Elemental Altus Royalties Corp. (TSXV: ELE, OTCQX: ELEMF) has highlighted a major production expansion at the Karlawinda Gold Project, operated by Capricorn Metals Ltd (ASX: CMM). Elemental Altus holds an uncapped 2.0% Net Smelter Return (NSR) royalty on this project, which is poised to significantly enhance its revenue stream. Capricorn aims to increase annual gold production to 150,000 ounces, representing a 30% boost from previous guidance, driven by an expansion of processing capacity to 6.5 million tonnes per annum (Mtpa).
The Karlawinda project is a cornerstone asset for Elemental Altus, generating US$4.6 million in zero-cost revenue in 2023. The anticipated production increase will provide Elemental Altus with approximately 3,000 Gold Equivalent Ounces (GEOs) annually based on the higher production target.
Capricorn’s expansion plan includes a substantial investment of approximately A$120 million, with completion targeted by the end of the second quarter of 2026. This expansion follows a recent increase in mineral reserves by 15%, bringing total reserves to 1,428 thousand ounces of gold contained within 57.7 million tonnes at a grade of 0.8 grams per tonne (g/t). This marks a significant growth in mineral reserves, even after accounting for mining depletion up to July 2024.
Frederick Bell, CEO of Elemental Altus, expressed enthusiasm about the expansion, stating, “We are excited to note Capricorn’s Board approved a major A$120 million expansion at Karlawinda, increasing production to 150,000 ounces per annum over an initial 10-year mine life.” He emphasized that this project is crucial for Elemental Altus and underscores the potential for further resource growth alongside planned production increases.
The expansion strategy includes the installation of a new three-stage crushing and ball mill circuit designed to enhance throughput by approximately 50%, increasing total processing capacity from the current range of 4.0 to 4.5 Mtpa. Capricorn has initiated long-lead procurement and detailed engineering processes for the expanded plant.
Notably, Capricorn anticipates that achieving the new throughput target will not require a significant increase in its mining fleet. The proposed tailings storage facility will utilize waste from the existing Bibra Pit, further optimizing operational efficiency. The new processing facility design aims to enhance flexibility while leveraging synergies in equipment and maintenance.
Capricorn has also indicated that it does not foresee any permitting issues related to the expansion and has begun work on necessary permit applications. The total capital investment for this project is estimated at A$120 million (approximately US$79 million), with an expected payback period of around 20 months.
The recent announcement regarding the production expansion comes on the heels of an updated mineral reserve estimate that highlighted significant growth in both reserves and resources at Karlawinda. Indicated resources have increased to 1,965 thousand ounces of gold contained in 85 million tonnes at a grade of 0.7 g/t, while inferred resources include an additional 287 thousand ounces in 13.6 million tonnes at the same grade.
Richard Evans, Senior Vice President Technical for Elemental Altus and a qualified person under National Instrument 43-101 standards, has reviewed and approved the scientific and technical disclosures.
As Elemental Altus continues to leverage its royalty interests and strategic partnerships in the mining sector, the upcoming production expansion at the Karlawinda Gold Project positions the company for increased revenue potential and sustainable growth.
