Written by 5:00 pm Australia, Daily News, Homepage, Interesting Reads, Latest News, Mining, Mining, Sectors

Capricorn Metals Greenlights Major Expansion at Karlawinda Gold Project

Capricorn Metals Greenlights Major Expansion at Karlawinda Gold Project

Capricorn Metals has received board approval to expand its Karlawinda Gold Project (KGP), located in the Pilbara region of Western Australia. This significant development is expected to enhance the project’s annual production rate to an impressive 150,000 ounces (oz) of gold, based on a 10-year mine life and existing ore reserves currently estimated at 1.43 million ounces (Moz) at a grade of 0.8 grams per tonne (g/t).

Capricorn Metals Greenlights Expansion Gold Project

The KGP expansion will involve the installation of a new crushing and ball mill circuit, which will significantly increase the facility’s processing capacity to 6.5 million tonnes per annum. Importantly, this upgrade will not require a substantial increase in the mining fleet or earthmoving volumes, which means the operation can expand smoothly without major logistical disruptions.

In addition to the processing upgrades, the expansion will involve accommodation construction to support the increased workforce needed during the plant construction phase and for long-term operations. This is crucial for maximising productivity and ensuring the project meets its ambitious production targets. Capricorn Metals has already begun work on long-lead procurement and detailed engineering for the new processing plant, indicating that the company is urgently moving forward.

Recent mine-to-mill studies have focused on optimising the delivery of run-of-mine (ROM) ore to the processing facilities. By minimising ore stockpiling and re-handling, these studies aim to reduce associated costs throughout the life of the mine. This approach is particularly beneficial in a competitive gold market, where operational efficiency can significantly impact profitability.

The total capital investment required for the KGP expansion is estimated at $120 million, with a projected payback period of just 20 months, based on a gold price of $3,300 per ounce. Capricorn anticipates completing the construction of the expanded plant by the fourth quarter of the 2025–26 financial year, which aligns with the company’s strategic timeline for ramping up production.

Mark Clark, executive chairman of Capricorn Metals, expressed confidence in the expansion, stating, “The board’s approval of KGP’s expansion reflects the quality and simplicity of the operation and the optionality that comes from increasing reserves and mine life with targeted resource drilling.” He further emphasised the importance of the strong technical team at Capricorn, which has delivered a comprehensive expansion study designed to maximise returns from the operation.

The current gold price is approximately $2,762 per ounce, having recently experienced a slight decline of 0.21%. The price reached a day high of $2,770.20 and a day low of $2,752.00. Over the past year, gold has shown a return of +37.19%, highlighting its position as a valuable investment asset amidst economic uncertainties. This backdrop supports Capricorn’s decision to expand KGP, as gold often serves as a haven during volatile times.

Several factors influence gold prices, including central bank purchases, the strength of the U.S. dollar, and worldwide jewellery demand. Central banks’ net purchases can significantly impact the cost, while a strong U.S. dollar typically leads to lower gold prices. Additionally, the ongoing global demand for gold, especially from countries like China and India, plays a crucial role in price fluctuations.

Once the Karlawinda expansion project is executed, along with the development of Mount Gibson, Capricorn Metals will enter a select group of companies in Australia that produce more than 300,000 ounces of gold annually, holding low-cost gold reserves exceeding three million ounces. This milestone is significant for Capricorn and indicates the company’s growth trajectory in the competitive gold mining landscape.

The KGP expansion is not just about increasing production; it also represents a strategic investment in the long-term sustainability of the operation. Maintaining a low-cost structure will be essential for maximising profitability as gold prices fluctuate. The decision to proceed with the expansion aligns with Capricorn’s overall growth strategy, positioning the company for future success in the evolving gold market.

With a focus on operational efficiency, resource optimisation, and strategic capital investment, Capricorn Metals is well-prepared to leverage the opportunities presented by the Karlawinda Gold Project. This expansion marks a pivotal moment in the company’s journey and is expected to contribute significantly to its future cash flows and overall market standing.

Disclaimer

Visited 68 times, 1 visit(s) today
Close Search Window
Close