TORONTO, Sept. 3, 2020 /CNW/ - Karora Resources Inc. (TSX:
KRR) ("Karora" or the "Corporation") is pleased to announce it has
closed the previously announced agreement (see Karora news releases
dated June 30, 2020) with Maverix
Metals Inc. to reduce the gold royalty at Karora's Beta Hunt mine,
aligning both parties in unlocking the significant value at Beta
Hunt for their respective shareholders. Maverix has agreed with
Karora to reduce the royalty on Beta Hunt gold production from 7.5%
to 4.75% effective July 1, 2020. In
consideration for the royalty reduction, as previously announced,
Karora agreed to pay Maverix US$18
million in cash, US$15.5
million of which was paid at closing and US$2.5 million of which will be paid in January
2021.
Paul Andre Huet, Chairman &
CEO of Karora, commented: "Having now materially reduced the
royalty burden at Beta Hunt, we are excited to move forward with
our exploration program underground. This transaction has the
potential to unlock significant value for both Karora and Maverix
shareholders by allowing our strong operational team to develop
Beta Hunt to its full potential. We look forward to continue
working with our partner, Maverix, at the Beta Hunt mine."
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
KRRGD.
Cautionary Statement Concerning Forward-Looking
Statements
This news release contains "forward-looking information"
including without limitation statements relating to the timing of
production and cash flow from the Spargos Gold Reward Project and
the potential of the Beta Hunt Mine, Higginsville Gold Operation
and Spargos Reward Gold Project.
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.