ASX Mining Stock Enhancing Potential Returns

Capricorn’s strategic initiatives have transformed it into a highly successful, low-cost gold mining operation. Among the best growth stocks to buy now, its mining operation maintains a favorable low stripping ratio of 4.6, indicating a manageable level of waste removal relative to ore extraction, suggesting efficient waste management and potentially lower costs. 

Capricorn Metals Limited (ASX: CMM) 

Capricorn Metals Limited announced that Karlawinda Gold Project (KGP) delivered Q1 FY25 gold production of 25,559 ounces (Q4: 26,835 ounces) at an all-in-sustaining cost (AISC) of $1,647/oz (Q4: $1,548/oz), consistent with the FY25 mine plan. AISC is anticipated to decrease in subsequent quarters as earthmoving volumes taper and production ramps up. Management remains confident in achieving FY25 guidance of 110,000–120,000 ounces at an AISC of $1,370–$1,470/oz. 

One of the high growth stocks, its operational cash flow generation remained robust at $38.0 million (Q4: $40.4 million), supported by stabilized gold recovery rates at 91.9% (Q4: 89.1%) following the commissioning of liquid oxygen and lead nitrate facilities. Material mined from the Bibra open pit increased 17% QoQ, and planned pit face positions were achieved, enabling improved productivity for the remainder of FY25. Revenue from gold sales totalled $83.1 million from 22,285 ounces sold at an average realized price of $3,729/oz. An additional 4,656 ounces remained unsold at quarter-end, valued at $18.0 million.

KGP’s Ore Reserve Estimate (ORE) increased by 15% to 1,428,000 ounces, reflecting a net gain of 333,000 ounces after mining depletion, while the Mineral Resource Estimate (MRE) rose 1% to 2,252,000 ounces. Group-wide, Capricorn’s ORE stands at 3,262,000 ounces, with MRE at 5,557,000 ounces. A KGP expansion study, targeting a throughput increase of 2–2.5 Mtpa (from 4.5 Mtpa), is expected in Q2, leveraging recent reserve upgrades. At the Mt Gibson Gold Project (MGGP), construction of the 400-room accommodation village progressed, with all buildings in place and services installation underway. Completion is on track for CY24. The $23.9 million spent to date reflects strategic early expenditure against the $260 million MGGP capital budget to compress project timelines. Tender evaluations for mining, power, and processing plant contracts are ongoing, with awards expected in Q2. Meanwhile, environmental reporting for the MGGP is advancing, with a Public Environment Report (PER) submission planned for late Q2.

For FY24, Capricorn reported a profit after tax of $89.1 million, broadly in line with FY23 ($85.8 million), driven by record revenue of $359.8 million. Record cash flow from operations of $158.2 million supported a net cash position of $69.3 million (FY23: $55.9 million) despite significant discretionary expenditures, including $69.6 million to hedge closures and $19.4 million in early MGGP capital spend. Looking ahead, KGP production is expected to accelerate as higher-grade zones in the Bibra pit are accessed, driving improved processed grades and reduced unit costs. The operational outlook for both KGP and MGGP underscores Capricorn’s robust organic growth potential.

Source: Company’s Report