Capricorn Metals Ltd (ASX: CMM) has seen the ore reserve estimate at its Mt Gibson Gold Project (MGGP) in Western Australia jump 26 percent through drilling work on site, boosting the company’s overall stock of gold, while feasibility work on the project continues in the background.
The ore reserve at MGGP is now estimated at 61.6 million tonnes at 0.9 grams per tonne of gold, yielding 1.83 million ounces, a rise of 380,000 ounces from the project’s first estimate which was achieved last April.
Overall, this brings Capricorn’s group gold reserves to 3.1 million ounces, built on Mt Gibson and the Karlawinda Gold Project, also in Western Australia.
The ore reserve boost at MGGP was achieved through a program of drilling which included 89,543 metres over the past year, and Capricorn continues to update pre-feasibility on the project, with the latter’s financial model showing that Mt Gibson could provide a viable second mine for the company, producing an average of 155,000 ounces for the first 9 years of mine life.
Production costs for this mine would be in the area of between A$1,450 and A$1,550 per ounce, based on reserves alone.
Pre-feasibility updates have also concentrated on the development of a plant, with the April 2023 cost estimate of $260 million remaining unchanged, and the mine overall expected to generate an operating cashflow of $1.7 billion across a 11.5 year mine life.
Capricorn Executive Chairman Mark Clark said he was pleased with where MGGP was sitting in terms of development and ore status.
“It is exciting that the ongoing drilling and resource upgrades at Mt Gibson have delivered a 380,000 ounce increase in the reserve to 1.83 million ounces,” he said.
“The update of our 2023 PFS shows an operation with long life, high margin gold production averaging over 150,000 ounces per annum.
“The development of Mt Gibson will see Capricorn enter the very limited space of companies having all Australian based gold production exceeding 250,000 ounces per annum and gold reserves in excess of 3 million ounces.”
Capricorn Metals has been trading at $5.250.