TORONTO, July 14, 2020 /CNW/ - Karora Resources Inc. (TSX:
KRR) ("Karora" or the "Corporation") is pleased to announce that
Eric Sprott has agreed to increase
his ownership in Karora by 26 million shares. In a strategic move,
Karora has worked alongside Maverix Metals Inc. ("Maverix") to
effectively place the entire planned share issuance previously
announced June 30, 2020 (see Karora
news release dated June 30,
2020).
In lieu of issuing shares to Maverix, Karora will use the
proceeds from total of 36.5 million common shares to be issued to
Eric Sprott and one other
institutional investor to complete the previously announced Maverix
transaction with an all-cash consideration of US$18 million (subject to the conditions
described in the Karora news release dated June 30, 2020). The shares of Karora to be issued
to Mr. Sprott and the institutional investor will be issued at the
same $0.506 price per share that had
been agreed with Maverix. Subject to completion of the
transactions, no common shares of Karora will be issued to
Maverix.
Paul Andre Huet, Chairman &
CEO of Karora, commented: "I am very excited that Eric Sprott, a highly influential and well-known
leader in the resource investment community and one of the world's
premiere gold and silver investors, has significantly increased his
investment in Karora. This investment is a strong endorsement of
the confidence Mr. Sprott has in both our execution over the past
year and our plans to unlock the value of our Western Australian
gold mining assets."
In total, Karora intends to issue 36.5 million common shares,
made up of 26 million shares to Eric
Sprott and the balance expected to be to another
institutional investor. The completion of this investment
transaction is subject to the approval of the Toronto Stock
Exchange and other customary conditions. A cash finder's fee will
be payable to certain third parties in connection with this private
placement of Karora shares.
About Karora Resources
Karora is focused on growing gold production and reducing costs
at its integrated Beta Hunt Gold Mine and Higginsville Gold
Operations ("HGO") in Western
Australia. The Higginsville treatment facility is a low-cost
1.4 Mtpa processing plant which is fed at capacity from Karora's
underground Beta Hunt mine and open pit Higginsville mine. At Beta
Hunt, a robust gold mineral resource and reserve is hosted in
multiple gold shears, with gold intersections along a 4 km strike
length remaining open in multiple directions. HGO has a substantial
historical gold resource and highly prospective land package
totaling approximately 1,800 square kilometers. Karora has a strong
Board and management team focused on delivering shareholder value.
Karora's common shares trade on the TSX under the symbol KRR.
Karora shares also trade on the OTCQX market under the symbol
KRRGF.
Cautionary Statement Concerning Forward-Looking
Statements
This release contains certain "forward looking statements"
and certain "forward-looking information" as defined under
applicable Canadian and U.S. securities laws. Forward-looking
statements and information can generally be identified by the use
of forward-looking terminology such as "may", "will", "should",
"expect", "intend", "estimate", "anticipate", "believe",
"continue", "plans" or similar terminology. The forward-looking
information contained herein is provided for the purpose of
assisting readers in understanding management's current
expectations and plans relating to the future. Readers are
cautioned that such information may not be appropriate for other
purposes. Forward-looking statements and information include, but
are not limited to, statements with respect to the closing of the
private placement.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Karora to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. Factors that could
affect the outcome include, among others: future prices and the
supply of metals; the results of drilling; inability to raise the
money necessary to incur the expenditures required to retain and
advance the properties; environmental liabilities (known and
unknown); general business, economic, competitive, political and
social uncertainties; results of exploration programs; accidents,
labour disputes and other risks of the mining industry; political
instability, terrorism, insurrection or war; or delays in obtaining
governmental approvals, projected cash operating costs, failure to
obtain regulatory or shareholder approvals. For a more detailed
discussion of such risks and other factors that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements, refer to Karora 's filings with
Canadian securities regulators, including the most recent Annual
Information Form, available on SEDAR at www.sedar.com.
Although Karora has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results to
differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are made as of the date
of this news release and Karora disclaims any obligation to update
any forward-looking statements, whether as a result of new
information, future events or results or otherwise, except as
required by applicable securities laws.
Cautionary Statement Regarding the Higginsville Mining
Operations
A production decision at the Higginsville gold
operations was made by previous operators of the mine, prior to the
completion of the acquisition of the Higginsville gold operations
by Karora and Karora made a decision to continue production
subsequent to the acquisition. This decision by Karora to continue
production and, to the knowledge of Karora, the prior production
decision were not based on a feasibility study of mineral reserves,
demonstrating economic and technical viability, and, as a result,
there may be an increased uncertainty of achieving any particular
level of recovery of minerals or the cost of such recovery, which
include increased risks associated with developing a commercially
mineable deposit. Historically, such projects have a much higher
risk of economic and technical failure. There is no guarantee that
anticipated production costs will be achieved. Failure to achieve
the anticipated production costs would have a material adverse
impact on the Corporation's cash flow and future profitability.
Readers are cautioned that there is increased uncertainty and
higher risk of economic and technical failure associated with such
production decisions.
SOURCE Karora Resources Inc.