Karora Resources Inc. (ticker: KRR), a gold production and exploration company, announced a record year in 2023 with exceeding production and revenue targets. The company's Beta Hunt mine produced over 35,000 ounces of gold in the fourth quarter at a cash cost of $1,128 per ounce, contributing to a total gold production of 108,698 ounces for the year, which is a 37% increase from the previous year. Despite a slight decrease in nickel production, Karora's financial results for the year showcased record revenue of $416 million, adjusted earnings of $36 million, and cash flow from operations of $133 million. Looking forward, the company has set a production target range of 170,000 to 195,000 ounces of gold for 2024 and aims to reduce costs to $12.50 to $13.75 per ounce.
Key Takeaways
- Karora Resources exceeded its 2023 production guidance and achieved record revenue.
- Beta Hunt mine's Q4 gold production exceeded 35,000 ounces with a cash cost of $1,128 per ounce.
- The company is preparing the Fletcher zone for mining in the second half of 2024.
- Higginsville's production was lower in Q4 due to planned reductions, but is set for increased production in Q2 2024.
- Record revenue for 2023 was $416 million, with adjusted earnings of $36 million.
- Added 5 trucks and 3 loaders at Beta Hunt, with plans to expand the fleet in 2024.
- 2024 guidance anticipates higher production in the second half of the year and decreasing costs.
Company Outlook
- Karora Resources plans to further increase its gold production rate to 2 million tonnes per annum in 2024.
- The company expects production to begin at the Fletcher zone in the second half of 2024 with significant milestones expected.
- Karora anticipates a decrease in costs throughout 2024, with guidance set between $12.50 and $13.75 per ounce.
Bearish Highlights
- Nickel production slightly decreased in 2023 compared to the previous year.
- Elevated costs in Q4 were due to a crusher issue and pre-stripping at the Pioneer open pit.
- Rainfall in the region did not significantly impact operations.
Bullish Highlights
- The Beta Hunt mine's gold production increased by 37% in 2023.
- The company completed the Kali Metals spin-off transaction.
- A long-term power purchase agreement was signed for the Higginsville (HGO) processing operations, expected to reduce carbon emissions and costs.
Misses
- Higginsville saw lower production in Q4 due to planned lower tonnage and grade.
Q&A Highlights
- Karora is planning for nickel mining following the scheduled shutdown of the nearby BHP concentrator.
- The company highlighted the importance of a new sales agreement and the expertise of its team.
- CEO mentioned the unexpected benefit of gold trading at AUD3,300 per ounce.
- Upcoming analyst site visit announced.
Karora Resources' investment of over $400 million in operations, including equipment and infrastructure, signifies a strong commitment to growth and efficiency. The company's exploration efforts at the Fletcher Shear Zone and the promising nickel results from the 50C area indicate a robust potential for future developments. The power purchase agreement for Higginsville, which will be operational by early 2025, is a strategic move towards sustainability and cost reduction, with Karora not bearing the initial capital costs. The company's goal to reduce carbon emissions by 20% by 2030, with the Higginsville PPA contributing significantly to this target, reflects its dedication to environmental responsibility. Karora's proactive approach to exploring power optimization options across all operations demonstrates its forward-thinking strategy in the face of evolving energy landscapes. The CEO's acknowledgment of shareholder support and the announcement of an analyst site visit underscore the company's transparent and shareholder-friendly approach.
Full transcript - None (KRRGF) Q4 2023:
Leigh Junk - MD, Australia:
Oliver Turner - Executive Vice President of Corporate Development:
Operator: Good morning. My name is Joelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Karora Resources Fourth Quarter 2023 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Paul Huet, Chairman and CEO of Karora Resources. Please go ahead.
Paul Huet: Thank you, operator. Good morning, everyone. I would like to welcome you to Karora Resources' fourth quarter 2023 conference call. Please note, we will be referencing a slide deck, which is available on the Homepage of our website, as well as through the webcast of this call. Slide 3 and 4, the cautionary notes. Before I begin the presentation, I would like to remind you to please review our cautionary statements regarding forward-looking information and non-IFRS measures. These statements can be found in our fourth quarter MD&A news release, and in our presentation slides. Over to Slide 5. Tonight, we are joining you from our Beta Hunt mine in Western Australia. In the room with me is Leigh Junk, our Managing Director for Australia. Leigh will take us through the operational highlights for the year. Also with me this evening is Oliver Turner, our Executive Vice President of Corporate Development, who you will hear from later in the call. But first, I will cover some recent achievements and then review our financial results. 2023 was another record year for Karora, and I'm proud of what we accomplished. Once again, we broke records for gold produced, tons milled, ounces sold, revenue and operating cash flow. We exceeded our 2023 production guidance of 145,000 to 160,000 ounces and we're within the guided range of our full year all in sustaining cost guidance of US$1,100 to US$1,250 per ounce sold. Our flagship Beta Hunt mine delivered consistent production and cost performance in Q4, producing over 35,000 ounces at a cash cost of US$1,128 per ounce. As the flagship of our company, we are thrilled to see such consistent and strong performance as we continue investing in our core assets. Beta Hunt also delivered more outstanding drill results, particularly from the Fletcher zone, where we are seeing many, many encouraging results for what we believe has the potential to be a major new production area for the very near future and beyond. I am thrilled to announce that we have begun driving an exploration drift over to Fletcher and expect to take the first cut into the ore zone as early as the second half of 2024. That's quite soon actually. We are eager to understand what Fletcher can deliver into our 2024 mine plan and beyond. At Higginsville, we had a planned lower tonnage and grade quarter as we prepared the Pioneer open pit for the next phase of production, which we will benefit from in the second quarter of 2024. On the cost front, Q4 was higher cost quarter, yet we still delivered all in sustaining costs in line with our guidance. At Higginsville, specifically, the combination of a number of temporary factors at our HGO mill and reduced nickel sales contributed to an increase of over US$100 per ounce to our all-in sustaining costs in the fourth quarter of 2023. The factors including the crusher bridge failure that occurred in Q3 at the Higginsville Mill resulted in the use of higher cost mobile contract crushing at Higginsville, which was further compounded by the fact that nickel byproduct credits were low while we renegotiated improved nickel sales terms. I'm very happy to say that the new and improved nickel contract is now in place. In Q1 of 2024, we will benefit from the sale of approximately 10,000 tonnes of nickel at a very high grade above 2%. Lastly, slightly lower Q4 gold sales compared to gold produced, coupled to the factors that I just mentioned, resulted in a higher cost at Higginsville. I would like to emphasize that one of the benefits we have at Karora is the diversification provided by multiple mines feeding multiple mills, allowing us to consistently deliver quarter-after-quarter. During the third quarter of 2023, Higginsville produced tremendous results as we mined the high grade underground. During the fourth quarter, as we entered a planned lower tonnage and grade quarter at Higginsville, Beta Hunt more than picked up the slack. This is one of the advantages of being a multi mine producer having multiple mills. Leigh will provide more details on the operations, but I would like to point out that once again, our team showed resourcefulness and resilience in dealing with difficult circumstances as we have in the past when we faced obstacles. The fact that we met full year production and cost guidance despite the crusher bridge failure to close out the year demonstrates the robustness of our growing operation and gives me, full confidence that we are on track for yet another record year in 2024. Turning over to Slide 6, financial highlights. This morning, we issued a news release with our 2023 financial results. Our audited financial statements and MD&A for the period ended December 31, 2023, have been filed and are available on our website under Karora's profile on SEDAR+. Headline financial results for 2023 included record revenue of $416 million, up 31% compared to our prior 2022 record of $317 million a whopping $100 million more. The strong 2023 revenue was driven by sales of 157,034 ounces at an average realized gold price of US$1,926 per ounce. I must admit that these gold prices are exciting and certainly something I look forward to delivering into during 2024 and beyond. When we consider gold prices today in Australia, we've seen numbers in excess. In fact, we sold gold last week or the week before at over $3,300 an ounce. So very exciting times to be mining in Australia. 2023 adjusted earnings were $36 million or $0.21 per share, a 71% improvement from the prior year. Adjusted EBITDA for ‘23 was $129 million or $0.74 per share and cash flow provided by operating activities was $133 million or $0.75 per share, up $44 million or $0.25 per share from the prior year. Our cash balance at the end of Q3 was a very strong healthy $83 million, up $14 million from 2022 after a big year of investment into our flagship assets and our undrawn $40 million revolving credit, we've maintained an extremely strong and flexible financial position as we continue to ramp up production in the current strong gold price environment. With that, I'll now turn the call over to Leigh Junk to take you through our operating highlights.
Leigh Junk: Thanks very much, Paul. Good morning, everyone. Our operating team continued to deliver excellent performance while maintaining a safe work environment. That's exactly what we're after. We will make sure that the safety focused approach is built into our core culture. Now referring to Slide 8, on a consolidated basis, for the full year 2023, we produced a record 160,492 ounces from a record of just over 2 million tonnes, milled at an average grade of 2.59 grams per tonne. Consolidated mill recoveries remained strong at 95%, and our mills are operating consistently, which is good to see. Production for Q4 2023 remained high at 40,295 ounces. As the record production and tonnes processed in 2023 demonstrates the addition of the Lakewood Mill provides us not only with the benefit of increasing processing capacity, but it also significantly derisks our growth plan and gives us more processing flexibility. Consolidated cash operating costs for Q4 were US$12.72 per ounce sold and AISC was US$14.35 per ounce. Both significant year-over-year increases driven by the temporary factors mentioned earlier before. The two largest factors accounted for over US$100 per ounce of the increase from the use of the temporary crushing at Higginsville, which was $51 an ounce and the lower nickel sales. The Higginsville crusher bridge failure occurred during Q3. And while we're able to quickly mobilize a temporary contract crushing solution, it did come at a cost. The good news is that it's now been fully repaired and is once again back in operation, which will help reduce and normalize our production cost going forward. Similarly, in Q4, there was an abnormally low nickel byproduct credit of only US$6 an ounce, lower by US$50 an ounce compared to the same period in 2022. None of the nickel we mined during Q4 was sold due to the fact we're completing terms on a new nickel sales agreement. The terms of the agreement are confidential, but the new arrangement is an improvement on the previous one, and we look forward to delivering into it going forward. Although nickel is not really flavor amongst these days, we do have huge flexibility at Beta Hunt to scale production quickly in response to rising nickel prices. In fact, I can't think of another operation like Beta Hunt where the infrastructure is carried by our gold mining, and we maintain the ability to throttle nickel mining up and down like we do. The huge advantage and something that no other nickel mine I can think of possesses, and we have a high grade nickel resource to work with, which is a real asset for our shareholders. Looking forward, we're confident in achieving our full year 2024 cost guidance range of US$12.50 to US$13.75 an ounce and production range of 170,000 to 195,000 ounces. We expect cost performance to improve as we continue to ramp up production as the year progresses. Turning over to Slide 9 now. Before I get to the numbers, I'll give a brief update on the progression of the ongoing expansion of the Beta Hunt operation. The three new ventilation razors installed in 2023 are in operation, currently utilizing a temporary primary fan arrangement with the installation and commissioning of the permanent fans on track for installation later in the year. The ventilation upgrades are a critical component as it allows us to operate the larger mining fleet required to continue the ramp up towards our target of 2 million tonnes per annum by the end of the year. During 2023, we added 5 trucks and 3 loaders to the underground fleet with further fleet additions planned for 2024. Turning to the numbers for 2023 at Beta Hunt. We mined 1.3 million tonnes, which is a 22% increase compared to the prior year, demonstrating the progress we've made in ramping up production. Full year gold production from Beta Hunt in 2023 totaled 108,698 ounces, a 37% increase from production of 79,125 ounces in 2022, which resulted from 21% higher ore mill throughput and 13% higher grade for the full year. Cash operating cost per ounce sold averaged US$1,088, which was in line with the US$1,045 in 2022. Overall, a good performance from Beta Hunt. During Q4, as planned, we mined 360,300 tonnes at an average grade of 3.05 grams per tonne containing 35,296 ounces of gold. This represented a 43% improvement on the fourth quarter of 2022 ore tonnes mine and a slight improvement on the prior quarter ore tonnes, reflecting progress in the ongoing production ramp up of Beta Hunt. Switching to processing, 362,500 tonnes of Beta Hunt material was milled at an average grade of 3.13 grams per tonne for production of 34,496 ounces of gold in Q4. Contained gold was 52% higher than Q4 in 2022 and 54% higher than the prior quarter, reflecting the mining of a planned high-grade section of Beta Hunt during the quarter as disclosed during our Q3 reporting. The majority of the mine tonnes during the fourth quarter came from the central and southern sections of Western Flanks and the scheduled higher-grade ore zones from A Zone during December. Turning to Nickel. For 2023, 23,288 tonnes of nickel ore are mined at an estimated grade of 2.2% nickel, which compared to 24,604 tonnes mined at an estimated grade of 1.7% nickel a year earlier. For Q4, 5,253 tonnes of ore at a grade of 2.3% remind compared to 5,755 tonnes of nickel or mine that grade of 2% in the same period in 2022 and 5,193 tonnes of nickel ore at an estimated grade of 1.7% for the previous quarter. Now looking at Slide 10. For 2023, Higginsville Mines contributed 51,794 ounces of gold produced from 725,800 tonnes milled at an average grade of 2.36 grams per tonne. Higginsville mine material was 437,100 tonnes at an average grade of 3.26 grams per tonne. Cash operating cost per ounce sold averaged US$1,209, compared to US$1,179 in 2022 with a slightly higher cash cost largely due to the crusher bridge failure and associated higher temporary contract crushing costs incurred in the second half of the year. During Q4, 90,400 tonnes in an average grade of 1.76 grams per tonne containing 5,129 ounces was mined from the Pioneer open pit and Two Boys underground mine. Production from Higginsville mines totaled 5,809 recovered ounces based on milling 122,800 tonnes at an average rate of 1.61 grams per tonne. Cash operating cost per ounce sold at Higginsville averaged US$2,112 in the fourth quarter of 2023 versus US$1,098 for 2022, with a slight increase reflecting impact of the higher cost per tonne and lower processing grade. Had we operated in a normal crushing environment, Higginsville would have delivered a consistent result. Cash operating cost per ounce sold in the fourth quarter of 2023 increased from US$832 the previous quarter reflecting lower grade processed 1.61 gram per tonne, compared to 3.13 grams per tonne in the previous quarter, with the previous quarter ounces coming primarily from the higher grade Aquarius underground mine. Turning to Slide 11. One of the many areas that Beta Hunt I'm excited about from an exploration and development point of view is the Fletcher Shear Zone. Building on a series of very strong drill results from Fletcher over the course of 2023, including some very wide intercepts such as 4.8 grams per tonne over 32 meters, and 3.6 grams per tonne over 34.5 meters. Last month, we announced some further strong results from our Stage 2 drill program at the southern end of Fletcher, including 3.8 grams per tonne over 33 meters, 5 grams per tonne over 9 meters, and 15.2 grams per tonne over 3.3 meters. These extremely strong results recorded today at Fletcher supported our decision to adjust our Beta Hunt mine plan earlier this year, and we've now commenced an exploration drive towards Fletcher South. We expect to take our first exploration cuts in the second half of 2024 and look forward to adding new working places in this area as we ramp up towards our 2 million tonne run rate at Beta Hunt. As a reminder, Fletcher is a parallel shares on the Western Flanks, Beta Hunt's largest and most prolific gold zone to date. Fletcher is positioned about 250 meters to the west and parallel to Western Flanks in the Hunt Block and extends to the Alpha Island Fault. Fletcher remains open along strike with the potential to extend up to 2 kilometers and is open at depth. Overall, Fletcher is a really exciting opportunity for the ongoing growth of Beta Hunt. We also reported some very promising new nickel results from infill and extensional drilling at the 50C area south of the Alpha Island Fault. Initial results from the 50C drill program included some of the highest grade nickel intersections recorded to date with 12% over 2.9 meters, 8.2% over 5.1 meters, and 8.8% over 3.3 meters. The results highlight the potential to grow the current Gamma nickel mineral resource of 6,000 tons in the M&I category and over 8,000 tonnes in the inferred category. The gamma and nickel resource is primarily comprised of 50C and the 10C zones. It's very encouraging to note, Gamma remains open to the south to a potential strike length of about 3 kilometers to the southern tenement boundary. Additionally, 400 meters further along strike is a historic drill hole that returned 11.4% nickel over 9.5 meters. By all indications, Gamma is poised for substantial resource growth for the coming years in the new mining area suitable for mechanized large-scale mining compared to our previous practices of Higginsville mining and remnant areas. Finally, it's important to recall that in November, we announced significant increases to our gold measured and indicated mineral resource, the Beta Hunt, representing a year-on-year increase of 249,000 ounces or 18% net of mining depletion. The total M&I mineral resource now stands at 18.1 million tonnes at 2.7 grams per tonne to 1.6 million ounces with a further 1.1 million ounces in the inferred category. Beta Hunt's Western Flanks zone highlighted the update with a 12% improvement in grade to 2.9 grams per tonne and a net addition of 143,000 ounces in M&I resources. Nickel M&I resources also showed improved grade along with the addition of 1,200 tons of contained nickel. All-in-all, an outstanding year-on-year improvement in line with the long established resource growth trajectory at Beta Hunt. With that, I'll turn the call over to Oliver Turner.
Oliver Turner: Thanks, Leigh, and good morning, everyone. I'm pleased to provide an update on two important achievements so far this year. First, on Kali Metals, the Kali Metals spin off transaction was completed and began trading on the ASX on January 8 following a very successful oversubscribed IPO that raised AUD15 million. Karora now owns 22% of Kali, which represents a current value to share of Karora shareholders of approximately AUD13 million. The Kali transaction is a great start to our strategy to unlock the lithium value creation potential across our extensive Higginsville land package. Our ownership stake in Kali provides Karora shareholders exposure to lithium upside through participation in a well-capitalized exploration company in a Tier 1 jurisdiction. Kali Metals will fund its own exploration and development activities, allowing Karora to keep its management and capital allocation decisions focused on growing our gold and nickel production. In addition to the Higginsville lithium rights bended in by Karora, Kalamazoo Resources bended in its Australian lithium projects located in the Pilbara area, of Western Australia and Lachlan Fold Belt area of New South Wales. Kali Metals has an impressive 3,854 square kilometers of highly prospective lithium and critical mineral sentiments, much of which is adjacent to existing large lithium mines and deposits. Kali Metals is led by an experienced team with a proven track record of success, and we are encouraged to watch the success unfold. Switching to energy. On January 16, Karora announced the signing of a long-term power purchase agreement for HGO processing operations. The agreement involves connection to grid power with a new spur being constructed by the power provider during 2024. The PPA is expected to provide 2 main benefits to Karora once it's implemented early in 2025. Firstly, the PPA is expected to result in a significant reduction of 11% to 13% in Scope 1 & 2 carbon emissions by 2030 by replacing our current on-site 7-megawatt diesel power generators with more efficient grid power. This is a tremendous first step towards our stated objective of reducing our GHG emissions by 20% by 2030 compared to a business as usual baseline. More details on these targets can be found in our latest ESG report filed earlier this year. Secondly, the grid power tie in is expected to significantly reduce power costs at HGO by approximately 30% or almost $0.5 million per month or $6 million per year. Overall, these two arrangements are good news for shareholders as they measurably add value and reduce costs while requiring little capital or ongoing core management time and energy. With that, I'll turn the call back over to Paul Huet.
Paul Huet: Thanks, Oliver. Before I turn it over to the operator for questions. I just want to take a moment and thanks our entire team in Australia, who worked extremely hard. Today, we had the privilege of going underground, myself, Leigh, and our Chief Operating Officer, Peter, with RGMs. And it was very encouraging to see everybody and how excited they are about our future, about the infrastructure we've spent in the last 4 years a little over $400 million, $410 million capital into this operation to watch it grow and to finally see the equipment, the ventilation, all the tunnels in place and see ourselves taking advantage of that new infrastructure that was all funded from cash flow from operations is very exciting on this note. So our future is quite excited. We've got the Fletcher as Leigh pointed out, I pointed out, we're driving towards it. It just opens up such a new area for us. And you cannot be excited about the nickel that we have in front of us despite some of the lower nickel prices, even at these levels, we can do really well. We're no longer mining with a teaspoon, with Fletcher, and jack legs. What we have in front of us is very different than what we've been mining over the last 4 or 5 years. So pretty exciting time for us and our shareholders. And with that, I'll turn it over to the operator for questions.
Operator: [Operator Instructions] Your first question comes from Nicolas Dion with Cormark.
Nicolas Dion: I just have a few questions. Firstly, you mentioned more mining equipment was added in 2023 at Beta Hunt in terms of jumbos, haul trucks, et cetera. What additional equipment do you need to add in 2024 to get to that 2 million tonne per annum run rate?
Leigh Junk: We added a lot last year as we've talked about trucks progress come by us. This year, we'll add, 2 new 2,900 buggers and one new truck, and I think we're doing about 3 new rebuilds. So, the equipment is, being upgraded continually, and it's the part of the Gold Fields (NYSE:GFI). It's all pretty new. So we're really happy with it.
Nicolas Dion: And then 2024 guidance, just wondering if you can give us an indication on how that'll look over the course of the year, in terms of whether we should expect higher production in the second half, for example?
Oliver Turner: Nick, it was slightly weighted to the second half as we're developing Pioneer Two Boys coming on and beta hunting up throughout the year. So we'll, slightly second half way then.
Nicolas Dion: And should we expect the inverse for cost? Maybe Q1 will be the highest and coming down from there?
Oliver Turner: Yes. Correct.
Nicolas Dion: And then, last one just on the nickel, considering the scheduled shutdown of the BHP concentrator nearby, in your new sales agreement, wondering if you can just give us an update on your plans in terms of nickel mining looking forward in the near term and your plans there?
Oliver Turner: Sure. We are putting a plan together at the moment. It should be done by midyear. As you say, the nickel concentrate in Kimbell will probably go into care and maintenance just after the midyear. We do have the option to truck to Leinster, which Karora has done for several years previously. So, we'll build our plan around that. And when the contractor comes back online, we will just keep delivering to that. So we've got the option to go to Leinster, which we'll put in our plan. We've already transitioned from Clearlink to Jumbo. We're more productive and safer, and, we are ready to go when the market improves. So I'm pretty keen to get into 50C with those cool results that we just announced.
Paul Huet: I just want to add one thing. One of the things when I was living here in Australia, as a company, we were looking for succession planning, and Leigh's name came up all the time. And most people know Leigh's background. Leigh is very well known in WA for his experiences in the nickel industry. He was instrumental in renegotiating that contract for us, which is a tremendous benefit to us. So even if we have to go back up the Leinster like we were doing in the first couple years, the improved rates will cover those costs. We're very close to it anyhow. So that new contract is a feather in lease cap. And all the transition from Jack Lake to jumbo, like he said, that needs to be done by people who know what they're doing. Mining nickel flat line like that is not something that's simple anywhere in the world, and Leigh and his team and our team here are experts. So I'm quite excited to see the progress. And when I -- we were underground today, we could see it actually in a face where we're flat resting and some beautiful nickel right in front of it. So, pretty exciting to see us doing it that way instead of with Jack Lake. So a little more color onto your nickel question, Nick.
Nicolas Dion: That's it for me. I'll let others ask their questions. Thanks.
Paul Huet: Nick, I'm just going to add one thing. I know you talked about production and cost. The only thing I will add is that I don't think any of us would have thought gold would be trading at AUD3,300 an ounce either. So that's a tremendous benefit mining here in Australia. And I know I've said it before, but I think you'll hear me say it a 100x. AUD3,300 an ounce for gold. Man, I don't think a whole lot of us had a crystal ball envisioning that. So I think that's something people need to update their models and make sure the right prices are in there also.
Operator: Your next question comes from John Sclodnick with Desjardins.
John Sclodnick: Just a couple from me. Obviously, Fletcher is pretty exciting with the exploration drive going. Just wondering if you can outline some milestones and catalysts for 2024, I guess, in terms of exploration results, a maiden resource and then when we could see production from that zone.
Leigh Junk: Yes. Good John. We'll -- like we said, we're driving that now we -- underground saw that today, that's going really well. It's been a huge focus for us, and we've been hitting our targets there. So we're driving out there now. We should hit that, just after midyear in Q3. We should put, we should be completing our resource, inferred resource, somewhere towards the end of the first half. And we're drilling now. We're continuing drilling. We're seeing results coming up as we speak. So we're and drilling's ongoing now, which is pretty exciting. I think easier to imagine as we're driving out there, getting closer, and drilling will become more efficient as we're drilling from closer. So we should have more results as we get closer.
John Sclodnick: I guess the other notable thing from the quarter was Q4 costs were a bit elevated and I'm sure some of that was related to the crusher issue at Higginsville and then nickel prices also. But are there any factors there that are stickier and that we could see kind of throughout 2024 and beyond?
Leigh Junk: No, not really. We're also those 2 things are also doing a pre strip on our pioneer open pit, so that's a one off. So once we once we complete that will be into the ore zone there. So no, those three things are about it.
John Sclodnick: Also last, in terms of Q1 and how that's been going so far, heard there's been a little bit more rain in the region than usual. Just wondering if you guys have experienced that and if that's impacting operations so far?
Oliver Turner: We have seen some, but everyone else in the gold field. So we're pushing on and aiming to hit our targets or come close. And we're still aiming to hit our guidance for the year. So it's only early days in the whole year. So if you're going to have some rain, it's good to have it early in the year.
Operator: Your next question comes from Daniel Kozielewicz with Red Cloud Securities.
Daniel Kozielewicz: So first question is around the new ventilation system that is now fully functional with a temporary fan system. Are there any further performance gains to be expected when the permanent fans are installed later this year?
Leigh Junk: Towards the, in Q3, we get the permanent fans in the and our other infrastructure will go from about 400 up to about 700, cubic meters, which is huge amount of ASO there. So that does help everything. And also allows us to comply with the upgraded work health and safety rigs. So, that'll be great, Daniel.
Daniel Kozielewicz: My second question is around the PPA for Higginsville you announced in January, which sounds like I guess a win-win in terms of both carbon footprint and cost factors. But can you provide some more detail on what's involved in the implementation? And what are the capital requirements like? And are there any further similar power optimizations you are looking for in your other optimizations sorry, operations?
Oliver Turner: We're quite excited to get that underway. As we mentioned, the power provider, that we signed the PPA with is responsible for construction of the spur or the connection to the mains power line. I think the total capital sum for that somewhere in the order of AUD10 million to AUD12 million, but that core is not responsible for that. That gets paid back through the rate that we pay on the power over the course of the agreement, so no upfront capital cost to Karora. And we and we expect to sort of connect that and switch on at the beginning of 2025. And, of course, at that point, we can ramp down our diesel power generation with the on-site generators that we have. But we'll always have them as a redundancy, which is which is a great thing to have as well. Good benefits on the carbon emission side. It's about half halfway through our goal of reducing by 20% by 2030, so good visibility on our reduction there, which is really, really good. And then the last part of your question in terms of looking at similar power optimization at the other operations, which would, of course, be Beta Hunt and Spargo’s. Look, we're always evaluating things. There's other partners in the region that are also looking at, hybrid solutions between natural gas and renewable energy and some potential opportunities for us to piggyback on some of their work as well. So we'll always be evaluating those solutions first and foremost from a cost reduction standpoint. And then anything we can do on the GHG emission reduction side, we'll look at as well. So certainly more to come there. I think in the entire gold fields, everybody is starting to switch over. Certainly, solar options are pretty interesting there as well. So we'll continue to look at those and update the market as any of that develops.
Operator: There are no further questions at this time. I would now like to turn the call back to Paul for closing remarks.
Paul Huet: Thanks. I just want to take a moment and thank everyone for listening in on our call. We know and understand everyone has busy lives, busy schedules, so we appreciate you taking the time to listen in. Pretty exciting quarter we had, being the record year we had, and I'm looking forward to 2024. I want to thank all our shareholders. And, lastly, I just want to say, I welcome the analysts that will be coming up. We're having an analyst site visit here, so we're quite excited about that. And we've got, I think, quite a few of them coming up, and you'll see some really good reports. You're going to be able to see it with their own eyes here, in the next couple of days. So thank you very much. Have a great day, everyone.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating in that, that you please disconnect your lines.
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