Karora Delivers Another Strong Quarter of Operational and Financial Results, On Track to Meet 2023 Guidance Targets

• Karora reported strong Q3 2023 production of 39,547 ounces of gold, up 3% year-over-year. Cash costs were $1,062 per ounce.
• Revenue for Q3 was $107.1 million, up 32% versus Q3 2022 driven by higher gold ounces sold and prices.
• Net earnings were $6.9 million or $0.04 per share for Q3 2023 compared to $4.4 million or $0.03 per share in Q3 2022.
• Cash balance increased to $84.2 million at September 30, 2023, up from $70.8 million at the end of Q2 2023.
• Karora maintained its consolidated 2023 production guidance of 145,000-160,000 ounces of gold at AISC of $1,100-$1,250 per ounce.

About Karora Resources

Karora Resources is a growing Canadian gold mining company focused on increasing sustainable gold production at its integrated Beta Hunt and Higginsville Gold Operations in Western Australia. Karora has a strong balance sheet and proven operational track record, delivering 24% production growth year-to-date through the end of Q3 2023. The company is executing a clear growth plan to double gold production to 200,000 ounces per year by 2024.

Robust Q3 Gold Production and Lower All-In Sustaining Costs

In the third quarter of 2023, Karora achieved consolidated gold production of 39,547 ounces, a 3% increase compared to 38,437 ounces produced in Q3 2022. Production was slightly lower than the record 40,823 ounces achieved in Q2 2023. The year-over-year increase was driven by an 8% improvement in average milled grade, reflecting the mining of higher grade stopes from the Aquarius underground mine at Karora's Higginsville operation during the quarter.

Cash costs were US$1,062 per ounce sold, up 7% from US$991 per ounce in the year ago period, reflecting cost inflationary pressures across the business. However, all-in sustaining costs (AISC) declined 12% year-over-year to US$1,196 per ounce sold compared to US$1,069 per ounce in Q3 2022, highlighting Karora's focus on cost control.

For the first nine months of 2023, consolidated gold production increased 24% to 120,197 ounces compared to 96,578 ounces for the same period last year. The significant production growth reflects an 11% increase in tonnes processed and 11% higher average milled grade following Karora's acquisition of the Lakewood mill in August 2022.

32% Increase in Revenue Driven by Higher Gold Production and Prices

Revenue for the third quarter was $107.1 million, a 32% increase from Q3 2022 revenue of $81.3 million. The strong growth was driven by a 17% increase in ounces sold to 41,278 ounces and a 12% increase in the average realized gold price to US$1,931 per ounce.

On a year-to-date basis, revenue totaled $314.5 million, up 42% compared to the first nine months of 2022. The increase reflects a 30% growth in gold ounces sold and a 5% improvement in realized gold prices. Karora's growing gold production and exposure to higher gold prices has translated into robust top and bottom line growth in 2023.

Strong Cash Flow Generation Funds Growth Projects

Cash flow from operating activities, before changes in working capital, increased 29% year-over-year to $36.1 million in Q3 2023. For the first nine months of 2023, operating cash flow doubled to $103.8 million compared to $61.8 million generated in the same period last year.

The strong cash generation funded $27 million of capital expenditures during the third quarter as Karora advanced development projects aimed at doubling gold production to 200,000 ounces per year by 2024. Karora maintained a strong cash position of $84.2 million at the end of the third quarter, up 19% from the end of Q2 2023.

Key Development Project Milestones Achieved in Q3 2023

At Karora's flagship Beta Hunt mine, the company completed installation of the third and final ventilation raise, a crucial step in supporting the ongoing production expansion to 2 million tonnes per annum by the end of 2024. Additional mining equipment arrived on site during the quarter as fleet expansion continues.

The company also announced encouraging drill results from the new Fletcher shear zone at Beta Hunt, significantly expanding the strike length of this high-grade gold discovery. The results point to the potential for Mineral Resource additions outside of the main Western Flanks zone.

Finally, Karora's spin-out of its nickel assets into a new company called Kali Metals remains on track for completion by year-end 2023. Kali Metals recently launched an IPO process on the Australian Securities Exchange to create a separately financed base metals growth vehicle.

Maintaining 2023 Production Guidance; Positioned for Record Annual Gold Output

For the full year 2023, Karora maintained consolidated gold production guidance of 145,000 to 160,000 ounces. All-in sustaining costs continue to be guided between US$1,100 and US$1,250 per ounce sold. At the mid-point of the guidance range, Karora is targeting record annual gold production 18% above 2021 levels.

With 120,197 ounces produced through the first three quarters, Karora is well positioned to deliver another year of strong growth in 2023 while maintaining costs within guidance. The company has demonstrated steady execution of its growth plan, driven by operational improvements at Beta Hunt and Higginsville.

The Investment Thesis for Karora Resources

• Karora offers investors excellent exposure to a growing, low-cost gold producer in a Tier 1 mining jurisdiction. The company has an experienced management team focused on cost control and prudent capital allocation.
• Karora is advancing a clear growth strategy centered around its low-risk brownfields expansion projects at Beta Hunt and Higginsville. The growth plan is fully funded and on track to increase gold production 100% by 2024.
• Exploration results continue to demonstrate resource expansion potential at Karora's properties, providing significant upside beyond the current mine life. Recent drilling highlights at Beta Hunt's Fletcher zone are particularly encouraging.
• Strong cash flow generation has allowed Karora to build a robust balance sheet with over $80 million in cash. The company is in a great financial position to self-fund its internal growth projects.
• Trading at just 3.5x 2023E EBITDA, Karora shares represent a compelling value relative to gold producer peers. The valuation gap should narrow as Karora executes on its well-defined growth trajectory over the next 18 months.

Karora Resources offers investors an attractive combination of low-cost gold production growth, strong cash flow generation, exploration upside and an attractive valuation. Execution of the fully funded doubling of output by 2024 could drive significant share price outperformance.

Conclusion

Karora Resources delivered another quarter of operational and financial execution in Q3 2023, keeping the company firmly on track to meet its production and cost guidance for the year. With the key growth projects advancing well, Karora's plan to double gold output by 2024 remains on schedule and budget. The company's shares represent an attractive value opportunity to gain exposure to a growing, low-cost gold producer in a top mining jurisdiction.