Capricorn Metals Expands Gold Production with Karlawinda and Mt Gibson Projects

About Capricorn Metals

Capricorn Metals Limited (Capricorn Metals, ASX: CMM) operates the Karlawinda Gold Project in Western Australia which began production in 2021. CMM also owns the historic Mt Gibson gold project, which has a gold resource of more than 2 million ounces with exploration upside. The current highly experienced and well credentialled management team have been running the business since 2018 and this has coincided with a notable increase in market support and momentum leading to the finalisation of Karlawinda’s funding and development.

Karlawinda Expansion Project to drive earnings growth from FY26

Capricorn’s Karlawinda Gold Project is expanding its production capacity from an estimated 110,000 – 120,000 ounces of gold in FY25 to 150,000 ounces annually from FY26. The project produced 113,000 ounces in FY24.

The capital cost of the processing plant expansion is A$120 million with a project payback period of 20 months. However, this payback period will be much earlier because the original feasibility study provided for a A$3,300 per ounce gold price. The current gold price is about A$4,580 and has risen significantly since US President Donald Trump’s return to the White House in January. President Trump’s election prompted investors to buy safe-haven assets and gold is considered a safe investment during uncertain times.

The significantly higher gold price since the project feasibility study was prepared and the targeted All-in Sustaining Cost of production at A$1,700 per ounce are what makes the economics of the expanded project so compelling.

Much of this gold price upside is being captured by Capricorn Metals because since July 2024 management closed-out its gold hedging commitments for FY25. This was the repeat of a strategy first initiated in FY23.

The 12 months processing plant construction period is planned to commence late in the June 2025 quarter following the engineering and procurement activities that are currently underway.

The current estimated 10-year mine life is based on existing known Ore Reserves and further exploration may expand this estimate.

Mt Gibson Gold Project is a medium-term value creation opportunity

Capricorn Metals is also committed to developing the low technical risk open pit Mt Gibson mine site. This project is estimated to produce 150,000 ounces of gold production annually for first 15 years at an All-in Sustaining Cost of A$1700 per ounce.

The estimated capital cost of plant is A$260 million with a processing capacity of 5 million tonnes of ore per annum, with a payback period of 2.3 years. This is a large-scale project and the 400-person accommodation camp is nearing completion and major power purchase and mining services contracts are advancing.

The environment protection guidelines are being worked through, and the permitting process is underway. First gold production at Mt Gibson will commence 12 months after the necessary permits are granted,

Looking ahead

Capricorn Metals owns two significant long-life, low cost, high cashflow and high margin per ounce gold projects in a resource-rich area of Western Australia. The expanded development of the Karlawinda and Mt Gibson Projects are capable of being funded out of existing cashflow and from the $363 million of cash and gold on hand at 31 December 2024.

These expansion projects are well-timed given the current gold price outlook and should prove shareholder value-accretive over the long-term.