TORONTO, Aug. 7, 2020 /CNW/ - Karora Resources Inc. (TSX:
KRR) ("Karora" or the "Corporation") is pleased to
announce that following an extensive due diligence period, it
has closed the acquisition of the Spargos Reward Gold Project
("Spargos Reward Project" or "Spargos") from Corona Resources
Limited as originally announced on May 11,
2020 (see related press release). The Spargos Gold Project
contains a historical JORC1 (2012) Mineral Resource
Estimate of 112,000 oz (785,800 tonnes @ 4.4 g/t) indicated
resource and 19,000 oz (151,000 tonnes @ 4.0 g/t) inferred
resource2, as detailed in Table 1 below.
Note: A qualified person has not done sufficient work on behalf
of Karora to classify the historical estimate noted in Table 1
below as current mineral resources or mineral reserves, and Karora
is not treating the historical estimates as current mineral
resources or mineral reserves.
Paul Andre Huet, Chairman and
CEO, commented "The Spargos Reward Project is an excellent bolt-on
project for our Higginsville gold operation ("HGO") and a great
addition to our already strong asset base in Western Australia, providing a new high-grade
source of feed just 65km from the HGO mill. We intend to fast track
Spargos into our growing production pipeline with the goal of
beginning to generate cash flow from the Project in 2021. Follow up
is planned on the exciting exploration upside potential at Spargos,
as demonstrated by RC drillhole 19SPRRC004 intersection of 37.1 g/t
over 18m (62m to 80m),
including 93.1 g/t over 2m from
78m downhole3,4."
Karora has acquired the Spargos Reward Project for A$4 million in cash and will be subject to a
minimum spending commitment of A$2.5
million on exploration and development over a two-year
period from the closing date. The seller is entitled to an
additional (i) A$1.5 million in
Karora shares on commencement of gold production from Spargos, and
(ii) A$1.0 million in Karora shares
if a new additional indicated gold resource of at least 165,000 oz
is delineated at the project.
The Spargos Reward project tenements cover 33 km2
located in the Eastern Goldfields of Western Australia, 35 minutes by road to HGO.
On top of the existing historical resource, there are a number of
historic workings within the project, the most notable of which is
the historic Spargos Reward Gold Mine which produced 105,397 tonnes
at an average grade of 8.56 g/t Au in the 1930s and
1940s1, with limited gold extraction since that
time.
Table 1: Spargos Reward Historical Mineral Resource Estimate
February 26, 2020 (JORC Code
2012)1,2
ABOVE 300m RL
|
Thousand Tonnes
|
Au
CUT (g/t)
|
Contained
Ounces Au
|
Indicated
|
337.7
|
4.4
|
48,000
|
Inferred
|
18.0
|
4.0
|
2,000
|
|
Lower
cut-off
|
1.0 g/t
Au
|
|
|
BELOW
300m
RL
|
Thousand
Tonnes
|
Au
CUT (g/t)
|
Contained
Ounces Au
|
Indicated
|
448.0
|
4.4
|
64,000
|
Inferred
|
133.0
|
4.0
|
17,000
|
|
Lower
cut-off
|
2.0 g/t
Au
|
|
|
TOTAL
|
Thousand Tonnes
|
Au
CUT (g/t)
|
Contained Ounces Au
|
Indicated
|
785.8
|
4.4
|
112,000
|
Inferred
|
151.0
|
4.0
|
19,000
|
Notes:
1. As per the 2012 JORC (Joint
Ore Reserves Committee) Code.
The information is extracted from the report entitled
'Resource Estimate Update for Spargos Reward Project Eastern
Goldfields Western Australia' dated on February 26, 2020 and is available to view on
Corona Resources Limited's website (www.coronaresources.com.au).
Karora confirms that the form and context in which the Competent
Person's findings are presented have not been materially modified
from the original report. A qualified person has not done
sufficient work on behalf of Karora to classify the historical
estimate noted here and in Table 1 as current mineral resources or
mineral reserves and Karora is not treating the historical
estimates as current mineral resources or mineral reserves. There
is no certainty they will prove to be accurate or that a range of
outcomes will be achieved.
2. The historical mineral
resource is estimated at variable cut-off grades: >1.0 g/t Au
for open-cut mining (above the 300m
RL) and >2.0 g/t Au for underground mining (below the
300m RL). The cut-off grades reflect
the different mining costs for each mining method.
3. Historical drill information
for hole 19SPRRC004, as provided in Corona Resources Limited
news release (www.coronaresources.com.au), December 6, 2019:
Table 2: Historical drill Results, 19SPRRC004, December 6, 2019
Hole
ID
|
sub
interval
|
From
(m)
|
To
(m)
|
Downhole
Interval (m)
|
Estimated
True Width
(m)
|
Au
(g/t)
|
19SPRRC004
|
|
62
|
80
|
18
|
-
|
37.16
|
including
|
66
|
71
|
5
|
-
|
79.41
|
78
|
80
|
2
|
-
|
93.12
|
Table 3: Drill Location SPRRC004, December 6, 2019
HOLE
ID
|
Drill
type
|
EASTING
(m)
|
NORTHING
(m)
|
mRL
|
AZI
|
DIP
|
Total
Length
(m)
|
19SPRRC004
|
RC
|
354199
|
6543083
|
429
|
270
|
-55
|
80
|
4. Downhole thickness. True
thickness cannot be estimated with available information.
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.
Compliance Statement (JORC 2012 and NI 43-101)
The disclosure of scientific and technical information
contained in this news release has been reviewed and approved
by Stephen Devlin, FAusIMM, Group Geologist - Exploration
& Growth, a Qualified Person for the purposes of NI
43-101.
The historical data referenced in this release has been
reviewed under the supervision of the Qualified Person and is
supported by the Corona Resources report entitled 'Resource
Estimate Update for Spargos Reward Project Eastern Goldfields
Western Australia' dated on February 26,
2020 and is available to view on Corona Resources LTD's
website (www.coronaresources.com.au).This report details the QA/QC
procedures used on drill samples and provides analysis of the
results of all associated QA/QC samples including blanks, standards
(CRM samples) and duplicates. Samples specific to drillhole
SPRRC004 were verified by on-site inspection and check assays
carried out under the supervision of the QP in May and June 2020.
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.