Capricorn Metals has reported higher December half earnings after a solid final three months of the year and says it is on track to meet guidance for the year to the end of this June.
The Perth-based miner said profit before tax increased by 13% to $58.3 million from previous corresponding period, reflecting what it called “strong operating performance with gold production up 10% to 60,315 ounces and “strong cost control against a back drop of industrywide inflationary pressures”.
Thanks to a lowest-quartile All in Sustaining Cost (AISC) of $A1,105 an ounce for the half, EBITDA jumped to $A74.8 million for a gross margin at this level of 51%.
Gold revenue was up 16% with gold sales of 56,218 ounces at an average delivery price of $A2,587 per ounce. A further 5,196 ounces of bullion on hand which was subsequently sold in January 2023 for $13.9 million;
Strong cashflow from operations of $65.3 million helped lift the company’s holdings of cash and bullion at December 31 to $91.7 million from $65.9 million at June 30.
Net cash was $41.7 million with the $50 million project loan facility converted by Macquarie during the half year to a corporate facility with a single bullet repayment in June 2025.
Directors said Capricorn is on track to achieve production guidance for FY23 of 115,000 – 125,000 ounces at AISC of $1,160 – $1,260 per ounce after its Karlawinda gold mine in WA produced almost 30,000 ounces of gold.
The company reported that mining volumes were down roughly 50% in the three months to December overall from the first quarter, owing to a temporary suspension of operations. In October, a 59-year-old Perth man was killed in a workplace accident at the Karlawinda mine.
The quarterly report follows favourable drilling results received in late January from Capricorn’s Mt Gibson and Karlawinda operations. Assays received from 160 holes at the Mt Gibson gold project continued to return exceptional results.
“The continued excellent results from drilling at Mt Gibson since the significant increase to the resource in November 2022 provide further encouragement about the prospects of the project,” Capricorn executive chair Mark Clark said.
At the Karlawinda gold project, drilling continued near mine prospect Carnoustie with assay results expected in the March 2023 quarter.
“We are also excited to be underway with regional exploration across the under-explored Karlawinda tenement package,” Clark said.
No mention of a dividend, however.
Capricorn shares rose more than 2% to $4.48 after gold’s early rush up. Comex prices later eased as some of the angst about US banks faded.
