Capricorn drops capital cost to $132m

Capricorn Metals has flagged a reduction in the capital cost of its planned Karlawinda gold project near Newman to $132 million following an optimisation study.

Perth-based Capricorn said the study estimated a 10 per cent drop in the capital expenditure, down from the original estimate of $146 million.

The study also revealed a 69 per cent increase in the project’s net present value to $243 million.

The study was completed after the company upgraded the ore reserves last month.

The mine life has also increased by two years to 8.5 years.

The project includes a 3 million tonnes per annum processing plant and following a tender evaluation process, contractor GR Engineering Services downgraded the cost of the facility by 10.7 per cent to $88.1 million.

Executive chairman Heath Hellewell said the study had provided improved economics for the project.

“In parallel with the final stages of permitting the Karlawinda gold project, our team have also been working with our consultants to further enhance the value of the project - and the results have been fantastic,” he said

“The value of the project has increased by approximately $100 million with improved rates of return and quicker payback.

“This outstanding result highlights the serious potential of our project and brings us even closer to becoming Australia’s newest significant gold producer.”

Shares in Capricorn finished down 2.9 per cent at 6.7 cents each today.