Karora Resources Inc.

Q1 2024 record revenue was $116 million, up approximately 19% versus Q1 2023 and approximately 14% versus the prior quarter. Adjusted earnings were $13 million, or $0.07 per share; adjusted EBITDA was $40 million, or $0.23 per share; and cash flow from operating activities was $43 million, or $0.23 per share, up $16 million from the prior quarter. Cash at March 31 was $87 million, up $5 million sequentially. Consolidated Q1 production was 36,147 ounces from 436,000 tonnes milled at 2.75 g/t, with recoveries of 94%, cash operating costs of $1,193/oz sold, and AISC of $1,285/oz. Beta Hunt produced 31,249 ounces and had cash operating costs of $869/oz sold; Higginsville produced 4,898 ounces. Management reaffirmed full-year 2024 guidance of 170,000-185,000 ounces at AISC of $1,250-$1,375/oz.

Paul Huet framed the Westgold merger as the quarter’s defining strategic event, calling it a strong value-creation opportunity with significant synergies and a 49.9% exposure to the combined company. He said legal and regulatory work is progressing well and that shareholder support has been very strong as the company heads toward the July vote. On the operating side, he said Karora remains confident in meeting its 2024 guidance after a solid sales quarter and costs coming in line.

Huet emphasized that Q1 financial performance benefited from both a favorable gold price environment and higher ounces sold. He highlighted record revenue of $116 million, adjusted EBITDA of $40 million, operating cash flow of $43 million, and a cash balance of $87 million, saying the company remains in a strong financial position even while investing in growth at Beta Hunt. He also noted Q1 AISC of $1,285/oz, which was about $150/oz, or 10%, lower than the prior quarter, aided by higher gold sales and a higher nickel by-product credit of $2.9 million, or $54/oz versus $5/oz in the prior quarter.

Analysts focused mainly on the Westgold merger reaction, Fletcher timing, and Higginsville’s second-half outlook. Management said the merger marketing has been well received in both North America and Australia, with strong support from shareholders and institutions and no meaningful difference in reaction between the two regions. On Fletcher, management said the drive is progressing well and should intersect the ore in late June, with meaningful ore deliveries expected in the second half and some stoping potentially in Q4; for Higginsville, they guided to about 400,000 tonnes and roughly 30,000 ounces from Pioneer and Two Boys through year-end.