Capricorn Metals produced 30,358 ounces of gold in Q3 at Karlawinda, progressing its expansion project on schedule and declaring a maiden dividend, while exploration at Mt Gibson reveals promising underground gold extensions.
- Q3 gold production steady at 30,358 ounces
- Karlawinda Expansion Project on track for Q1 FY27 commissioning
- Record quarterly operating cash flow of $143.1 million
- Maiden fully franked interim dividend declared
- Exceptional underground drilling results at Mt Gibson
Steady Gold Production Supports Expansion Ambitions
Capricorn Metals Ltd (ASX:CMM) maintained a robust gold output at its Karlawinda Gold Project (KGP) during the March 2026 quarter, delivering 30,358 ounces at an all-in sustaining cost (AISC) of A$1,617 per ounce. This result aligns closely with the previous quarter’s 30,476 ounces and keeps the project on track to meet the upper end of its FY26 guidance range of 115,000 to 125,000 ounces at an AISC between A$1,530 and A$1,630. The steady production underpins the company’s confidence in the ramp-up phase as it advances the Karlawinda Expansion Project (KEP).
Operationally, the KGP processing plant sustained consistent throughput of 1.09 million tonnes, processing predominantly fresh ore at a head grade of 0.95 g/t with a gold recovery rate of 91.0%. Mining volumes remained strong at 3.7 million bank cubic metres (BCM) moved, supporting both ongoing production and the construction requirements of the KEP. The total stripping ratio eased to 6.7 from 8.6 in the prior quarter, reflecting stable mining conditions.
Financially, Capricorn generated a record quarterly operating cash flow of A$143.1 million, up from A$122.4 million in the previous quarter, bolstering its cash and gold holdings to A$507.6 million. Gold sales of 29,009 ounces at an average price of A$7,034 per ounce brought in revenue of A$204 million, with an additional 4,112 ounces of gold on hand valued at A$27.8 million. This strong cash position enabled the declaration of Capricorn’s maiden fully franked interim dividend of 5 cents per share, totalling A$22.8 million, marking a significant milestone for the company’s shareholders.
Karlawinda Expansion Project Nears Commissioning
The KEP continues to advance rapidly towards commissioning in Q1 FY27, with major construction milestones achieved. Concrete works at the plant site are largely complete, structural steel and platework are mostly on site, and all major pipework packages have been delivered. Notably, the ball mill was delivered ahead of schedule and is now in place, setting the stage for commissioning activities.
Mining activities have progressed in the Berwick pit, supplying materials for tailings storage facility (TSF) 2 civil works, which are nearing operational readiness. The process plant design and procurement are complete, and most instrumentation and electrical components have been delivered, with remaining equipment expected in the coming quarter. The expansion is designed to increase processing capacity to 6.5 million tonnes per annum, targeting an average annual gold production of approximately 150,000 ounces post-commissioning, up from around 120,000 ounces currently.
The company has awarded MACA preferred contractor status for mining services at KEP, with early works mine design and mobilisation underway. Power supply contract evaluations are also progressing as Capricorn plans to leverage existing gas infrastructure and explore renewable energy options for future cost efficiencies.
Exploration Success Extends Mt Gibson Underground Potential
Exploration drilling at Capricorn’s Mt Gibson Gold Project (MGGP) delivered exceptional results during the quarter, particularly at the Lexington underground prospect. The first seven holes of an ongoing programme returned high-grade intercepts including 13.1 metres at 13.93 g/t Au and 28.6 metres at 5.35 g/t Au, significantly extending the known strike length of high-grade mineralisation to over 900 metres and depths beyond 500 metres, with mineralisation remaining open in all directions.
This drilling success supports the potential for a significant, long-life underground mining operation combining the Lexington and Orion South prospects, which together span a 2.1-kilometre strike length. The Orion South underground resource, recently expanded to 9.5 million tonnes at 2.9 g/t Au for 895,000 ounces, is undergoing a planned Mineral Resource Estimate update and prefeasibility study to underpin a maiden Ore Reserve expected this quarter.
Capricorn’s exploration efforts at MGGP are further supported by advancing environmental approvals, with the final Public Environmental Report submitted to federal authorities and the Environmental Review Document progressing through the Western Australian EPA assessment process. Early works mine design and mobilisation have commenced following MACA’s appointment as preferred mining contractor, and power supply options are nearing finalisation.
Regional Exploration and Permitting Progress
Beyond the core projects, Capricorn is actively exploring the Fields Find and Golden Range areas, with recent drilling at the Belhaven prospect near the Bibra mine yielding encouraging results that warrant follow-up work in the current quarter. High-resolution airborne gravity gradiometry surveys have been received and are being interpreted to identify structural corridors prospective for gold mineralisation.
The company’s cautious monitoring of fuel supply chains reflects broader uncertainties in Australia’s energy markets, though no interruptions have been experienced at Karlawinda to date. Capricorn’s diesel is sourced under long-term contracts from major importers, providing some insulation against volatility.
Capricorn’s operational and exploration momentum is supported by a strong balance sheet and disciplined capital expenditure, with A$50 million invested in the quarter across the KEP and MGGP developments. The company’s strategic focus on advancing expansion projects while delivering steady production and unlocking underground potential at Mt Gibson positions it well for growth in FY27.
This quarter’s results and developments build on Capricorn’s recent strong Q3 gold production and the exceptional underground gold intercepts reported at Lexington, which continue to reshape expectations for the Mt Gibson project’s scale and longevity Lexington underground drilling results. Investors will be watching closely as the company delivers its upcoming resource updates and prefeasibility studies, alongside the critical commissioning phase of the Karlawinda Expansion Project.
Bottom Line?
Capricorn Metals is poised for a pivotal year with its Karlawinda expansion nearing commissioning and Mt Gibson exploration unlocking new underground potential, but delivery risks and regulatory timing remain key variables.
Questions in the middle?
- How will the Karlawinda Expansion Project commissioning impact Capricorn’s FY27 production and cost guidance?
- What are the implications of the exceptional Lexington underground drilling for Mt Gibson’s long-term mine plan?
- How might ongoing environmental approvals and fuel supply uncertainties influence Capricorn’s development timelines?