The step-out drilling to test the southern strike extension of the Fletcher Shear Zone returned a bonanza 0.7m at 262 grams per tonne, within 7m at 46.5gpt from 448m across one interval and 26m at 6.5gpt from 353m, including 6m at 9.9gpt across the other.

 

The company said the grades were some of the best-ever seen at Beta Hunt.

 

The hole that also returned 1m at 3.8gpt from 184m while drilling through the undeveloped Larkin zone.

 

Fletcher is now considered to be the third major gold system in the Hunt block. It runs parallel to the west of the Western Flanks that are being mined, and appears to be an analogue.

 

The Western Flanks are historically Karora's most productive front and host the largest resource at Beta Hunt of 1.2 million ounces grading 2.73gpt. 

 

Given Fletcher is just 230m from the existing nickel infrastructure at Beta Hunt, and 150m from the company's 119,000 ounces at 2.6gpt Larkin deposit to the south of the Alpha Island Fault, it is well located for development.

 

It is also open along strike and at depth. 

 

Executive chair Paul Andre Huet said the discovery showed the Toronto-based company was "just getting started at Beta Hunt, even with the very strong resource additions over the last several years".

 

More drilling is planned this year, with Karora aiming to test the full strike potential to the north, where the potential exists for some 2km, up to the mining lease with adjacent landholder St Ives Gold, where Lunnon Metals is looking to develop the adjacent Silver Lake nickel resource.

 

Past work at Fletcher was stymied by onerous royalties and fluctuating metal price environments, but in the high gold price environment he could already see several "compelling development scenarios". 

 

It was first drilled in 2016 and defined as a steep, west-dipping zone over 150m in down-dip extent over 500m of strike.

 

Canaccord Genuity analyst Michael Fairbairn, a long-time fan of Karora, said Fletcher could play a key role in supporting Karora's plans to expect processing to 2Mtpa, or even aid in any possible future expansion scenarios beyond that.

 

Karora recently appointed ex-Dacian Gold boss Leigh Junk as managing director to help the expansion.

 

Fairbairn reiterated his buy recommendation and C$6 per share price target.

 

Karora shares closed at $4.77 overnight, valuing it at $831 million.

 

The company aims to produce 145,000-160,000oz of gold at $1100-1250/oz this year, with up to 550t nickel.