Capricorn Metals in hefty $200m equity raising to fund dual gold developments

Capricorn Metals is raising $200 million from investors to help fund a $420m dual development program that will set up the gold miner as a long-life producer.

The WA producer went into a trading halt early Wednesday before unveiling a placement at $6 a share, a 4.9 per cent discount to Tuesday’s closing price, to fund its expansion of the Karlawinda gold mine and help build a proposed new mine at Mt Gibson.

Capricorn said the projects would be fully funded after the equity raising, with the remaining development costs to be met from existing debt and future cashflow from Karlawinda.

The development plans position Capricorn, valued at nearly $2.4 billion, to produce more than 300,000 ounces a year by the end of the decade.

The $120m expansion of Karlawinda, 65km south-east of Newman in the Pilbara, was only approved by the company’s board earlier in the week. It will expand production at the mine to 150,000 ounces a year once construction is completed in mid-2026.

Acquired three years ago, the Mt Gibson project is still progressing through the permitting process but preliminary works are underway.

Capricorn expects to spend $300m to bring it into production. When fully operation, it will turn out up to 155,000 ounces a year.

Some $55m of the placement proceeds will be deployed to Karlawinda and $85m to Mt Gibson. The remaining $60m will cover the cost of the raising and supplement working capital.