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The Capricorn secret: What’s in the water at Karlawinda?

Capricorn Karlawinda

Capricorn Metals delivered record quarterly production from its Karlawinda gold project (KGP) in Western Australia, which has not gone unnoticed from its financiers.

Karlawinda produced 32,018 ounces (oz) of gold in the second quarter of 2022, a slight increase from the company’s 31,769oz output in the first three months of the year.

This saw Capricorn achieve the upper end of its 110,000–120,000oz production guidance for the 2021–22 financial year on the back of a 118,432oz year.

Capricorn said it repaid $15 million of its project loan facility with Macquarie Bank shortly after the quarter ended, which included a $5 million early, unanticipated payment.

The company has $50 million left to repay from the loan facility, which Macquarie Bank has converted to a “general-purpose” corporate loan facility with a single repayment owed in June 2025.

Capricorn executive chair Mark Clark said this was big coup for the gold miner.

“The continued strong operational performance and outlook for the Karlawinda gold project have put Capricorn in an excellent position to create balance sheet flexibility by converting the project loan facility to a general purpose, medium-term corporate loan facility,” he said.

“This provides a great platform to pursue the outstanding growth opportunities at both the Karlawinda and Mt Gibson gold projects and also to continue our active assessment of external growth opportunities.”

Up to 30,000oz of forward sale contracts with an average delivery price of $2247/oz have been rolled from July 22 – December 22 to December 25 – June 26 to align with the maturity date of the new corporate loan facility.

Capricorn’s cash and bullion holdings increased from $45 million to $66 million at the end of the June quarter and the company now has net cash of $1 million, up from its previous net debt position of $20m at end of the March quarter.

“Achieving a net cash position within first year of operations reflects the strong operating performance and cashflow generation of KGP,” the company said in a statement.

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