Karora Resources (KRR) – Reduced Gold Royalty Frees Up Beta Hunt Mining

Published on November 9, 2021

Interesting replays relevant with gold shares, safe gold buying, commodity etfs, and Why Are Gold Mining Stocks up, Karora Resources (KRR) – Reduced Gold Royalty Frees Up Beta Hunt Mining.

Interview with Paul Huet, CEO of gold producer Karora Resources (TSX: KRR)



Finally the news Karora Resources investors have been waiting for, a renegotiated royalty package with Maverix Royalty. Maverix has agreed to reduce the Royalty on Beta Hunt gold production from 7.5% to 4.75% from July 1, 2020. Karora will pay US$5M and issue 35.1M shares at C$0.506 to Maverix. The US$5M will be paid in two equal installments of US$2.5M million, one on closing and the second payment in January 2021.

Karora Resources had reduced work at Beta Hunt whilst negotiations continued. The royalty to Maverix, together with the state royalty totalled 10% making it less economically attractive than their other properties. The company had paid C$30M in royalties since it owned Beta Hunt.

With the reduced burden Karora Resources can start to mine again and the market will be hoping that it can once again find these course gold pockets which brought it to prominence. The economics at its average grade of c.3g/t is attractive, but the magic of the course gold is what captures the imagination.

The management has been very discreet during negotiations, but now are revelling in the opportunity add to their large ore pile. The relatively inexpensive ore sorter testing result should be imminent and should removed 20-25% of waste which will drastically increase the feed grade to the mill. More margin. The business is already throwing off free cash flow. The company has options. The questions is what will the new sequence and focus of operations be.

00:00 – Introduction
2:19 – Maverix Royalty Renegotiated: An Overview
4:47 – Why Was the Renegotiation Needed and What Benefits Will Karora Reap from it?
7:35 – Deal Structure and Explaining the Multifaceted Terms
9:12 – Potential of Beta Hunt
11:00 – 4 Promises of Reducing AISC
13:18 – Plans for Dumont
14:27 – What We Say, We Deliver: The Future for Karora Resources

Company Page: https://www.karoraresources.com/

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