Regulatory Approval Paves Way for Capricorn’s Costly Karlawinda Expansion Risks
Capricorn Metals has received regulatory approval to expand its Karlawinda operations, enabling a 25% increase in gold production to 150,000 ounces annually. Construction is set to accelerate with key contracts extended and infrastructure upgrades underway.
- Regulatory approval granted for Karlawinda Expansion Project
- Gold production expected to rise to approximately 150,000 ounces per annum
- Processing capacity to increase from 4Mtpa to 6.5Mtpa
- Mining contract extended with MACA for expanded operations
- Construction of new camp and processing plant upgrades underway
Regulatory Green Light for Expansion
Capricorn Metals Limited has secured a critical regulatory milestone with the Western Australian Department of Energy, Mines, Industry Regulation and Safety approving its Mining Proposal and Mine Closure Plan for the Karlawinda Expansion Project (KEP). This approval unlocks the full development of expanded mining activities across multiple open pits and supports the construction of new infrastructure essential to the project’s success.
Scaling Up Production and Processing
The KEP aims to increase the processing capacity of the Karlawinda Gold Project from 4 million tonnes per annum to 6.5 million tonnes, achieved by installing a parallel three-stage crushing and ball mill circuit. This upgrade is expected to boost annual gold production by around 25%, reaching approximately 150,000 ounces. The design replicates existing processing flows, offering operational synergies and flexibility, while leveraging existing downstream infrastructure to manage costs effectively.
Advancing Construction and Operational Readiness
Capricorn has been proactive in advancing preparatory work ahead of formal approvals, positioning the company for an expedited construction timeline estimated at around 12 months. Key developments in the June quarter include extending the mining contract with MACA for five years at existing rates, accommodating the larger fleet needed for increased mining volumes. Additionally, the expansion of the onsite accommodation camp to 164 rooms is nearly complete, supporting the influx of construction personnel.
Procurement of critical processing equipment is well underway, with significant investments already committed to conveyors, pumps, and other essential machinery. Early earthworks and clearing have commenced, signaling a tangible shift from planning to execution.
Strategic Outlook and Future Considerations
Executive Chairman Mark Clark expressed optimism about the project’s potential to enhance Capricorn’s low-cost, high-margin gold operations. The company anticipates delivering substantial shareholder value through increased production and operational efficiencies. While the current gas infrastructure is sufficient to meet increased power demands, Capricorn is also exploring renewable energy options that could further reduce costs in the long term.
Looking ahead, Capricorn plans to finalize an updated project schedule and capital cost estimate early in the next quarter, which will provide clearer insights into the financial and operational trajectory of the expansion.
Bottom Line?
With regulatory hurdles cleared, Capricorn Metals is poised to accelerate growth, but investors will watch closely for final cost and schedule updates.
Questions in the middle?
- What will be the final capital expenditure and timeline for the Karlawinda Expansion Project?
- How might fluctuations in gold prices impact the project's profitability post-expansion?
- Will Capricorn Metals integrate renewable energy solutions to reduce operational costs?
