Karora Resources Posts $73.6 Million In Revenue For Q2 2022, Announces A$57 Million NPV In Nickel PEA For Beta Hunt Mine

Karora Resources Inc. (TSX: KRR) reported its financials for Q2 2022 on Friday. The firm posted $73.6 million in quarterly revenue, up from $65.3 million in Q1 2022 and $69.6 million in Q2 2021.

As the company previously announced, the firm was able to sell 30,398 gold ounces during the quarter at US$1,860 per ounce. These were sold with US$1,130 per ounce cash costs and US$1,190 per ounce all-in sustaining costs, the latter being above the upper end of the guidance of US$950 to US$1,050 per ounce sold.

However, the firm still recorded a quarterly net loss of $0.3 million compared to last quarter’s net loss of $3.7 million and last year’s net earnings of $5.4 million. Adjusting for financial items, adjusted EBITDA for the quarter came in at $22.6 million compared to last quarter’s $12.2 million and last year’s $29.5 million.

Adjusted EBITDA per share came down to $0.14 while adjusted earnings per share ended at $0.03 per share.

The company’s cash inflow from operations for the quarter ended at $11.2 million vis-a-vis last quarter at $12.2 million and last year at $26.4 million. The company also ended the quarter with $114.1 million in cash and cash equivalents, up from last quarter’s ending balance of $78.1 million and 2021’s ending balance of $91.0 million.

The company narrowed its lowered 2022 production guidance to 120,000 – 135,000 gold ounces from the previously announced 110,000 – 135,000 gold ounces, still at an AISC of US$1,100 – US$1,200 per ounce. For the first half of the year, the firm has so far produced 58,141 gold ounces and record an average of US$1,285 AISC per ounce.

Beta Mine Nickel

The gold producer also announced the results of preliminary economic assessment for nickel at its Beta Hunt mine in Western Australia. The results was toplined by a pre-tax NPV5% A$57 million and IRR of 105% at a base case price of US$19,500 per nickel tonne.

“The PEA highlights the robust economics and by-production credit potential for nickel production from the Beta Hunt Mine. This PEA is based on just our initial nickel resource estimate at Karora which we expect to expand as drilling continues,” said CEO Paul Andre Huet.

For an eight-year mining plan, the mine is expected to produce a total of 9,435 payable nickel tonnes, grossing a total of A$252.0 million at the same base case price. Production costs are expected at A$14,542 per tonne sold cash costs and A$16,946 per tonne sold AISC. Total capital investment is estimated to be A$18.7 million, with A$7 million deployed in the first year.

On an annual basis, nickel production is expected to increase “considerably” from the 450 – 550 tonnes expected production in 2022.

“In my view, the PEA is an excellent starting point for realizing the full potential for a revitalized nickel production plan at Beta Hunt… It is important to remind ourselves that Beta Hunt was a Nickel mine for over 40 years and produced over 60,000 nickel tonnes based on a very large nickel resource system,” added Huet.

Karora Resources last traded at $3.12 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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