TORONTO, May 15, 2023
/CNW/ - Karora Resources Inc. (TSX: KRR) ("Karora" or
the "Company") today announced financial and operating
results for the first quarter of 2023 ("Q1 2023"). The Company's
full unaudited condensed interim financial statements and
management discussion & analysis ("MD&A) are available on
SEDAR at www.sedar.com and on the Company's website at
www.karoraresources.com. All dollar amounts are in Canadian
dollars, unless otherwise noted.
RECORD QUARTERLY PRODUCTION
- Production of 39,827 ounces exceeded target levels and
increased 45% from the first quarter of 2022 ("Q1 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.
UNIT COSTS ON TRACK TO ACHIEVE 2023 GUIDANCE
- Cash operating costs1 and all-in sustaining costs
("AISC")1 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; AISC1 per ounce sold was in line with full-year
2023 guidance of US$1,100 –
US$1,250.
REVENUE MATCHES QUARTERLY RECORD SET IN Q4 2022
- 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 ("Q4
2022").
STRONG IMPROVEMENT IN OPERATING EARNINGS FROM Q1 2022 AND Q4
2022
- Operating earnings of $8.6
million improved from a Q1 2022 operating loss of
$2.3 million and increased 31% from
Q4 2022.
SOLID OPERATING CASH FLOW GENERATION
- Cash flow provided by operating activities before change in
non-cash working capital of $28.6
million more than doubled from the Q1 2022 level of
$12.2 million and increased 2% from
$28.2 million in Q4 2022.
EARNINGS PERFORMANCE REFLECTS NON-CASH, OTHER
EXPENSES
- Net loss of $2.9 million
($0.02 per share) improved from a net
loss of $3.7 million ($0.02 per share) in Q1 2022 and largely reflected
non-cash, unrealized losses of $6.2
million and $3.9 million
related to derivatives3 and foreign exchange,
respectively; Adjusted earnings totalled $4.8 million ($0.03
per share) versus $1.1 million
($0.01 per share) in Q1 2022 and
$8.7 million ($0.05 per share) in Q4 2022.
CONTINUED PROGRESS WITH GROWTH PLAN
- Development of second (west) decline and first of three
ventilation raises at Beta Hunt completed on schedule and budget in
Q1 2023; Expansion of Beta Hunt remains on track to support growth
to annualized production rate of 2.0 Mtpa during 2024.
ADDITONAL EXPLORATION SUCCESS HIGHLIGHTS FUTURE POTENTIAL OF
BETA HUNT
- Drilling at Beta Hunt 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 metres, were released extending the
drill-supported strike potential of the Fletcher Shear Zone by 900
metres for a total potential strike length of 1.4 km.
SOLID GROWTH IN RESERVES AND RESOURCES3
- Gold Mineral Reserves at Beta Hunt increased 12% to 538,000
ounces, with growth in gold Measured and Indicated Mineral
Resources of 20% to 1.35 million ounces; Nickel Measured and
Indicated Mineral Resources were increased 8% to 21,100
tonnes.
-
- Non-IFRS: the definition and reconciliation of these measures
are included in the "Non-IFRS Measures" section of this news
release and in the MD&A for the three months ended March 31, 2023.
- Relates to the Company's Morgan Stanley royalty agreement (see
Note 11 of the unaudited condensed interim consolidated financial
statements for the three months ended March
31, 2023 for more information).
- For a full review of the Mineral Reserve and Mineral Resource
estimates at Beta Hunt released during Q1 2023 and effective as of
September 30, 2022, please see the
technical report filed at www.sedar.com.
Karora will host a call/webcast on
May 15, 2023 at
10:00
am (Eastern Time) to
discuss the first quarter 2023 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
https://app.webinar.net/XOyDxmex2wA
(replay access information below).
Paul Andre Huet, Chairman and
CEO, commented: "We are off to a strong start in 2023, with
record quarterly production exceeding target levels driven by grade
outperformance and higher than expected tonnes mined and processed.
Our unit costs are tracking in line with our 2023 plan and guidance
and improved 14% from last year's first quarter. We also continued
to advance our capital programs on schedule and budget, with the
second decline and first of three ventilation raises at Beta Hunt
completed during the quarter. Overall, the expansion project
remains on track to support the mine's growth to an annualized
production rate of 2.0 Mtpa over the course of 2024 and we sit well
positioned to achieve all of our production, cost and capital
expenditure guidance for full-year 2023.
"A highlight of the quarter was the continued emergence of Beta
Hunt as a world-class mine with gold production of 26,577 ounces
exceeding planned levels and increasing by 55% from a year ago and
27% from last quarter. The mine's cost performance was excellent,
with cash operating costs of $967 per
ounce improving from both prior periods. In addition to solid
operating performance and effective execution of its growth plan,
Beta Hunt also continued to generate very encouraging exploration
results. We increased our gold mineral reserves and mineral
resources during the first quarter and, with the drilling results
we are getting, we are very confident that we will continue to grow
reserves and resources going forward. We are equally confident
that, within this world-class gold mine, we are well on our way to
establishing a profitable, long-term nickel mining operation that
will support further improvement in gold unit costs through higher
byproduct credits. The "mine within a mine" concept provides Beta
Hunt with an important competitive advantage and, with the growth
in nickel mineral resources being achieved and the drill results
being generated, we fully expect that nickel will become a more
substantial component of the Beta Hunt story.
"Turning to HGO, production of 13,250 ounces at HGO exceeded
plan and increased 28% from last year's first quarter. Cash
operating costs improved from a year ago and are expected to trend
lower, particularly later in the year when we commence open-pit
mining at our Pioneer project.
"Finally, our financial performance in the first quarter was
solid, with revenue matching the record level we reported last
quarter, operating earnings improving from both prior periods and
adjusted earnings more than tripling from a year ago. Operating
cash flow was strong and, while we recorded a slight decline in our
cash position (primarily related to reducing accounts payable), we
saw an improvement in working capital from $38.0 million at year end to $43.9 million at the end of the first quarter. We
expect to see cash growth resume over the course of the year as we
execute our expansion plan and deliver operationally into the
current strong gold price environment."
RESULTS OF OPERATIONS
Table 1. Results of Operations
|
Three months
ended,
|
|
Mar. 31 2023
|
Mar.
31 2022
|
Dec. 31,
2022
|
Gold Operations
(Consolidated)
|
|
|
|
Tonnes milled
(000s)
|
502
|
394
|
522
|
Recoveries
|
94 %
|
94 %
|
94 %
|
Gold milled, grade
(g/t Au)
|
2.62
|
2.31
|
2.37
|
Gold produced
(ounces)
|
39,827
|
27,489
|
37,309
|
Gold sold
(ounces)
|
36,145
|
26,286
|
39,900
|
Average exchange rate
(CAD/USD) 1
|
0.74
|
0.79
|
0.74
|
Average realized price
(US $/oz sold)
|
$1,877
|
$1,905
|
$1,737
|
Cash operating costs
(US $/oz sold)2
|
$1,124
|
$1,310
|
$1,034
|
All-in sustaining cost
(AISC) (US $/oz sold)2
|
$1,213
|
$1,396
|
$1,110
|
Gold (Beta Hunt
Mine)
|
|
|
|
Tonnes milled
(000s)
|
298
|
233
|
250
|
Gold milled, grade
(g/t Au)
|
2.92
|
2.42
|
2.76
|
Gold produced
(ounces)
|
26,577
|
17,109
|
20,870
|
Gold sold
(ounces)
|
23,077
|
16,128
|
22,342
|
Cash operating cost
(US $/oz sold)2
|
$967
|
$1,137
|
$992
|
Gold (HGO
Mine)
|
|
|
|
Tonnes milled
(000s)
|
204
|
161
|
273
|
Gold milled, grade
(g/t Au)
|
2.18
|
2.12
|
2.01
|
Gold produced
(ounces)
|
13,250
|
10,380
|
16,439
|
Gold sold
(ounces)
|
13,068
|
10,158
|
17,558
|
Cash operating cost
(US $/oz sold)2
|
$1,402
|
$1,586
|
$1,082
|
|
|
1.
|
Average exchange rate
refers to the average market exchange rate for the
period.
|
2.
|
Non-IFRS: The
definition and reconciliation of these measures are included in the
"Non-IFRS Measures" section of this news release and the MD&A
for the three months ended March 31, 2023.
|
3.
|
Numbers may not add due
to rounding.
|
Consolidated Operations
Consolidated gold production in the first quarter of 2023
totalled 39,827 ounces, a 45% increase from the first quarter of
2022 and 7% higher than 37,309 ounces the previous quarter. The
increase from the first quarter of 2022 resulted from a 27%
increase in tonnes milled and a 13% improvement in the average
grade.
Cash operating costs1 per ounce sold for the first
quarter of 2023 averaged US$1,124, a
14% improvement from $1,310 for the
same period in 2022 when the Company's operations were impacted by
disruptions caused by record COVID-19 cases in Western Australia. Cash operating
costs1 per ounce sold in the first quarter of 2023
increased 9% from the previous quarter reflecting higher
unit costs at HGO due to the impact of mine sequencing
and costs related to stockpiled material processed during the
quarter. AISC1 per ounce sold in the first quarter of
2023 averaged $1,213 compared to
$1,396 in the first quarter of 2022
and $1,110 the fourth quarter of
2022, with the changes from the prior periods mainly related to
changes in cash operating costs.1
Beta Hunt
During the first quarter of 2023, Beta Hunt mined 299,900 tonnes
at an average grade of 2.81 g/t containing 27,100 ounces of gold.
Mine production during the first quarter of 2023 increased 32% from
228,000 tonnes mined in the first quarter of 2022 at an
average grade of 2.45 g/t and was 19% higher than 252,500 tonnes at
an average grade of 2.84 g/t in the fourth quarter of 2022. The
majority of the scheduled mined tonnes during the first quarter
came from the A Zone and central section of Western Flanks with the
15% increase in grade compared to the first quarter of 2022 mainly
reflecting mining high-grade ore from the A Zone 17 Level.
Gold production from Beta Hunt in the first quarter of 2023
totalled 26,577 ounces based on milling 298,300 tonnes at an
average grade of 2.92 g/t. Production for the quarter increased 55%
and 27%, respectively, from the first quarter of 2022 and the
previous quarter due to higher tonnes processed and an increase in
the average grade from both prior periods.
Cash operating costs1 per ounce sold at Beta Hunt
averaged US$967 in the first quarter
of 2023, a 15% improvement from the first quarter of 2022 and 3%
lower than the previous quarter. Contributing to the improvement in
cash operating costs per ounce sold from both prior periods was a
higher average grade, which increased 21% and 6% from the same
period a year earlier and the previous quarter, respectively.
In addition to gold production, Beta Hunt mined 7,331 tonnes of
nickel ore at an estimated nickel grade of 2.22% during the first
quarter of 2023 compared to 5,243 tonnes of nickel ore mined at an
estimated nickel grade of 2.13% for the same period in 2022 and
5,755 tonnes of nickel ore at an estimated nickel grade of 2.00%
the previous quarter.
Higginsville Mining Operations
("HGO")
During the first quarter of 2023, HGO mined 72,200 tonnes
at an average grade of 3.85 g/t, which compared to 86,900 tonnes
mined in the first quarter of 2022 at an average grade of 2.67
g/t and 106,000 tonnes the previous quarter at an average grade of
3.34 g/t. The level of tonnes mined during the first quarter
of 2023 largely reflected the completion of mining from the Spargos
open pit late in 2022 and the transition to underground mining,
primarily at Aquarius, as well as a minor delay in development of
the Mouse Hollow open pit, with production from this target having
commenced during the second quarter of 2023.
Production at HGO in the first quarter of 2023 totalled 13,250
ounces based on milling 203,600 tonnes at an average grade of 2.18
g/t. Production in the first quarter of 2023 compared to production
of 10,380 ounces based on milling 160,800 tonnes at an average
grade of 2.12 g/t in the first quarter of 2022 and 16,439 ounces
based on milling 272,600 tonnes at an average grade of 2.01 g/t the
previous quarter.
Cash operating costs1 per ounce sold at HGO averaged
US$1,402 in the first quarter of 2023
versus US$1,586 for the same period
in 2022 and US$1,088 the fourth
quarter of 2022. The increase from the previous quarter reflected a
planned transition to a higher-cost production profile (during the
period after the completion of mining from the Spargos open pit and
prior to the commencement of production at the Pioneer open pit
later in 2023) as well as the impact of costs related to
stockpiled tonnes processed during the first quarter of 2023.
Processing Operations
A total of 380,900 tonnes were milled at the Higginsville mill
during the first quarter of 2023 (with 51% of mill feed coming from
Beta Hunt and 49% from HGO) at an average grade of 2.86 g/t.
Recovered gold totalled 33,148 ounces. Throughput at the Lakewood
Mill during the first quarter of 2023 totalled 121,000
tonnes (87% from Beta Hunt and 13% from HGO) at an average grade of
1.82 g/t. Recovered gold during the quarter totalled 6,679
ounces.
1.
|
Non-IFRS: the
definition and reconciliation of these measures are included in
the" Non-IFRS Measures" section of this news release and the
MD&A for the three months ended March 31, 2023.
|
FINANCIAL REVIEW
Table 2. Financial Overview
(in thousands of
dollars except per share amounts)
|
|
|
For the three months
ended March 31,
|
2023
|
2022
|
Revenue
|
$96,806
|
$65,272
|
Production and
processing costs
|
54,393
|
42,436
|
Loss before income
taxes
|
(1,744)
|
(2,153)
|
Net loss
|
(2,941)
|
(3,709)
|
Net loss per share –
basic
|
(0.02)
|
(0.02)
|
Net loss per share –
diluted
|
(0.02)
|
(0.02)
|
Adjusted EBITDA
1,2
|
28,636
|
12,203
|
Adjusted EBITDA per
share - basic 1,2
|
0.16
|
0.08
|
Adjusted earnings
1,2
|
4,847
|
1,120
|
Adjusted earnings per
share - basic 1,2
|
0.03
|
0.01
|
Cash flow provided by
operating activities
|
20,859
|
12,150
|
Cash investment in
property, plant and equipment and mineral property
interests
|
(19,854)
|
(24,784)
|
|
|
1.
|
Non-IFRS: the
definition and reconciliation of these measures are included in
the" Non-IFRS Measures" section of this news release and the
MD&A for the three months ended March 31, 2023.
|
For the three months ended March 31,
2023, the Company generated revenue of $96.8 million, a $31.5
million or 48% increase from the first quarter of 2022. Of
total revenue in the first quarter of 2023, $91.6 million was gold revenue, which compared to
$62.8 million in the first quarter a
year earlier. Contributing to the increase in gold revenue was a
$23.6 million favourable impact from
a 38% increase in gold sales, to 36,145 ounces. Rate factors,
including changes in the gold price and exchange rates, contributed
an additional $5.2 million to revenue
growth as the impact of a significantly stronger US dollar compared
to the Canadian dollar more than offset a slightly lower average
realized gold price compared to the first quarter of 2022.
Beta Hunt contributed $58.1 million
of total gold revenue in the first quarter of 2023, with HGO
contributing $33.5 million. During
the comparable period in 2022, Beta Hunt contributed $38.6 million of gold revenue, with the remaining
$24.2 million coming from
HGO.
Net loss for the three months ended March
31, 2023 totalled $2.9 million
($0.02 per share) compared to a net
loss of $3.7 million ($0.02 per share) for the three months ended
March 31, 2022. The improved net
earnings performance compared to the first quarter of 2022
reflected an 85% higher gross operating margin (revenue less
production and processing costs), which more than offset the impact
of increased deprecation and amortization expense, higher royalty
expense as well as the impact of $10.3
million of other expenses, net versus other income, net of
$0.2 million in the first quarter of
2022.
Adjusted earnings1 for the three months ended
March 31, 2023 totalled $4.8 million ($0.03
per share) versus $1.1 million
($0.01 per share) in the first
quarter of 2022. The year-over-year increase in adjusted
earnings reflected a $19.6 increase
in operating margin (revenue less production and processing costs),
partially offset by higher royalty and general and administrative
expenses and depreciation and amortization costs. The difference
between net earnings and adjusted earnings1 in the first
quarter of 2023 resulted from the exclusion from adjusted
earnings1 of the after-tax impact of losses on
derivatives and foreign exchange, non-cash share-based payments of
$1.7 million as well as an unrealized
gain on the revaluation of marketable securities.
1.
|
Non-IFRS: the
definition and reconciliation of these measures are included in
the" Non-IFRS Measures" section of this news release and the
MD&A for the three months ended March 31, 2023.
|
Table 3. Highlights of Liquidity and Capital Resources
(in thousands of
dollars)
|
|
|
|
For the three months
ended March 31,
|
|
2023
|
2022
|
Cash provided by
operations prior to changes in working capital
|
|
$28,642
|
$12,201
|
Changes in non-cash
working capital
|
|
(7,783)
|
296
|
Asset retirement
obligations
|
|
-
|
(347)
|
Cash provided by
operating activities
|
|
20,859
|
12,150
|
Cash used in investing
activities
|
|
(19,690)
|
(24,739)
|
Cash used in financing
activities
|
|
(3,289)
|
(1,017)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(789)
|
701
|
Change in cash and cash
equivalents
|
|
$(2,909)
|
$(12,905)
|
1.
|
Working capital is
calculated as current assets (including cash and cash equivalents)
less current liabilities.
|
2.
|
Financial liabilities
include long-term debt and lease obligations.
|
For the three months ended March 31,
2023, cash provided by operating activities, prior to
changes in non-cash working capital, totalled $28.6 million compared to cash provided of
$12.2 million for the same period in
2022. The increase compared to the first quarter of 2022 reflected
significantly higher earnings after giving affect to expenses not
impacting cash such as depreciation and amortization and losses on
derivative instruments and foreign exchange. Changes in non-cash
working capital represented a net use of cash totalling
$7.8 million during the three months
ended March 31, 2023, mainly
reflecting a $8.9 million reduction
in accounts payable and accrued liabilities and a $1.9 million increase in inventories, partially
offset by a $3.1 million reduction in
trade and accounts receivables.
Karora's cash position at March 31,
2023, totalled $65.9 million
compared to $68.8 million as
at December 31, 2022 with the reduction mainly reflecting
changes in working capital levels.
OUTLOOK
TWO-YEAR GUIDANCE (2023 – 2024)
The Company is maintaining its 2023 and 2024 production and cost
guidance. The targets included in the Company's outlook relate only
to the 2023 to 2024 period. This outlook includes forward-looking
information about the Company's operations and financial
expectations and is based on management's expectations and outlook
as of the date of this MD&A. This outlook, including expected
results and targets, is subject to various risks, uncertainties and
assumptions, which may impact future performance and the Company's
ability to achieve the results and targets discussed in this
section. The Company may update its outlook depending on changes in
metal prices and other factors.
Table 4. Two-Year Guidance (2023 – 2024)
|
|
2023
|
2024
|
Gold
Production
|
(Koz)
|
145 – 160
|
170 – 195
|
All-in Sustaining
Costs
|
(US$/oz
sold)
|
1,100 –
1,250
|
1,050 –
1,200
|
Sustaining
Capital
|
(A$M)
|
10 – 15
|
15 – 20
|
Growth
Capital
|
(A$M)
|
57 – 68
|
63 – 73
|
Exploration &
Resource Development
|
(A$M)
|
18 – 22
|
20 – 25
|
Nickel
Production
|
(Ni Tonnes)
|
450 - 550
|
600
– 800
|
|
|
1.
|
Production guidance is
based on the September 2022 Mineral Reserves and Mineral Resources
announced on February 13, 2023.
|
2.
|
The Company expects to
fund the capital investment amounts listed above with cash on hand,
cashflow from operations and through the financing of heavy
equipment.
|
3.
|
The material
assumptions associated with the expansion of Beta Hunt mining
production rate to 2.0 Mtpa during 2024 include the addition of a
second ramp decline system driven parallel to the ore body,
ventilation and other infrastructure that is required to support
these areas, and an expanded mining equipment and trucking
fleet.
|
4.
|
The Company's guidance
assumes targeted mining rates and costs, availability of personnel,
contractors, equipment and supplies, the receipt on a timely basis
of required permits and licenses, cash availability for capital
investments from cash balances, cash flow from operations, or from
a third-party debt financing source on terms acceptable to the
Company, no significant events which impact operations, such as
COVID-19, nickel price of US$22,000 per tonne, as well as an A$ to
US$ exchange rate of 0.70 in 2023 and 2024 and A$ to C$ exchange
rate of 0.90. Assumptions used for the purposes of guidance may
prove to be incorrect and actual results may differ from those
anticipated. See below "Cautionary Statement Concerning
Forward-Looking Statements".
|
5.
|
Exploration
expenditures include capital expenditures related to infill
drilling for Mineral Resource conversion, capital expenditures for
extension drilling outside of existing Mineral Resources and
expensed exploration. Exploration expenditures also includes
capital expenditures for the development of exploration
drifts.
|
6.
|
Capital expenditures
exclude capitalized depreciation.
|
7.
|
AISC guidance includes
Australian general and administrative costs and excludes
share-based payment expense.
|
8.
|
See "Non-IFRS Measures"
set out at the end of this MD&A
|
CONFERENCE CALL / WEBCAST
Karora will be hosting a conference call and webcast today,
May 15, 2023, beginning at
10:00 a.m. (Eastern time). The
accompanying presentation can be found on Karora's website,
www.karoraresources.com.
Live Conference Call and Webcast Access Information:
North American callers please dial: 1-888-664-6383
Local and international callers please dial: 416-764-8650
A live webcast of the call will be available through Cision's
website at: https://app.webinar.net/XOyDxmex2wA
A recording of the conference call will be available for replay
through the webcast link, or for a one-week period beginning at
approximately 1:00 p.m. (Eastern
Time) on May 22, 2023, through
the following dial in numbers:
North American callers please dial: 1-888-390-0541; Pass Code:
355899 #
Local and international callers please dial: 416-764-8677; Pass
Code: 355899 #
Non-IFRS Measures
This news release refers to cash operating cost, cash operating
cost per ounce, all-in sustaining cost, EBITDA, adjusted EBITDA and
adjusted EBITDA per share, adjusted earnings, adjusted earnings per
share and working capital which are not recognized measures under
IFRS. Such non-IFRS financial measures do not have any standardized
meaning prescribed by IFRS and are therefore unlikely to be
comparable to similar measures presented by other issuers.
Management uses these measures internally. The use of these
measures enables management to better assess performance trends.
Management understands that a number of investors and others who
follow the Corporation's performance assess performance in this
way. Management believes that these measures better reflect the
Corporation's performance and are better indications of its
expected performance in future periods. This data is intended to
provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
In November 2018, the World Gold
Council ("WGC") published its guidelines for reporting all-in
sustaining costs and all-in costs. The WGC is a market development
organization for the gold industry and is an association whose
membership comprises leading gold mining companies. Although the
WGC is not a mining industry regulatory organization, it worked
closely with its member companies to develop these non-IFRS
measures. Adoption of the all-in sustaining cost and all-in cost
metrics is voluntary and not necessarily standard, and therefore,
these measures presented by the Corporation may not be comparable
to similar measures presented by other issuers.
The following tables reconcile these non-IFRS measures to the
most directly comparable IFRS measures:
MINING OPERATIONS
Cash Operating and All-in Sustaining Costs
The Company uses these measures internally to evaluate the
underlying operating performance of the Australian Operations.
Management believes that providing cash operating cost data allows
the reader the ability to better evaluate the results of the
underlying operations.
CONSOLIDATED
For the three months
ended March 31,
|
|
|
2023
|
2022
|
Production and
processing costs 1
|
|
|
$64,927
|
$48,109
|
Royalty expense
1
|
|
|
5,753
|
3,634
|
By-product credits
1,2
|
|
|
(2,646)
|
(2,453)
|
Adjustment for toll
milling costs 1,3
|
|
|
(13,061)
|
(5,673)
|
Operating costs
(C$)
|
|
|
$54,973
|
$43,617
|
General and
administrative expense - Australia
|
|
|
3,800
|
2,232
|
Sustaining capital
expenditures
|
|
|
523
|
611
|
All-in sustaining costs
(C$)
|
|
|
$59,296
|
$46,460
|
Ounces of gold
sold
|
|
|
36,145
|
26,286
|
Operating costs (A$)
4
|
|
|
$59,476
|
$47,533
|
All-in sustaining costs
(A$) 4
|
|
|
$64,154
|
$50,631
|
Cash operating costs
per ounce sold (A$)
|
|
|
$1,645
|
$1,808
|
All-in sustaining costs
per ounce sold (A$)
|
|
|
$1,775
|
$1,926
|
Operating costs (US$)
4
|
|
|
$40,645
|
$34,447
|
All-in sustaining costs
(US$) 4
|
|
|
$43,842
|
$36,692
|
Cash operating costs
per ounce sold (US$)
|
|
|
$1,124
|
$1,310
|
All-in sustaining costs
per ounce sold (US$)
|
|
|
$1,213
|
$1,396
|
|
|
1.
|
Refer to Note 20 of the
March 31, 2023 unaudited condensed interim consolidated financial
statements.
|
2.
|
By-product credits
exclude $2,527 of third-party toll milling revenue.
|
3.
|
Adjustment for toll
milling costs includes $10,534 of intercompany tolling costs and
$2,527 of third-party tolling costs at Lakewood Mill.
|
4.
|
Average exchange rates
for the three months ended March 31, 2023 and 2022 include C$1-US$1
of 0.74 and 0.79, respectively, and A$1-US$1 of $0.68 and 0.72,
respectively.
|
BETA HUNT
For the three months
ended March 31,
|
|
|
2023
|
2022
|
Production and
processing costs 1
|
|
|
$27,995
|
$22,739
|
Royalty expense
1
|
|
|
4,814
|
2,899
|
By-product credits
1
|
|
|
(2,616)
|
(2,421)
|
Operating costs
(C$)
|
|
|
$30,193
|
$23,217
|
Ounces of gold
sold
|
|
|
23,077
|
16,128
|
Operating costs (A$)
2
|
|
|
$32,667
|
$25,302
|
Cash operating costs
per ounce sold (A$)
|
|
|
$1,416
|
$1,569
|
Operating costs (US$)
2
|
|
|
$22,324
|
$18,336
|
Cash operating costs
per ounce sold (US$)
|
|
|
$967
|
$1,137
|
|
|
1.
|
Refer to Note 20 of the
March 31, 2023 unaudited condensed interim consolidated financial
statements.
|
2.
|
Average exchange rates
for the three months ended March 31, 2023 and 2022 include C$1-US$1
of 0.74 and 0.79, respectively, and A$1-US$1 $0.68 and 0.72,
respectively.
|
HGO
For the three months
ended March 31,
|
|
|
2023
|
2022
|
Production and
processing costs 1
|
|
|
$36,932
|
$25,370
|
Royalty expense
1
|
|
|
939
|
735
|
By-product credits
1,2
|
|
|
(30)
|
(32)
|
Adjustment for toll
milling costs 1,3
|
|
|
(13,061)
|
(5,673)
|
Operating costs
(C$)
|
|
|
$24,780
|
$20,400
|
Ounces of gold
sold
|
|
|
13,068
|
10,158
|
Operating costs (A$)
4
|
|
|
$26,811
|
$22,232
|
Cash operating costs
per ounce sold (A$)
|
|
|
$2,052
|
$2,189
|
Operating costs (US$)
4
|
|
|
$18,322
|
$16,111
|
Cash operating costs
per ounce sold (US$)
|
|
|
$1,402
|
$1,586
|
|
|
1.
|
Refer to Note 20 of the
March 31, 2023 unaudited condensed interim consolidated financial
statements.
|
2.
|
By-product credits
exclude $2,527 of third-party toll milling revenue.
|
3.
|
Adjustment for toll
milling costs includes $10,534 of intercompany tolling costs and
$2,527 of third-party tolling costs at Lakewood Mill.
|
4.
|
Average exchange rates
for the three months ended March 31, 2023 and 2022 include C$1-US$1
of 0.74 and 0.79, respectively, and A$1-US$1 of $0.68 and 0.72,
respectively.
|
Adjusted EBITDA and Adjusted
Earnings
Management believes that adjusted EBITDA and adjusted earnings
are valuable indicators of the Company's ability to generate
operating cash flows to fund working capital needs, service debt
obligations, and fund exploration and evaluation, and capital
expenditures. Adjusted EBITDA and adjusted earnings exclude the
impact of certain items and therefore is not necessarily indicative
of operating profit or cash flows from operating activities as
determined under IFRS. Other companies may calculate adjusted
EBITDA and adjusted earnings differently.
Adjusted EBITDA is a non-IFRS measure, which excludes the
following from comprehensive earnings (loss); income tax expense
(recovery); interest expense and other finance-related costs;
depreciation and amortization; non-cash other expenses, net;
non-cash impairment charges and reversals; non-cash portion of
share-based payments; acquisition costs; derivatives and foreign
exchange loss; sustainability initiatives.
(in thousands of
dollars except per share amounts)
|
|
|
|
For the three months
ended March 31,
|
|
2023
|
2022
|
Net loss for the period
- as reported
|
|
$(2,941)
|
$(3,709)
|
Finance expense,
net
|
|
1,770
|
1,045
|
Income tax
expense
|
|
1,197
|
1,556
|
Depreciation and
amortization
|
|
18,386
|
8,754
|
EBITDA
|
|
18,412
|
7,646
|
Adjustments:
|
|
|
|
Non-cash share-based
payments 1
|
|
1,674
|
5,768
|
Unrealized loss (gain)
on revaluation of marketable securities 2
|
|
(1,537)
|
646
|
Other expense, net
2
|
|
54
|
(21)
|
Loss on derivatives
2
|
|
6,171
|
1,115
|
Foreign exchange loss
(gain) 3
|
|
3,862
|
(2,951)
|
Adjusted
EBITDA
|
|
$28,636
|
$12,203
|
Weighted average number
of common shares - basic
|
|
174,268,927
|
154,440,916
|
Adjusted EBITDA per
share - basic
|
|
$0.16
|
$0.08
|
|
|
1.
|
Primarily non-operating
items which do not impact cash flow.
|
2.
|
Non-operating in nature
which does not impact cash flows.
|
3.
|
Primarily related to
intercompany loans for which the loss is unrealized.
|
4.
|
Primarily related to
non-operating environmental initiatives.
|
Adjusted earnings is a non-IFRS measure, which excludes the
following from comprehensive earnings (loss): non-cash portion of
share-based payments; revaluation of marketable securities;
derivatives and foreign exchange loss; tax effects of adjustments;
sustainability initiatives.
(in thousands of
dollars except per share amounts)
|
|
|
|
For the three months
ended March 31,
|
|
2023
|
2022
|
Net loss for the period
- as reported
|
|
$(2,941)
|
$(3,709)
|
Non-cash share-based
payments 1
|
|
1,674
|
5,768
|
Unrealized loss (gain)
on revaluation of marketable securities 2
|
|
(1,537)
|
646
|
Loss on derivatives
2
|
|
6,171
|
1,115
|
Foreign exchange loss
(gain) 3
|
|
3,862
|
(2,951)
|
Tax impact of the above
adjusting items
|
|
(2,382)
|
251
|
Adjusted
earnings
|
|
$4,847
|
$1,120
|
Weighted average number
of common shares - basic
|
|
174,268,927
|
154,440,916
|
Adjusted earnings per
share - basic
|
|
$0.03
|
$0.01
|
|
|
1.
|
Primarily non-recurring
items which do not impact cash flow.
|
2.
|
Non-operating in nature
which does not impact cash flows.
|
3.
|
Primarily related to
intercompany loans for which the loss is unrealized.
|
4.
|
Primarily related to
non-recurring environmental initiatives.
|
Working Capital
Working capital is calculated as current assets (including cash
and cash equivalents) less current liabilities.
|
|
March
31,
|
December 31,
|
(in thousands of
dollars)
|
|
2023
|
2022
|
Current
assets
|
|
$110,758
|
$115,857
|
Less: Current
liabilities
|
|
66,830
|
77,837
|
Working
Capital
|
|
$43,928
|
$38,020
|
Compliance Statement (JORC 2012
and NI 43-101)
The technical and scientific information contained in this
MD&A has been reviewed and approved by Steve Devlin, Group Geologist, Karora Resources
Inc., and a qualified person for the purposes of National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
About Karora Resources
Karora is focused on increasing gold production to a targeted
range of 170,000-195,000 ounces by 2024 at its integrated Beta Hunt
Gold Mine and Higginsville Gold Operations ("HGO") in Western Australia. The Higginsville treatment
facility is a low-cost 1.6 Mtpa processing plant, which is fed at
capacity from Karora's underground Beta Hunt mine and Higginsville
mines. In July 2022, Karora acquired
the 1.0 Mtpa Lakewood Mill in Western
Australia. At Beta Hunt, a robust gold Mineral Resource and
Reserve are hosted in multiple gold shears, with gold intersections
along a 4 km strike length remaining open in multiple directions.
HGO has a substantial gold Mineral Resource and Reserve and
prospective land package totaling approximately 1,900 square
kilometers. The Company also owns the high-grade Spargos Reward
project, which came into production in 2021. Karora has a strong
Board and management team focused on delivering shareholder value
and responsible mining, as demonstrated by Karora's commitment to
reducing emissions across its operations. Karora's common shares
trade on the TSX under the symbol KRR and also trade on the OTCQX
market under the symbol KRRGF.
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, full year
consolidated 2022 production guidance and the potential of the Beta
Hunt Mine, Higginsville Gold Operation, the Aquarius Project, the
Spargos Gold Project, the Lakewood Mill, and the completion of the
second Beta Hunt decline system.
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.
www.karoraresources.com
SOURCE Karora Resources Inc.