Capricorn Metals’ Expansion and CEO Change Signal New Growth Phase Amid Market Risks

Strong Operational Performance at Karlawinda

Capricorn Metals Ltd reported a solid operational quarter for the December 2024 period, with gold production at its Karlawinda Gold Project (KGP) rising to 28,702 ounces, up from 25,559 ounces in the previous quarter. This increase was achieved alongside a notable reduction in all-in sustaining costs (AISC) to $1,490 per ounce, down from $1,647, reflecting improved mining efficiencies and optimized processing.

The company’s half-year production stands at 54,261 ounces, aligning well with its FY25 guidance range of 110,000 to 120,000 ounces at an AISC between $1,370 and $1,470 per ounce. Operational improvements included a decreased stripping ratio at the Bibra open pit and stable gold recovery rates of 92%, underpinned by recent plant optimizations.

Record Cash Flow and Strong Balance Sheet

Capricorn generated a record quarterly operating cash flow of $52.6 million, a significant jump from $38.0 million in the prior quarter. This robust cash generation, combined with a successful $200 million institutional share placement, has bolstered the company’s cash and gold on hand to $363.1 million by the end of December 2024, up from $144.6 million three months earlier.

The capital raise, priced at $6.00 per share, was well supported by both existing and new institutional investors, providing full funding for Capricorn’s key growth initiatives, including the Karlawinda Expansion Project (KEP) and the Mt Gibson Gold Project (MGGP).

Advancing Growth Projects: Karlawinda Expansion and Mt Gibson Development

The Capricorn board approved a major expansion of the KGP, targeting a processing capacity increase to 6.5 million tonnes per annum through the installation of a new three-stage crushing, milling, and CIL circuit. This expansion is expected to lift average annual gold production to approximately 150,000 ounces, with a targeted AISC of around $1,700 per ounce at steady state.

The $120 million expansion is scheduled for completion by Q4 FY26, with an estimated payback period of 20 months at a gold price of A$3,300 per ounce. Design and procurement activities are underway, including awarding the plant design contract to MACA Interquip Mintrex Engineering and advancing tailings storage facility permitting.

Meanwhile, the MGGP continues to progress with a 41% increase in ore reserves to 2.59 million ounces, supported by a substantial mineral resource upgrade. The project’s 400-room accommodation village nears completion, and process plant design work has commenced. Capricorn submitted the Public Environmental Report to regulators, marking a key milestone in the permitting process.

Management Transition and Strategic Outlook

Capricorn announced a planned CEO transition with Paul Criddle, the current COO, stepping into the CEO role effective February 2025. Criddle brings extensive operational and development experience from his tenure at Roxgold Inc, positioning Capricorn well to execute its growth strategy. The management reshuffle also includes promotions to COO, Chief Development Officer, and Company Secretary roles, strengthening the leadership team.

Looking ahead, Capricorn is on track to meet its FY25 production and cost guidance, with operational momentum expected to build in the second half of the fiscal year. The company’s strong cash position and funding capacity provide a solid foundation to advance its expansion projects and exploration programs, including the recent acquisition of the Sylvania Project tenements adjacent to KGP.