K92 Mining (TSX: KNT; US-OTC: KNTNF) announced on Tuesday that underground operations at its Kainantu gold mine have been temporarily suspended following the death of an employee on March 10.
Following the incident, processing operations at the mine in Papua New Guinea were halted for three days, and have since resumed on the existing stockpiles.
Initial investigations by the company and PNG police have led to the conclusion that the incident is “non-industrial” in nature.
On March 13, PNG authorities ordered a temporary suspension of underground operations, pending the completion of action orders in relation to an independent safety audit and the installation of a collision avoidance system.
Work on these action orders is underway and were in process before the issuance of the action orders, the Canadian gold miner said in a news release.
Given the non-industrial nature of the incident, and the procedural, determination and jurisdictional breaches of the Mining (Safety) Act in issuing the action orders, the company said it filed an appeal last Thursday and expects this to be addressed shortly.
The death adds to a list of others reported at Kainantu over the past year. Last May and June, two separate vehicular accidents occurred in or around the mining area, leading to the deaths of two workers in each instance.
The Kainantu project in PNG’s Eastern Highlands province was originally acquired from Barrick Gold (TSX: ABX; NYSE: GOLD) in 2014, and it has become K92’s flagship operation. The mine is now entering its next phase of expansion to ultimately become a Tier 1 operation with a per-annum run rate of up to 470,000 oz. gold equivalent.
Shares of K92 Mining were down 5.3% to $6.01 apiece on Tuesday morning, valuing the company at $1.4 billion. Its shares traded in a 52-week range of $4.64 and $8.25.
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