Highlights:
- Beta Hunt Nickel Measured and Indicated Mineral Resources
increased by 22% to 19,600 nickel tonnes and Inferred
Mineral Resource increased by 52% to 13,200 nickel tonnes
ounces
- Significant addition includes the Maiden 50C Trend
Resource comprising Measured and Indicated 153k tonnes @ 2.8% Ni for 4,300 nickel tonnes and
Inferred 124k tonnes @ 3.1% Ni for
3,800 Ni tonnes. Now in Mineral Resource, the 50C Zone was first
discovered in April 2021,
demonstrating the advantage of leveraging the extensive underground
development in place at Beta Hunt.
- The 50C Trend is part of the Gamma Block Nickel Mineral
Resource which is defined over 800 metres of strike with potential
to extend a further 1.8 kilometres to 2.6 kilometres of
strike.
- The updated Mineral Resource will be used to support a
Preliminary Economic Assessment of expanded nickel production at
the Beta Hunt mine which is expected to be released during the
second quarter.
- Karora expects to update its global reserve and resources,
both gold and nickel, in the fourth quarter of 2022.
TORONTO, May 11, 2022
/CNW/ - Karora Resources Inc. (TSX: KRR) (OTCQX: KRRGF) ("Karora"
or the "Corporation") is pleased to announce its updated nickel
Measured and Indicated ("M&I") Mineral Resource estimate for
the Beta Hunt Mine has increased by 22% and the nickel Inferred
Mineral Resource estimate has increased 52%.
Paul Andre Huet, Chairman &
CEO, commented: "We are very pleased to announce significant
increases, net of mining depletion, to our Beta Hunt Mineral
Resource in the M&I category to 19,600 nickel tonnes and 13,200
nickel tonnes in the Inferred category. In particular, the addition
of the maiden Mineral Resource for the Gamma Zone, highlighted by
the 50C nickel discovery which we have moved rapidly from discovery
in April 2021 (see Karora news
release dated April 6, 2021) into
Mineral Resource in just over one year. This is yet another
example, as with our Larkin Gold Resource, of the tremendous
advantage we have at Beta Hunt with respect to leveraging existing
underground development. In fact, our +400km of existing
underground development at Beta Hunt would cost over A$2Bn at today's development prices to put in
place. The most exciting part of our new Nickel Resource is that
the 50C discovery has only been delineated over a strike length of
800 metres – the zone remains wide open for a potential strike
length of up to 2.6 kilometres. Certainly an exciting prospect for
future growth.
Our success in expanding the Beta Hunt Nickel Mineral Resource
underpins our plans to substantially increase our nickel production
from the expected 2022 output of between 450 and 550 payable nickel
tonnes to materially higher levels in the future. We are currently
in the process of completing a preliminary economic assessment
("PEA") to evaluate the potential of this expanded Gamma Zone at
Beta Hunt with a view to materially increasing the by-product
credit potential to reduce our gold AISC costs in future. Given the
significant strike length left to explore south of Gamma, this
initial PEA is just that – only the beginning of the expanded
nickel story at Beta Hunt."
Nickel Mineral Resource
Summary
In February, 2022, AMC Consultants Pty Ltd, Perth (AMC) were contracted to produce
resource estimates for the 30C and 40C nickel sulphide deposits in
the Beta Block and the Gamma Block nickel sulphide deposits, taking
into account the recently completed drilling. The new Nickel
Mineral Resource which incorporates all of Beta Hunt's nickel
deposits, including those updated by AMC, is shown in Table 1
below.
Table 1: Nickel– Mineral Resources as at 31 January, 2022 – 1% Ni lower
cut-off
January-2022
Mineral
Resource
|
Measured
|
Indicated
|
Measured &
Indicated
|
Inferred
|
K
tonnes
|
Ni
(%)
|
Ni
tonnes
|
K
tonnes
|
Ni
(%)
|
Ni
tonnes
|
K
tonnes
|
Ni
(%)
|
Ni
tonnes
|
K
tonnes
|
Ni
(%)
|
Ni
tonnes
|
Beta Block
|
-
|
-
|
-
|
494
|
2.8%
|
13,600
|
494
|
0
|
13,600
|
175
|
2.8%
|
5,000
|
Gamma Block
|
-
|
-
|
-
|
197
|
3.0%
|
6,000
|
197
|
0
|
6,000
|
317
|
2.6%
|
8,200
|
Total
|
-
|
-
|
-
|
692
|
2.8%
|
19,600
|
692
|
2.8%
|
19,600
|
492
|
2.7%
|
13,200
|
Note: Refer to detailed footnotes below
At January 31, 2022, Measured and
Indicated Mineral Resources totaled 692k tonnes grading 2.8% Ni for 19,600 Ni tonnes
an increase of 3,500 Ni tonnes, or 22% compared to the September 2020 Measured and Indicated Mineral
Resource estimate. At January 31,
2022, Inferred Mineral Resources totaled 492k tonnes grading 2.7% Ni for 13,200 Ni tonnes
an increase of 4,500 Ni tonnes, or 52%, compared to the
September 2020 Inferred Mineral
Resource estimate.
The new Nickel Resource incorporates updates to the
10C1. and 30C resources plus a small, new trough, the
40C. The bulk of the increased resources is due to the
addition of the 50C Trend which makes up 22% (4,300 Ni tonnes) of
the Measured and Indicated Mineral Resource and 29% (3,800 Ni
tonnes) of the Inferred Mineral Resource. The Beta Hunt Nickel
Mineral Resource estimate is net of mine production depletion of
7k tonnes grading 3.0% Ni for 211 Ni
tonnes over the period October 1,
2020 to January 31, 2022. The
depletion is from the Beta Southwest resource.
1.The 10C was
previously reported as Beta South in the February 1, 2021 Technical
Report.
The new name is now aligned with the standard convention for
reporting of nickel troughs at Beta Hunt
|
The new Nickel Resource marks the most significant increase
since February 2016 when the
Corporation acquired the private company Salt Lake Mining Pty Ltd,
previous owners of the Beta Hunt mine (see KRR news release,
Feb 1,2016). The major contributor to
the increase in Mineral Resources is the 50C Nickel Trend which was
discovered by Karora in 2021 (see KRR news release, April 6, 2021).
Summary
Nickel exploration and resource definition activities at Beta
Hunt in 2021 were concentrated on the newly discovered 50C Trend in
the Gamma Block, supplemented by infill and extensional diamond
drilling of the 30C nickel trough contained within the Beta Block
primarily above the Larkin Gold Zone.
The 50C Trend was drilled as fans from underground drill cuddies
along the Beta Return Ingress (BRI), a drive that extends from the
Beta Block into the Gamma Block for a distance of 150 metres.
Drilling was targeted at both infilling and extending the new
nickel mineralization as well as infilling the existing 10C mineral
resource that occurs along the eastern flank of the 50C Trend.
Drilling was aimed at upgrading the 10C mineral resource and
defining a maiden mineral resource for the 50C Trend. The 50C
mineralized trend was discovered in early 2021 as part of a drill
program based on an assessment and geological review of the area by
Karora's exploration team and was co-funded by the Western
Australian Government as part of its co-funded Exploration
Incentive Scheme (see KRR news release, April 6, 2021).
Both the 10C and 50C Trends remain open along strike to the
southeast with potential to extend a full 2.6 kilometres of strike
to the sub-lease boundary. This potential is highlighted by
historical surface drill hole LD4022 which intersected 9.5 metres
(downhole) @ 11.4% Ni, 400 metres southeast along strike of the new
mineral resource, as shown below in Figure 1(a). Additionally, see
KRR release dated Oct 8, 2021 for
more information.
The 30C drilling infilled and extended the prior Mineral
Resource (included in the Corporation's Technical Report dated
February 1, 2021 under Karora's
profile at www.sedar.com).
For the remainder 2022, drilling for nickel mineralization will
focus on extending and upgrading the Gamma Block resources with
drilling facilitated by a 300m
extension of the existing BRI. The extension requires an upgrade to
the vent infrastructure to be completed in Q3, 2022. Drilling from
the BRI extension is expected to commence in Q4, 2022.
Drilling will also continue to extend and upgrade existing
resources in the Beta Block. In addition, surface exploration
drilling is aimed at testing for a new interpreted trough west of
the known Beta nickel mineralization. The target is referred to as
the N90C with drilling expected to commence in Q4, 2022. This
drilling is a co-funded program with the Western Australian State
Government under their Exploration Incentive Scheme (EIS).
Nickel Resource by Deposit
Table 2: Beta Hunt Nickel Mineral Resources as at
31 January, 2022 – 1% Ni lower
cut-off
Note: Refer to detailed footnotes below
January-2022
Mineral
Resource
|
Measured
|
Indicated
|
Measured &
Indicated
|
Inferred
|
K
tonnes
|
Ni
(%)
|
Ni
tonnes
|
K
tonnes
|
Ni
(%)
|
Ni
tonnes
|
K
tonnes
|
Ni
(%)
|
Ni
tonnes
|
K
tonnes
|
Ni
(%)
|
Ni
tonnes
|
Beta Block
|
30C
|
-
|
-
|
-
|
138
|
1.8
|
2,500
|
138
|
1.8
|
2,500
|
24
|
1.7
|
400
|
40C
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
7
|
2.3
|
200
|
Beta Central
|
-
|
-
|
-
|
67
|
3.1
|
2,100
|
67
|
3.1
|
2,100
|
9
|
2.9
|
300
|
Beta
Southwest
|
-
|
-
|
-
|
14
|
3.5
|
500
|
14
|
3.5
|
500
|
36
|
3.5
|
1,300
|
East Alpha
|
-
|
-
|
-
|
276
|
3.1
|
8,600
|
276
|
3.1
|
8,600
|
98
|
2.9
|
2,900
|
Gamma Block
|
10C
|
-
|
-
|
-
|
44
|
3.8
|
1,700
|
44
|
3.8
|
1,700
|
193
|
2.3
|
4,400
|
50C
Trend1.
|
-
|
-
|
-
|
153
|
2.8%
|
4,300
|
153
|
2.8%
|
4,300
|
124
|
3.1%
|
3,800
|
Total
|
-
|
-
|
-
|
692
|
2.8%
|
19,600
|
692
|
2.8%
|
19,600
|
492
|
2.7%
|
13,200
|
1. 50C Trend
includes the 50C,55C and 95F nickel sulphide
deposits
|
50C Trend
The first-ever Nickel Mineral Resource was completed for the 50C
Trend which comprises three nickel deposits known as the 50C, 55C
and 95F. These deposits make up a zone of northwest trending nickel
mineralization located on the western margin of the 10C nickel
resource (Figure 2a). The 50C Trend totals Measured and Indicated,
153k tonnes grading 2.8% Ni (4,300 Ni
tonnes) and Inferred 124k tonnes
grading 3.1% Ni (3,800 Ni tonnes). The Mineral Resource is bounded
to the north by the Gamma Fault (GF) in the Gamma Block at the
southern end of the Beta Hunt mine. The 50C Trend is
interpreted as part of the southern off-set extension to Beta Block
nickel mineralization which occurs north of the Gamma Fault.
Nickel mineralization is predominantly contact style massive
sulphides that lie on the base of the Kambalda Komatiite. Thrust
related massive nickel mineralization is associated with local
thrust disruptions in the ultramafic and in some instances these
nickel sulphides overlay sediment units. The 50C is adjacent to the
55C and 10C nickel troughs that are within an area known as the
Gamma Block. The Gamma Block is bounded to the north by the Gamma
Fault which is a south-side up-fault zone. Nickel sulphides are
defined over a broad zone of almost continuous mineralization, up
to 150m across strike, located
80m above and west of the BRI.
Wireframes for modelling were completed by the Karora mine team
and took into account the ultramafic contact, nickel assays in
drilling and felsic porphyry intrusions observed in drilling and
underground exposures. Hard boundaries for the nickel
mineralization were guided by the ultramafic contact.
The Mineral Resource for those Beta Hunt nickel deposits which
were updated, including those that make-up the 50C Trend, was
undertaken by AMC Consultants Pty Ltd (AMC) using Micromine
software. The Gamma Block, which includes the 50C Trend, nickel
sulphide deposits modelled by AMC are shown in Figure 2. Nickel
grade estimation was completed using an accumulation (or seam)
modelling method and ordinary kriging (OK). This estimation
approach was considered appropriate based on review of several
factors, including the estimated true thickness of the
mineralization, the variable thicknesses of the mineralization and
drillhole intercepts and the variety of angles that the drillholes
intersected the mineralization. The estimation was constrained with
geological and mineralization interpretations. Grade estimation was
validated using visual inspection of interpolated block grades vs
sample data, and swath plots.
The Mineral Resource classification is based on preliminary
passes which take into account number of drill hole intersections
(≥ 4, Indicated; ≥ 2 Inferred) supported by an assessment of
confidence levels of key criteria which include data quality, grade
continuity, structural continuity and drill spacing.
Compliance Statement (JORC 2012
and NI 43-101)
Mr. Stephen Devlin is Group
Geologist for Karora, a full time employee of Karora and a Fellow
of the AusIMM. Mr Devlin has sufficient experience that is relevant
to the style of mineralization and type of deposit under
consideration and to the activity being undertaken to qualify as a
Competent Person as defined in the JORC Code, 2012 Edition, and
fulfils the requirements to be a "Qualified Person" for the
purposes of NI 43-101. Mr Devlin has reviewed and approved the
disclosure of the technical information for the Beta Hunt Nickel
Mineral Resource included in this news release.
The "JORC Code" means the Australasian Code for Reporting of
Mineral Resources and Ore Reserves prepared by the Joint Ore
Reserves Committee of the Australasian Institute of Mining and
Metallurgy, Australian Institute of Geoscientists and Mineral
Council of Australia. There are no
material differences between the definitions of Mineral Resources
under the applicable definitions adopted by the Canadian Institute
of Mining, Metallurgy and Petroleum (the "CIM Definition
Standards") and the corresponding equivalent definitions in the
JORC Code for Mineral Resources.
Detailed Footnotes relating to
Mineral Resource Estimates as at January
31,2022
- Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that all or
any part of the Mineral Resources estimated will be converted into
Mineral Reserves.
- The Measured and Indicated Mineral Resources are inclusive of
those Mineral Resources modified to produce Mineral Reserves.
- The Mineral Resource estimates include Inferred Mineral
Resources that are normally considered too speculative geologically
to have economic considerations applied to them that would enable
them to be categorized as Mineral Reserves. There is also no
certainty that Inferred Mineral Resources will be converted to
Measured and Indicated categories through further drilling, or into
Mineral Reserves once economic considerations are applied.
- Mineral Resources are reported within proximity to underground
development and nominal 1% Ni lower cut-off grade for the nickel
sulphide mineralization.
- Estimation for the Mineral Resources is by ordinary kriging
using an accumulation method to account for narrow lodes.
- The Mineral Resources assume an underground mining scenario and
a high level of selectivity.
- Classification is according to JORC Code and CIM Definition
Standards Mineral Resource classification categories.
- The models are depleted for underground mining to January 31, 2022.
- Totals may vary due to rounded figures.
About Karora
Resources
Karora is focused on increasing gold production to a targeted
range of 185,000-205,000 ounces by 2024 at its integrated Beta Hunt
Gold Mine and Higginsville Gold Operations ("HGO") in Western Australia. The Higginsville treatment
facility is a low-cost 1.6 Mtpa processing plant, expanding to a
planned 2.5 Mtpa by 2024, which is fed at capacity from Karora's
underground Beta Hunt mine and Higginsville mines. 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
Mineral gold Resource and Reserve and prospective land package
totaling approximately 1,900 square kilometers. The Company also
owns the high grade Spargos Reward project, which came into
production in 2021. Karora has a strong Board and management team
focused on delivering shareholder value and responsible mining, as
demonstrated by Karora's commitment to reducing emissions across
its operations. Karora's common shares trade on the TSX under the
symbol KRR and also trade on the OTCQX market under the symbol
KRRGF.
Cautionary Statement Concerning
Forward-Looking Statements
This news release contains "forward-looking information"
including without limitation statements relating to the liquidity
and capital resources of Karora, production guidance and the
potential of the Beta Hunt Mine, Higginsville Gold Operation, the
Aquarius Project and the Spargos 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.