Karora will host a call/webcast on
Highlights
- First quarter 2021 consolidated gold production of 24,694 ounces and gold sales of 25,547 ounces was precisely on track with budget, positioning the Company well to deliver 2021 guidance. Full year consolidated 2021 gold production guidance of 105,000 to 115,000 ounces is maintained (assumes no significant interruption in operations as a result of the COVID-19 virus).
- First quarter 2021 consolidated all-in-sustaining-costs ("AISC")1 of
US$1,049 per oz. was in line with the full year 2021 guided range ofUS$985-$1,085 per ounce and sets the pace for continued strong cost performance during 2021. - Net earnings of
$5.6 million or$0.04 per share for the first quarter of 2021 compared to$0.5 million in the first quarter of 2020. First quarter earnings were negatively impacted by a non-cash unrealized foreign exchange loss of$4.5 million (or$0.03 per share). - Adjusted earnings1 of
$8.1 million or$0.06 per share for the first quarter of 2021. - Adjusted earnings before interest, taxes depreciation and amortization ("EBITDA")1 was
$21.2 million or$0.15 per share for the first quarter of 2021, a$1.8 million increase compared to$19.4 million for the first quarter of 2020. - Cash flow from operating activities of
$18.7 million or$0.13 per share, a 53% increase compared to$12.2 million for the first quarter of 2020. - Cash Position and Balance Sheet: Karora ended the first quarter of 2021 with a strong cash position of
$76.7 million , and working capital of$63.2 million , slightly lower by$3.0 million and slightly higher by$6.4 million respectively fromDecember 31, 2020 . The cash position decrease was due to timing of planned investment into Karora's assets as part of 2021's capital program as well as a scheduledUS$2.5 million cash payment to Maverix Metals as part of the Beta Hunt royalty buy back agreement announced in 2020. - Phase I mill expansion to increase capacity by 15%, or 550 tonnes per day, to 1.6 million tonnes per annum is proceeding ahead of schedule having already achieved an annualized production rate of 1.5 million tonnes per annum (up from the prior capacity of 1.4 million tonnes per annum).
- 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.The Larkin Zone discovery was announced inSeptember 2020 . - Second new high grade nickel discovery at Beta Hunt in the last six months, known as the "
Gamma Zone - 50C", where 1.6% nickel over 4.6 metres, including 18.4% nickel over 2.2 metres was intersected in hole G50-22-005E. The drilling, 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. - At the
Lake Cowan prospect, air core drilling on the dry salt lake returned an interval of 1.35 g/t gold over 50 metres, including 3.64 g/t over 16 metres from hole HIGA8864, an excellent result from first pass drilling in this underexplored area. - At the
Spargos Reward Gold Project , continued strong drilling results were announced, including 6.1 g/t over 14.0 metres in hole SPDD0003, which confirmed the interpreted high grade gold plunging shoot thesis by extending the shoot to over 300 metres down-plunge (remains open down-plunge).
After recently visiting site upon my relocation to
Karora delivered a solid financial performance in the first quarter of 2021 with adjusted EBITDA of
With Karora's strong cash balance of
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COVID-19 Protocols
In response to the global COVID-19 pandemic, Karora's protocols and contingency plans have mitigated impacts of the pandemic. Karora's operations continued at expected levels, consistent with the Corporation's full year 2021 guidance for the first quarter of 2021. 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.
Results of Operations
Table 1 - Highlights of operational results for the periods ended
Three months ended | ||
For the periods ended | 2021 | 2020 |
Gold Operations (Consolidated) | ||
Tonnes milled (000s) | 371 | 314 |
Recoveries | 93% | 93% |
Gold milled, grade (g/t Au) | 2.16 | 2.35 |
Gold produced (ounces) | 24,694 | 24,816 |
Gold sold (ounces) | 25,547 | 24,626 |
Average realized price (US $/oz sold) | ||
Cash operating costs (US $/oz sold)1 | ||
All-in sustaining cost (AISC) (US $/oz sold)1 | ||
Gold ( | ||
Tonnes milled (000s) | 233 | 186 |
Gold milled, grade (g/t Au) | 2.63 | 2.58 |
Gold produced(ounces) | 18,261 | 17,170 |
Gold sold (ounces) | 18,754 | 17,078 |
Cash operating cost (US $/oz sold)1 | ||
Gold ( | ||
Tonnes milled (000s) | 138 | 128 |
Gold milled grade (g/t Au) | 1.57 | 2.00 |
Gold produced (ounces) | 6,433 | 7,646 |
Gold sold (ounces) | 6,793 | 7,548 |
Cash operating cost (US $/oz sold)1 |
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Consolidated Operations
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
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. The increased weighting of Beta Hunt material was due primarily to increased productivity at Beta Hunt and a lower contribution from Higginsville Central as part of the planned ongoing transition to higher grade mining areas throughout 2021.
Beta Hunt
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. Gold production was 18,261 ounces and cash operating costs of
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. Two additional CAT R2900 underground loaders and two CAT AD60 trucks are planned for 2021 which are required as part of the continued production ramp up in 2021. The first of these two new trucks recently hauled its first load of ore at Beta Hunt in May.
Nickel production is currently limited to remnant nickel resources south of the Alpha Fault; however, recent drilling has identified a number of new areas including the high grade 30C Nickel Trough discovery where production can potentially be increased.
Furthermore, on
Higginsville ("HGO") Central
During the first quarter, 138,000 of HGO material was milled at an average grade of 1.57 g/t to produce 6,433 ounces of gold and cash operating costs of
In the first quarter of 2021 mine production from
With Higginsville Central mining primarily focused at Hidden Secret, minimal production occurred during the first quarter of 2021 at Baloo. Mine production from Baloo totaled 21,355 tonnes for the quarter. 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. Karora continues to evaluate the underground potential at Baloo.
At Two Boys dewatering and exploratory work was significantly advanced during the first quarter of 2021. Mining is on track to commence as planned in the second quarter of 2021.
Karora continues to target the development of a starter pit at the high-grade Aquarius deposit, located less than two kilometres from the HGO treatment plant. 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 (see Karora news release dated
The existing Aquarius historical resource1,2 is 20 kt @ 19.5 g/t (Measured and indicated) and 43 kt @ 4.2g/t (Inferred) will be updated as part of the Corporation's 2021 resource report.
¹ Karora Resources profile at www.sedar.com technical report, |
² Westgold 2018 Annual Update of Mineral Resources & Ore Reserves dated |
A qualified person has not done sufficient work on behalf of Karora to classify the historical estimate noted as current mineral resources and Karora is not treating the historical estimates as current mineral resources.
The first stage of a reverse circulation ("RC") drilling program designed to test the offset southerly strike extension of the main Spargos Reward zone was completed in the first quarter. 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. An updated gold Mineral Resource statement is expected later in the second quarter of 2021.
Results from the RC drilling program were reported in Karora news release dated
Cash Operating Costs and AISC1
For the first quarter, consolidated cash operating costs1 and AISC1 were
Outlook
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
The above guidance assumes no significant disruption in operations as a result of the COVID-19 pandemic.
Exploration
Karora has identified multiple high priority exploration targets for 2021 as part of its significantly expanded
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
At Beta Hunt's
The second new high grade nickel discovery at Beta Hunt at Beta in the last six months, known as the "
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. Significant gold intersections included 2.7g/t over 12.0 meters, including 10.1g/t over 1.4 metres in hole G50-22-002E and 5.2 g/t over 3.2 metres in hole G50-22-005E.
At Higginsville, exploration efforts are focused on completing the scout lake aircore drilling program over the
Additional advanced targets for exploration during 2021 include the
Financial Highlights
Table 2 - Highlights of First Quarter
(in thousands of dollars except per share amounts) | ||
For the three months ended | 2021 | 2020 |
Revenue | ||
Production and processing costs | 29,301 | 27,286 |
Earnings (loss) before income taxes1 | 10,336 | 884 |
Net earnings (loss) | 5,624 | 539 |
Net earnings (loss) per share - basic | 0.04 | 0.00 |
Net earnings (loss) per share - diluted | 0.04 | 0.00 |
Adjusted EBITDA2 | 21,210 | 19,434 |
Adjusted EBITDA per share - basic2 | 0.15 | 0.14 |
Adjusted earnings1 | 8,087 | 10,655 |
Adjusted earnings per share – basic1 | 0.06 | 0.08 |
Cash flow provided by (used in) operating activities | 18,658 | 12,204 |
Cash investment in property, plant and equipment and mineral property interests | (18,193) | (7,702) |
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Revenue for the first quarter of 2021, was
Net earnings for the first quarter of 2021 were
Adjusted EBITDA1 for the first quarter of 2021 were
Table 3 - Highlights of Karora's Financial Position
(in thousands of dollars): | ||
For the period ended | ||
Cash and cash equivalents | 76,747 | 79,695 |
Working capital1 | 63,215 | 56,835 |
PP&E & MPI | 237,808 | 239,044 |
Total assets | 347,612 | 350,099 |
Total liabilities | 134,786 | 142,895 |
Shareholders' equity | 212,826 | 207,204 |
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Karora's cash position remained strong at
For a complete discussion of financial results, refer to Karora's MD&A and unaudited condensed interim financial statements for the three months ended
Conference Call / Webcast
Karora will be hosting a conference call and webcast today beginning at
Live Conference Call and Webcast Access Information:
North American callers please dial: 1-888-231-8191
Local and international callers please dial: 647-427-7450
A live webcast of the call will be available through Cision's website at:
Webcast Link (https://produceredition.webcasts.com/starthere.jsp?ei=1457707&tp_key=bad1bad436)
A recording of the conference call will be available for replay through the webcast link, or for a one-week period beginning at approximately
North American callers please dial: 1-855-859-2056; Pass Code: 6279266
Local and international callers please dial: 416-849-0833; Pass Code: 6279266
Compliance Statement (JORC 2012 and NI 43-101)
The disclosure of scientific and technical information contained in this news release has been reviewed and approved by Stephen Devlin, FAusIMM, Group Geologist,
About
Karora is focused on growing gold production and reducing costs at its integrated
Cautionary Statement Concerning Forward-Looking Statements
This news release contains "forward-looking information" including without limitation statements relating to the liquidity and capital resources of Karora, production guidance and the potential of the
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Karora 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: 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 (known and unknown); 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. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to Karora 's filings with Canadian securities regulators, including the most recent Annual Information Form, available on SEDAR at www.sedar.com.
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. Forward-looking statements contained herein are made as of the date of this news release and Karora 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.
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