Karora said Q1 adjusted profit rose 177%

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Karora Resources Inc. [KRR-TSX, KRRGF-OTCQX] has announced its financial and operating results for the first quarter of 2024. Pre-reported production in the first quarter came in at 36,147 ounces of gold, down 9.0% from 39,827 ounces in the first quarter of 2023, and down 10% from 40,295 ounces in the fourth quarter of 2023.

Cash operating costs and all-in-sustaining costs (AISC) per ounce sold in the first quarter averaged US$1,193 per ounce and US$1,285 per ounce respectively, versus US$1,272 an ounce and US$1,435, respectively in the fourth quarter of 2023.

“Our financial performance in the first quarter was solid with adjusted earnings of $13.3 million ($0.07 per share), up 177% from $4.8 million in the same period last year and a $10 million improvement compared to the prior quarter,’’ said Karora Chairman and CEO Paul Andre Huet.

Karora is focused on increasing gold production to a targeted range of 170,000 to 185,000 ounces in 2024 at its integrated Benta Hunt Gold Mine and Higginsville Gold Operations, approximately 60 kilometres from Kalgoorlie, along the prolific Norseman-Wiluna Greenstone Belt. The company is also forecasting 200 to 300 tonnes of nickel production this year.

Key institutional shareholders, with a combined shareholding of approximately 9.0%, (including Toronto-based financier Eric Sprott), have signed voting support agreements or otherwise indicated that they will support the deal.

Karora shares eased lower on the news, falling 2.03% or $0.11 to $5.31. The shares trade in a 52-week range of $5.77 and $3.60.

The company said production was negatively impacted by wet weather experienced across all three operating sites during the quarter and regional interruption to stage grid power impacting the Lakewood mill and Beta Hunt mine, affecting gold ounces produced. Gold sales, however, for the first quarter of 2024 were strong at 40,343 ounces, an increase of 12% compared to the first quarter of 2023 and 8.0% higher than the previous quarter.

Revenue in the first quarter totaled $115.5 million, a new quarterly record for the company and 19% higher than the first quarter of 2023, and 14% up from the previous quarter. The increase compared to both prior quarters reflected the higher realized gold price and higher sales volumes.

Karora recently announced details of a merger transaction with Westgold Resources Ltd. [WGX-ASX] that aims to create a mid-tier gold producer operating exclusively in Western Australia.

The merger will combine Karora’s its Beta Hunt and Higginsville operations with Westgold’s Murchison and Bryah properties, resulting in four production centres. Westgold is producing between 220,000 and 230,000 ounces of gold annually.

“The prize here is Beta Hunt’s gold potential. Rarely do you find a gold asset of the quality and potential of Beta Hunt hiding in a nickel belt and drilling is expected to further unlock value at this mine,’’ said Westgold Managing Director Wayne Bramwell.

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