TORONTO, May 13, 2024 /CNW/ - Karora Resources Inc. (TSX:KRR) ("Karora" or the "Company") today announced financial and operating results for the first quarter of 2024 ("Q1 2024"). The Company's unaudited condensed interim financial statements and management discussion & analysis ("MD&A) are available on SEDAR at www.sedarplus.ca and on the Company's website at www.karoraresources.com. All dollar amounts are in Canadian dollars, unless otherwise noted. FIRST QUARTER 2024 HIGHLIGHTS GOLD PRODUCTION AND SALES Pre reported Q1 2024 production of 36,147 gold ounces decreased 9% from 39,827 ounces in the first quarter of 2023, and 10% compared to production of 40,295 ounces in the fourth quarter of 2023 ("the previous quarter"). Production was negatively impacted by wet weather experienced across all three operating sites during the quarter and a regional interruption to state grid power impacting the Lakewood mill and Beta Hunt mine, affecting gold ounces produced. Gold sales for Q1 2024 were strong at 40,343 ounces, an increase of 12% compared to Q1 2023 and 8% higher than the previous quarter. COSTS ON TRACK TO ACHEIVE WITH 2024 GUIDANCE Cash operating costs1 and AISC1 per ounce sold for Q1 2024 averaged US$1,193 and US$1,285, respectively, versus US$1,272 and US$1,435, respectively, for Q4 2023. The lower costs compared to the prior quarter primarily reflects the impact of higher nickel by-product credits ($2.91 million or US$54/oz nickel by-product credits in the current quarter compared to $0.3 million US$5/oz for the final quarter of 2023). The higher by-product credits reflect recommencement of nickel sales in the first quarter. RECORD QUARTERLY REVENUE Revenue in Q1 2024 totaled $115.5 million, a new quarterly record for the Company and 19% higher than the first quarter of 2023 and 14% from the previous quarter. The increase compared to both prior quarters reflected higher realized gold price and higher sales volumes. SOLID OPERATING CASH FLOW GENERATION Q1 2024 cash flow provided by operating activities of $42.6 million versus $20.9 million in the first quarter of 2023 and $32.1 million the previous quarter, driven by the improved gold sales volume and realized price. Cash at March 31, 2024 of $87.3 million was an increase of $4.8 million or 6% from $82.5 million at December 31, 2023. EARNINGS PERFORMANCE Net earnings for Q1 2024 of $2.1 million ($0.01 per share) compared to net loss of $2.9 million ($0.02 per share) for the same period in 2023 and net loss of $1.7 million ($0.01 per share) in the fourth quarter of 2023. The first quarter of 2024 was impacted by a non-cash $6.3 million loss on derivatives and $5.0 million foreign exchange loss. Adjusted earnings1 for Q1 2024 of $13.3 million ($0.07 per share) compared to $4.8 million (0.03 per share) in the first quarter of 2023 and $3.3 million ($0.02 per share) for the previous quarter, reflecting higher sales volumes and prices as noted above. Adjusted EBITDA1,2 for Q1 2024 of $40.5 million ($0.23 per share) was an increase of 42% from $28.6 million in the first quarter of 2023 and 63% higher than the $24.9 million in the fourth quarter of 2023. 1. Non-IFRS: the definition and reconciliation of these measures are included in the "Non-IFRS Measures" section of this news release and in the MD&A for the three months ended March 31, 2024. 2. Earnings before interest, taxes, depreciation and amortization MERGER WITH WESTGOLD TO CREATE AUSTRALIA'S LARGEST UNHEDGED GOLD PRODUCER Karora and Westgold Resources Limited ("Westgold" ASX:WGX) agreed to combine in a merger pursuant to which Westgold will acquire 100% of the issued and outstanding common shares of Karora by way of a statutory plan of arrangement under the Canada Business Corporations Act ("CBCA"). The combination represents a transformational step change in growth for both Karora and Westgold shareholders, creating a globally investable ASX listed top 5 Australian gold producer based on the pro forma market capitalization. The merger is subject to procedural matters and conditional on receiving approval of 66 ⅔% of Karora shareholders at a meeting to occur in July. Please see Karora news release dated April 7, 2024 for further details. Under the proposed merger, Karora shareholders to receive a premium up front and own 49.9% of the combined +400,000 ozpa mid-tier gold producer. The combination of Karora and Westgold is expected to deliver substantial potential synergies of $440 million. Karora will host a call/webcast on May 13, 2024 at 10:00 am (Eastern Time) to discuss the first quarter 2024 results. North American callers please dial: 1-888-664-6383; Local and international callers please dial: 416-764-8650. To join the conference call without operator assistance, you may register and enter your phone number at the Callback Link to receive an instant automated call back and be placed into the call. For the webcast of this event click the Webcast Link   https://app.webinar.net/qPWvB7E8zl7  (replay access information is provided below). Paul Andre Huet, Chairman and CEO, commented: "We are off to a strong start to 2024 with record quarterly revenue of over $115 million in Q1. The record result was driven by robust gold sales of over 40,000 ounces for the first quarter, coupled with the current strong gold price environment resulting in operating cash flow of $43 million. Our financial performance in the first quarter was solid with adjusted earnings of $13.3 million ($0.07 per share), up 177% from $4.8 million from the same period a year ago and a $10 million improvement compared to the prior quarter. The Beta Hunt Mine continued to demonstrate why we consider it to be our cornerstone asset with gold production of 31,249 ounces in Q1. The mine's cost performance during the quarter was excellent, with cash operating costs of US$869 per ounce, which was an improvement from the prior quarter and from the same period one year ago. The solid operating performance at Beta Hunt is a direct result of the effective execution of our growth plan by the operations team. Beta Hunt also continued to generate very encouraging exploration results. Results from the Stage 2 infill program at the Fletcher zone continue to demonstrate why we are so excited about this area as a very significant new gold mineralized system just west of Beta Hunt's largest and most prolific zone to-date – Western Flanks. As a reminder, in the first quarter, we reported some exciting intersections at Fletcher (3.8 g/t over 33.0 metres, 15.2 g/t over 3.3 metres and 34.6 g/t over 2.0 metres, see Karora news release dated February 22, 2024). As we reported in March, we have commenced development of an exploration drive towards the Fletcher Shear Zone and expect to access this mineralization in the third quarter. The potential of this area is an exciting part of our 2024 mine plan and could provide additional flexibility with new working faces as we continue the ramp up towards 2.0 Mtpa at Beta Hunt. Overall, our cost performance came in as planned for Q1 at US$1,285 per ounce sold, well within our full year 2024 AISC guidance range of US$1,250 to US$1,375 per ounce.  While we experienced cost pressures at our HGO mines in Q1 driven by extreme weather and additional waste stripping, we benefitted from higher nickel by-product credits in Q1 of US$54 per ounce compared to only US$5 per ounce in the prior quarter, demonstrating why we are excited about the potential for nickel by-product credits from new nickel areas we plan to develop with mechanized mining. As a reminder we are at a competitive advantage at Beta Hunt, with our growing gold infrastructure and operations carrying the majority of the fixed costs required to access the proximal nickel areas, providing us with tremendous flexibility to exploit our very high-grade nickel zones throughout the same mine – an enviable position. Finally, but most significantly, we announced a very exciting merger transaction with Westgold on April 7. This is very good news for Karora shareholders that delivers a premium price once approved and provides ongoing exposure to the strong gold market conditions through a 49.9% interest in the new merged Westgold/KRR which will be largest unhedged gold producer in Australia. The new merged company offers value to its shareholders in many ways, including substantial synergies potential in the order of $440 million, rerating potential as a larger entity, expected buying from new TSX and ASX index inclusions and the flexibility to further unlock the growth potential of both sets of assets with a strong combined balance sheet and significantly expanded equipment fleet at Westgold. It is clear to me that together Karora and Westgold offer all our shareholders a compelling vehicle in which to participate in this historic gold price rally, unlocking significant value across both asset bases that could not be achieved as standalone companies." RESULTS OF OPERATIONS  Table 1. Results of Operations Three Months Ended, Mar. 31,2024 Mar 31,2023 Dec 31,2023 Gold Operations (Consolidated) Tonnes milled (000s) 436 502 485 Recoveries 94 % 94 % 94 % Gold milled, grade (g/t Au) 2.75 2.62 2.75 Gold produced (ounces) 36,147 39,827 40,295 Gold sold (ounces) 40,343 36,145 37,439 Average exchange rate (C$/US$) 1 0.74 0.74 0.73 Average realized price (US $/oz sold) $2,067 $1,877 $1,988 Cash operating costs (US $/oz sold)2 $1,193 $1,124 $1,272 All-in sustaining cost (AISC) (US $/oz sold)2 $1,285 $1,213 $1,435 Gold (Beta Hunt) Tonnes milled (000s) 271 298 363 Gold milled, grade (g/t Au) 3.81 2.92 3.13 Gold produced (ounces) 31,249 26,577 34,486 Gold sold (ounces) 34,310 23,077 31,819 Cash operating cost (US $/oz sold)2 $869 $967 $1,123 Gold (HGO Mine) Tonnes milled (000s) 165 204 123 Gold milled, grade (g/t Au) 1.00 2.18 1.61 Gold produced (ounces) 4,898 13,250 5,809 Gold sold (ounces) 6,033 13,068 5,620 Cash operating cost (US $/oz sold)2 $3,031 $1,402 $2,112   1. Average exchange rate refers to the average market exchange rate for the period. 2. Non-IFRS: the definition and reconciliation of these measures are included in the "Non-IFRS Measures" section of this news release and in the MD&A for the three and twelve months ended December 31, 2023. 3. Numbers may not add due to rounding. Consolidated Operations Consolidated gold production in the first quarter of 2024 was 36,147 ounces, an 9% decrease from the first quarter of 2023 (39,827 ounces) and 10% decrease from the 40,295 ounces in the previous quarter. The decrease from the first quarter of 2023 resulted primarily from the 13% decrease in tonnage partially offset by a 5% higher grade primarily driven by Beta Hunt (31% higher grade than the comparable quarter). Consolidated tonnage was 13% down on the comparative period in 2023 and 10% lower than the prior quarter due to the impact of two weeks of extreme wet weather during the quarter and a two-week regional interruption to state grid power that directly impacted the Lakewood mill and Beta Hunt. Cash operating costs1 per ounce sold for the first quarter of 2024 averaged US$1,193 compared to US$1,124 for the same period in 2023 and US$1,272 the previous quarter. The increase from the same period in 2023 reflects higher production processing costs slightly offset by higher grade. The lower cost compared to the prior quarter primarily reflects the impact of higher nickel by-product credits. Higher production costs reflect inclusion of all development costs in the shorter term Two Boys underground mine and additional waste movement at the Pioneer pit to improve wall stability and the impact of temporary contract crushing at Higginsville during the current quarter. The lower cost compared to the prior quarter reflects higher grade and higher by-product credits in the current quarter of US$54/oz compared to US$5/oz for the final quarter of 2023. The higher by-product credits reflect recommencement of nickel sales in the current quarter. AISC1 per ounce sold in the first quarter of 2024 averaged US$1,285 compared to US$1,213 in the first quarter of 2023 and US$1,435 in the previous quarter, with the increase from the first quarter of 2023 reflecting higher cash operating cost per ounce, partially offset by higher gold sales volume. The lower AISC compared to the prior quarter reflects lower cash operating costs and higher gold sales volume in the current quarter. Beta Hunt During the first quarter of 2024, Beta Hunt mined 271,200 tonnes at an average grade of 3.73 g/t containing 32,485 ounces of gold and on track with the 2024 mine plan. This represented a 10% reduction from the first quarter of 2023 ore tonnes mined, and a 25% decrease from the prior quarter ore tonnes due to lower availability of some operating areas, planned power upgrades in the lower section of the mine and a number of unplanned local transmission network failures, now resolved.  Despite the lower tonnage moved, contained gold was 20% higher than the first quarter of 2023 (299,900 tonnes at 2.81 g/t for 27,100 contained ounces) but 8% lower than the prior quarter (360,300 tonnes at 3.05 g/t for 35,286 contained ounces) reflecting the mining of a planned higher-grade section of Beta Hunt during the current quarter. The majority of the mined tonnes during the first quarter came from the central and southern section of Western Flanks and the scheduled higher grade ore zones from A Zone. Gold production from Beta Hunt in the first quarter of 2024 totaled 31,249 recovered ounces based on milling 271,000 tonnes at an average grade of 3.81 g/t and 94% plant recovery. The higher grade offset lower processed tonnes, to deliver 18% higher gold recovery compared to the first quarter of 2023. The higher grade was offset by the lower processed tonnes when compared to the previous quarter which produced 9% higher gold production (34,486 ounces). Cash operating costs1 per ounce sold at Beta Hunt averaged US$869 in the first quarter of 2024, which compared to US$967 in the first quarter of 2023, and US$1,123 the previous quarter. The reduction in cash operating costs per ounce from the same and previous quarters in 2023 reflects the positive impact of higher grades and higher sales volumes. In addition to gold production, Beta Hunt mined 4,337 tonnes of nickel ore at an estimated grade of 2.5% nickel during the first quarter of 2024 compared to 7,331 tonnes of nickel ore mined at an estimated grade of 2.2% nickel for the same period in 2023 and 5,253 tonnes of nickel ore at an estimated grade of 2.3% nickel the previous quarter. Higginsville Mining Operations ("HGO") During the first quarter of ...