Key Highlights

• Karlawinda produced 123,589 ounces in FY26 at an All-In Sustaining Cost (AISC) of $1,629 per ounce.

• Capricorn spent $133.4 million in FY26 on the Karlawinda expansion and preparatory works at Mt Gibson, and $74.0 million on exploration across both projects.

• In FY26 the average realised price was $6,241 per ounce, so Cash Flow was highly sensitive to the gold price.

• Preparatory works have already been funded within the $133.4 million of expansion spending in FY26.

What does Capricorn Metals Ltd (ASX:CMM) do with a record year of cash generation, and how soon can its expansions lift output? The gold producer's FY26 results, for the year ended 30 June 2026 and reported on 27 August 2026, showed net profit after tax of $327.2 million and net cash of $504.8 million, while FY27 guidance points to higher production from the Karlawinda Expansion and the start of development at Mt Gibson. For investors the question is no longer whether Capricorn can operate profitably at current gold prices. It is whether it can deliver its growth projects on time and at the costs it has guided.

The central development: record Earnings and a step-up in production

The FY26 figures, as reported in coverage of the company's results release, were as follows.

- Sales revenue: $769.3 million, up 46%.

- Gold sold: 123,096 ounces at an average of $6,241 per ounce.

- Underlying EBITDA: $483.6 million, a record, up 63%, with a 63% margin.

- Net profit after tax: $327.2 million, up 59% from $206.4 million in FY25.

- Operating cash flow: $470.2 million.

- Net cash at year end: $504.8 million, up 42%.

Karlawinda produced 123,589 ounces in FY26 at an all-in sustaining cost (AISC) of $1,629 per ounce. The gap between the average sale price of $6,241 per ounce and AISC of $1,629 per ounce explains the high EBITDA margin.

Capital allocation

Capricorn spent $133.4 million in FY26 on the Karlawinda expansion and preparatory works at Mt Gibson, and $74.0 million on exploration across both projects. It declared a final Dividend of 5 cents per share, fully franked, and total FY26 dividends of 10 cents per share. The interim figure was not stated directly, although the totals imply 5 cents earlier in the year.

The company also flagged a tax change. A one-off final tax payment for FY26 is expected in FY27, and from FY27 tax payments move to an estimates-based regime. That timing effect means FY27 cash flow will carry a catch-up payment on top of ordinary instalments, which investors should Factor in when comparing cash generation across years.

FY27 guidance

Capricorn's FY27 guidance is:

- Gold production: 137,000 to 147,000 ounces.

- AISC: $1,900 to $2,100 per ounce.

Against FY26, that range implies production growth at the midpoint and a higher AISC. The company said that once the Karlawinda Expansion is commissioned, which it expected in the quarter following the results, output is forecast to ramp to around 150,000 ounces per annum.

Business model and Revenue drivers

Capricorn is an Australian gold producer built around a single operating asset, Karlawinda. Revenue depends on ounces sold and the realised gold price, and the company's Margin is the spread between that price and its sustaining costs. In FY26 the average realised price was $6,241 per ounce, so cash flow was highly sensitive to the gold price.

The growth pipeline: Mt Gibson

Mt Gibson is Capricorn's second project, and development is targeted to start in the second quarter of FY27, subject to permitting. That qualification matters. Approvals, rather than capital, are the most visible gating item, and any delay would push out the timeline for adding a second source of production. Preparatory works have already been funded within the $133.4 million of expansion spending in FY26.

Because the realised price is the largest driver of the result, any fall in the gold price would narrow the margin. This is a general observation, not a forecast.

Sector and competitive position

Australian mid-tier gold producers have benefited from elevated gold prices in FY26, and Capricorn's margin of 63% is a measure of that environment. Its main competitive advantages are low unit costs relative to price and a net cash balance, while the main disadvantage is concentration: until Mt Gibson is producing, one operation generates the company's output.

Risks to monitor

- Gold price movements, which have a direct effect on revenue and margin.

- Commissioning and ramp-up of the Karlawinda Expansion, including whether output reaches the roughly 150,000 ounces per annum the company forecasts.

- Unit cost increases, with FY27 AISC guided to $1,900 to $2,100 per ounce.

- Permitting delays for Mt Gibson.

- Single-asset concentration while Mt Gibson is not yet operating.

- The one-off FY26 tax payment falling in FY27 and the move to estimated tax instalments.

What to watch next

It should show whether the expansion was commissioned as planned and whether production and AISC are tracking within FY27 guidance. Investors should also look for permitting news at Mt Gibson ahead of the targeted second-quarter FY27 development start, any updates on project Capital and timing, and the company's dividend decisions for the first half of FY27.