Capricorn Metals says it has entered into agreements with APA Group for the transportation of gas from the Goldfields Gas Pipeline (GGP) to the Karlawinda gold project, in Western Australia.

As part of the agreement, APA will also build, own and operate the lateral pipeline that links the GGP to Karlawinda. It is expected that some 3 Tj/d of gas will be transported through the pipeline for power generation at Karlawinda.

Capricorn has also recently executed a power supply agreement with Pacific Energy subsidiary Contract Power Australia where, under the terms of the agreement, Contract Power will build, own and operate a 16 MW gas-fuelled power station with 2 MW of diesel back-up at Karlawinda.

Based on a 1.2 Moz reserve, Capricorn envisages a 12-year mine life at Karlawinda, with an annual production target of 105,000-120,000 oz of gold. The company plans to mine a single large, low strip ratio open pit and use a 3.5-4.0 Mt/y carbon-in-leach processing plant.

Development of the project is underway, with commissioning expected in the March quarter of 2021.

Capricorn Executive Chairman, Mark Clark, said: “We look forward to a successful long-term partnership with these high-quality companies to meet our energy requirements. The completion of these contracts, combined with the current low price of gas in Western Australia, present Capricorn with a very attractive cost of power generation for the operation of the Karlawinda project.”