, the question is whether a buyer can refuse delivery of a product outside of contractual specifications. In the case of weight loss agreements, specific levels of refusal are sometimes provided. However, if not, it can be controversial. In the absence of a specific contractual refusal threshold and agreed penalties for the supply of „off-spec“ products, the purchaser may argue that the absence of sanctions provisions gives him the right to refuse shipments that do not meet contractual specifications. Such a position will be more difficult if the contract provides for price adjustments in terms of quality, which are at least likely the result of the seller`s delivery of an „off-spec“ product. Taketake agreements are often used in the development of natural resources, where the cost of capital for resource extraction is high and the company wants a guarantee that part of its product will be sold. In addition, an acquisition agreement facilitates the financing of producers to pass a project through the construction of mines.

A lender or investor is more willing to finance a project if it is certain that companies are already lining up to buy the tons of metal it will produce. Of course, if the index or repository disappears, the parties are forced to find a new solution, but they may be diametrically opposed to what this solution should be. A page may try to apply a new index published by index providers to replace the previous index. The other party may consider that the new published index is calculated differently, is based on different cash inputs, or does not work because of the parties` tailored price adjustments. In each of these cases, the replacement reference may not be appropriate to be used in the agreement between the parties without some new adjustments being included in the price formula. Like long-term gas sales contracts, many long-term mining agreements will include price adjustment mechanisms, also known as price adjustment clauses, requiring parties to renegotiate elements or variables in the price formula, including the basic benchmark or benchmark used for pricing. However, unlike gas sales agreements, which have drawn attention in recent years to such clauses, price review mechanisms have not been the subject of such detailed commentary in long-term mining off-tac, royalty and streaming agreements. The company recently signed its 5th taketake contract of 10,000 tons per year for a period of three years. The total number of off-take agreements signed therefore amounts to 128,000 t over three years. These agreements represent approximately 85% of the company`s expected production during this period. Our customers are present in various markets, including refractory, expandable graphite and battery-powered anode equipment.