Capricorn’s Expansion Push Faces Execution Risks Despite Strong Start

Strong Start to FY26

Capricorn Metals Limited has kicked off FY26 with a solid quarter at its flagship Karlawinda Gold Project (KGP), producing a record 32,318 ounces of gold. This output matches the company’s expectations and keeps it firmly on track to meet its full-year guidance of 115,000 to 125,000 ounces at an all-in sustaining cost (AISC) between $1,530 and $1,630 per ounce.

The steady increase in mining productivity, reflected in consistent quarterly gains throughout FY25, continued into the September quarter. Operational metrics such as material mined and ore milled showed incremental improvements, underpinning the strong production performance.

Advancing Expansion Projects

Capricorn is not resting on its laurels. The Karlawinda Expansion Project (KEP) is now in full construction mode, with capital expenditure of $30.4 million recorded in the quarter. Key milestones include completion of a 164-room camp expansion, earthworks at the plant and tailings storage facility sites, and mobilisation of civil and mechanical contractors. Mining activities have also commenced in the Berwick pit to supply materials for civil works, while the process plant design is approximately 85% complete.

Meanwhile, the Mt Gibson Gold Project (MGGP) is progressing through early development stages, with $3.3 million spent on detailed design and procurement. The awarding of a mining services agreement to MACA has enabled early mine design and planning, and the process plant design is about 80% complete. Capricorn has also submitted the final Public Environment Report, moving closer to securing all necessary environmental approvals.

Financial Strength Supports Growth

Financially, Capricorn Metals ended the quarter with $394.4 million in cash and gold on hand, up from $356.4 million at the end of June. This strong cash position, bolstered by a $71.8 million build during the quarter before capital expenditure, provides a solid foundation to fund ongoing expansion and development activities.

The company’s strategic approach to capital allocation, accelerating early procurement and construction activities, aims to compress project timelines and enhance future production capacity. The scheduled arrival of key equipment, such as the ball mill in early Q4 FY26, signals readiness for commissioning in the following quarter.

Outlook and Considerations

With regulatory approvals in place, including mining proposals and mine closure plans, Capricorn Metals is well positioned to maintain momentum across its projects. However, as with all mining operations, risks remain around commodity price fluctuations, operational execution, and environmental compliance. The upcoming Quarterly Report will provide further detail on operational costs and performance metrics, offering investors a clearer picture of the company’s trajectory.