ASX gold share Capricorn Metals Ltd (ASX: CMM) has bolstered its balance sheet with a hefty capital raise, giving it more dry powder to work with.
The gold miner raised $200 million from investors, as confirmed by an announcement made to the market last week.
Zooming out, the stock is up 39% this year to date, finishing the last week of trade at 2% in the green. Here are the details.
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ASX gold share raises funds
Capricorn Metals raised $200 million from institutional investors via a placement priced at $6.00 per share. The ASX gold share says the capital raise was met with strong demand from institutional investors.
These included both Australian and international backers, which is unsurprising given the current gold market. At the time of writing, the yellow metal trades at US$2,733 per ounce.
Management says the capital injection will enable it to accelerate its ambitious growth plans, especially across two primary projects: the Karlawinda Expansion Project and the Mt Gibson Gold Project.
Karlawinda aims to increase processing capacity by 2.5 million tonnes per annum (mtpa) to 6.5 mtpa.
If it hits this target, it positions the site for an anticipated gold output of 150,000 ounces annually.
Additionally, the ASX gold share plans to deploy funds toward detailed plant designs, advanced engineering, and essential equipment purchases for both sites.
Meanwhile, exploration at Mt Gibson is set for a significant ramp-up. Capricorn intends to focus on resource expansion, thereby "presenting potential underground resource and mining opportunities" at the site. This could impact the ASX gold share moving forward.
Capricorn's goal of 300,000 ounces per year
The ASX gold share has ambitious goals of hitting a production volume of 300,000 ounces per annum, effectively doubling its gold output. According to the release:
[The] development of the KEP and MGGP will see Capricorn on a path to >300,000 ounces gold production per annum, with operating costs in the lowest quartile of the Australian gold mining industry.
This growth is underpinned by Capricorn's 3.3Moz reserve base at two quality projects with long mine lives (10 years) in the tier one location of Western Australia.
Bell Potter rates Capricorn a buy with a price target of $7.50 apiece. The broker likes the economics of its Karlawinda and Mt Gibson projects.
Consensus also rates the stock a buy, according to CommSec.
Foolish takeout
Capricorn Metals has raised $200 million via an institutional placement to fund its growth initiatives. It also has ambitious goals of producing 300,000 ounces each year.
The ASX gold share is up 35% in the past year.
