Capricorn gold project to cost $146m

Gold explorer Capricorn Metals has released a feasibility study for its Karlawinda gold project near Newman, which will cost about $146 million to develop.

Perth-based Capricorn said today it expected to spend about $133.3 million on development of a 3 million tonnes per annum processing plant and associated infrastructure at the single open-pit project, plus a contingency of $13.1 million.

The feasibility study estimated about 713,000 ounces of gold at the project, which is expected to have an initial 6.5-year mine life.

Capricorn hopes to produce about 100,000oz of gold a year out of Karlawinda, at an all-in sustaining cost of $1,025/oz.

The study was approved by Capricorn’s board, while construction is expected to begin in the second quarter of next year.

“This study provides us with the confidence that the Karlawinda gold project will become a significant new Western Australian gold mine, with a strong production profile, low forecast operating costs and the ability to generate strong financial returns over its initial 6.5-year life and beyond,” chairman Heath Hellewell said.

“With certainty now around the state government gold royalty, and based on what are now high confidence capital and operating cost estimates, we are confident that the development of the project will proceed, subject to financing.

“As our exploration programs once again ramp up, we are excited about the endowment potential of the region and the opportunities that exist within our current exploration targets.

“We now look forward to developing the Project over the coming months with the aim of first gold production in June quarter 2019”.

Shares in Capricorn were 1.3 per cent higher to 7.8 cents each at 1:45pm.