TORONTO, May 8, 2023
/CNW/ - Karora Resources Inc. (TSX: KRR) ("Karora" or the
"Corporation") is pleased to announce it has entered into an
agreement with Kalamazoo Resources Limited (ASX: KZR) ("Kalamazoo")
to create a lithium and critical metals exploration company to be
called Kali Metals Limited ("Kali"). Karora and Kalamazoo will vend
their lithium exploration projects into Kali with a goal of
creating a new, jointly owned but separately run lithium-focused
ASX listed exploration company to be led by an experienced board
and management team. The proposed transaction will allow Karora
shareholders to participate in the significantly enhanced upside
potential of a larger, combined lithium-focused investment vehicle
that will fund its own exploration and development activities while
Karora remains focused on growing its gold and nickel production
base at both Beta Hunt and Higginsville.
Transaction highlights:
- Agreement entered into with ASX-listed Australian gold miner
Kalamazoo whereby at IPO, Karora will vend into Kali its highly
prospective lithium mineral rights across an extensive range of
projects located south of Kalgoorlie, Western Australia ("Higginsville Lithium
Project") and Kalamazoo will vend into Kali its Australian lithium
projects, including Marble Bar and DOM's Hill located in the
Pilbara and Jingellic and Tallangatta projects located in the
Lachlan Fold Belt (New South Wales
and Victoria)
- At listing, Kali will be a leading Australian critical
minerals exploration company, having consolidated significant
lithium and critical minerals tenure totaling
~3,833km2
- Kali's extensive exploration portfolio is adjacent to
world-class lithium mines and deposits in the Eastern Yilgarn
(1,607km2) and Pilbara (199km2) WA, and
prospective greenfields lithium exploration projects in the Lachlan
Fold Belt (2,027km2) in NSW and VIC
- Kali to raise a minimum of A$10
million, up to a maximum of A$12
million at IPO to fund its exploration and drilling plans
across the combined Australian lithium portfolio
- Kalamazoo to own 55% of Kali, with Karora owning the
remaining 45% (prior to the proposed capital raise)
- Kali will be led by Managing Director Graeme Sloan and Non-Executive Chairman
Luke Reinehr, both bringing
significant existing understanding of the newly combined Kali
lithium tenements as well as strong track records of value creation
in Australia's mining
sector.
Paul Andre Huet, Chairman &
CEO of Karora, commented: "After carefully evaluating several
different avenues to fully assess, explore, accelerate and
crystallize the value of the lithium potential across Karora's
Higginsville tenements, we are very pleased to enter into this
arrangement with Kalamazoo Resources to create Kali Metals – a
leading Australian lithium-focused exploration company. Working
with Kalamazoo, we have assembled a top-notch management group with
not only an excellent track record of building value in
Australia's mining sector, but
also an extensive existing knowledge of the tenement base to give
Kali a running start.
The creation of a separate lithium-focused vehicle allows
Karora's management team to remain laser-focused on our existing
gold and nickel production growth strategy, while giving Karora
shareholders near-term exposure to the lithium exploration
potential on our Higginsville tenements in combination with
Kalamazoo's tremendous lithium projects in Western Australia, New South Wales and Victoria. Under the Kali Metals banner these
assets form a new large, highly prospective exploration vehicle in
the exciting Australian lithium sector that is playing a leading
role in the global energy transition. We look forward to
participating in the enhanced combined success of the newly formed
Kali Metals."
Luke Reinehr, Chairman and CEO of
Kalamazoo commented "With Kalamazoo's primary focus on gold, we
have contemplated alternatives for our Pilbara and Lachlan Fold
Belt lithium projects for quite some time. When the opportunity
arose to join with Karora, into what we consider will be a
significant critical minerals exploration company in Australia, the rationale was compelling. We
are delighted to have reached an agreement with Karora that will
see our lithium portfolio combined with its highly prospective
tenement package located in a Tier 1 lithium mining jurisdiction.
The transaction will result in the establishment of Kali as a
well-funded ASX-listed lithium explorer, with an unrivalled
portfolio of assets located in the hottest hard-rock lithium
regions, not just in Australia,
but globally. The spin-out of Kali will provide our shareholders
with ongoing exposure to these expanded assets and strategy."
Figure 1: Location of Kali Metals' Portfolio of Lithium
Exploration Projects
Overview
Karora has entered into a Shareholders Agreement ("the
Agreement") with Kalamazoo under which Kalamazoo will vend its
non-gold exploration projects and mineral rights into Kali,
followed by the undertaking of an IPO pursuant to the
agreement. The proposed transaction will see the
establishment of a new ASX-listed exploration company, Kali Metals
Limited (proposed ASX Code ASX: KM1), with its own highly
experienced board and management team.
Kali's lithium exploration tenure at IPO will comprise:
- Kalamazoo's Marble Bar and DOM's Hill Lithium Projects in the
Pilbara, WA (199km2) which hosts the world-class
Pilgangoora and Wodgina lithium mines. Exploration across these
lithium projects is currently being undertaken in Joint Venture
with Chilean lithium producer Sociedad Química y Minera de Chile
S.A. ("SQM") (NYSE: SQM).
- Lithium mineral rights granted across a substantial portion of
Karora's Higginsville gold tenement package (~1,607km2)
located south of Kalgoorlie, in the Eastern Yilgarn, WA, which
hosts the nearby Mt Marion and Bald Hill lithium mines and the
Pioneer, Manna and Buldania lithium deposits.
- Lithium mineral rights granted across Kalamazoo's Jingellic and
Tallangatta Lithium Projects (2,027km2) located in the
Lachlan Fold Belt, NSW, and Victoria.
Kali has established its headquarters in Perth, WA, with an exploration office in
Melbourne, Victoria. Kali
intends to be certified carbon neutral for its business operations
under the Australian Government's recognized Climate Active
Program. This process will have Kali establishing its carbon
footprint, outlining its plans to measure and reduce its greenhouse
gas emissions where feasible and offsetting its remaining
carbon-generating activity. Both Karora's and Kalamazoo's
operations are similarly certified under the Climate Active
Program.
Board and Management
Graeme Sloan has been appointed
as Managing Director of Kali with Kalamazoo's Chairman/CEO
Luke Reinehr as Non-Executive
Chairman. Graeme Sloan is a
highly qualified Mining Engineer with over 35 years' experience
including as previous Managing Director of Karora.
Paul Adams, John Leddy, and Simon
Coyle have been appointed as Non-Executive Directors.
Assisting the Board during the IPO process is Luke Mortimer as Exploration Manager,
Bernard Crawford as CFO, and Nick
Madders as Company Secretary/Legal Counsel. These appointments will
provide a high degree of continuity and understanding of Kali's
exploration portfolio. Kali has appointed Grant Samuel as Corporate Advisor and Gilbert +
Tobin as legal advisor.
Next Steps
As part of the proposed IPO listing on the ASX, Kali is
targeting to raise approximately A$10
million to A$12 million (prior
to fees). The closing of the proposed transaction is subject to
final Board, regulatory and other conditions precedent.
Kali Projects Overview
Eastern Yilgarn Lithium Projects, WA
The Higginsville Lithium Project is located south of Kalgoorlie
within the Eastern Yilgarn, a leading hard-rock lithium region
containing major mines and deposits including the Mt Marion Lithium
Mine (71Mt @ 1.4% Li2O), Bald Hill Lithium Mine (26Mt @
1.0% Li2O), Pioneer Dome Lithium Project (11Mt @ 1.2%
Li2O), Buldania Lithium Project (15Mt @ 1.0%
Li2O) and Manna Lithium Project (33Mt @ 1.0%
Li2O) (Figure 2). Within the Higginsville Lithium
Project area, highly prospective lithium targets have already been
identified from outcrop and historical reports at Spargos, Mt
Henry, Buldania North and East and the Chalice/Sinclair
prospects.
Pilbara Lithium Projects, WA
The Marble Bar Lithium Project is located along the margin of
the Moolyella tin and tantalum alluvial field and contains numerous
local occurrences of mapped lithium-enriched pegmatites (Figure
3). Located approximately 25km to the north is Global Lithium
Resources Limited's (ASX: GL1) Archer Lithium Deposit, also on the
margin of the Moolyella tin and tantalum field, with a reported
Inferred Resource of 18Mt @ 1.0% Li202.
Recent mapping and surface sampling at the Marble Bar Lithium
Project, has discovered outcropping spodumene-bearing pegmatite
dykes associated with high-grade rock chip samples assaying up to
2.8% Li2O.
The DOM's Hill Lithium Project, East Pilbara, contains a similar
geological setting and target host rocks strongly analogous to that
of the nearby world class Pilgangoora (Pilbara Minerals, ASX: PLS)
and Wodgina (Albemarle, NYSE: ALB/Mineral Resources, ASX: MIN)
pegmatite-hosted lithium deposits. The project covers significant
strike extent of Archaean granite-greenstone contact zone, or
"Goldilocks Zone" considered highly prospective for
Lithium-Caesium-Tantalum ("LCT") pegmatites.
The Marble Bar and DOM's Hill Lithium Projects are part of an
exploration Joint Venture ("JV") agreement originally between
Kalamazoo and major Chilean lithium producer SQM. Kalamazoo
has, with SQM's consent, assigned its interest in the JV to
Kali. SQM has been granted the right to earn an initial 30%
interest (to a maximum of 70%) in all mineral rights at the Marble
Bar and DOM's Hill Lithium Projects, by sole funding a minimum of
A$12 million of exploration and
development activities over the next four years. SQM is one
of the world's leading lithium producers with its main asset in
Australia being its 50% joint
venture interest in the Mt Holland Lithium Project.
Lachlan Fold Belt, NSW/VIC
The Jingellic and Tallangatta Lithium Projects are an "early
mover" play, covering geology considered highly prospective for
both LCT-pegmatites as well as hard-rock tin mineralization (Figure
4). Both projects host highly fractionated S-type granites and
related pegmatite dykes that are closely associated with numerous
alluvial and hard rock tin-tungsten and tantalum occurrences and
mine-workings. These are all critical, favourable features of the
LCT-pegmatite exploration model. Additionally, both projects lie
within the extension of the same Lachlan Fold Belt geology that
hosts known LCT mineralization (including spodumene) at the Dorchap
LCT Pegmatite Project located nearby in NE Victoria as reported by Dart Mining NL
(ASX: DTM).
About Kalamazoo Resources Limited
Kalamazoo Resources Limited (ASX: KZR) is an ASX-listed
exploration company with a portfolio of high-quality gold and
lithium projects in Victoria and
the Pilbara, WA. In Victoria Kalamazoo is exploring its 100%
owned projects in the Castlemaine (historical production of ~5.6Moz
Au), Maldon (historical production of ~2Moz), and Tarnagulla
Goldfields as well as its Myrtle and Mt Piper Projects near the
world class Fosterville gold mine
in Victoria. In the Pilbara, Kalamazoo's extensive
exploration program is advancing the 100% owned Ashburton Gold
Project to further increase the 1.44Moz Au resource as well as the
100% owned Mallina West Project along strike from De Grey's 10Moz
Hemi discovery.
Kalamazoo's lithium projects include DOM's Hill and Marble Bar
Lithium Projects in an exploration joint venture with the major
Chilean lithium producer Sociedad Química y Minera de Chile S.A.
(SQM) (NYSE: SQM) and the 100% owned Pear Creek Lithium
Project. Kalamazoo also has the 100% owned "Jingellic" and
"Tallangatta" lithium exploration projects in the Lachlan Fold Belt
of southern NSW/NE Victoria.
Kalamazoo has become the first gold and lithium explorer
operating in Australia to be
certified carbon neutral for its business operations under the
Federal Government's Climate Active Program, with projected 2022
emissions fully offset achieved with a verified environmental
reforestation program in Western
Australia.
About Karora Resources
Karora is focused on increasing gold production to a targeted
range of 170,000-195,000 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, which is fed at
capacity from Karora's underground Beta Hunt mine and Higginsville
mines. In July 2022, Karora acquired
the 1.0 Mtpa Lakewood Mill in Western
Australia. At Beta Hunt, a robust gold Mineral Resource and
Reserve are hosted in multiple gold shears, with gold intersections
along a 5 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. 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 on the OTCQX market under the symbol KRRGF.
Compliance Statement (JORC 2012 and NI 43-101)
The disclosure of scientific and technical information contained
in this news release has been reviewed and approved by Stephen Devlin, FAusIMM, Group Geologist, Karora
Resources Inc., a Qualified Person for the purposes of NI
43-101.
Cautionary Statement Concerning Forward-Looking
Statements
This news release contains "forward-looking information"
including without limitation statements relating to production
guidance, full year consolidated 2023 and longer-term production
guidance and the potential of the Beta Hunt Mine and Higginsville
Gold Operation.
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.
SOURCE Karora Resources Inc.