Capricorn Metals Ltd (ASX:CMM) has revealed significant improvements to the economic parameters of its Karlawinda Gold Project in Western Australia following the completion of an optimisation study.
Significantly, the pre-tax net present value (NPV) has increased by 69% to $243 million at an improved internal rate of return (IRR) of 36%, with project pay back reduced to 2.5 years.
Capricorn’s total upfront capital costs have been reduced by about 10% to $132 million and significant improvements to the process flowsheet have been identified.
The mine life has been increased by 2 years to 8.5 years, with a 25% increase in life of mine (LOM) gold production to 823,000 ounces recovered at a LOM all-in sustaining cost of A$1038 per ounce.
Significant reduction in processing costs
Capricorn’s optimisation of the mining schedule has smoothed material movements, enhancing the cashflow generation in the first two years of production.
A significant reduction in processing costs has also been achieved due to reductions in power costs, higher throughput of oxide and laterite ore and improved operational efficiencies.
An increase in gold price assumptions to A$1,700 per ounce, which is more reflective of the prevailing market, also has a positive impact on the economics of the project.
Tender process for mining commenced
Capricorn is working with several short-listed banks with the aim of finalising the debt component of the project financing in the September 2018 quarter.
Based on the May 2018 ore reserve upgrade and resultant optimised mine schedule, Capricorn has commenced a competitive mining contractor tender process.
This tender process will be finalised before the end of July 2018 and a final decision on the preferred mining scenario will be made once tenders have been reviewed.