Caracal Gold plc / EPIC: GCAT / Market: Main / Sector: Mining

Caracal Gold plc ('Caracal' or the 'Company')

Mine Plan for Kilimapesa expansion  

Caracal Gold plc, the East African gold producer with over 1,300,000oz JORC-compliant gold resources, announces the completion of Phase 1 of the work program which was to review and update the geological model and mining plan for the Kilimapesa Hill deposit.

The work included the review of the geological model, mineralization model, grade models, producing the Whittle optimisations, pit designs and a project evaluation. This is an important milestone in the Kilimapesa expansion project financing process.

Work Program

Minopex Advisory (Pty) Ltd, a DRA Global Group Company, are carrying out the work program on behalf of Caracal. The scope of work/phases are as follows:

·   Phase 1:               3-year mine plan to support Kilimapesa expansion financing;

·   Phase 2:              Full remodeling of Kilimapesa Hill deposit including additional drilling;

·   Phase 3:              Update the MRE (JORC) for Kilimapesa Hill deposit;

·   Phase 4:              Completion of 10 year mine plan for Kilimapesa Hill deposit.

Highlights from the Phase 1 work are as follows:

·      Independent Technical report providing 36 month mine plan for Kilimapesa Hill deposit;

·      49,155oz forecast production;

·      AISC US $1,055 per oz;

·      Gross Revenue + US $83.5m;

·      Total Free Cash + US $31.7m;

·      Gold Price US $1.700 per oz.

The Phase 1 mining plan has 2,427,279t of ore mined over the 36 month period at an average grade of 1.06g/t. 529,756t at an average grade of 1.8g/t are processed through the Milling/CIL plant with 1,897,524t at an average grade of 0.86g/t processed by the Heap Leach plant. The plan assumes a 75% recovery by the Milling/CIL plant for 23,002oz recovered and a 50% recovery through the Heap Leach plant for a total of 26,153oz recovered. Combined Milling/CIL and Heap Leach production over the 36 months is 49,155oz.

The current capital cost to complete the Kilimapesa expansion project is approximately US $10.5m based on the results from the Phase 1 work. A reduction in the capital is expected and this  plan will now be costed and an updated capital cost for the expansion project calculated and announced.

This capital cost, along with the revised operating costs, will be used to update the financial model and agree the terms of the expansion funding.

The construction and commissioning program for the project is 6 months from when the funds are drawn down.

Robbie McCrae, Chief Executive Officer of Caracal, commented,

"We are delighted with the results of the 1^st Phase work completed by Minopex. The 3 year mine plan and project valuation provide robust economics and validate our confidence in the Kilimapesa expansion project.

We see further upside in Milling circuit recoveries and in the gold price used versus what we are currently getting for our gold sales.

We look forward to commencing the Phase 2 program with Minopex and to updating the market on the progress. Phase 2 will provide full understanding of the size of the Kilimapesa Hill resource (increased and updated MRE) and to the Life of Mine plan and project valuation.

The 3 year revised Mine plan will now be incorporated into the financial model allowing us to finalize the terms of the expansion financing. We look forward to providing an update for the expansion funding process in the near future."

**ENDS**