Interview with Oliver Turner, Executive VP of Karora Resources (TSX: KRR).

Our previous interview: https://www.cruxinvestor.com/posts/karora-resources-tsxkrr-a-deep-dive-into-their-gold-nickel-expansion-plans-3951

Recording date: 26th October 2023

Karora Resources is a gold and nickel producer based in Western Australia. In the recent quarterly update, the company produced around 40,000 ounces of gold, bringing year-to-date production to around 120,000 ounces. This positions Karora well to meet its full year production guidance of 145,000-160,000 ounces. The company continues to see input cost pressures, but expects to remain within its all-in sustaining costs guidance range of $1,100-$1,250 per ounce for 2022. Karora had $84 million in cash at quarter end, with cash continuing to grow.

While gold prices have held up well, gold mining equities have struggled amidst rising interest rates and inflation. However, this challenging environment presents an opportunity for investors who believe gold will come back into favor. When capital rotates back into the gold sector, companies like Karora that have strong assets and balance sheets stand to benefit disproportionately as early favorites.

Karora continues to add resource ounces at its flagship Beta Hunt mine at very low discovery costs of around $35 per ounce. The company will announce an updated resource by year-end, which is expected to show further growth. Exploration results this year have demonstrated potential for higher grades than currently being mined. Three new ventilation raises being completed by year-end will increase capacity, supporting a ramp up to annual production of 165,000-180,000 ounces from Beta Hunt alone by 2024.

While Karora needs to keep investing in exploration and growth to maintain assets and extend mine life, the company is also building up its cash reserves. Guidance for 2023 is around $100 million in capital spending, mostly focused on development and exploration to bring additional production online. Karora's growing production profile, long mine life, and tier one jurisdiction in Western Australia differentiate it from many peers. The exploration results not yet incorporated into resources, along with the potential for higher grades, mean there is significant fundamental value still to be realized.

In summary, despite share price weakness, Karora continues adding value through exploration, development, and production growth. The company believes it is well positioned for when sector sentiment improves given the quality of its asset base. Continued strong drill results and anticipated resource additions provide further upside potential.

View Karora Resource's company profile: https://www.cruxinvestor.com/companies/karora-resources

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