The miner successfully recovered 133,836 ounces from its Beta Hunt and Higginsville operations, capped off by fourth quarter output of 37,258oz.

 

Production was at the higher end of its 120,000-135,000oz guidance range, despite a swathe of issues in the first half of the year, primarily due to labour shortages and COVID-19 related issues.

 

Despite some big investments over the year, including the purchase of a second mill at Lakewood, Karora exited 2022 with almost C$69 million in cash, up $12.6 million over the December quarter.

 

Canaccord Genuity analyst Michael Fairbairn said the performance in the fourth quarter exceeded his estimates by around 10%, largely thanks to the integration of Lakewood into Karora's workflow.

 

He noted the new record, which broke the level set in the September quarter, did not appear to include any ‘sugar hit' from Beta Hunt coarse gold, but more typical ore sources.

 

Fairbairn said expects that, as development spending at the new Beta Hunt decline winds down and the company benefits from a full year of operations from the Lakewood mill, it will start building a significant war chest on its balance sheet.

 

He sounded a note of caution on Karora's cost guidance, given available cash was modestly below expectation, which could put the miner's 2022 capital guidance at risk given industry wide cost escalation.

 

Full-year results are due in March.

 

Overall, Fairbairn remains optimistic in Karora, with a resource and reserves update due this quarter, and the new decline being commissioned, which should allow mine throughput to double.

 

"We expect another step change in 2023," he said.

 

Karora shares closed up overnight at $5.61, valuing it at $971 million.

 

Canaccord's price target remains $5 per share. The stock has traded in a range of $2.38-7.55 over the past year.