Capricorn Metals Advances Growth, Hits Production Targets, and Goes Debt Free
Capricorn Metals reported a strong June quarter with Karlawinda gold production meeting FY25 guidance and announced it is now debt free and unhedged. Development at Mt Gibson and Karlawinda Expansion projects progresses, supported by record cash flow.
- Karlawinda Gold Project Q4 production of 32,216 ounces at AISC of $1,381/oz
- FY25 gold production of 117,076 ounces within guidance range
- Company fully unhedged and repaid $50 million corporate debt
- FY26 production guidance increased to 115,000–125,000 ounces at higher AISC
- Significant progress on Mt Gibson and Karlawinda Expansion projects with key permits approved
Strong Operational Performance at Karlawinda
Capricorn Metals Ltd delivered a robust operational update for the June 2025 quarter, with the Karlawinda Gold Project (KGP) producing 32,216 ounces of gold at an all-in sustaining cost (AISC) of A$1,381 per ounce. This quarterly output represents a steady increase from the previous quarter and brings the full year production to 117,076 ounces, comfortably within the company’s FY25 guidance range of 110,000 to 120,000 ounces. The company’s focus on mining productivity and fleet performance has enabled it to meet planned pit face positions and accelerate pre-stripping activities ahead of the Karlawinda Expansion Project (KEP).
Financial Strength and Hedge Closure
In a significant corporate milestone, Capricorn closed its final gold hedging instrument, a 16,700-ounce call option, and repaid its residual $50 million corporate debt to Macquarie Bank Limited, leaving the company completely unhedged and debt free. This strategic move allows Capricorn to fully participate in prevailing gold prices, supported by a strong cash and bullion position of $356.4 million at quarter-end. The company generated a record operating cash flow of $85.7 million in Q4, underscoring its strong financial footing as it embarks on growth projects.
Growth Outlook and Capital Investment
Looking ahead, Capricorn has provided FY26 guidance projecting a 4.3% increase in gold production to between 115,000 and 125,000 ounces, albeit at a higher AISC range of A$1,530 to $1,630 per ounce. This cost increase reflects the transition to the Karlawinda Expansion Project, which will require growth capital expenditure estimated between $30 million and $40 million. The expansion aims to increase processing capacity to 6.5 million tonnes per annum and boost average annual gold production to approximately 150,000 ounces, positioning Capricorn for sustained growth.
Advancing Development at Mt Gibson and Karlawinda
Development activities at Capricorn’s Mt Gibson Gold Project (MGGP) and the Karlawinda Expansion Project continue to advance. At MGGP, the company completed installation of a 400-room accommodation village and progressed process plant design to 55% completion. Environmental permitting is underway, with the final Public Environmental Report submitted to regulators. Meanwhile, the KEP received key approvals from the Department of Energy, Mines, Industry Regulation and Safety, enabling full development and early site works. The mining services agreement with contractor MACA was extended for five years, securing operational continuity for the expanded mining fleet.
Exploration Success Bolsters Resource Base
Exploration results at MGGP were encouraging, with a 13% increase in the mineral resource estimate to 4.5 million ounces. Drilling at the Orion Deposit yielded a maiden underground resource of 684,000 ounces at 3.1 grams per tonne, with mineralisation remaining open at depth and along strike. Additional drilling at the Lexington deposit extended high-grade mineralisation, highlighting potential for further underground mining operations. Capricorn also expanded its tenure with the acquisition of the Ninghan Gold Project, contiguous to MGGP, enhancing its exploration footprint in Western Australia’s Murchison region.
Bottom Line?
Capricorn Metals’ debt-free status and unhedged position, combined with strong production and exploration results, set the stage for a pivotal year of growth and value creation.
Questions in the middle?
- How will the higher AISC in FY26 impact Capricorn’s profitability amid fluctuating gold prices?
- What are the updated capital cost estimates and timelines for the Karlawinda Expansion Project?
- How might ongoing exploration results at MGGP influence future mine planning and resource upgrades?
