Capricorn Metals has secured board approval for the expansion of the Karlawinda gold project (KGP) in the Pilbara region of Western Australia.
The Australian gold project’s expansion will involve the installation of a new three-stage crushing and ball mill circuit with a capacity of 2.5 million tonnes per annum (Mtpa). This addition is expected to raise the processing capacity to 6.5Mtpa.
Capricorn Metals estimates the expansion of the Karlawinda gold project to cost A$120m ($78.6m), with a project payback period of 20 months. In addition, the expansion will yield an internal rate of return (IRR) of 49%.
Located 65km southeast of Newman, the Karlawinda gold project started operations in June 2021 and has produced more than 375,000 ounces of gold. So far, the gold project has generated more than A$500m ($327.7m) in operating cashflow with minimal capital expenditure.
The expanded Karlawinda gold facility is anticipated to deliver an annual gold output of 150,000 ounces.
Capricorn Metals will execute the expansion project in a phased manner, with permitting, engineering, and procurement expected to be completed by the end of Q4 FY25. This will be followed by a 12-month construction phase aimed for completion by Q4 FY26.
The mine life is projected to extend to 10 years.
Capricorn Metals executive chairman Mark Clark said: “The Board’s approval of KGP’s expansion reflects the quality and simplicity of the operation and the optionality that comes from increasing reserves and mine life with targeted resource drilling.
“Capricorn’s strong technical team have delivered an expansion study that will allow the Company to continue to maximise returns from the operation. KGP is a long-life, low-cost gold mine, and the strong financials associated with the expansion strengthen our belief that KGP will continue to generate industry-leading cash flows for years to come.”
Capricorn Metals’ decision to expand the Karlawinda gold project comes after an increase in its ore reserves to 1.43 million ounces as of August 2024.
Additional infrastructure developments include expanded accommodation facilities to support the workforce and a new tailings storage facility (TSF) to manage increased output by using displaced waste material from the nearby Berwick deposit.
The company indicated that environmental approval requirements for the project are well understood, and preparations for submitting applications to regulators are advancing. The expansion footprint will remain within the bounds of Capricorn Metals’ current mining leases.
