Capricorn Metals : 110,000 Metre Drill Programme at Mt Gibson Gold Project

For personal use only

15 December 2021
Company Announcements Office
Australian Securities Exchange Limited
Level 4, 20 Bridge Street	ASX:CMM
Sydney NSW 2000

MT GIBSON GOLD PROJECT

TENURE GRANTED

&

110,000 METRE DRILL PROGRAMMES PLANNED

ASX Announcement

Highlights

• All key mining tenure at Capricorn's wholly owned Mt Gibson Gold Project (MGGP) has been granted.
• Granted tenure now consists of 24 exploration and prospecting licences covering 213 square kilometres.
• The 2.08 million ounce resource and all current exploration targets are on granted tenure.
• Grant of tenure completes Capricorn's acquisition of the project, which at a cost of less than $20 per resource ounce, represents a compelling value proposition for the company.
• Grant of tenure facilitates expedited commencement of >110,000 metre drill programmes.
• An 81,000 metre resource infill and extensional (drill hole data gaps, depth and along strike) drill programme with a budget of $10 million to commence in January 2022.
• This drill programme will underpin an updated resource estimate and maiden reserve estimate in 2022.
• Regional exploration activities including a 30,000 metre first pass aircore drilling programme to commence with low impact exploration activities and environmental surveys (required for drill sites) in the March 2022 quarter.
• A further 4 exploration licences applications (491 square kilometres) have been made since the project acquisition covering prospective regional exploration areas, with grant pending.

Grant of Mining Tenure

Capricorn Metals Ltd (Capricorn or the Company) is pleased to advise that all key mining tenure at the wholly owned Mt Gibson Gold Project has been granted.

The grant of mining tenure is the culmination of tenement applications made by Capricorn subsidiary Crimson Metals Pty Ltd pursuant to its priority rights in the Mt Gibson project area under section 100 of the Mining Act 1978 (WA).

The granted tenure covers the 8 kilometres of strike hosting the current 2.08 million ounce gold resource, strike extension beyond the resource, and all known gold occurrences on the Mt Gibson project. The grant of mining tenure allows Capricorn to commence expedited work to grow the gold resource and advance the project towards a maiden reserve estimate and feasibility study. It also provides access to commence testing of high priority exploration targets outside the immediate resource areas.

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MGGP granted tenure

Applications for a further four exploration licence covering 491 square kilometres have been made by Capricorn at the MGGP since the acquisition of the project and are currently pending grant. These applications cover regional exploration areas with limited historical exploration. The target areas have been identified as having a geological and structural setting known to host mineable deposits in the Yilgarn Craton. These applications are expected to be granted in due course.

MGGP tenure granted and under application

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Unique Opportunity at MGGP

The combined area of the granted tenure at MGGP covers approximately 213 square kilometres and in excess of 15 kilometres of strike on the gold bearing Retaliation Greenstone Belt, in the SW portion of the Yalgoo-Singleton Greenstone Belt.

The MGGP has been the subject of approximately 660,000 metres of exploration and operations drilling, of which less than 5% is deeper than 150 metres below surface. The deepest open pit at the MGGP finished only approximately 100 metres below surface while the average depth of mining is between 60 - 80 metres below surface. The gold price in 1999 when the mining operations ceased was in the order of A$450 per ounce (compared to current price of circa A$2,500 per ounce).

Capricorn has completed a JORC 2012 compliant Mineral Resource Estimate for the Mt Gibson Gold Project. A summary of the MRE is provided below:

	Material Type			Cut-Off		Classification			Tonnes			Gold Grade			Gold Metal
						(Mt)			(g/t)			(koz)
	Oxide		Open Pit	0.4		Inferred			9.7			0.8			243
	Transitional		Open Pit	0.4		Inferred			7.4			0.8			188
	Fresh		Open Pit	0.4		Inferred			62.6			0.8			1,651
	Total						79.7		0.8		2,083

Notes:	1.Mineral Resources are estimated using a gold price of A$2000/ounce.
	2.Mineral Resources are estimated using a cut-off grade above 0.4g/t Au.
	3.The above data has been rounded to the nearest 100,000 tonnes, 0.1 g/t gold grade and 1,000 ounces.
	Errors of summation may occur due to rounding.

In addition to the resource expansion potential at the project there is also a significant broader exploration opportunity on the tenure package. The parallel (immediately west) structure to the Mt Gibson Mine Trend and the Highway/McDonalds area located 5km north of the current resources have been identified as significant immediate exploration targets.

The quality of the project and its unique historical background present significant opportunities for Capricorn, including:

1. The resource estimate extends over a length of 8 kilometres to an average depth of 140 metres and maximum depth of 220 metres below surface. There are significant drillhole data gaps between areas of the resource optimisation shells along the length of the resource strike. There are also numerous targets (derived from both deeper historical drill results and from geological interpretations) below the depth limits of the current resource shells;
2. Although the density of drilling in the resource is very good, (ranging from 25m x 25m to 50m x 25m) the resource is currently all classified in the Inferred category until database validation drilling is completed in the planned programme;
3. The deposit is open along strike both to the north and south of current resource shells; and
4. Known gold occurrences have also been identified elsewhere on the granted tenure outside the immediate current resource areas.

Capricorn has planned extensive drill programmes for both resource development and first pass exploration.

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Resource Development Drilling

A detailed review of the 8 kilometres strike of the current 2.08 million ounce resource has generated an 81,000 metre drill programme for the purposes of:

• Infill drilling of resource to broadly bring the drill density to 25 x 25 metres;
• Test gaps between resource pit optimisation shells along the 8 kilometres of strike of current resources; and
• Test for extensions of gold mineralisation below the current resource shells.

This $10 million drill programme is planned to commence in January 2022 with up to three RC drill rigs and is expected to take in the order of 4 - 6 months to complete. Results of this programme (and any extensions to it) will be used as the basis for a resource update and a maiden Ore Reserve estimate in 2022.

Plan view of resource drilling areas:

Plan view of cross section and long section locations

Selected long and cross sections showing historical results, current resource optimisation pit outlines and planned RC drilling are shown below. Intercepts listed are reported at a minimum of 0.5g/t Au value over a minimum length of 1m with a maximum 2m length of consecutive internal waste. No upper cuts have been applied.

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Hornet Long Section with planned RC drilling

Hornet Cross Section with planned RC drilling

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