In the rugged landscapes of Western Australia's mining regions, the relentless onslaught of wet weather continues to pose significant challenges for industry players. The latest victim of nature's fury is Capricorn Metals' (ASX:CMM) Karlawinda gold mine, nestled in the heart of the Pilbara. Facing its second deluge in less than three months, the company finds itself grappling with the consequences of Mother Nature's unpredictability.
In a disclosure to the Australian Securities Exchange (ASX) on Tuesday, Capricorn Metals revealed the toll exacted by the recent downpours. Despite enduring two substantial bouts of rainfall, the company maintains cautious optimism regarding its annual guidance for the fiscal year ending June. However, it concedes that meeting targets may necessitate operating at the lower end of the projected range, set at 115,000 to 125,000 ounces.
The impact of the inclement weather on open-cut operations at the Karlawinda site has been pronounced. With over 150 millimeters of rain inundating the area in recent days, the mine grapples with operational disruptions reminiscent of the deluge experienced merely two months prior, when 133 millimeters of rain fell within a couple of days.
These relentless downpours have resulted in eight days of lost mining activities for Capricorn Metals, significantly impeding progress at the site. The company's contracted mining partner, MACA, finds itself unable to meet the targeted material movements for the March quarter, further exacerbating operational challenges.
While the processing plant remains operational despite the rainfall, Capricorn Metals has been compelled to process lower-grade stockpiles due to the inability to access higher-grade ore in the open pit. In response, the company now shifts its focus towards maximizing the extraction of higher-grade ore until the conclusion of the fiscal year in June, aiming to bolster production amidst the setbacks.
The repercussions of these lost days are reflected in Capricorn's revised production estimates for the quarter, with expectations now hovering around 26,000 ounces of gold. Despite a promising performance in the preceding December half, where production surged to 60,099 ounces and sales increased by 7% to 60,341 ounces, the company acknowledges the formidable challenges posed by the prevailing weather conditions.
Moreover, the adverse weather conditions are anticipated to impact the company's all-in sustaining costs (AISC) for the first half of the fiscal year 2024, which stood at $1,324 per ounce. Capricorn Metals anticipates that the overall AISC for fiscal year 2024 will likely trend towards the upper end of the guidance range of $1,270 to $1,370 per ounce, primarily due to the reduced tonnage processed as a consequence of the weather-induced disruptions.
As Western Australia's miners navigate the formidable challenges presented by nature's whims, Capricorn Metals' experience at the Karlawinda gold mine underscores the resilience and adaptability required to thrive in such volatile environments. As the company perseveres through the trials posed by the elements, it remains steadfast in its commitment to surmounting obstacles and delivering on its strategic objectives despite the odds.
