Capricorn Metals’ (ASX:CMM) Mt Gibson Gold Project in Western Australia will be a “transformative, fully funded” second mine for the company after updating a Prefeasibility Study.
As part of the ore reserve estimate update — which resulted in a 41% increase totalling 89.9 million tonnes at 0.9 grams per tonne gold for 2.59 million ounces of gold — the updated PFS shows Mt Gibson has a 17-year mine life with an average gold production of 150,000 ounces per year for the first 15 years.
Since the previously announced PFS, Capricorn Metals, which has a market capitalisation of $2.44 billion, has conducted drilling and technical studies and has used this information to update operating costs and further update the study.
As a result, Mt Gibson has an anticipated all-in sustaining cost of $1,650 to $1,750 per ounce over the entire mine life.
The project is forecast to generate $3.6 billion of operating cashflow over the mine’s life, with a life-of-mine revenue of $7.76 billion and free cashflow of $3.2 billion. Further, the PFS also outlines Mt Gibson will have a post capex and pre-tax net present value of $1.948 billion.
Capricorn notes the development cost estimate calculated in April 2023 of $260 million, remains appropriate along with pre-production mining capital estimate of $83 million reflecting recently tendered mining costs.
Executive Chairman Mark Clark says the company believes this is one of the most “compelling” development projects in the Australian gold industry.
“We are excited that there is still significant further growth potential for the resource and reserve as drilling continues at pace at modest depths and we see an emerging underground opportunity,” Clark says.
“We believe Mt Gibson will become a high-quality operation for Capricorn and to this end we are doing the work to be in the best possible position to expedite development of the project on completion of the permitting process.”
The company intends to update the mineral resource again mid-2025 for ongoing drilling on the open-pit deposits and underground potential drilling.
Meanwhile, Capricorn has begun detailed design of the processing plant for Mt Gibson. In the coming quarters, as design advances, long lead procurement commitments will also be made in conjunction with progressive receipt of development and environmental permits.
The company notes this strategy is designed to compress the construction phase of Mt Gibson to around 12 months from receipt of regulatory approval for development.
The Mt Gibson Project is located 280km northeast of Perth in the Murchison region of Western Australia. Gold production began at the project in 1986 and by 1999, the project had mined 14 open pits.
Capricorn Metals is an Australian gold explorer and producer headquartered in Perth, Western Australia. The company operates within the Pilbara and Mid-West regions of Western Australia, via its Karlawinda and Mt Gibson projects.
Write to Aaliyah Rogan at Mining.com.au
Images: Capricorn Metals
