Karora Resources Set for Significant Gold and Nickel Growth at Beta Hunt Mine in Western Australia

• Paul Huet, Chairman and CEO of Karora Resources, discusses the company's gold and nickel expansion plans.
• Karora Resources is a gold company located in Western Australia with a large land package and two operational mills.
• They have seen significant growth in their gold resources, from 400,000 ounces to 2.4 million ounces in just two years.
• The company has also identified seven new shear zones that are excluded from their existing resource.
• Karora Resources is unique in that they produce both gold and nickel, with plans to ramp up nickel production in the future. They also mention the possibility of spinning out their lithium assets into a separate company.

About Karora Resources

Karora Resources is a gold and nickel producer with significant growth plans at its Beta Hunt mine in Western Australia. Led by Chairman and CEO Paul Andre Huet, the company has ambitious targets to increase gold production to 185,000-205,000 ounces per year by 2024. Karora also plans to ramp up nickel production at Beta Hunt to historical rates of around 3,500 tonnes per year.

Interview with Paul Huet, Chairman & CEO & Oliver Turner, Executive VP of Karora Resources Inc.

Transforming Gold Production in Recent Years

Since Huet took over leadership of the company in 2018, Karora has undergone a major transformation. In 2018, Karora had just 400,000 ounces of gold resources. Through acquisition and exploration, the company has grown its resources to 2.4 million ounces as of June 2023.

Karora Resources operates two gold mills in Western Australia, both currently running at full capacity. In 2023, the company is on track to produce 145,000-160,000 ounces of gold, having already produced 80,000 ounces in the first half of the year.

The main asset is the Beta Hunt mine, located in a prime gold mining region along the Kalgoorlie to Kambalda trend. Karora Resources has a massive 2,000 square km land package around Beta Hunt, the largest in the area.

Unlocking Exploration Potential at Beta Hunt

A key to Karora's growth has been eliminating restrictive royalties at Beta Hunt. The company renegotiated deals with Morgan Stanley and Maverix Metals to remove or reduce royalties across its land package.

This has allowed Karora Resources to ramp up exploration spending from just $300,000 per year historically to $20-30 million planned for 2023. The increased spending has driven rapid resource growth, with seven new gold shear zones discovered outside of the current 2.4 million ounce resource.

With gold grades averaging 32-36 g/t at Beta Hunt, the mine delivers high margins even with increased mining costs in Australia. The company targets discovery costs of just A$40 per ounce, ensuring excellent returns on exploration investment.

Leveraging By-Product Nickel at Beta Hunt

Beta Hunt was a nickel mine for over 30 years before Karora Resources acquired it, producing over 66,000 tonnes of high-grade nickel historically. Karora sees major synergies in mining both nickel and gold at Beta Hunt.

Ramping up nickel production will provide credits against gold mining costs, reducing AISC. Karora Resources aims to increase nickel output from around 1,000 tonnes per month currently to 10,000 tonnes per month in the coming years under new Nickel Head of Operations Lee John. At steady state volumes, Karora's AISC could be $150-200/oz lower than peers at A$1,000/oz versus A$1,200/oz benchmark costs in the region. This gives Karora a significant cost advantage.

The company has already delineated over 35,000 tonnes of nickel resources at Beta Hunt, with significant exploration upside remaining. Rather than spinning out the nickel assets, Karora Resources plans to develop the nickel and gold operations in tandem to maximize synergies.

Well Positioned for Further Growth

With a strong production base and A$72 million in cash, Karora Resources is funded for its near-term growth plans. The company plans to increase exploration spending to extend gold and nickel resources across its district-scale land package.

Given its production track record, resource growth potential and strategic nickel by-product credits, Karora Resources offers a compelling value opportunity trading at just 0.5-0.6x NAV. The company is well positioned to continue growing towards its target of becoming a mid-tier gold producer.

The Investment Thesis for Karora Resources

• Proven track record of executing on growth plans - Karora Resourceshas consistently hit production targets and grown resources as outlined. This demonstrates the management team can deliver on ambitions to become a mid-tier producer.
• Significant exploration upside at Beta Hunt - With only 2 years of unencumbered drilling so far, Karora Resources has grown resources rapidly. The large land package has immense potential for further discoveries.
• Low-cost gold production - Gold grades are high and nickel by-product credits will lower costs significantly versus peers. This should enable strong profit margins.
• Funded growth pipeline - With over $70M in cash and funded from operating cash flows, Karora Resources has capital to increase exploration and advance projects. Minimal dilution risk.
• Attractive valuation - Trading at just 0.5-0.6x NAV, Karora Resources has substantial upside as it continues to grow resources, production, and cash flow. More rerating potential as a mid-tier.
• Leverage to gold and nickel prices - As a producer, Karora Resources provides leverage to any increases in the gold and nickel price.
• Strong institutional support - Institutions are buying at current levels, signaling Karora is undervalued based on growth prospects.

Karora Resources offers an attractive mix of low-cost gold production, funded growth potential, upside from exploration, and relative undervaluation. For investors bullish on gold and nickel, it represents a solid medium-term investment opportunity.