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Capricorn’s golden year

Capricorn Metals has produced a record 32,018 ounces of gold from its Karlawinda mine for the June 2022 quarter.

Gold miner Capricorn has announced record revenue for the 2023 financial year (FY23), totalling $320.8 million.

Production at the company’s Karlawinda gold project in WA was 120,014 ounces at an all-in-sustaining-cost (AISC) of $1208 per ounce.

“FY23 was another very strong year of operations at Karlawinda, with the project generating outstanding cashflow,” Capricorn executive chairman Mark Clark said.

“This saw Capricorn’s balance sheet strengthen from a net debt position of $3.9 million to a net cash position of $55.9 million over the course of the year.”

The cash flow allowed Capricorn to invest $35.6 million in exploration, primarily focused on an extensive drilling campaign at Mt Gibson.

“This drilling underpinned a maiden ore reserve of 1.45 million ounces and a pre-feasibility study (PFS) that strongly supports development of the project,” Clark said.

Capricorn also saw earnings before interest, taxes, depreciation and amortisation (EBITDA) of $161.9 million.

Cashflow from operating activities reached $152.6m, which was an increase of 13 per cent from FY22.

“Capricorn also spent $36.8 million to partially close out its gold hedge book, providing full exposure to the A$ gold price in FY24,” Clark said.

“With the spot price of gold currently in excess of $3000 per ounce, some $140 per ounce higher than at the time of closure, the opportunity presented by this strategy is clear.”

For FY24 and beyond the remainder of the hedge book will qualify for hedge accounting treatment and any unrealised mark to market gains or losses will be booked to a hedge accounting reserve rather than through the statement of profit and loss.

The company expects to continue strong cashflow generation in FY24 with a production guidance of 115,000 – 125,000 ounces at an AISC of $1270 – $1370 per ounce.

“We look forward to another strong year of operations at Karlawinda and advancing the development of Mt Gibson in FY24,” Clark said.

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