Karora Resources Announces Major Expansion of Gold Resources and Reserves, Supporting Long Term Growth

• Karora grows flagship Beta Hunt gold measured and indicated resources by 18% to 1.6M oz; reserve grade improves 8%.
• Consolidated gold resources increase 9% to 3.2M oz, net of depletion.
• Western Flanks Zone expanded 16%, underpinning 2 million tonne per annum production target.
• New discovery at Fletcher Zone shows potential for maiden resource addition.
• Strong resource additions support long term production growth strategy.

About Karora Resources

Karora Resources Inc. is a growing junior gold producer focused on increasing gold production from its Beta Hunt underground mine and Higginsville Gold Operations in Western Australia. Karora has a strong management team focused on cost control and delivering shareholder value from responsible mining. The company continues to reduce emissions as part of its ESG commitments. Karora is planning to expand Beta Hunt annual production rate to 2 million tonnes per annum, underpinned by its expanded gold resource base.

Major Expansion in Gold Resources and Higher Grades at Flagship Beta Hunt Mine

Karora announced strong measured and indicated resource additions of 18% or 249,000 oz at its flagship Beta Hunt mine, increasing total M&I resources to 1.6M oz (net of mining depletion). The company also announced a 12% increase in grades at the key Western Flanks, Beta Hunt's largest zone, from 2.6 g/t to 2.9 g/t. This will benefit mined gold production and supports Karora’s plan to expand Beta Hunt production rate to 2 million tonnes per annum by 2024.

On a consolidated basis including the Higginsville mill and resources, Karora grew total gold M&I resources by 9% to 3.2M oz, net of 101,000 oz mined over the past year. Total inferred resources also grew a healthy 4% to 1.5M oz despite the company’s focus on resource conversion drilling.

At the main Western Flanks zone which provides the bulk of Beta Hunt production, measured and indicated resources grew 16% or 143,000 oz. The company also saw the average grade improve by an impressive 12% to 2.9 g/t following refinements to the resource model.

Karora believes the consistently strong measured and indicated resource additions at Beta Hunt over the past several years highlight the expansive, continuous mineralized shear zones that remain open along strike and at depth.

New Fletcher Zone Discovery Shows Resource Growth Potential

Exploration drilling at the new Fletcher zone near Beta Hunt intersected exceptional widths and grades, including 46.5 g/t over 7.0 metres and 15.9 g/t over 6 metres. This highlights potential for Karora to add new resource zones close to existing mine infrastructure. Fletcher will be a key focus for expansion and maiden resource delineation in 2024.

Strongly Expanded Production Profile Funded Through 2024

The continued measured and indicated gold resource additions provide critical support for Karora’s expansion plans to increase Beta Hunt mine and milling production to 2 million tonnes per annum by 2024.

The resource additions come on top of a strong cash position, with Karora holding $84 million in cash and equivalents at the end of Q3 2023. Together with ongoing cash flow generation this provides funding for Karora’s growth plans through 2024.

Continued Resource Growth at Flagship Beta Hunt Underpinning Production Expansion Plans

Karora’s main Beta Hunt mine has demonstrated remarkable resource growth over the past 6 years since the company acquired the asset in 2016. As shown in Figure 1 below, Karora has increased total measured and indicated gold resources from just 285,000 ounces to over 1.6M ounces as of September 2023 – a staggering increase of over 550%.

Behind this growth is Karora’s extensive drilling program that has successfully targeted underground resource additions and conversions along a 5 kilometre strike length. Encouragingly, mineralization remains open and continuous at depth and along strike. This highlights the potential for significant future underground expansions.

The latest September 2023 resource addition of 18% or 249,000 oz gold underpins Karora’s planned production growth. The company is advancing infrastructure upgrades and expansions at Beta Hunt to support increasing mill feed to 2M tonnes per annum, initially targeting completion by end 2024.

Importantly, not only have total measured and indicated resources grown substantially, but grades have also improved 8% over the past year to 2.7 g/t. This results from both the addition of new, higher grade mineralization as well as refinements to the resource model. Higher feed grades to the mill will directly benefit gold production as Beta Hunt scales up volumes over the coming 2 years.

Key Western Flanks Zone Resource Grows 16%

The largest single component at Beta Hunt is the key Western Flanks Zone which represents Karora’s main production-driving area.

Over the past year, Karora’s drilling focus has successfully expanded the Western Flanks resource 16% or by 143,000 oz net of mining depletion. The Zone now totals over 1M oz in measured and indicated resources. Upgraded geological modelling also helped lift the average grade by 12% to 2.9 g/t.

In addition to expanding Western Flanks, Karora is advancing its new high grade Fletcher zone discovery as well as delineating initial resources at its new Mason and Cowcill zones. Fletcher intersections as high as 46.5 g/t over 7 metres showcase the potential for new near-mine discoveries to further expand resources.

Collectively across all Beta Hunt shear zones, Karora now holds underground gold resources totalling 1.6M oz measured & indicated, alongside a healthy 1.1M oz inferred. This growth directly supports Karora’s staged expansion plans to reach 2 million tonnes annual feed production.

Gold Production Scaling Up Backed by $84M Cash Balance

Importantly, Karora is fully funded for its growth plans with over $84M in cash and equivalents as at September 2023, alongside ongoing operating cash flows. This will see the company through its budgeted expansion spending at Beta Hunt during 2023 and 2024.

Gold production has already shown a strong increase in 2022, with consolidated output rising 20% year-on-year to between 115,000 to 125,000 ounces. This meets the bottom end of Karora’s guidance range. Production is split roughly 60:40 between the underground Beta Hunt mine and Higginsville operations.

Karora’s has designated 2024 as the “Big Push” year, which will see capital expenditures peaking as the last of the infrastructure upgrades wrap up at Beta Hunt to support higher volumes.

The company’s expanding production profile combined with its +3M oz gold resource base provides a solid growth platform over the long term.

Exploring High Grade Nickel Potential

While gold remains Karora’s key focus, the Beta Hunt mine is also endowed with substantial nickel mineralization, hosting over 22,300 nickel tonnes in measured and indicated resources.

Beta Hunt’s nickel prospects essentially come for free alongside existing gold mining operations, with little incremental spending required. This provides shareholders significant exposure to potential byproduct nickel credits from any future production.

In particular, drilling in 2024 will target expanding and upgrading resources at the high grade (~3% Ni) East Alpha zone. Karora is also intrigued by the gold potential below the existing nickel zones, with drilling in 2023 intersecting 40 g/t gold over 4 metres below the 50C nickel resource.

While not factored into company valuations or price targets currently, any exploration success on the nickel side at modest incremental cost would provide a key upside bonus for Karora investors.

Conclusion

Karora has continued its impressive track record of gold resource additions at its key Beta Hunt mine, driven by an aggressive drilling program. Both grades and overall measured and indicated ounces have shown solid growth – this directly supports Karora’s production expansion plans.

With these latest results, Beta Hunt’s resource additions have grown over 550% since 2016 when Karora (then RNC Minerals) first acquired the asset. We expect significant potential remains for new zones and depth extensions to existing zones like Western Flanks.

Major new discoveries like Fletcher also show additional near mine exploration potential even in a brownfields environment.

With $84 million cash on hand, and expansion spending already budgeted, Karora looks fully funded for its growth plans through 2024. The company expects Beta Hunt to expand mill feed to 2 million tonnes per annum, up from 1.2M tonnes in 2022.

This production growth, driven by exploration success and disciplined capital allocation, has the potential to drive strong free cash flow growth as gold output scales over the next 2 years. For investors, Karora offers an attractive junior producer lagging peers on EV/Resource valuations despite its solid growth outlook over the next 24 months. With few other gold juniors holding this combination of growth and funding, Karora is appealing for those seeking leveraged returns.