Karora Reduces 2023 Gold Production Guidance As It Increases Focus On Nickel

Karora Resources (TSX: KRR) this morning posted its fourth quarter financial results, highlighted by topline revenue of $96.8 million in the fourth quarter, with the company producing 37,309 ounces of gold.

In the fourth quarter Karora milled 522k tonnes of ore, with gold having an average grade of 2.37 g/t and a recovery rate of 94%. The 37,309 ounces produced was down from 38,437 ounces in the prior quarter.

A total of 39,900 ounces of gold were sold during the quarter, at an average realized price of US$1,737 per ounce. Cash operating costs in the quarter amounted to US$1,031 per ounce sold, while all-in sustaining costs came in at US$1,100 per ounce sold.

Karora managed to post net earnings of $9.56 million for the quarter, or $0.06 per share. Adjusted EBITDA meanwhile totaled $29.2 million, with cash flow provided by operating activities hitting $36.5 million.

For the full fiscal year, Karora milled 1,925k tonnes of ore at an average grade of 2.30 g/t gold with a 94% recovery. A total of 133,887 ounces were produced, with 132,098 ounces sold at an overall average price of US$1,793 per ounce.

Cash operating costs for the year came in at US$1,099 per ounce sold, while all-in sustaining costs amounted to US$1,171 per ounce sold.

Net earnings for 2022 meanwhile hit just $9.9 million, or $0.06 per share, while adjusted EBITDA came in at $91.5 million. This compares to net earnings of $27.5 million in 2021, and adjusted EBITDA of $104.3 million.

In terms of guidance, the company has reduced its outlook for 2023 and 2024 versus prior issued guidance. Gold production, previously estimated at 150 – 170 koz for 2023, has been reduced to 145 – 160 koz, while 2024’s estimate has been reduced from 185 – 205 koz to 170 – 195 koz. All in sustaining costs meanwhile have risen from US$890 – US$990 per ounce in 2023 to US$1,100 to US$1,250, and from US$885 – US$985 in 2024 to that of US$1,050 – US$1,200.

The changes are said to be due to “a shift in production startup of the Spargos underground operations,” while the company improves its focus on nickel operations at Beta Hunt. Nickel production for 2023 is estimated at 450 – 550 tonnes, and at 600 – 800 tonnes for 2024. Inflationary pressures, among other reasons, were cited as the reason for the increase in production costs.

“We have refreshed our 2023 and 2024 production, cost and capex guidance to tighten up ranges and reflect the reality of inflationary cost pressures since we originally provided the guidance in mid-2021 alongside our original growth plan announcement,” commented CEO Paul Andre Huet.

Karora Resources last traded at $4.86 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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