TORONTO, May 7, 2021 /CNW/ – Karora Resources Inc.
Paul Andre Huet, Chairman & CEO, commented: “I am pleased with Karora’s first quarter performance, which places us on a very strong footing to achieve our full year 2021 gold production guidance of between 105,000 and 115,000 ounces and AISC1 of US$985-$1,085 per ounce sold.
Once completed, as previously announced, the Phase I expansion will increase production capacity at our Higginsville mill in 2021 by approximately 15%, or 550 tonnes per day, to 1.6 million tonnes per annum from the prior capacity of 1.4 million tonnes per annum.
Karora delivered a solid financial performance in the first quarter of 2021 with adjusted EBITDA of $21 million or $0.15 per share, operating cash flow of $19 million or $0.13 per share and consolidated AISC1 of US$1,049 per ounce sold.
Karora’s ongoing response to the COVID-19 pandemic continues to prioritize the safety of its workforce and host communities while mitigating potential operational impacts.
For the first quarter of 2021, Karora’s gold operations milled 371,000 of material at an average grade of 2.16 g/t to produce 24,694 ounces of gold, the Corporation’s seventh consecutive quarter of consistent production of approximately 25,000 gold ounces since the acquisition of the Higginsville Mill in mid-2019.
The mill feed was made up of approximately 63% material from Beta Hunt underground and 37% material from Higginsville Central open pit compared to an average 55% from Beta Hunt and 45% from HGO in 2020.
Production for the first quarter of 2021 was 219,000 tonnes mined, a 33% increase over the first quarter of 2020, and 233,000 tonnes milled, a 25% increase over the first quarter of 2020.
The increased production is a direct reflection of improved mining techniques and a staged fleet replacement and upgrade program, including the addition of a CAT R2900 underground loader and two CAT AD60 trucks into the mining fleet.
Furthermore, on April 6, 2021 Karora announced the second new high grade nickel discovery at Beta Hunt in the last six months, known as the “Gamma Zone – 50C”, where 11.6% nickel over 4.6 metres, including 18.4% nickel over 2.2 metres was intersected in hole G50-22-005E.
In the first quarter of 2021 mine production from Hidden Secret totaled 141,078 tonnes and metallurgical recoveries were aligned with expectations at 92-93%.
A re-optimization of the pit was completed with additional mineralization identified in the northern portion of the pit which has driven the development of a new ramp from the south to allow additional open pit material to be mined from the North eastern corner.
As previously reported, near surface drilling identified a number of high grade supergene gold intersections, including 43.5 g/t over 3.0 metres and 5.7 g/t over 6.0 metres .
This program was part of HGO’s larger resource definition program with the aim of improving the confidence of the Spargos Reward main zone ahead of mining activities schedule to begin by mid-year.
The intersection of 6.1 g/t over 14.0 metres in diamond drill hole SPDD003 supports the interpretation of high grade gold mineralization extending over a down-plunge distance of over 300 metres.
For the first quarter, consolidated cash operating costs1 and AISC1 were US$952 and US$1,049 per ounce sold, respectively .
Karora is maintaining its previously announced full year consolidated 2021 production guidance of between 105,000 – 115,000 ounces of gold at an AISC range of US$985 to US$1,085 per ounce.
Exploration is separated into brown fields drilling which is predominantly aimed at upgrading and extending existing Mineral Resources and greenfields exploration, which is targeting new +250k oz discoveries.
At Beta Hunt, 7,837 metres of exploration drilling during the first quarter continued to focus on upgrading and extending the northern, up-plunge margin of the A Zone Mineral Resource and the recently discovered Larkin Gold Zone.
At Beta Hunt’s Larkin Zone, drilling intersected 19.0 g/t gold over 9.0 metres, including 542 g/t over 0.3 metres in hole EL-EA2-023E with visible gold mineralization observed in the drill core .
These results are 140 metres from existing mine development and reinforce the potential for a repeat of the Beta style mineralization south of the Gamma Island Fault, potentially representing a significant growth opportunity for by-product nickel production at Beta Hunt.
The drilling in Beta Hunt’s 50C discovery area, which was targeting nickel, also intersected gold mineralization above and below the 50C trough and suggests the Beta Hunt gold mineralized system extends for over 3.5 kilometres of strike from the northern end of the A Zone.
Following the receipt of assays from this initial drilling program, Karora intends to prioritize targets generated with reverse circulation and diamond drill programs to further test geochemical anomalies and aircore results.
Additional advanced targets for exploration during 2021 include the Spargos Project area, Mt Henry and the Sleuth trend which incorporates the Baloo deposit and the Nanook and Monsoon prospects.
The increase in revenue in 2021 was the result of a combination of higher gold ounces sold and higher realized prices which increased by 4% and 18%, respectively.
At Beta Hunt, a robust gold Mineral Resource and Reserve is hosted in multiple gold shears, with gold intersections along a 4 km strike length remaining open in multiple directions.
Factors that could affect the outcome include, among others: future prices and the supply of metals; the results of drilling; inability to raise the money necessary to incur the expenditures required to retain and advance the properties; environmental liabilities ; general business, economic, competitive, political and social uncertainties; results of exploration programs; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; or delays in obtaining governmental approvals, projected cash operating costs, failure to obtain regulatory or shareholder approvals.
Although Karora 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.