Karlawinda expansion gets $200 million boost

Capricorn Metals has received commitments for an institutional placement to raise $200 million to fund its Karlawinda expansion project in Western Australia.

The gold miner announced its plans to expand the Karlawinda gold project last week, with the expansion to target an annual gold production of 150,000 ounces (oz) based on Karlawinda’s 10-year mine life and 1.43 million ounces (Moz) at 0.8 grams per tonne (g/t) in ore reserves.

To fund the expansion, Capricorn has raised $200 million, before costs, through the issue of over 33 million shares at an placement issue price of $6 per share.

The amount represents a discount of 4.9 per cent to the last closing price of $6.31 and a 5.8 per cent discount to the fiv-day trading volume weighted average market price of $6.37.

Aside from the Karlawinda expansion project, the placement’s proceeds will fund the purchase of a detailed plant design, engineering and drawings and long lead equipment at Karlawinda and the Mt Gibson gold project in WA.

It will also fund accelerated exploration at Mount Gibson, which is aimed to grow the project’s resource and reserve, as well as working capital and balance sheet strength to provide optionality around debt repayment and further gold hedging closures.

“The placement proceeds, together with current cash reserves and the expected future free cash flow generated from Karlawinda, are expected to fully fund the development of the Karlawinda expansion project and the Mount Gibson gold project,” Capricorn said.

“This underpins Capricorn’s clear development pathway to become a 300,000 ounce per annum gold producer.”

Capricorn expects the development of Karlawinda and Mt Gibson to be fully funded, with no further debt or mandatory gold hedging required.