Karora drills hit high-grade gold, nickel in Oz

Canada’s Karora Resources (TSX: KRR; US-OTC: KRRGF) has released high-grade drill results from the Fletcher shear and Larkin gold zones and the emerging 50C nickel zone at the Beta Hunt mine in Western Australia.

At the Fletcher South area, Karora reported on Feb. 22 that highlight results include drill hole WF380ACC-09AE, which returned 3.8 grams gold per tonne over 33 metres. Other notable results from Fletcher include intersections of 34.6 grams gold over 2 metres and 15.2 grams gold over 3.3 metres, supporting the potential extension and upgrading of the Fletcher south zone resource statement.

In last year’s fourth quarter, Karora focused on exploration and resource definition drilling for gold, totalling 3,932 metres, mainly at Fletcher South, part of the Fletcher shear zone. This included a Stage 2 infill program with nine holes aimed at expanding and upgrading mineralization around specific previous holes.

In the Larkin zone, infill drilling targeted gold and nickel mineralization, with significant intersections including 6.7 grams gold per tonne over 9.4 metres and 13.7 grams gold over 3.5 metres.

The record-breaking 2023 gold production results from Karora’s Beta Hunt and Higginsville mines underline the continued gold prospectivity and exploration success in parts of Western Australia.

Canaccord Genuity Capital Markets mining analyst Jeremy Hoy says that Karora believes that Beta Hunt is a historically under-explored, vast system. “We believe continued success at Fletcher could help KRR deliver a significant maiden resource for the zone,” the analyst said in a note to clients, adding he was also encouraged by the continuity of results within the Larkin zone.

The company plans to update the Larkin resource model and aims to publish an initial resource for Fletcher this year, although the specific timelines were not provided.

Karora chairman and CEO Paul Andre Huet says that productivity at Beta Hunt has significantly improved after completing the second decline and upgrades to primary ventilation. This progress was further enhanced by acquiring two new Sandvik DD4422i twin boom jumbo drills in December, along with two CAT AD63 underground trucks and a CAT R2900 loader in the latter half of 2023.

The focus for 2024 is on expanding development rates to introduce additional mining faces, aiming to achieve a production rate of 2 million tonnes per year by year-end. This expansion targets new areas like the Larkin and Mason zones and existing ones like Western Flanks and the A zone.

In 2023, Karora produced a record 160,492 oz. gold, exceeding 2022 production by over 26,000 oz. and beating the high end of its full-year guidance range of 145,000 – 160,000 ounces. Beta Hunt garnered global attention in 2018 by discovering two of the largest gold specimens ever found, weighing about 95 kg and 63 kg, with an estimated gold content of 2,440 oz. and 1,620 oz., respectively.

As of Sept. 30, 2023, Beta Hunt held proven and probable gold reserves of 6.6 million tonnes grading 2.7 grams gold per tonne for 573,000 oz. of metal, and it has 18.1 million tonnes grading 2.7 grams gold for 1.6 million oz. gold in measured and indicated resources.

Nickel progress

Honing its focus on Beta Hunt’s nickel potential, Karora, on Feb. 26, announced the initial results from the nearby 50C infill drilling program aimed at upgrading and extending the existing resource. The program delivered some of the best nickel intercepts at Beta Hunt yet.

Among the highlight results was hole G50-22-26NE, which cut 8.2% nickel over 5.1 metres, including 13.7% nickel over 2.6 metres.

Management highlighted that 50C remains open along strike and can potentially extend 3 km from the Gamma Fault to the southern property boundary.

Karora’s Australian nickel focus contrasts with current market trends. While increased Indonesian nickel supply has cratered London Metals Exchange prices, prompting Wyloo Metals to mothball its Cassini, Long, and Durkin nickel mines, while BHP (ASX: BHP) announced plans to switch the Kambalda concentrator and Nickel West operations to care and maintenance.

All Beta Hunt nickel ore is processed at BHP’s Kambalda nickel concentrator, only about 4 km away. 

Karora’s Gamma nickel resource, comprising the 50C and 10C deposits, extends southeast and remains open for exploration. There is potential for this resource to expand over a 3-km stretch from the Gamma Fault to the boundary of the sub-lease. This is supported by historical drill results, specifically from drill hole LD4022, which found significant nickel grades of 11.4% nickel over 9.5 metres, 400 metres southeast of the current resource and 1.2 km southeast of the initial 50C discovery. Beta Hunt currently hosts 776,000 measured and indicated tonnes grading 2.9% nickel for 22,300 tonnes of metal and 500,000 inferred tonnes grading 2.75% nickel for 13,400 tonnes of metal.

Gamma Block holds 197,000 measured and indicated tonnes at 3% nickel for 6,000 tonnes of metal. Huet says the nickel infill and extensional drilling program bodes “very well” for the next Beta Hunt nickel resource update, expected in late 2024.

As of the market close on Tuesday, at $4.08 per share, Karora’s Toronto-quoted equity has traded flat over the 12-month period, touching $3.60 and $5.61. It has a market capitalization of $725 million.