Karora Intersects 3.64 g/t Gold over 16 m as Part of Strong Results from Initial Scout Drilling on the Lake Cowan Prospect at Higginsville Greater

Provides Management Update and Announces Participation in Upcoming Investor Conferences

Highlights:

• Initial scout drilling at Lake Cowan in the Higginsville Greater area has delivered exciting new drill targets in previously under-explored terrain east of the Higginsville mining operations.
  
  
• Results from early stage scout drilling are viewed as very encouraging especially given the sparse nature of the drilling over this large area.
  
  
• Significant gold intersections from lake air core scout drilling include:
  
  
  
• • HIGA8864: 1.35 g/t gold over 50 metres, including 3.64 g/t over 16 metres¹
    
    
• Paul Andre Huet, Karora's Chairman and CEO, to relocate to Western Australia in the first half of 2021 to lead the Corporation's near term organic growth initiatives alongside Graeme Sloan, Managing Director, Australian Operations.
  
  
• Oliver Turner promoted to Executive Vice President of Corporate Development. Mr. Turner will continue to oversee strategic corporate initiatives and will provide senior leadership to support Karora's TSX listing.

TORONTO, Feb. 8, 2021 - Karora Resources Inc. (TSX: KRR) ("Karora" or the "Corporation") is pleased to announce encouraging Phase 1 drill results from initial scout drilling on its under-explored Lake Cowan (dry salt lake bed) area of Higginsville Greater. The targeted area has seen little historic exploration and is situated over prospective ground which covers the eastern margin of the Kalgoorlie Terrane. The area contains several of the main regional faults and has similar geology to many of the major gold deposits within the Kalgoorlie-Kambalda-Norseman area. Lake Cowan represents a high priority exploration area for Karora in 2021 as part of its large A$20 million drilling and exploration budget.

Paul Huet, Chairman and CEO of Karora said, "Initial scout drilling results from our Lake Cowan prospect, which is part of the Higginsville Greater exploration area, have been particularly promising. All of the results are located at relatively shallow depths, including some particularly strong, and potentially open pittable, gold intercepts such as 1.35g/t over 50 metres which includes a very robust intercept of 3.64g/t over 16 metres in hole HIGA8864. These are excellent results for first pass aircore drilling and confirm the strong exploration potential of the Lake Cowan area.

While we have experienced delays in the return of lab assays from across our properties given very high regional demand and COVID-19 related labour shortages, we look forward to ongoing results from this exciting greenfields program. To date, I am extremely pleased with the results returned from the drill bit which have very successfully vectored in on the targets generated by our large 400 square kilometre gravity survey completed last year."

Management Update and Participation in Upcoming Investor Conferences

Karora is also pleased to announce that Paul Andre Huet, Chairman and CEO, will be relocating to Western Australia in the first half of 2021 to lead Karora's near term organic growth initiatives alongside Graeme Sloan, Managing Director Australian Operations. With Karora's focus on organic growth at its Australian gold operations over the near-to-mid-term, the Corporation intends to take full advantage of Mr. Huet's proven leadership and mining operations experience to oversee Karora's growth in Western Australia alongside Mr. Sloan. Karora expects to outline its organic growth plan to the market in the coming months.

Oliver Turner has been promoted to the position of Executive Vice President, Corporate Development and will continue to be based in Toronto, Canada. Mr. Turner will continue to oversee strategic corporate initiatives and will provide senior leadership to support Karora's TSX listing and capital markets relationships in North America.

Paul Huet, Chairman and CEO of Karora said, "Since acquiring and integrating the Higginsville Gold Operations in mid-2019, we have been diligently focused on the transformation of Karora into a stable junior gold producer with a robust mineral inventory. Our initiatives have included significant cost reductions, the major reduction of royalties across our properties and the transformation of our executive team, all of which have attracted some of the strongest shareholders in the industry.

With our sights now set on delivering a strong organic growth profile to our investors and stakeholders, it is important that we leverage our significant collective experience in operations to execute our strategy to grow the business. As such, I am very much looking forward to working alongside our tremendous team in Australia to deliver our vision for our shareholders. Karora has built a very strong shareholder base in North America and Europe and remains focused on continuing to support and expand its market presence globally.

In North America, Oliver Turner has been a critical component to the outstanding corporate transformation we achieved in 2020 and I am extremely pleased to announce his promotion to Executive Vice President of Corporate Development. Together as a team we are looking forward to continuing to expand awareness of our business across both sides of the Pacific and Europe while continuing to attract top tier shareholders to Karora. We are looking forward to further growth in 2021."

Additionally, Karora is pleased to announce its participation in the upcoming investor conferences.

Upcoming Investor Conferences

Karora has confirmed its participation in the following upcoming investor conferences:

• BMO Global Metals and Mining Conference to be held March 1-5, 2021
• Red Cloud 2021 Pre-PDAC Mining Showcase to be held March 3-5, 2021
• PDAC 2021 Virtual Convention to be held March 8-11, 2021
• Stifel GMP 2021 Virtual Canada Cross Sector Insight Conference to be held April 21, 2021.

Lake Cowan Reconnaissance Drilling Program

As part of Karora's exploration plan to discover and develop large new gold deposits to continue to feed its expanding organic growth strategy, drilling commenced late last year to test prospective shear zones and selected priority targets identified from the recently completed Lake Cowan desktop study produced by Resource Potentials². The study, conducted 10 kilometres east of the Higginsville mill, utilized a high density (200x100 metre grid) gravity survey incorporating aeromagnetic, geochemical and geological data (see Karora news release date September 8, 2020). The first pass drilling program comprises 18,000 metres of specialized reconnaissance lake aircore drilling on a 640x160 metre grid with some infill spaced lines.

The desktop study covered large areas of the Zuleika shear zone and the western margin of the Boulder Lefroy shear zone. The Zuleika shear zone is a regional structure that, along with subsidiary faults, controls the bulk of the Higginsville Central deposits (2Mozs), extending 55 kilometres north to Cave Rocks (0.5Mozs), 70 kilometres north to Mount Marion (1Mozs) and 110 kilometres north to Kundana (6Mozs)³. The Zuleika shear zone extends south over Lake Cowan and is a key target as part of Karora's first test of this under-explored area. The Baloo mine and the Monsoon/Nanook prospects (see Karora Technical Report dated February 6, 2020, www.sedar.com) are interpreted as belonging to the southern extension of the Zuleika Shear. The Boulder Lefroy shear zone is interpreted to extend into the eastern edge of the Higginsville leases and is host to the world class St Ives gold mine, 50 kilometres to the north. St Ives has produced over 14Mozs since 1980. The current scout drilling program will test part of the western margin of this prolific Shear Zone.

A total of 15,339 metres and 288 holes of the Phase 1 aircore drilling program were completed to January 1st, 2021. Holes are drilled vertically and to refusal with a maximum depth capacity of approximately 120 metres. Assay results have been returned for 192 holes to January 18, 2021 with turn-around times on assay results impacted by industry-wide laboratory capacity issues as a result of an increasing demand on assay lab services and labour supply hurdles related to COVID-19 restrictions.

Results from the reconnaissance program received to date are very encouraging with 36 holes returning assays above 0.02 g/t gold - an assay grade considered anomalous and prospective in this environment. Highlighted significant gold drilling results⁴ are described below:

• HIGA8864: 1.35 g/t over 50 metres (from 68 metres), including 3.64 g/t Au over 16 metres. This result is 180 metres north of historical drilling and represents an extension of the Monsoon mineralized system.
• HIGA8841: 0.31 g/t over 20 metres (from 30 metres). This intersection comes from an area with no known associated mineralization and is potentially a new mineralized corridor.
• HIGA8857: 0.18 g/t over 31 metres (from 72 metres). This intersection appears to support a Northeast trending mineralized zone between Aral and Monsoon.
• HIGA8824: 0.22 g/t over 17 metres (from 68 metres). This result has increased the footprint of the Aral prospect to 440x120 metres.

Drilling is ongoing, with the Phase 1 program expected to be completed during March 2021. Planning for follow-up drilling (both aircore and RC) on the basis of the Phase 1 drilling results has commenced.

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.

At Higginsville All RC drill sampling is conducted by Karora personnel. Samples for gold analysis are shipped to Bureau Veritas Laboratories of Kalgoorlie and Perth for preparation and assaying by 40 gram fire assay analytical method. All drilling samples submitted for assay include Certified Reference Material ("CRM") and coarse blank every 25^th down hole metre. Duplicate samples are taken every 50^th metre. The lab is also required to undertake a minimum of 1 in 45 wet screens on pulverised samples to ensure a minimum 90% passing at -75µm. Samples for low level gold (current aircore drill program) are shipped to Bureau Veritas Laboratories, Perth for preparation and assaying by 40 gram Aqua Regia Digest, with ICP-MS finish with a detection limit of 1 ppb Au. Aircore samples are presented to the laboratory as 4m composite samples. Where problems have been identified in QA/QC checks, Karora personnel and the Bureau Veritas laboratory staff have actively pursued and corrected the issues as standard procedure.

About Karora Resources

Karora is focused on growing gold production and reducing costs at its integrated Beta Hunt Gold Mine and Higginsville Gold Operations ("HGO") in Western Australia. The Higginsville treatment facility is a low-cost 1.4 Mtpa processing plant which is fed at capacity from Karora's underground Beta Hunt mine and open pit Higginsville mine. At Beta Hunt, a robust gold Mineral Resource and Reserve is hosted in multiple gold shears, with gold intersections along a 4 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. The Company also owns the high grade Spargos Reward project which is anticipated to begin mining in 2021. Karora has a strong Board and management team focused on delivering shareholder value. Karora's common shares trade on the TSX under the symbol KRR. Karora shares also trade on the OTCQX market under the symbol KRRGF.

Cautionary Statement Concerning Forward-Looking Statements

This news release contains "forward-looking information" including without limitation statements relating to the timing for the completion of technical studies, liquidity and capital resources of Karora, production guidance, organic growth profile and the potential of the Beta Hunt Mine, Higginsville Gold Operation, the Aquarius Project, Spargos Gold Project and Lake Cowan prospect.

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.

Cautionary Statement Regarding the Higginsville Mining Operations
A production decision at the Higginsville gold operations was made by previous operators of the mine, prior to the completion of the acquisition of the Higginsville gold operations by Karora and Karora made a decision to continue production subsequent to the acquisition. This decision by Karora to continue production and, to the knowledge of Karora, the prior production decision were not based on a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, which include increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that anticipated production costs will be achieved. Failure to achieve the anticipated production costs would have a material adverse impact on the Corporation's cash flow and future profitability. Readers are cautioned that there is increased uncertainty and higher risk of economic and technical failure associated with such production decisions.

Table 1: Higginsville Greater Aircore Drilling to January 2021^{1, 2}

Table 2: Location of Higginsville Greater Aircore Drilling to January 2021

SOURCE Karora Resources Inc.



Contact
Rob Buchanan, Director, Investor Relations, T: (416) 363-0649, www.karoraresources.com