Well, thanks for that, and good afternoon, everyone. K92 Mining, growing production, transformative discoveries, which I hope you'll get by the end of it. As always, forward-looking cautionary statements, you'll be distributed a questionnaire at the end of it to make sure that you've read all that so that we cover ourselves with the TSX. K92 Mining, very much a unique Tier 1 opportunity. Why? Rapid near-term growth to Tier 1/mid-tier producer towards 500,000 ounces. We just commissioned our Stage 3 expansion, which takes us to 300,000 ounces. That plant is actually designed to be able to take us up to 400,000 ounces over the next two years. An experienced team with a proven track record in Papua New Guinea.
We've been operating in Papua New Guinea for almost 10 years, and in that time, we've grown the Kainantu Mine from a mine that was on care and maintenance acquired from Barrick to the mine that it is today, strong balance sheet. At the end of last year, I think we had in excess of $230 million in cash, despite the fact that in 2024, 2025, we spent $350 million in capital and paid in excess of $100 million in corporate tax to the government. It's a large, high-grade resource, significant growth potential from multiple deposits. The high-grade resource currently is 7.1 million ounces at around nine grams per ton. In addition to that, we've got a significant lower grade resource of over 14 million ounces from a porphyry.
All of that, I think you can see, can lead us to a significant rerating potential ahead of the execution and during the execution of those expansions. ESG-focused. We're on grid power, which is hydropower. We've got a strong relationship both with the government, community, and the workforce. In terms of our valuation, you can see we're around 30% below our peer average, and if you look at our production growth between 2025 and 2028, it's about 130%. Very significant, not just potential, but potential that's actually being realized already this year. We're amongst the highest grade, lowest cost operating mines globally. Reserve grade currently, 8.5 grams per ton. In 2025, we mined at 10.3.
As you can see, our forecast all-in sustaining cost is around $1,300, which is elevated as we are in an expansion phase, which actually we've been in for about the last eight years. 2025, very much a transformative year for K92. We completed the construction and commissioning of our Stage 3 expansion process plant. That was a brand-new plant built on-site. It's a flotation plant with gravity recovery. You can see there, that was the official opening on October the 16th. That's the Prime Minister there shaking my hand, by the look of it, hopefully, together with our Chair and what have you. In terms of our operational guidance for 2026, 190,000-225,000 ounces. That's very much ramping up our underground to meet our surface production capacity. On a by-product basis, cash cost of $710-$770, and AISC of $1,250-$1,350.
If we look at it on co-product basis, that's $980-$1,040 and $1,480-$1,580. Again, all-in sustaining costs, significantly higher than cash costs because right now we are doing significant development underground, which is designed to open up and sustain the operation to ultimately 1.8 million tons per annum, 400,000 ounces a year. Significant investment in exploration. Last year, we spent a bit under $20 million. This year, we're looking at $31 million-$35 million. We're the largest explorer in Papua New Guinea. Roughly one out of every two dollars that's spent on exploration in Papua New Guinea is spent by K92 Mining. We've very much been a company that has been in expansion mode basically for the last eight years.
We completed our Stage 2 expansion, 400,000 tons per annum, during COVID, at a time which we couldn't bring a single outside contractor consultant into the country. It was all done in-house by our own people. Having successfully completed that, we then moved on to Stage 2A to take us to 500,000 tons per annum. That was all upgrading our existing plant. Stage 3 was then the new plant, which I spoke about, taking us to 300,000 ounces. The new plant, the front end of it, the crusher, the mill, et cetera, are designed to be able to go up to 1.8 million tons per annum. With about $20 million expenditure on the flotation and filtration, we get to 1.8 million tons per annum, all fully financed.
As you can see there, as of the end of the last quarter, 96% of our expansion growth capital had either been spent or committed. I make the point, it's the first time in the history of PNG that a plant has actually been built in budget. You can see the benefit of expansion on expansion on expansion as our production has grown since we declared commercial production in the first quarter of 2018. Obviously, in order to support that growth in production, we've increased material that we process. We've increased our total development meters. First quarter of this year was a record for us, the first time we've done 3,000 meters of development in a quarter, and that's the level that we need to be at to sustain our Stage 3 expansion.
That'll be going up to around 1,200 meters a month or 3,600 per quarter by the end of the year, which is what we need for our Stage 4. In terms of the process plant itself, the new process plant actually averaged, in the first quarter, 95.1% recovery of gold against 92.6% being what the test work had actually said we'd be able to achieve. The plant is doing 2.5% better recovery than we anticipated. That's 2.5% that you pay nothing for. You've already mined it. You've already paid to process it. That's a significant impact in terms of cash flow and what have you. Copper recovery's about where we expected. In looking at the near-term transformation of the mine, we've been busy with major infrastructure upgrades. First of all, there's the twin incline. I can see the green.
I doubt if anyone else can, but that's the white line at the bottom with the number one on it and five at the end. So we commenced in 2020, putting in a new twin incline, a 6 by 6.5 by 5.5, coming in at 125 to open up the mine and make maximum use of gravity to be able to actually bring our material out from the mine. That was completed in '24, beginning of '25, and so that is fully operational. Ore pass system, number two. So we bought our own equipment, our own raise bore. So we actually do our own raise boring to put in both our internal ventilation shafts and also our material movement. That does up to a five-meter diameter, up to about 500 to 600 meters.
We like to control our own destiny, so rather than getting a contractor to do it, we actually bought our own. We have three raise bores, which can do various size diameters. Again, first of those systems are in, so now we have a mine that rather than tracking material down the old incline, which is a 4 by 4.5, we're actually bringing it down to the new ore pass system, able to run larger trucks and run surface trucks all the way underground to our plant. Number three there, Puma Vent Incline. That actually broke through last month. That significantly increased our ventilation flow, about 175% increase, and that gives us life of mine infrastructure for ventilation. The internal ramp system. You've got the twin incline has come in 300 meters below our operating level.
We've got to ramp down and ramp up to interconnect the two. That breakthrough was done in January, so now we have one single mine, which is all interconnected. The fifth is Paste Fill, which we're busy with right now, and that'll be commissioned by the end of this year. To give you some idea about some of those things, the twin incline, you'll see there on the left is the existing incline to the main mine. That's a 4 by 4.5. That's the one that was there when we bought the mine from Barrick. On the right is the 6 by 6.5 of the new twin incline. As you can see, it's a little bit better finished.
Importantly, from our perspective, we go from being able to bring a 45-ton truck out of the mine, going at about 10 km an hour, to being able to run a 60 or 70-ton surface truck at 40 km an hour coming out of the mine. As you can imagine, that's a fairly major impact. In terms of the internal ramp, you can see there we had the breakthrough. It's always a point of trepidation when you've got a ramp that's coming down and a ramp that's going up, and you hope that your survey is right. As you can see from the picture, we got the survey right and the breakthrough was pretty much on time and as predicted. Ore pass system. You're using gravity because this is a mine that you go up into.
You're using gravity to bring it down to your bottom tramming level, and then you're putting it onto tracks and taking it out. Again, significant improvement in terms of both material movement and cost of material movement. In terms of the ventilation, you can see here our primary fans, two 1.85 MW fans. They're among the largest that you would see underground. Variable speed, variable pitch. These are life-of-mine installations. We actually only need one fan for about the next five years. Based on the current design, we actually never need two fans running at full speed. I mentioned that we're on hydropower, but we also have complete installed standby power. This has just been in the process of being expanded to 15.3 MW of power to allow for our Stage 4.
This allows us to bring in the hydro grid power as well as our diesel power, and also to bring in solar power, which is something that we're looking to put in partnership with our provincial government. The other major area that we need to be able to increase our production is increasing our mining fronts. Originally, we were operating with just what we call the current mining front, which is a bottom-up mining from the 1,185 level. Subsequent to that, we've been opening up four new levels. We started the second level, which is developing again as a bottom-up, and then a third level, which is actually coming in from the twin incline. Once we bring in our paste fill, of course, we effectively double all of that because then we'll be able to do bottom-up and top-down at the same time.
In terms of other enhancements, we're pretty much committed to using Sandvik equipment. This is one of the LH517i loaders. In this particular case, you can see that the loader is able to be operated from a tele-remote system from surface. We can actually operate these loaders from surface. We've actually just come from a meeting with Sandvik for a couple of days in Finland, looking at various enhancements for both our loader and drilling and trucking fleet. Strong PNG government stakeholder support. We're one of the largest payers of corporate tax in Papua New Guinea. Earlier this year, in fact, just a couple of weeks back, we paid our first tax installment for 2026 to the government, which was PGK 287 million.
And I'm sure that, I mean, Switzerland, everybody knows all the various currencies, so I'm sure you'll very quickly be able to convert that into around about 70 million of US dollars. And that was our first of three installments for the year. The Prime Minister actually put out a one-page press release to say how good we were at paying tax, et cetera, which went some way to overcoming the sadness of giving away $70 million. I'd point out that despite the fact that we paid that we've been paying capital for our stage four expansion, our cash balance went up significantly in the first quarter as well. Just giving you an idea of the various near-term deliveries of our stage three and four expansion. You can see our new plant, which is on the right. And again, I don't think you can really see this.
On the left is the old plant, which is now on care and maintenance. I'd point out, commissioning of the plant actually went ahead of schedule. We actually shut down the old plant about a month prior to when we intended. As I've shown earlier, it's actually running at about 2.5 percentage points better recovery than designed. Some of the various other projects that we've been doing, including the warehouse, camp, et cetera, I think it's the second biggest camp in Papua New Guinea. It's about 1,800 people on average per night. I think we've got about 2,400 beds in the camp. Paste fill is the last part of the puzzle, if you like, that we're busy with. Here you can see the tailings filter plant. We're taking our tailings, we're filtering it to produce a dry product.
We then transport that with the trucks that bring down the ore up to just outside the portal, and then we take it underground to actually make the final product that goes into the stopes. Around 60% of our tailings actually goes back underground. Other improvement is upgrade of our roads. The roads we inherited could take a truck carrying 20 tons. That's all. We've been operating with that since we took the mine over. We're replacing the two bridges, three bridges actually, two bridges with bridges, and a third one with a culvert system. It's the largest culvert in Papua New Guinea. That's a 10-meter diameter culvert designed for a one in 20,000-year event. Hopefully, I won't be around. Maybe it'd be good if I am. Maybe I'll live a long time to actually see that event.
That now allows us to go up to a 70 ton load being able to transport down, over three times. Just in closing, exploration. That's what's built this company. That's what we're focused on in many ways. That's what we're committed to, being the largest explorer in the country. We got multiple high-grade vein systems and porphyry targets. If you look at the high-grade vein systems, this is Kora. Kora in the pink is the K1, K2 veins. Each one is three to six meters wide, about 20 meters apart. You can see the area below. We just put out some results which included holes at 200 meters below the existing resource. We're now extending the resource down at depth. We're also pushing it along to the south and the north.
You can see that on a number of those holes where we've got up to 30 m at 8 grams per ton, we've actually identified a number of dilatant areas. Although they are in the envelope, they are not within the resource. Judd, far less drilling. There's over 1,000 holes in Kora. It's a parallel vein system about 100 m away. Same thing, if we look down at what we call the Judd Deep, up to 350 m below the existing resource, you've got 8.5 m at 8.6 grams per ton. Again, showing that it's going down dip, it's going along strike.
John, if we could finish off, please.
Yep. Finally, Arakompa is just one of the many other projects that we're working on. We'll have our first resource on Arakompa middle of this year. An updated resource on Kora and Judd at the end of this year, and that'll be the first time that we've put an updated resource out on Kora, Judd for three years. We expect to see a significant increase in the resource, as well as replacing our depletion. With that, it says that I'm now a 004. No, I'm a 007. Okay. Thank you very much.
Thank you. Sadly, we're out of time. I've got lots of questions to ask on that growth profile, which is quite exciting. Sadly, time does not permit. I'm sure John would be happy to take questions privately. Thank you very much.
Thank you.