Karora Resources Inc. (TSX: KRR) ("Karora" or the "Company" - https://www.commodity-tv.com/ondemand/companies/profil/karora-resources-inc/) today announced financial and operating results for the first quarter of 2024 (“Q1 2024”). The Company’s unaudited condensed interim financial statements and management discussion & analysis (“MD&A) are available on SEDAR at www.sedarplus.ca and on the Company’s website at www.karoraresources.com. All dollar amounts are in Canadian dollars, unless otherwise noted.
Karora will host a call/webcast on May 13, 2024 at 10:00 am (Eastern Time) to discuss the first quarter 2024 results. North American callers please dial: 1-888-664-6383; Local and international callers please dial: 416-764-8650. To join the conference call without operator assistance, you may register and enter your phone number at the Callback Link to receive an instant automated call back and be placed into the call. For the webcast of this event click the Webcast Link
https://app.webinar.net/qPWvB7E8zl7
(replay access information is provided below).
Paul Andre Huet, Chairman and CEO, commented: “We are off to a strong start to 2024 with record quarterly revenue of over $115 million in Q1. The record result was driven by robust gold sales of over 40,000 ounces for the first quarter, coupled with the current strong gold price environment resulting in operating cash flow of $43 million. Our financial performance in the first quarter was solid with adjusted earnings of $13.3 million ($0.07 per share), up 177% from $4.8 million from the same period a year ago and a $10 million improvement compared to the prior quarter.
The Beta Hunt Mine continued to demonstrate why we consider it to be our cornerstone asset with gold production of 31,249 ounces in Q1. The mine's cost performance during the quarter was excellent, with cash operating costs of US$869 per ounce, which was an improvement from the prior quarter and from the same period one year ago. The solid operating performance at Beta Hunt is a direct result of the effective execution of our growth plan by the operations team.
Beta Hunt also continued to generate very encouraging exploration results. Results from the Stage 2 infill program at the Fletcher zone continue to demonstrate why we are so excited about this area as a very significant new gold mineralized system just west of Beta Hunt’s largest and most prolific zone to-date – Western Flanks. As a reminder, in the first quarter, we reported some exciting intersections at Fletcher (3.8 g/t over 33.0 metres, 15.2 g/t over 3.3 metres and 34.6 g/t over 2.0 metres, see Karora news release dated February 22, 2024). As we reported in March, we have commenced development of an exploration drive towards the Fletcher Shear Zone and expect to access this mineralization in the third quarter. The potential of this area is an exciting part of our 2024 mine plan and could provide additional flexibility with new working faces as we continue the ramp up towards 2.0 Mtpa at Beta Hunt.
Overall, our cost performance came in as planned for Q1 at US$1,285 per ounce sold, well within our full year 2024 AISC guidance range of US$1,250 to US$1,375 per ounce. While we experienced cost pressures at our HGO mines in Q1 driven by extreme weather and additional waste stripping, we benefitted from higher nickel by-product credits in Q1 of US$54 per ounce compared to only US$5 per ounce in the prior quarter, demonstrating why we are excited about the potential for nickel by-product credits from new nickel areas we plan to develop with mechanized mining. As a reminder we are at a competitive advantage at Beta Hunt, with our growing gold infrastructure and operations carrying the majority of the fixed costs required to access the proximal nickel areas, providing us with tremendous flexibility to exploit our very high-grade nickel zones throughout the same mine – an enviable position.
Finally, but most significantly, we announced a very exciting merger transaction with Westgold on April 7. This is very good news for Karora shareholders that delivers a premium price once approved and provides ongoing exposure to the strong gold market conditions through a 49.9% interest in the new merged Westgold/KRR which will be largest unhedged gold producer in Australia. The new merged company offers value to its shareholders in many ways, including substantial synergies potential in the order of $440 million, rerating potential as a larger entity, expected buying from new TSX and ASX index inclusions and the flexibility to further unlock the growth potential of both sets of assets with a strong combined balance sheet and significantly expanded equipment fleet at Westgold. It is clear to me that together Karora and Westgold offer all our shareholders a compelling vehicle in which to participate in this historic gold price rally, unlocking significant value across both asset bases that could not be achieved as standalone companies.”
Cautionary Statement Concerning Forward-Looking Statements
This news release contains "forward-looking information" which may include, but is not limited to, statements relating to the liquidity and capital resources of Karora, production and cost guidance including the Consolidated Multi-Year Guidance to 2024, the Company’s multi-year growth plan, the potential of Beta Hunt, HGO, and Spargos and its exploration properties, successfully obtaining permitting, the future financial or operating performance of the Company and its projects, the future price of and supply and demand for metals, the estimation of mineral reserves and resources, the realization of mineral reserves and resources estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new and existing deposits, costs and timing of future exploration as well as the potential of exploration at Beta Hunt, HGO, Spargos, and the Company’s exploration properties, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, the success of mining operations, economic return estimates and potential upside. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate” or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Readers should not place undue reliance on forward-looking statements.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could affect the outcome include, among others: project delays; general business, economic, competitive, political and social uncertainties; labour and operational disruptions due to any public health crises (including a resurgence of COVID-19), or other widespread public health issues, results of exploration programs; future prices of metals; availability of alternative metal sources or substitutions; actual metal recovery; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; the future cost of capital to the Company; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; delays in obtaining governmental approvals, necessary permitting or in the completion of development or construction activities, as well as those factors discussed in the section entitled “Risk Factors” in the Company’s December 31, 2023 MD&A and Annual Information Form for the year ended December 31, 2023 filed on SEDAR+. Such forward-looking statements are also based on a number of material factors and assumptions, including: the availability of financing at rates and on terms and conditions otherwise acceptable to the Company; future metal prices; permitting and development consistent with the Company’s expectations; foreign exchange rates; prices and availability of equipment; that contracted parties provide goods and/or services on the agreed time frames; that on-going contractual negotiations will be successful and/or be completed in a timely manner; and that no unusual geological or technical problems occur.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws. Given these risks and, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Readers of this report are cautioned that actual events and results may vary.
For further information please see the attachment.
Karora will host a call/webcast on May 13, 2024 at 10:00 am (Eastern Time) to discuss the first quarter 2024 results. North American callers please dial: 1-888-664-6383; Local and international callers please dial: 416-764-8650. To join the conference call without operator assistance, you may register and enter your phone number at the Callback Link to receive an instant automated call back and be placed into the call. For the webcast of this event click the Webcast Link
https://app.webinar.net/qPWvB7E8zl7
(replay access information is provided below).
Paul Andre Huet, Chairman and CEO, commented: “We are off to a strong start to 2024 with record quarterly revenue of over $115 million in Q1. The record result was driven by robust gold sales of over 40,000 ounces for the first quarter, coupled with the current strong gold price environment resulting in operating cash flow of $43 million. Our financial performance in the first quarter was solid with adjusted earnings of $13.3 million ($0.07 per share), up 177% from $4.8 million from the same period a year ago and a $10 million improvement compared to the prior quarter.
The Beta Hunt Mine continued to demonstrate why we consider it to be our cornerstone asset with gold production of 31,249 ounces in Q1. The mine's cost performance during the quarter was excellent, with cash operating costs of US$869 per ounce, which was an improvement from the prior quarter and from the same period one year ago. The solid operating performance at Beta Hunt is a direct result of the effective execution of our growth plan by the operations team.
Beta Hunt also continued to generate very encouraging exploration results. Results from the Stage 2 infill program at the Fletcher zone continue to demonstrate why we are so excited about this area as a very significant new gold mineralized system just west of Beta Hunt’s largest and most prolific zone to-date – Western Flanks. As a reminder, in the first quarter, we reported some exciting intersections at Fletcher (3.8 g/t over 33.0 metres, 15.2 g/t over 3.3 metres and 34.6 g/t over 2.0 metres, see Karora news release dated February 22, 2024). As we reported in March, we have commenced development of an exploration drive towards the Fletcher Shear Zone and expect to access this mineralization in the third quarter. The potential of this area is an exciting part of our 2024 mine plan and could provide additional flexibility with new working faces as we continue the ramp up towards 2.0 Mtpa at Beta Hunt.
Overall, our cost performance came in as planned for Q1 at US$1,285 per ounce sold, well within our full year 2024 AISC guidance range of US$1,250 to US$1,375 per ounce. While we experienced cost pressures at our HGO mines in Q1 driven by extreme weather and additional waste stripping, we benefitted from higher nickel by-product credits in Q1 of US$54 per ounce compared to only US$5 per ounce in the prior quarter, demonstrating why we are excited about the potential for nickel by-product credits from new nickel areas we plan to develop with mechanized mining. As a reminder we are at a competitive advantage at Beta Hunt, with our growing gold infrastructure and operations carrying the majority of the fixed costs required to access the proximal nickel areas, providing us with tremendous flexibility to exploit our very high-grade nickel zones throughout the same mine – an enviable position.
Finally, but most significantly, we announced a very exciting merger transaction with Westgold on April 7. This is very good news for Karora shareholders that delivers a premium price once approved and provides ongoing exposure to the strong gold market conditions through a 49.9% interest in the new merged Westgold/KRR which will be largest unhedged gold producer in Australia. The new merged company offers value to its shareholders in many ways, including substantial synergies potential in the order of $440 million, rerating potential as a larger entity, expected buying from new TSX and ASX index inclusions and the flexibility to further unlock the growth potential of both sets of assets with a strong combined balance sheet and significantly expanded equipment fleet at Westgold. It is clear to me that together Karora and Westgold offer all our shareholders a compelling vehicle in which to participate in this historic gold price rally, unlocking significant value across both asset bases that could not be achieved as standalone companies.”
Cautionary Statement Concerning Forward-Looking Statements
This news release contains "forward-looking information" which may include, but is not limited to, statements relating to the liquidity and capital resources of Karora, production and cost guidance including the Consolidated Multi-Year Guidance to 2024, the Company’s multi-year growth plan, the potential of Beta Hunt, HGO, and Spargos and its exploration properties, successfully obtaining permitting, the future financial or operating performance of the Company and its projects, the future price of and supply and demand for metals, the estimation of mineral reserves and resources, the realization of mineral reserves and resources estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new and existing deposits, costs and timing of future exploration as well as the potential of exploration at Beta Hunt, HGO, Spargos, and the Company’s exploration properties, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, the success of mining operations, economic return estimates and potential upside. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate” or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Readers should not place undue reliance on forward-looking statements.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could affect the outcome include, among others: project delays; general business, economic, competitive, political and social uncertainties; labour and operational disruptions due to any public health crises (including a resurgence of COVID-19), or other widespread public health issues, results of exploration programs; future prices of metals; availability of alternative metal sources or substitutions; actual metal recovery; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; the future cost of capital to the Company; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; delays in obtaining governmental approvals, necessary permitting or in the completion of development or construction activities, as well as those factors discussed in the section entitled “Risk Factors” in the Company’s December 31, 2023 MD&A and Annual Information Form for the year ended December 31, 2023 filed on SEDAR+. Such forward-looking statements are also based on a number of material factors and assumptions, including: the availability of financing at rates and on terms and conditions otherwise acceptable to the Company; future metal prices; permitting and development consistent with the Company’s expectations; foreign exchange rates; prices and availability of equipment; that contracted parties provide goods and/or services on the agreed time frames; that on-going contractual negotiations will be successful and/or be completed in a timely manner; and that no unusual geological or technical problems occur.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws. Given these risks and, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Readers of this report are cautioned that actual events and results may vary.
For further information please see the attachment.
