Oliver Turner, VP of Corporate Development at Karora Resources (TSX:KRR – OTCQX:KRRGF), joins me to review the strong production metrics and increased earnings from Q3 2023 and Year-to-date operations through September, along with a comprehensive development and exploration update at their Beta Hunt gold and nickel operations and other operations in Western Australia through year end, and the strategy moving into 2024. 

Key Q3 and Year-to-date Operations and Financial Metrics:

• Production of 39,547 gold ounces increased 3% from 38,437 ounces in the third quarter of 2022, with year-to-date 2023 production of 120,197 ounces increased 24% from 96,578 ounces for the same period in 2022.  The Company ended the third quarter well-positioned to achieve full-year 2023 production guidance of 145,000 – 160,000 ounces.

• Q3 2023 cash operating costs and all-in sustaining costs (“AISC”) per ounce sold averaged US$1,062 and US$1,196, respectively. Year-to-date costs have averaged US$1,083 and US$1,188, respectively

• Revenue in Q3 2023 of $107.1 million increased 32% from Q3 2022, and 41,278 gold ounces were sold at an average realized gold price of US$1,931 per ounce.
• Year-to-date 2023 revenues totaled $314.5 million, 42% higher than $220.2 million in YTD 2022 mainly reflecting a 30% increase in gold sales and a realized gold price that was US$89 per ounce higher than comparable period in 2022.

• Cash flow provided by operating activities in Q3 2023 of $45.3 million, up 60% from $28.3 million in Q2 2022, and YTD 2023 cash flow provided by operating activities of $100.6 million was almost double from $51.7 million in YTD 2022.

• Net earnings of $6.9 million ($0.04 per share) compared to net earnings of $4.4 million ($0.03 per share) in Q3 2022.  Adjusted earnings of $14.0 million ($0.08 per share) compared to $6.6 million ($0.04 per share) in Q3 2022
• Net earnings for YTD 2023 of $10.6 million ($0.06 per share) compared to net earnings of $0.3 million ($0.00 per share) for the same period in 2022; Adjusted earnings totalled $32.8 million ($0.19 per share), a 164% increase from $12.4 million ($0.08 per share) reported for YTD 2022.

We review the aggressive growth plans for production over the next few years, with the 2^nd mill in operation,  the completion of the  2^nd twin decline ramp (west) into the Beta Hunt mine, along with the increased ventilation raise to assist further development of stopes and underground exploration.     Oliver outlines that the continued expansion and efficiencies of Beta Hunt, along with steady contributions from the Higginsville Gold and Spargos operations, has the Company on track to support a growth goal to annualized production throughput rate of 2.0 Mtpa during 2024 and a target of 170,000-195,000 ounces of annual production. 

Shifting over to exploration at the  Beta Hunt gold-nickel mine, the Company continued to extend mineralization at Western Flanks,  the A Zone, and Larkin; as well as demonstrating the significant potential of the Fletcher Shear Zone and the Mason and Cowcill zones all emerging as important new resource growth and future mining opportunities.   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 40,000 tonnes with an average grade of 2.7% nickel, so to find more high-grade gold underneath it will further improve the economics of eventual development.

We wrap up having Oliver unpack the evolving strategy towards Carbon Neutral production as a key ESG factor in the critical minerals investing landscape. Additionally, he reviews the recent agreement with Kalamazoo Resources Limited (ASX: KZR)  to create a lithium and critical metals exploration company called Kali Metals Limited, that will start trading publicly in early 2024.  Karora has a 45% stake and Kalamazoo has 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, Higginsville, and Spargos.

If you have 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 at the time of this recording. 

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