Three Year Production Guidance And Organic Growth Plan To Double Gold Production
TORONTO - Karora Resources Inc. reported its multi-year consolidated growth plan to double gold production from 99,249 ounces in 2020 to a range of 185,000 – 205,000 ounces in 2024. The growth plan will be driven by an expansion of Beta Hunt underground mine production to 2.0 Mtpa by 2024, from 0.8 Mtpa recorded in 2020. Increased production from Beta Hunt will be complemented by the Spargos Reward and Higginsville Central areas, with Spargos expected to begin mining ore in Q3 2021. This tonnage will be processed by the Higginsville mill, which will be expanded to a capacity of 2.5Mtpa by 2024 (Phase II), an increase from the current Phase I expansion to 1.6Mtpa from 1.4Mtpa that is currently underway.
Paul Huet, Chairman and CEO, said, "I am extremely pleased to announce our organic growth plan, which includes a three-year ranged guidance profile that is based on Karora's 2020 year-end Mineral Reserves and Mineral Resources announced earlier. Our new growth plan doubles our ounce output, reduces costs and increases margins over three years. We are in a very strong position to deliver this plan funded from our current cash balance of almost $80 million and cash flow from operations during this period. Based on this robust plan, we also intend to refinance our existing $30 million debt facility to provide us with further flexibility over the coming years along with materially reducing our interest costs.
This growth plan to increase gold production from 99,249 ounces in 2020 to a range of 185,000 to 205,000 ounces in 2024 is, importantly, driven via the expansion of our primary asset - Beta Hunt. Over the past two years, we have optimized, improved and executed extremely well across our operations, with Beta Hunt leading these efforts. During this period, we have delivered seven consecutive quarters of reliable and robust production despite operational, weather and pandemic-related challenges. I am extremely proud of our operational accomplishments during this period, and as an operator at heart myself, I am very confident in our ability to deliver on this growth plan.
In addition to the Beta Hunt underground expansion and Higginsville mill expansion to 2.5Mtpa, we have several exciting projects that we expect will provide upside beyond the growth plan we are announcing today. If we are able to unlock the value in these projects, and I am confident we will, they will significantly enhance what is an already impressive path forward for Karora.
These additional opportunities include our plan to deliver a maiden resource estimate of the Larkin Zone, which will form part of our 2021 consolidated Mineral Resource and Mineral Reserve update. Based on drilling results to date, Larkin has the potential to increase grades above and beyond the current growth plan numbers. Furthermore, the potential future by-product nickel credits associated with the Beta Hunt 30C and high grade 50C nickel trough discoveries provide further upside opportunity, the latter having the potential to be higher grade than our current nickel Measured and Indicated Mineral Resource of 561 kt at 2.9% for 16,100 tonnes of nickel. We now have an exploration team dedicated to these high priority nickel areas at Beta Hunt. As we will continue to drill these zones and receive assays, we will update the market with developments.
On the subject of drilling, our 2021 program continues to deliver on the untapped exploration potential across our land package including Beta Hunt, Higginsville Central, Spargos and Lake Cowan. To date in 2021 we have completed 57,968 meters of our planned 68,500 meter exploration drilling program. In the first half of the year, drilling at Beta Hunt was focused on resource definition while drilling at Higginsville was more directed towards greenfields exploration, the bulk of which is associated with the Lake Cowan reconnaissance program. We are currently compiling and analyzing these results ahead of targeting our next phase of drill targets.
Lastly, I would like to acknowledge the very hard work of our entire team required to deliver this growth plan on time and on budget despite numerous external challenges. I know they are as excited as I am to get to work on executing this plan. Together we are confident it's going to be an exciting journey ahead."