Capricorn Metals Boosts Gold Reserves to 5.24 Million Ounces, Targets 400,000 oz Annual Output with Expansion Plans

Karlawinda Reserve Expansion Sustains Decade-Long Mine Life Outlook

Ore reserves at the Karlawinda Gold Project have risen 32% to 1.57 million ounces, continuing Capricorn’s established biennial reserve update cycle that supports approximately a ten-year mine life. This growth mainly resulted from targeted drilling below the 2024 pit design, converting mineral resources into ore reserves based on a conservative gold price assumption of A$2,600 per ounce. The drilling confirmed the ore body's strength and consistency at depth and identified multiple new exploration targets that could support future reserve additions.

This update highlights Capricorn’s disciplined reserve management at Karlawinda, which has consistently delivered incremental reserve growth through systematic drilling. The project maintains mineral resources of 2.99 million ounces, offering a solid pipeline for future reserve conversion as the company further refines its understanding of the ore body's extent and grade. Although no updated production guidance specific to Karlawinda was provided, the existing target of 150,000 ounces per annum remains unchanged.

Mount Gibson Prefeasibility Study Validates 260,000 Ounce Annual Production and Competitive Cost Structure

Capricorn released an updated prefeasibility study for the Mount Gibson Gold Project, confirming the economic feasibility of a two-stage operation featuring an open-pit mine feeding ore to a primary processing hub. The study forecasts steady-state production of 260,000 ounces annually during years three to six, supported by ore reserves of 3.68 million ounces encompassing both open-pit and underground components. Estimated all-in sustaining costs stand at A$1,870 per ounce, positioning Mount Gibson as a competitive mid-tier Australian gold operation.

The prefeasibility study reports a pre-tax net present value of A$6.1 billion and a pre-tax payback period of 14 months, demonstrating strong capital efficiency. The project’s expected mine life is 19.25 years, offering significant longevity and cash flow potential. Notably, the study includes a maiden underground ore reserve of 0.36 million ounces, marking a third production source and highlighting the asset’s quality and scale. This underground component represents a significant expansion of Mount Gibson’s development scope compared to earlier assessments.

Maiden Underground Ore Reserve Highlights Growth Beyond Open-Pit Operations

The declaration of a maiden underground ore reserve totaling 0.36 million ounces at Mount Gibson marks a strategic milestone, distinguishing the project within Australia’s mid-tier gold sector. The underground mining option, supported by the prefeasibility study, adds production flexibility beyond the open-pit operation and reinforces Capricorn’s positioning of Mount Gibson as a low-cost, multi-phase development. The underground reserves reflect economically viable deeper mineralisation, confirming consistent ore body quality and grade at depth.

Excluding reserves, Mount Gibson’s mineral resources total 5.67 million ounces at a higher gold price assumption of A$2,800 per ounce, indicating substantial exploration upside. This resource base exceeds current reserves, offering potential for future reserve conversion, mine life extension, or increased production rates. The company noted that the ore body remains strong, consistent, and open both at depth and along strike, suggesting further drilling could enhance reserves as the project advances toward construction and first production.

Combined Production Target of 400,000 Ounces Supports Medium-Term Growth Strategy

Capricorn’s medium-term guidance anticipates a group gold production rate exceeding 400,000 ounces annually within 2.5 years of Mount Gibson’s start-up. This target combines Mount Gibson’s prefeasibility study output of 260,000 ounces per annum with Karlawinda’s existing 150,000-ounce target, initially announced on 29 October 2024. Achieving this milestone would represent a significant production scale increase, establishing Capricorn as a leading mid-tier Australian gold producer upon full ramp-up.

The company emphasized that this production rate is based on technical studies and targets detailed in separate updates released on 27 July 2026, including the Mount Gibson prefeasibility study and Karlawinda expansion board approval. While the 2.5-year timeline provides a clear benchmark for progress, no formal decision date for Mount Gibson’s commencement was disclosed.

Range 500 Ambition Sets Long-Term Production Growth Beyond 400,000 Ounces

Capricorn introduced Range 500, an aspirational goal to increase annual gold production beyond 500,000 ounces through further exploration and development across its portfolio. This ambition is supported by an ongoing options study assessing the feasibility of a second processing hub at the Golden Range Project. Such a facility could enable processing of high-grade ore from Mount Gibson’s underground expansion northward, reducing the need to transport lower-grade ore south to the primary hub. This study runs alongside aggressive drilling programs targeting both the Mount Gibson underground resource and Golden Range open-pit opportunities.

The company clarified that Range 500 is an aspiration rather than a formal production target, noting that additional work is needed to delineate sufficient reserves and resources to substantiate the goal. The study and drilling efforts are expected to culminate in a prefeasibility study and final investment decision in 2027, providing investors with a key milestone to evaluate the aspiration’s feasibility.

Golden Range Project Positioned as Future Growth Driver via Warriedar Resources

The Golden Range Project, held through Capricorn’s wholly owned subsidiary Warriedar Resources Limited (ASX:WA8), forms a core part of the company’s long-term growth strategy. Located within Capricorn’s Western Australian operations, Golden Range is being evaluated as a potential third processing hub under the Range 500 plan. The options analysis is exploring the economics of a dedicated processing facility that would allow selective routing of high-grade ore from Mount Gibson’s underground operation northward, complementing the primary processing hub.

Warriedar Resources previously released mineral resource estimates for the Golden Range Project’s Ricciardo component in an update dated 5 May 2025, accessible via the ASX archive. While this announcement did not restate Golden Range’s resource inventory, it confirmed ongoing aggressive drilling of the open-pit target as part of the Range 500 support work. The subsidiary structure enables Capricorn to isolate this growth opportunity while maintaining focus on near-term ramp-up at Karlawinda and Mount Gibson.

Reserve Growth Driven by Targeted Drilling and Optimized Trade-Off Studies

The 33% increase in group ore reserves to 5.24 million ounces reflects disciplined exploration and reserve definition at both Karlawinda and Mount Gibson. At Karlawinda, focused drilling below the 2024 pit design successfully converted mineral resources into reserves using a conservative gold price of A$2,600 per ounce, enhancing reserve confidence. This approach provides a buffer against price volatility and strengthens reserve reliability for investors.

At Mount Gibson, the reserve increase to 3.68 million ounces, including open-pit and underground components, was driven by targeted drilling in the Orion South area and a comprehensive trade-off study optimizing mining and processing scenarios. The trade-off study incorporated additional ore into reserves at a conservative A$2,200 per ounce gold price assumption, while the maiden underground reserve benefited from deeper drilling programs. The company noted the ore bodies remain strong, consistent, and open at depth and along strike, indicating potential for continued reserve growth with further drilling.

Competitive Cost Structure and Capital Efficiency Support Development Funding

Mount Gibson’s all-in sustaining costs of A$1,870 per ounce position it competitively within Australia’s mid-tier gold sector, especially relative to inflation-adjusted historical costs. The prefeasibility study’s 14-month pre-tax payback period indicates rapid capital recovery and free cash flow generation, supporting development of future phases and exploration. Capricorn describes Mount Gibson as "fully funded" for development, relying on cash flow from Karlawinda and Mount Gibson operations without requiring external capital.

The 19.25-year mine life provides a substantial cash flow runway and long-term earnings visibility. Combined with Karlawinda’s ten-year mine life, Capricorn’s asset base offers at least two decades of production certainty, reducing exploration risk and providing a stable foundation for shareholder returns as production ramps up.

Exploration Upside and Resource-to-Reserve Pipeline Bolster Future Growth Prospects

Capricorn’s mineral resources significantly exceed ore reserves at both Karlawinda and Mount Gibson, creating a robust pipeline for future reserve conversion and production increases. Karlawinda’s 2.99 million ounces of mineral resources offer opportunities beyond the current 1.57 million ounce reserve base, while Mount Gibson’s 5.67 million ounces of resources (at A$2,800 per ounce) greatly surpass reserves, indicating potential for expanded production or extended mine life. Multiple exploration targets at Karlawinda under current gold price assumptions further support ongoing reserve growth as mining progresses.

The combined mineral resource base of 8.66 million ounces highlights the geological potential of Capricorn’s Western Australian portfolio and its systematic resource definition approach. This inventory provides strategic flexibility to adjust production, extend mine life, or increase processing capacity based on market conditions and capital availability. Investors will likely monitor Capricorn’s biennial reserve updates to assess progress toward the medium-term 400,000 ounce production goal and the longer-term Range 500 ambition.