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Karora Resources hails first quarter performance, which sets miner up for further growth

Karora Resources Inc (TSE:KRR) (OTCMKTS:KRRGF) (FRA:5RN1), the western Australia-focused gold miner, has posted a solid set of first-quarter results, which it said positions the company well for further growth this year. In the three months to end-March, 2021, the company – which runs the Beta Hunt and Higginsville mines – recorded net earnings of C$5.6 million, well up from C$539,000 seen in the first quarter of 2020 on revenue of  C$59.2 million, up from C$54.2 million in the same period a year earlier. Cash flow used in operations for the quarter was C$18.6million, up from C$12.2 million a year earlier, while Karora ended the period with C$76.7 million in cash and working capital of C$63.2 million. READ: Karora Resources delivers consistent 1Q gold production of nearly 25,000 ounces from its Western Australia operations  In terms of output, the company generated 24,694 ounces of gold, which was its seventh consecutive quarter of consistent production of around 25,000 gold ounces since its key acquisition of the Higginsville mill in mid-2019. All-in-sustaining costs for the latest quarter came in at US$1,049 per ounce of gold sold, an improvement on the US$1,101 per ounce seen in Q1, 2020. The performance places the company “on a very strong footing” to achieve its full-year 2021 gold production guidance of between 105,000 and 115,000 ounces and all-in-sustaining-costs (AISC) of between US$985 and US$1,085 per ounce sold,” Karora CEO Paul Andre Huet told investors. “First quarter gold production of just under 25,000 ounces was right on budget as we prepared new higher grade mining areas at Higginsville Central. Over the course of 2021, as we have previously stated, we expect quarterly grade improvements resulting from Spargos and Two Boys to drive increased production towards the second half of the year,” he said. Huet also highlighted that the Phase I mill expansion at Higginsville was proceeding “well ahead of schedule”. “We have already achieved an annualized production rate of 1.5 million tonnes per annum. Once completed, as previously announced, the Phase I expansion will increase production capacity at our Higginsville mill in 2021 by approximately 15%, or 550 tonnes per day, to 1.6 million tonnes per annum from the prior capacity of 1.4 million tonnes per annum.” He added: “With Karora’s strong cash balance of $76.7 million at the end of the first quarter, and much of the ground work to bring on higher grade mining areas over the balance of 2021 completed, we are in a very strong position to deliver on our 2021 organic growth commitments.” Highlights of the quarter included drilling at the 2020 Larkin Zone discovery, which hit 19 grams per ton (g/t) gold over 9 metres (m). There was also the second new high grade nickel discovery at Beta Hunt in the last six months, known as the “Gamma Zone – 50C”, where 1.6% nickel over 4.6m, including 18.4% nickel over 2.2m was hit in one hole. At the Spargos Reward gold project, more strong drilling results were reported, including 6.1 g/t over 14m in one hole, which confirmed the interpreted high grade gold plunging shoot thesis by extending the shoot to over 300m down-plunge, which remains open. Contact the author at giles@proactiveinvestors.com