Oliver Turner, VP of Corporate Development at Karora Resources (TSX:KRR – OTCQX:KRRGF), joins us to review the record production and increased earnings from Q1 2023 operations, along with a development and exploration update at their Beta Hunt gold and nickel operations in Western Australia.
First quarter 2023 consolidated gold production of 39,827 ounces exceeded target levels and increased 45% from the first quarter of 2022 reflecting growth of 27% in tonnes processed and a 13% improvement in average grade. Production ended the quarter on track to achieve full-year 2023 guidance of 145,000 – 160,000 ounces. Cash operating costs and all-in sustaining costs ("AISC") per ounce sold averaged US$1,124 and US$1,213, respectively, compared to US$1,310 and US$1,396, respectively, for same period a year earlier. Revenue totalled $96.8 million, 48% higher than in Q1 2022 reflecting a 38% increase in gold ounces sold, to 36,145 ounces, and was largely unchanged from the quarterly record set in the fourth quarter of 2022.
We review the aggressive growth plans for production over the next few years, as the company has now got a 2nd mill in operation, and has completed much of the development work on the 2nd twin decline ramp (west) into the Beta Hunt mine, which will allow more ore to be trucked for increased mill throughput moving forward. Oliver outlines some of the other ongoing development with the first of three ventilation raises at Beta Hunt completed on schedule and budget in Q1 2023. The expansion of Beta Hunt remains on track to support growth to annualized production rate of 2.0 Mtpa during 2024 and a target of 200,000 ounces of annual production 2 years out.
Shifting over to exploration at the Beta Hunt gold-nickel mine, the Company continued to extend mineralization at both Western Flanks and the A Zone and to demonstrate the significant potential of the Mason and Cowcill zones to emerge as important new mining opportunities. Subsequent to the end of Q1 2023, new high-grade gold intersections, including 6.5 g/t over 26 metres and 46.5 g/t over 7.0 meters, were released extending the drill-supported strike potential of the Fletcher Shear Zone by 900 meters for a total potential strike length of 1.4 km. The balance of exploration will come from the Higginsville Gold Operations and the new contributions from the Spargos deposit which just came online in Q4 of 2021. We also touch on the high-grade gold drill results returned recently under the already known Gamma Block of high-grade nickel. This area dubbed a “nickel mine within a gold mine” already has defined 35,000 tonnes of 2.7% nickel, with in-situ value around $1.3 Billion at today’s prices, so to find more high-grade gold underneath it will further improve the economics of eventual development.
We wrap up having Oliver unpack the recent agreement with Kalamazoo Resources Limited (ASX: KZR) to create a lithium and critical metals exploration company to be called Kali Metals Limited, where Karora will have a 45% stake and Kalamazoo will have a 55% stake in this new vehicle. The proposed transaction will allow Karora shareholders to participate in the significantly enhanced upside potential of a larger, combined lithium-focused investment vehicle that will fund its own exploration and development activities while Karora remains focused on growing its gold and nickel production base at both Beta Hunt and Higginsville.
Please email us with any questions for Oliver regarding Karora Resources, then please email me at Shad@kereport.com.
- In full disclosure Shad is a shareholder of Karora Resources.
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