Karora Resources Delivers Strong Q1 2024 Gold Production & Cash Position

• Karora Resources announced Q1 2024 consolidated gold production of 36,147 ounces and gold sales of 40,343 ounces
• Production was impacted by wet weather and a regional power interruption affecting the Lakewood mill
• Cash balance increased $4.8M to $87.3M compared to end of 2023
• Full year 2024 guidance reiterated: 170,000-185,000 oz gold production at AISC of $1,250-$1,375/oz
• Beta Hunt ramp up on track, initial cuts into high-grade Fletcher Zone expected 2H 2024

About Karora Resources

Karora Resources is an emerging junior gold producer focused on increasing production from its integrated Beta Hunt Mine and Higginsville Gold Operations (HGO) in Western Australia. The company is targeting production of 170,000-185,000 ounces of gold in 2024 at all-in sustaining costs (AISC) between US$1,250-$1,375 per ounce. Karora operates a 1.6 Mtpa processing plant at Higginsville fed by ore from its Beta Hunt underground mine and open pit mines at Higginsville. The company also owns the 1.0 Mtpa Lakewood Mill nearby which it acquired in July 2022.

Despite some temporary challenges, Karora delivered a solid start to 2024, producing 36,147 ounces of gold and selling 40,343 ounces in Q1. This boosted the company's consolidated cash balance by $4.8 million to $87.3 million as of March 31, 2024, compared to the end of 2023. With a strong balance sheet, experienced management team, and promising organic growth profile, Karora Resources represents a compelling investment opportunity in the junior gold space.

Production Impacted by Weather & Power Interruption

Consolidated gold production for the first quarter came in at 36,147 ounces, which was impacted by two key factors outside of the company's control:

1. Extreme wet weather conditions affected all producers in the region for about two weeks. Open pit mining at Higginsville was particularly impacted.
2. A regional two-week power interruption to the grid knocked out power to the 1.6 Mtpa Lakewood processing mill. This resulted in approximately two weeks of lost processing time.

Despite these temporary setbacks, Karora's operations team responded well to minimize the impact and maintain steady production. Management remains confident in the company's ability to achieve its full year production and cost guidance.

While primary crushing at Higginsville was down due to a crusher bridge failure in Q1, mobile crushing continued in the interim. Repairs were completed in late March and full primary crushing has now been restored.

Boosted by Gold Price & Shipment Timing

Karora's gold sales outperformed production in Q1 at 40,343 ounces. This was aided by the timing of shipments as well as strong gold prices during the quarter.

The higher sales volumes and gold price, even with lower production, enabled Karora to grow its cash position by $4.8 million during the quarter to reach $87.3 million as of March 31. This continues to strengthen the company's balance sheet and financial flexibility to support its growth plans.

Beta Hunt Ramp Up on Track

A key part of Karora's growth strategy is the production ramp up at the Beta Hunt underground mine. The company is pleased to report this remains on track and it is confident in achieving its full year production and cost guidance.

Importantly, Karora is making good progress on developing an exploration drive to access the high-grade Fletcher Zone at Beta Hunt. This newly discovered zone has delivered some very exciting drill results and is expected to be an important source of high-grade ore feed as the mine ramps up. Initial mining is anticipated in the Fletcher Zone in the second half of 2024.

Further Upside in HGO Land Package

In addition to production growth from Beta Hunt, Karora sees significant exploration potential in its large, 1,900 km2 land package at Higginsville. The HGO area hosts a substantial Mineral Resource and Reserve base and remains highly prospective for new discoveries.

The company continues to actively explore this land package to organically grow its mining inventory around the centrally located Higginsville mill. With three mining centers now feeding the mill, Karora has enhanced flexibility to optimize its production mix and maximize margins.

Conclusion

For investors looking at Karora Resources, the company offers a number of compelling attributes:

• Emerging junior producer with strong organic growth profile in a Tier 1 jurisdiction
• Proven operations team that can navigate temporary challenges and consistently deliver
• Strong balance sheet with $87M in cash, no debt and growing cash flow
• Centralized infrastructure driving operational flexibility and cost efficiencies
• Significant exploration upside in large, prospective land package
• Commitment to ESG with a focus on reducing emissions

With a targeted production run rate of 170-185koz per year by 2024 at competitive costs, Karora is well positioned to generate strong free cash flow as it executes on its growth strategy. If the company continues to extend mine life through exploration success, the stock could command a premium valuation in line with other established mid-tier producers.

In the current environment of global uncertainty and looming inflation, gold equities provide an attractive hedge for investors looking to diversify their portfolios. And among gold producers, Karora stands out as a disciplined operator with a clear path to value creation. As the company delivers on its growth objectives, investors can look forward to a potential re-rating of the stock to better reflect the underlying value of its assets and cash flow potential.