Karora Resources Drops 10% Following Q2 Production Data

Karora Resources (TSX: KRR) is currently down roughly 10% following the release of its second quarter production results. Despite showing an improvement on a quarter over quarter basis, shareholders evidently are rather displeased with the overall results posted.

Production for the second quarter amounted to 30,652 ounces of gold, versus 27,489 ounces in the first quarter. Production is said to remain inline for previously issued guidance of 110,000 to 135,000 ounces, which is said to be weighted towards the second half of the year.

Production costs for the quarter were not provided. Prior issued guidance has indicated AISC of between US$950 to US$1,050 per ounce sold – although the firms first quarter results boasted all in sustaining costs of US$1,396 per ounce sold.

The company did however indicate that it sold 30,398 ounces of gold during the quarter, versus 26,286 ounces in Q1.

Investor discontent appears to be at least partially related to the current cash balance of the company, which sits at $114 million, despite an over-subscribed $69.0 million bought deal conducted during the quarter. The company ended the first quarter of the year with cash and cash equivalents of $78.1 million, implying roughly $33.1 million in cash was spent over the course of the quarter.

That cash reportedly has been spent on capital expenditures related to the second decline being advanced at the Beta Hunt mine. The expansion however is said to be ahead of schedule, with completion slated for the first quarter of 2023. The expansion is said to be a key factor, along with the acquisition of the Lakewood Mill, for the firms current guidance for 2024 of 185,000 to 205,000 ounces of gold production.

Karora Resources last traded at $2.55 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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