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1. Company Snapshot

1.a. Company Description

Karora Resources Inc.operates as a multi-operational mineral resource company in Australia.The company explores for gold and nickel deposits.


It holds 100% interests in the Beta Hunt Gold Mine; the Higginsville Gold Operations; and Spargos Reward Gold Project located in Western Australia.The company was formerly known as Royal Nickel Corporation and changed its name to Karora Resources Inc.in June 2020.


Karora Resources Inc.was incorporated in 2006 and is headquartered in West Perth, Australia.

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1.b. Last Insights on KRR

Key drivers behind Karora Resources' recent developments include the approval of the proposed arrangement with Westgold Resources by shareholders, Institutional Shareholder Services (ISS), and Glass Lewis, two leading independent proxy advisory firms. The merger, which has now been completed, is expected to create a leading mid-tier gold producer and international gold company. The approval by approximately 99% of the votes cast on the resolutions regarding the proposed merger transaction, along with receipt of FIRB approval, represent important milestones towards the closing of the transaction.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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WESTGOLD AND KARORA COMPLETE MERGER

Aug -01

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Karora Obtains Final Court Order Approving its Plan of Arrangement with Westgold

Jul -24

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Karora Shareholders Approve Transaction with Westgold; FIRB Approval Received

Jul -19

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A Second Leading Independent Proxy Advisory Firm, Glass Lewis, Recommends Karora Resources Shareholders Approve the Proposed Arrangement with Westgold Resources

Jul -12

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Leading Independent Proxy Advisory Firm ISS Recommends Karora Resources Shareholders Approve the Proposed Arrangement with Westgold Resources

Jul -08

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Institutions own 41% of Karora Resources Inc. (TSE:KRR) shares but individual investors control 58% of the company

Jul -04

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Karora Resources Files Management Information Circular in Connection with Proposed Arrangement

Jun -21

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Karora Extends Fletcher Gold Zone to 800 metres of Strike Including Drilling Results of 17.3 g/t over 14.5 metres and Clusters of Fine Visible Gold Mineralization

Jun -10

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.97%)

6. Segments

Beta Hunt Gold/Nickle Mine Australia

Expected Growth: 7%

Karora Resources' Beta Hunt Gold/Nickel Mine in Australia is driven by increasing gold prices, strong demand for nickel in electric vehicle batteries, and the mine's high-grade ore reserves. Additionally, the company's focus on operational efficiency, exploration, and expansion of existing resources contribute to its 7% growth rate.

Higginsville Gold Operations Gold Mine/Mill Australia

Expected Growth: 6%

Karora Resources' Higginsville Gold Operations in Australia is driven by a 6% growth rate, attributed to increased gold production, improved milling rates, and enhanced processing recoveries. Additionally, exploration success and resource upgrades, coupled with a strong gold price environment, contribute to the operation's growth momentum.

Intersegment Elimination

Expected Growth: 0%

Karora Resources Inc.'s Intersegment Elimination with 0% growth is driven by the absence of significant transactions between segments, indicating a lack of intercompany sales or purchases. This suggests a decentralized operating model, where each segment operates independently, eliminating the need for intersegment eliminations.

7. Detailed Products

Gold

Karora Resources Inc. is a gold producer with operations in Western Australia, focusing on the Beta Hunt Mine and the Higginsville Gold Operations.

Nickel

Karora Resources Inc. also produces nickel as a by-product of its gold mining operations.

8. Karora Resources Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Karora Resources Inc. is medium due to the availability of alternative metals and minerals in the market.

Bargaining Power Of Customers

The bargaining power of customers for Karora Resources Inc. is low due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Karora Resources Inc. is medium due to the presence of multiple suppliers in the market, but the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for Karora Resources Inc. is low due to the high barriers to entry in the mining industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Karora Resources Inc. is high due to the competitive nature of the mining industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 11.74%
Debt Cost 14.27%
Equity Weight 88.26%
Equity Cost 14.27%
WACC 14.27%
Leverage 13.30%

11. Quality Control: Karora Resources Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Lundin Gold

A-Score: 6.5/10

Value: 1.9

Growth: 9.1

Quality: 8.6

Yield: 6.0

Momentum: 10.0

Volatility: 3.7

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Perseus Mining

A-Score: 6.5/10

Value: 3.4

Growth: 6.6

Quality: 8.4

Yield: 1.7

Momentum: 9.5

Volatility: 9.3

1-Year Total Return ->

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OceanaGold

A-Score: 6.2/10

Value: 2.8

Growth: 7.1

Quality: 8.1

Yield: 0.0

Momentum: 10.0

Volatility: 9.0

1-Year Total Return ->

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Kinross Gold

A-Score: 6.0/10

Value: 4.3

Growth: 7.2

Quality: 8.0

Yield: 2.0

Momentum: 10.0

Volatility: 4.7

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Resolute Mining

A-Score: 5.0/10

Value: 2.4

Growth: 5.2

Quality: 6.8

Yield: 0.0

Momentum: 8.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Karora Resources

A-Score: 4.2/10

Value: 1.9

Growth: 7.4

Quality: 6.6

Yield: 0.0

Momentum: 6.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.7$

Current Price

6.7$

Potential

-0.00%

Expected Cash-Flows