Karora Resources Inc. (TSX:KRR) has reported record-setting 2Q gold production of 29,831 ounces and gold sales for the same period of 30,412 ounces in its financial results for the 2Q and 1H of 2021, both of which ended on June 30.
The company said the profitable quarter has maintained its ability to deliver full-year consolidated 2021 gold production guidance of 105,000 to 115,000 ounces.
The gold miner ended the second quarter of 2021 with a strong cash position of $82.2 million and working capital of $64.8 million, up by $5.5 million and $1.6 million, respectively, from March 31, 2021.
READ: Karora Resources reveals record 2Q gold production and sales from its Western Australia operations
Karora's All-in-sustaining-costs (AISC) of US$985-$1,085 per ounce and a 5% reduction for 2Q also fit within the company’s forecasted range, and were lower than the 1Q AISC which was US$1,049 per ounce.
Second-quarter adjusted earnings totaled $14.3 million, or $0.10 per share, an $11.6 million year-over-year increase. It was also $6.2 million (or $0.04 per share) higher than the first quarter of 2021.
Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also increased by $8.3 million quarter-over-quarter to $29.5 million.
There was an 18% year-over-year uptick in cash flow from operating activities in 2Q 2021 to $26.4 million, which was $7.7 million higher than the first three months of 2021.
"Karora's second-quarter performance was very impressive with record gold production of 29,831 ounces, record gold sales of 30,412 ounces and AISC of US$996 per ounce sold. The strong second-quarter production was driven primarily by strong grade performance across both operations and marked a 20% improvement over the prior seven quarters, which averaged approximately 25,000 ounces per quarter,” Paul Andre Huet, chairman and CEO said in the results statement.
He continued: “Our operations delivered an outstanding quarter despite difficult weather conditions towards the end of the period which have extended into the first part of the third quarter. The Kalgoorlie area has seen record rainfall which has challenged mining operations and ore haulage across the district. I am extremely proud of our team's ability to prepare and adapt for these conditions, as we did when faced with multiple obstacles during 2020.”
Multi-year goals highlighted
Huet also took the opportunity to highlight the western Australian gold company’s multi-year goals.
“On June 28, 2021 the corporation announced a multi-year growth plan funded through operating cash flows and current cash balance. Three-year production and cost guidance will approximately double consolidated gold production to 185,000 – 205,000 ounces by 2024 at an AISC of US$885-US$985 per ounce,” he explained.
Karora’s growth plan includes a significant expansion of its Beta Hunt project to increase underground production to 2 million tons per annum (Mtpa) by 2024 through the addition of a second decline.
The three-year growth plan also includes a Phase II expansion of the Higginsville processing plant, increasing throughput to 2.5 (Mtpa). A Phase I expansion to 1.6 Mtpa from 1.4 Mtpa is currently underway.
Additionally, Karora unveiled a new high-grade nickel discovery at Beta Hunt, the second in the last six months, known as the Gamma Zone - 50C, where 11.6% nickel over 4.6 meters, including 18.4% nickel over 2.2 meters was intersected in hole G50-22-005E.
Drilling at the target also intersected gold mineralization above and below the 50C trough and indicates the Beta Hunt gold mineralized system extends for over 3.5 kilometers of strike from the northern end of the A Zone.
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