ASX-listed Capricorn Metals has announced the results of its updated prefeasibility study (PFS) for its Mt Gibson gold project (MGGP), in Western Australia.

The updated study includes underground production for the first time and gold production ramping up to 260 000 oz/y by year three. The company says the study confirms a transformative and fully funded mine development, delivering a 19-year mine life with low operating costs.

Executive chairperson Mark Clark says the company is “delighted” to deliver the updated MGGP PFS incorporating underground production for the first time.

Capricorn says the study indicates strong resource and reserve growth, with an updated MGGP mineral resource of 188.9-million tonnes at 0.9 g/t gold for 5.67-million ounces – up 20% from 2025 estimates. This includes an underground mineral resource estimate (MRE) of 9.6-million tonnes at 2.9 g/t for 886 000 oz.

The study also indicates an updated MGGP ore reserve of 119.3-million tonnes at 1 g/t gold for 3.67-million ounces – up 34% from 2025, including a maiden underground reserve of five-million tonnes at 2.3 g/t gold for 365 000 oz.

Ore reserve estimate (ORE) optimisations used conservative gold price assumptions of A$2 200/oz to A$2 600/oz.

Additionally, Capricorn notes that the PFS reports a steady-state gold production average of 260 000 oz/y from concurrent underground and openpit mining activities over four full years of underground mine life delivered by the exciting underground drill programmes of the last two years.

Moreover, the company says underground drilling and delineation of underground resources has been very successful to date but is still in its infancy. Ongoing drill programmes are expected to deliver further resource growth at Orion South and Lexington in the short term.

The PFS also indicates a 19.25-year mine life, averaging 190 000 oz/y for 18 years, after 15 months of pre-production mining.

The company says 96% of production is sourced from ORE.

The PFS indicates a rapid pre-tax payback of 14 months and life-of-mine (LoM) forecasts of 3.5-million ounces of gold production at an all-in sustaining cost (AISC) of A$1 870/oz; revenue of A$19.3-billion and pre-tax free cash flow of A$12-billion; and post-capital expenditure pre-tax net present value of A$6.1-billion.

The study also shows updated development capital of A$345-million for plant and infrastructure, with a further A$129-million for pre-production mining (15 months).

Capricorn explains that development of the MGGP underground mine does not expand surface disturbance footprint and so does not require additional federal environmental permitting.

State permitting for underground mining will be pursued in parallel with development of the openpit mine and processing infrastructure and is not expected to be critical path for the development of the underground mine.

Capricorn notes that detailed design of the processing plant for the MGGP is now complete, allowing procurement to start in the first quarter of the 2027 financial year for major equipment items and contracts on the critical path.

The company says this strategy of early commitments (along with the installation of the accommodation village in 2025) is designed to compress the construction phase of the project to about 15 months from receipt of regulatory approval for development and access to the plant site.

With the federal environmental permit received and Western Australia permitting progressing, Capricorn says it is targeting start of site development activities in the second quarter of the 2027 financial year.

Additionally, Capricorn explains that the project contemplated by the updated PFS is Stage 1 of Capricorn’s development opportunity at the broader Mt Gibson project.

The company has begun technical studies into MGGP Stage 2, which will consider the technical, permitting and financial aspects of a second processing hub at the Golden Range project located 65 km to 100 km north of the Mt Gibson processing site.

The study will be driven by the objective of maximising the return from the broader MGGP in the context of optimising gold production, mine life and capital investment.

The study will test a range of processing plant scale options at Golden Range between 1.5-million and 2.5-million tonnes a year.

Preliminary results of this technical process plant study are expected in the second quarter of the 2027 financial year.

Capricorn says further aggressive resource definition and extension drilling programmes at both Golden Range openpit and MGGP underground targets will continue in parallel with this study, allowing the two workstreams to culminate in a PFS and final investment decision in the 2027 calendar year.

“The study highlights the exceptional quality and longevity of the Mt Gibson project with production ramping up to 260 000 oz/y and compelling economics that confirm it as one of the most exciting development opportunities in the Australian midtier gold sector,” says Clark, noting that, with permitting advancing significantly in the last quarter, the company hopes to finalise that process and start development this year.

“Having now validated the strong technical and financial viability of underground mining at Mt Gibson we also look forward to investigating how that growing inventory and the broader opportunities on the tenure package, including Golden Range, can be best optimised to deliver value for Capricorn shareholders,” he adds.