Karora Resources to acquire Lakewood gold mill in Australia for A$80 million
(Kitco News) - Karora Resources (TSX: KRR) announced today that it has entered into a binding agreement to acquire the operating, fully permitted 1.0 Mtpa Lakewood Mill gold processing facility located near Kalgoorlie, Western Australia, approximately 60 kilometres from the Beta Hunt Mine.
According to the company's statement, the acquisition price of A$80 million is comprised of A$70 million in cash and A$10 million in Karora shares.
Karora said it successfully tolled Beta Hunt material through the Lakewood mill in Q1 2022, achieving 94% gold recovery.
Chairman & CEO Paul Andre Huet commented, "Closing the acquisition of the Lakewood Mill would be a transformational step forward for Karora, similar to the Higginsville mill acquisition in June 2019. Not only is the Lakewood mill closer to Beta Hunt than Higginsville, but the acquisition would provide several immediate strategic and operating benefits to Karora."
He said it is anticipated that the acquisition would immediately de-risk Karora's growth plan to increase gold production to between 185,000 and 205,000 ounces by 2024, by eliminating the procurement, schedule and construction risks associated with a major expansion of Karora's Higginsville Mill.
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Moreover, upon closing, the addition of a second mill is anticipated to immediately increase the company's nominal processing capacity by over 60% from 1.6 Mtpa to approximately 2.6 Mtpa.
"The expansion to double production from Beta Hunt to 2 Mtpa is well underway and, as previously announced this morning, the development of the second decline is tracking ahead of schedule and on budget," he added.
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 in Western Australia. The company also owns the high grade Spargos Reward project, which came into production in 2021.