chair. John has a deep respect for and commitment to Papua New Guinea, and as non-executive chair, he plans to continue traveling to Papua New Guinea, while maintaining important relationships with government and the resources industry. Chris Kinver, currently Vice President, Projects & Engineering, who's done an excellent job with the Stage 3 Expansion, he's transitioning to the role of Chief Operating Officer, and Anne Giardini is transitioning to the role of the director.
The transition provides significant continuity. On to the investment highlights. K92 is truly a unique tier 1 opportunity, a special situation in the precious metal sector. Effectively, May 2017, we made a disruptive near mine infrastructure discovery called Kora North, 2- 3 times the thickness, 2- 3 times the grade, a better geotech, geological continuity, metallurgy versus the Irumafimpa deposit that we were mining at that time.
We rapidly pivoted to mining it in late 2017, commenced commercial production in 2018, and due to the phenomenal characteristics of the deposit, we were able to largely self-fund multiple stages of expansion as shown on the chart on the bottom left, with our most transformational expansion currently underway, which is a Stage 3 Expansion.
Our targeting run rate average production of 300,000 oz gold equivalent per annum. We also have a Stage 4 Expansion, which is targeting a run rate average production of over 400,000 oz gold equivalent per annum. As shown on the chart on the bottom right, we have grown the resource significantly. High-grade vein resource is over 7 million ounces and with a limited amount of free cash flow from the mine, we did a disciplined porphyry program with a maiden resource at Blue Lake of 14.6 million ounces gold equivalent.
The team is very experienced, with a proven track record in Papua New Guinea. K92 has been operating in PNG for over 10 years now. ESG is a major focus for us, with strong relations with government, community, and our workforce. The company has a very strong balance sheet. This is due to strong product execution, strong operational execution, and also strong commodity price environment, where we actually significantly grew our cash balance during a major construction period.
Our stock has been re-rating, and we still see a significant re-rating in front of us, implied from average P/ NAV multiples of over 34%, while offering one of the best medium-term growth profiles in the sector. And I think as I go through the presentation, you'll see just tremendous asset quality. We ultimately see our stock trading at a premium P/ NAV multiple.
We are among one of the highest grade, lowest cost operating mines globally, as you can see on the table. And the point I'd like to make is that as we ramp up the operation, we expect costs to trend down. In terms of corporate structure, our market cap is around CAD 7 billion. We have a cash balance at mid-year financials of roughly CAD 350 million. Debt is CAD 40 million.
I will say that during the third quarter, our cash balance has grown, and we've also paid off a bit of debt. 13 investment banks cover us. We're about 70% institutionally held. Our largest shareholder is L1 Capital Pty Ltd out of Melbourne, Australia. A major strategic focus for us has been value creation through discovery. I'll take you through a few images here. So May 2017, this was when we made the discovery of Kora North.
Fast-forward four years, Kora and Judd grew to 5 million ounces gold equivalent, roughly. In that year, we were also awarded the Thayer Lindsley Award from the PDAC for Best Global Discovery. Fast-forward to September 2023, which is our latest resource. You have over 7 million ounces of high-grade Kora and Judd, and we plan to announce an updated resource to the market in Q1 of next year.
The other key part of our strategy is crystallizing the value creation through discovery, through strong project execution, strong operational execution, which has been realized through multiple stages of expansion. In 2020, we delivered the Stage 2A Expansion, doubling plant throughput to 400,000 tons per annum. In 2023, we delivered the Stage 2A Expansion, increasing plant throughput by 25%.
In 2025, we delivered our most significant expansion milestone to date, which is the completion of construction, commissioning, and the commencement of full operation of the Stage 3 Expansion process plant. It is a state-of-the-art, standalone 1.2 million ton per annum process plant.
We are currently ramping up the mine, targeting run rate average production of 300,000 oz gold equivalent per annum. We designed and built that plant to be easily expandable. What we did was we oversized the front end of the plant, the comminution circuit, and for low CapEx upgrades to the flotation circuit and the filter press, largely, we are able to increase plant throughput by 50% to 1.8 million tons per annum, implying run rate average production of over 400,000 oz gold equivalent per annum.
As of August 31st, 98% of Stage 3 Expansion growth capital has been either spent or committed, and the project remains on budget. In terms of operational performance, as you can see from the chart, we have a long history of increasing both physicals and metal production. When you look at 2026, our guidance is 190,000 oz-225,000 oz gold equivalent. In our guidance, we say that the second half of the year will be the strongest.
We continue to see this, and we see the strongest quarter in the fourth quarter driven by our ramp-up in physicals, but also benefiting from higher grade stoping sequence, as you have seen in years prior. In terms of mine physicals, in Q2, we took a major step forward, as you can see on the charts. So record ore tons processed, record total development, and record total mine material.
In Q3 and Q4, we continue to see a record-setting trend. I would like to make the point on lateral advance. In July, we set yet another monthly record of 1,220 m of lateral advance. This well exceeds the 1 km a month required for the Stage 3 Expansion and also the 1.2 km a month required for the Stage 4 Expansion.
In terms of the process plant performance, we delivered nine consecutive quarters of gold recoveries exceeding the DFS parameters. The last two quarters have been exclusively the new process plant. We have built a really good foundation to build off of, and the team is currently optimizing its performance. Copper recoveries have been roughly in line with the DFS parameters. A major part of the expansion is the transformation that we have done to the underground with major infrastructure upgrades.
When I presented on this stage last year, there were two check marks. There was one for the twin incline and one for the ore pass. We just started tipping tons down the first ore pass in August of 2025. Now we have two ore passes. We have one dedicated for ore, one dedicated for waste. We are developing the third ore pass, and that plans to come online in the fourth quarter.
The Puma vent incline, that broke through in late February, and the internal ramp was connected in late January. I am just going to walk through a few images here just to show the significant impact of the infrastructure upgrades that we are putting in or that we have put in. The image on the top left, that is the original incline. This is what we acquired from Barrick Gold Corporation.
Up until recently, this is where the vast majority of the ore tons came out of the underground mine. When you look at the image to the right, you see the new twin incline. This is significantly larger. The image to the right of that is the internal ramp. This was taken with the crew celebrating the connection in late January.
You can see on the banner, they said, we are one mine. This is particularly significant because it means all mining fronts are now connected to the highly productive twin incline. It also means that before then, we were operating two crews, two fleets, one for the upper mine, one for the lower mine. This is now one crew, one fleet, so significant synergies there.
If you recall from the prior slide, you would have seen that the twin incline sits below the vast majority of the resource. What that means is that we have this tremendous gravity advantage, which we leverage, and we leverage it through material passes. The image on the bottom left, what happens here is a truck is loaded in the upper mine, it hauls a short distance, and then it directly tips down a material pass.
This particular material pass, the material drops approximately 350 m vertically, leveraging gravity, and then it gets loaded at the bottom of the material pass where the twin incline is, and then those trucks report out that underground highway, the twin incline.
For years, ventilation has been a constraint for the operation, and I am pleased that in late February, we broke through the Puma incline, effectively breaking the back of our ventilation constraint. This increased our airflow by 75% to 350 cubes per second. We are in the process of commissioning our primary vent chamber, so we have already electrified it, and we will look to get that fully commissioned in the second half of October.
This will enable us to increase airflow to up to 700 cubes per second. This meets what we need for Stage 3, Stage 4, and beyond. Another key area that we focus for the expansion is opening up the mine. This is something that we have been doing for a number of years. In 2026, we are tripling the number of mining fronts.
At the beginning of the year, it was only front number one, and this is where we've been mining since commercial production. We call that the main mine. Front number two, we call that the Lower Kora. We started taking our first stope tons out of there in April, and we're ramping that up.
Front number three, the twin incline mining front, we took out our first stope out of Judd in September, and we're ramping that up. This is an image of the new Stage 3 Expansion process plant, and as noted earlier in the presentation, it is performing well, better than designed. In terms of ancillary construction projects, all these projects are complete except for the new maintenance facilities. Those are weeks away from completion. I'd just like to make a few key points here. The warehouse, you see the lighter colored part of the roof.
That's what we acquired from Barrick Gold. We've substantially expanded it. The Kumian Creek camp, we're in the process of doing another expansion to it because our personnel requirements are increasing. The primary standby power station, we've done the phase I and the phase II expansions to it. This actually meets what we need for the Stage 4 Expansion for the mine.
We actually delivered this project for roughly half of what the EPC tenders were. We did it ourselves, and this is yet another example of how we've been able to keep this project on budget. The last major key piece of infrastructure to go in for the Stage 3 Expansion is the process plant. As a reminder, we've taken a lower technical risk approach. We produce a tailings filter cake in the valley next to the process plant from the tailings filtration plant.
That gets backhauled up near the portal area in the surface storage area, and then that gets hauled on-demand underground to the underground paste fill plant, which is located near the center of the gravity of the deposit. This means that most of the paste fill is actually catered to conventionally by gravity, and what's above it is with manageable amounts of pumping.
In terms of its progress, the tailings filter plant, the construction's complete, commissioning's complete. We're currently in the optimization stage, producing dry stack tails. The surface binder blending facility, that is nearly complete, and we'll start commissioning that imminently. The underground paste fill plant, construction is rapidly advancing on multiple levels, and we'll look to start commissioning that in the fourth quarter. We've also made a major upgrade to our haul road and river crossings.
Before we made the river crossing upgrades, we were limited by a payload restriction of 20 tons. You can see on the image on the left that we now have 60-ton trucks operating. This happened very recently. We've also done a major expansion to our underground fleet and also a renewal of the fleet.
You can see from the table that a large focus has been on the load and haul, so increasing our trucks and loaders. We also have a jumbo rig that plans to arrive at the end of the year. This will push our capabilities well above the 1.2 km a month required for the Stage 4 Expansion. These are images from some of the various site visits from the PNG government. I'd say that there's actually a lot more site visits that have occurred, but this is only some of them.
Our relationships with the PNG government are very strong, and they are a key factor in our success to date. In terms of the Gantt chart, when I presented here last year, there was only two check marks. You can see there are a lot more check marks, and from the slides that I presented, you can see that there's many more check marks that are coming in the weeks to come.
In terms of exploration, it's been a major value driver for the company. We currently have 14 drill rigs operating. We have seven drill rigs operating underground, so those cover targets number 1 - 3. That's the Kora South, Judd South. We have seven drill rigs operating on surface. We have one on Judd North, we have five on Arakompa, and we have one on Wera.
I'm just going to walk you through a long section of the Kora South vein system. There's a few key takeaways, mining fronts that we're opening up. As you can see from the high drill density in those areas. Because we're largely through that infill drilling program for those fronts, we're now focusing more on step-out drilling.
Earlier in the year, we reported some excellent results from Kora Deeps. This is our first set of results from there. We also continued from our infill drilling to expand high-grade areas up dip, as shown in the dark black ellipse. From the infill drilling, we've also discovered some dilating zones near mine infrastructure, which are the two double-sided arrow blue dashed lines. Some of the drill highlights there include 20 m at 14 g and 16 m at 16 g.
As we're ramping up our lateral advance, we also plan to further push our drill drives to the south. That includes a 1,200 level drill drive and the twin incline. We have some really good vectors at Kora South and Kora South Deeps, and we're looking forward to getting into that.
When you look at Judd became an exploration focus in late 2020, so it's a few years behind Kora, but it has a similar story in a number of areas. First of all, the deep drilling results at Judd continue to show that the system is well mineralized at depth. The infill drilling in the upper black ellipse, we continue to upgrade high-grade areas as we increase the drill density. Judd North, which is highlighted there, we actually have one drill rig there now.
It started drilling one week ago, and we'll look to ramp that up. The other point I'd like to make is you can see from both the Kora and the Judd long sections that there is a lot of the quadrant area that has not yet been drilled. So we believe that we are just scratching the surface here. In terms of regional exploration, major focus for us is Arakompa.
It's located 4.5 km from the process plant, so it's actually closer than Kora and Judd. Arakompa is hosted in a different host rock than Kora and Judd. It's hosted in diorite and tonalite rock, so it's more permeable, which is why you get these big bulk zones. The average true thickness of this bulk zone here from drilling is roughly 40 m, and it's along a ridge line. So it's very substantial.
The bulk zone is punctuated by a number of high-grade veins. There are two in particular from this long section that have high continuity, which is AR1 and AR2. Last point to make on Arakompa is that it is just growing rapidly. You can see where we were when we announced the first set of drilling results in 2024. Fast-forward to the latest drilling results in 2025. We went from one drill rig operating in 2024 to now five drill rigs operating in 2026.
We have a big bulk zone, we have multiple high-grade veins, and we have an emerging porphyry story. We are looking at announcing a maiden resource for Arakompa either late this year or in Q1. My final slide, when I speak to my VP Exploration, he says that there is over 25 years of highly prospective drill targets in front of us.
I would just like to make the point that the exploration that I showed on these slides is just a snippet of the 830 sq km land package that we have. Thank you very much.
We have got a moment for any questions if there are any from the audience. We have got one in the front row, please.
Just wondering how many porphyry targets you will be drilling in the next 12 months.
Thank you. Thank you very much for that question. We are currently drilling one at Arakompa. That is the focus for us at the moment. Later in 2027, we see the potential to expand that to potentially a second porphyry, but I would say that the base case scenario is one porphyry at the moment.
Any other questions from the audience?
David, K92 has been a consistent story of growing, debottlenecking, growing again, and you now got a pathway to 1.8 million tons of throughput. Is there natural levels beyond 1.8 million tons , the blue sky, you might be able to get more out of the mine and what in it?
In terms of the underground mine, I think it's fair to say that we see it staying to 1.8 million ton per annum at the moment. Of course, if you find more subparallel veins or you increase the strike length, your ton per vertical meter profile changes, and then there's a decision later, but it really is exploration dependent. I would say that we see the potential beyond stage 4 from Arakompa at the moment.
Thank you. All right, at this stage, I'd like to thank David for presenting on behalf of K92. Thank you so much.
Yeah. Thank you, Damon.