Positive Nickel PEA For Beta Hunt Mine Producing 9,400 Payable Nickel Tonnes

TORONTO - Karora Resources Inc. reported on positive results of the Preliminary Economic Assessment (PEA) for Nickel Resources at its Beta Hunt Mine in Western Australia. Paul Andre Huet, Chairman & CEO, said, "The PEA highlights the robust economics and by-production credit potential for nickel production from the Beta Hunt Mine. This PEA is based on just our initial nickel resource estimate at Karora which we expect to expand as drilling continues. The initial results from the PEA are tremendous, outlining a very low capex project with strong leverage to nickel prices in a macro environment potentially poised for price appreciation in the coming years as electric vehicle demand scales. Karora is now in a very unique position, boasting strong gold production growth coupled with outstanding nickel by-product potential over the next several years – an enviable position to be in.

I look forward to the ramp-up of nickel production at Beta Hunt beginning in 2023 and advancing the excellent exploration potential to add to the resource base. The PEA base case, using our January 31, 2022 resource, supports an 8-year mining plan to produce 9,435 payable nickel tonnes at a net AISC1 of A$16,946 per tonne of nickel sold (US$12,371 per tonne). On an average annual basis, production is forecasted to increase considerably from the 450 – 550 tonnes we expect to produce in 2022.

The total capital investment is estimated to be a very low A$18.7 million, with just over A$7 million deployed in the first year, yielding a very robust IRR of 105% for the base case (pre-tax and assuming a US$19,500 per tonne nickel price) and 232% for the upside case (pre-tax and assuming US$25,000 per tonne nickel price – in line with consensus nickel pricing). On a by-product basis, our gold AISC costs have the potential to be reduced by A$80 to A$100 per ounce sold using the base case assumptions.

In my view, the PEA is an excellent starting point for realizing the full potential for a revitalized nickel production plan at Beta Hunt. I believe we are just scratching the surface of what I expect will be a growing by-product credit contribution from nickel production at Beta Hunt for many years to come.

It is important to remind ourselves that Beta Hunt was a Nickel mine for over 40 years and produced over 60,000 nickel tonnes based on a very large nickel resource system. With the 50C Trend and Gamma Block discovery now part of our Mineral Resources, we are looking forward to continued drill definition work along the ~2.6km strike length to our property boundary. Of particular interest with respect to potential resource expansion is historic surface drill hole LD4022 which intersected 9.5 meters (downhole) of 11.4% nickel, located 400 meters southeast along strike beyond the margin of the earlier reported Mineral Resource . As we extend our BRI exploration drive south into the Gamma block, we are very much looking forward to drill testing what has the potential to be another very large system."