Opinions
Bruce Campbell (2)
Karora Resources Inc.
KRR-T
WATCH
Jan 02, 2024
Stock price when the opinion was issued
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Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A gold exploration and production company. An attractive play in the small cap space although for more high risk investors. Unlock Premium - Try 5i Free
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Results from last quarter looked good. All metrics beat streets. 30 cents EPS was nearly double expectations. EBITDA was 138% better than forecast. Production rose 54% compared to prior years. Numbers are good. Unlock Premium - Try 5i Free
KRR has missed most of its earnings estimates over the past several quarters, although the markets reaction to its report has not been that bad. KRR reported EPS of $0.076, missing estimates of $0.086 and revenues of $108.609M matched estimates. Profit margins have been declining over the past few years, although 2023 has shown improvement against 2022. The company is profitable and mostly generates positive free cash flow, however, it is a net issuer of shares. It generated positive free cash flow in the quarter, and its AISC averaged U$1,160, in line with full-year guidance of U$1,100 to U$1,250. This decreased slightly from U$1,190 in Q2 of 2022 and U$1,213 in the previous quarter.
Management is fairly experienced, with the CEO previously acting as the CEO of Klondex Mines from 2012 to 2018, and the CFO having mining sector experience for over 20 years at TSX and ASX listed companies.
We like KRR as a small, high-risk, and cheap play on the gold mining industry.
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Their deposits in Australia has serious upside potential. Production numbers will improve. They had a choppy year in 2023, but rose as gold prices rose. Watch gold's price.