Caracal Gold – increased Mineral Resource Estimate for the Kilimapesa Gold Mine

July 13, 2022 | Posted by

By Dr. Michael Green

More good news from Caracal Gold, the rapidly expanding East African gold producer with a +1.3Moz JORC compliant gold resource. Once again, the team hasn’t disappointed, unveiling an increased Mineral Resource Estimate (MRE) for the Kilimapesa Gold Mine.

The updated MRE covers the Kilimapesa Hill Deposit (KHD) at the company’s flagship Kilimapesa Gold Mine and Processing Operation in Kenya. Following the highly successful resource expansion drill campaign, the expanded Measured, Indicated and Inferred Resource is 12.15Mt @ 1.5g/t gold for 565.7koz of contained gold for the KHD. The Overall Project MRE now stands at 14.05Mt @ 1.56g/t gold for 705koz of contained gold, while Caracal’s total portfolio MRE now stands at 26.36Mt @ 1.61g/t gold for 1.365moz of contained gold.

This represents a really significant increase (202%) in the Measured and Indicated category at KHD, with 56% of the contained ounces (317.6koz) now in Measured and Indicated (previously 105koz). Such results provide impressive supports to at least a 10-year Life of Mine for the current Project expansion, targeting 24,000oz pa production.

The board was quick to point out to investors that one of the benefits of this significant increase in the Measured and Indicated Resource is that it essentially provides the required optionality for the current mining operations and the required difference in grade to feed the Milling Plant and the Heap Leach plants.

KHD is just one of two key deposits at Kilimapesa. The other key deposit is Red Ray, and news here is that a new licence has been approved to be issued, with the company due to engage with the office of the Cabinet Secretary for its finalisation and collection.

Further resource expansion is anticipated, with drilling at the Project ongoing. Assay results are expected from testing the western extent of Kilimapesa Hill and the eastern boundary of the mining licence. Meanwhile, drilling continues at prioritised regional targets.


Measured and Indicated



Project Name


Tonnes (Mt)

Grade (g/t)

Gold (kOz)

Tonnes (Mt)

Grade (g/t)

Gold (kOz)

Tonnes (Mt)

Grade (g/t)

Gold (kOz)


Kilimapesa Gold Mine

Kilimapesa Hill










Red Ray










Total KMG










Nyakafuru Gold

Voyager – Mentelle











Leeuwin – Grange











Total NG










Caracal Gold PLC











Resource Summary. Source: Company

At the time Robbie McCrae, CEO of Caracal commented that “….This significant increase in the quality of the resource at KHD has further strengthened the Project team’s confidence and justifies our decision to expand production at Kilimapesa to 24,000oz per annum, with the ounces contained in the Measured and Indicated category now able to be converted into reserves to support the mining and processing plant.

“With resource expansion drilling ongoing, we expect the next batch of drill results to grow the resource and life of mine even further.  These results should further enhance Kilimapesa Hill, as we have tested the western extent of the deposit and stepped out on strike to the eastern boundary of the mining licence. Alongside this, current drilling is focussed outside of the initial MRE area on the prospecting permit and regional targets, where we believe there is higher grade potential.  Accordingly, we believe there is significant further uplift potential and are very excited to find and prioritise the next sources of production to compliment the growth on Kilimapesa Hill and the existing mining licence.”

“The early decision to acquire our own drill rigs and assemble our own drilling team to work alongside Franck and his exploration team is proving to be successful as it gives us the flexibility to adapt drilling programmes based on the success of our results and ultimately drill lots of metres cost effectively.   We look forward to translating this into increased resources.”

“Beyond Kenya, the acquisition of the Nyakafuru Project in the world-class Lake Victoria Gold Fields in northern Tanzania continues to proceed according to plan, and we are excited for the new gold mine development opportunity this presents.”

The announcement of the updated MRE at Kilimapesa very neatly feeds into both narratives of getting a target 2Moz JORC-compliant resource at Kilimapesa and 3Moz for the group. There is no doubt that clear progress is being made on all fronts at Kilimapesa, with 2,000 ounces per month scheduled to be achieved in December 2022. Momentum is being clearly displayed every month and every quarter without fail. We know that the new heap leach works well, and it is now just a matter of scaling it up. At the same time the team seems to have also mastered the management of the tailings.

Investors do have to realise that between now and December there are likely to be some good months and some bad months for gold production at Kilimapesa, depending on which parts of the operation are being upgraded and improved. The board has made it perfectly clear to us that it is now not a question of if and how they will achieve 2,000 ounces per month but just a case of implementation.

If all this wasn’t enough to satisfy the most jaundiced of investors, there is also the build-up of excitement in Tanzania where the development programme looks fairly straight forward to us. At the time of this latest announcement, the board commented that the acquisition of the Nyakafuru Project in the world-class Lake Victoria Gold Fields in northern Tanzania continues to proceed according to plan – as outlined in the RNS of 31st May 2022.

So, next steps include finalising the exploration plan and infrastructure preparation during Q3 2022. This is ahead of commencing additional drilling to grow and increase confidence in the resource at the start of Q4 and feasibility study work in Q2 2023. So, we are looking at bankable growth. Moving ahead it looks like we are also assured a healthy news flow from Tanzania with the appointment of the team and drill contractors in the country.

Align Research initiated coverage on Caracal Gold in February 2022 with a Conviction Buy stance when the shares were trading at 1.15p with a conservative target price of 2.73p. Here we must say that our valuation was based on a peer group comparison with Shanta Gold (LSE:SHG) which is also an East Africa-focused gold producer, developer and explorer. At the time Shanta’s EV/oz figure was calculated to be £35.73 or US$48.25, a figure which we used to place a valuation on Caracal.

In the dying days of May 2022, Robbie McCrae drew attention to the OKLO’s flagship Dandoko Project in west Mali. This has a JORC compliant MRE of 11.3Mt at 1.83g/t for just under 700,000oz of gold and was being acquired by B2Gold at US$100 per ounce. So, it does looks as though we could afford to be more generous in our valuation and target price for Caracal Gold. At the current price of 0.70p we are more than happy to confirm our stance.


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