Capricorn Metals Ltd has satisfied all conditions precedent to allow it to commence drawing down on the $80 million Macquarie Bank debt facility for the development of the Karlawinda Gold Project (KGP) in Western Australia. It is expected that the required drawdown will be in the range of $50 – 60 million, with the majority of drawdown in the March and June 2021 quarters.
According to the company, project development is proceeding as planned and is expected to culminate in first gold production in the June 2021 quarter.
It outlines that the forecasted total cost of the development is also in line with the previously reported $165 – 170 million.
The combination of available cash reserves and the Macquarie debt facility give Capricorn available funding of $129.3 million, some $24.2 million (23 per cent) above the current cost to complete (midpoint) of $105.1 million. With the bulk of costs of development now largely contractually fixed this is a strong funding contingency.
Importantly the (unchanged) development cost forecast is for the final plant design which (as reported to ASX on 27 July 2020) increased the plant capacity by upscaling and modifying equipment selection and associated structures in the crushing area of the plant.
Capricorn Executive Chairman, Mark Clark, said the satisfaction of all the conditions precedent to the first drawdown of the $80 million debt facility is another milestone derisking the development of the project.
“It sees us fully funded with a significant contingency to our forecast cost to complete,” Mr Clark said.
“We continue to put all our efforts into the development of the project and look forward to commencing Australia’s next new gold mine at a 110,000 – 125,000 ounce per annum run rate in mid-2021.”
About the KGP:
The KGP is located in the Pilbara region of Western Australia, 70 kilometres by road south-east of the town of Newman. It is an advanced gold project which includes the Bibra deposit and numerous outstanding exploration targets including the Francopan prospect.
The project covers a total area of approximately 1,419 square kilometres and the project area is close to key infrastructure and mining support services.
Gold mineralisation at the Francopan Prospect was originally discovered by WMC Resources Ltd in 2005. The project was subsequently acquired by Independence Group (IGO) in 2008 resulting in the discovery of the significant Bibra Gold Deposit in 2009. Capricorn acquired the project in February 2016.
At the time of acquisition of KGP from IGO by Capricorn, approximately A$12 million had been spent on regional exploration, resource evaluation and prefeasibility activities.
The throughput capacity in the final design is:
- Up to 4.5 – 5 mtpa in the oxide/fresh ore blend in the first 3 years; and
- Up to 4 – 4.5 mtpa in solely fresh rock ore in years four and beyond.
These throughput capacities are higher than the 3.5 – 4 mtpa previously reported and have allowed a refinement of the expected long-term production range to 110,000 – 125,000 ounces per annum (previously 105,000 – 120,000 ounces pa).