Capricorn boom runs on with $200M raised for Karlawinda expansion

Booming gold miner Capricorn Metals (ASX:CMM) has scored another big win, raising $200 million through an institutional placement that will be funnelled into its Karlawinda mine expansion – now fully funded – and a foray at Mount Gibson.

Capricorn today confirmed it has firm commitments for the placement, which will raise the $200M at an issue price of $6 per share; 4.9% cheaper than last close.

The miner was quick to note the placement was “strongly supported” both by existing institutional shareholders and institutional investors.

The announcement also signals an end to Capricorn’s temporary trading halt today.

This $200 million windfall and what it means for Capricorn’s Karlawinda and Mount Gibson plays continues a bumper streak the Western Australia gold miner has been on since Mark Clark took the helm as executive chairman in 2019.

The proposed Karlawinda expansion – approved by the board a little earlier this week – will see the $2.4 billion miner soon rake in more than 150,000 ounces of gold a year through production at the project south-east of Newman in the Pilbara. Upgrade works are estimated to run through to mid-2026 and cost $120 million.

Everything is now building towards turning Capricorn into a 300,000 ounce per annum gold producer, the company declared alongside the raise news. The in-the-works Mt Gibson project play would (eventually) add the other 155,000 ounces annually.

“This growth is underpinned by Capricorn’s 3.3Moz reserve base at two quality projects with long mine lives (10 years) in the tier one location of Western Australia,” the WA company wrote in its Friday morning update.

Earlier, Mr 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 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.”

Focus at Capricorn now turns to getting Mt Gibson through its permit process.

Capricorn last traded at $6.28 today, down 0.4%.

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