Caracal Gold – high-grade mineralisation at the Kilimapesa gold mine

May 12, 2022 | Posted by

By Dr. Michael Green

Impressive results from Caracal Gold this morning provide clear evidence of high-grade mineralisation at the Kilimapesa Hill deposit at the company’s Kilimapesa Gold and Mining Operations in Kenya.

First assay results have shown some great gold grades and decent intersections such as 13m @ 2.09 g/t gold including 3m @ 3.06 g/t gold from 33m (Hole KPGRC005) and 7m @ 5.43g/t gold including 2m @ 14.47g/t gold from 51m (Hole KPGRC014).

Caracal started a 12,000m Reverse Circulation (RC) drilling programme, along with a 3,000m Diamond Drilling (DD) programme, in December 2021. This was designed to grow the 670,000oz JORC resource at Kilimapesa, increase confidence from the Inferred to the Indicated/Measured category and also confirm both the strike and depth extensions of the mineralisation on Kilimapesa Hill.

The RC drilling started 400m due east of the active underground mining and opencast pit operation at Kilimapesa Hill, with a total of 52 holes (5,194m) of RC drilling completed and 1,780 samples submitted to Nesch Mintech in Tanzania, an external lab for analysis. A strike length of 1,875m has been identified and drilled with the remaining drilling expected to extend this strike some 300m to the west and 400m to the east, giving a total strike length of around 2,575m.

Assay results for the first 27 RC holes (KPGRC 005-KPGRC 032) have been received, with all holes reassuringly intersecting veins currently being mined with comparable gold grades. The best results have been shown in the table below.


Assay results


13m @ 2.09 g/t Au including 3m @ 3.06 g/t Au from 33m


7m @ 5.43g/t Au including 2m @ 14.47g/t Au from 51m


3m @ 3.13g/t Au including 2m @ 4.11g/t Au from 40m


7m @ 5.04g/t Au including 2m @ 12.05g/t Au from 74m


6m @ 3.48g/t Au including 3m @ 5.57g/t Au from 43m


3m @ 2.93g/t Au including 1m @ 3.69g/t from 46m

Best results from the assays results from the latest drilling

Moving ahead there looks to be a good news flow promised here with the second batch of RC assay results expected later this quarter. In fact, six holes for 1,241m of DD drilling have also been completed and 583 samples have been sent to the lab with assay results expected imminently. All of this is expected to result in an updated Mineral Resource Estimate (MRE) for the Kilimapesa Hill deposit before the end of Q2 2022. It does look as though the market can expect a decent announcement every two weeks over the coming months.

There is also plenty more drilling to come as the company has a two-pronged approach to increase the overall project resource to more than 2Moz. So going forward investors also have a regional drill campaign on the broader Prospecting Licence to get excited about as there is a total of with seven prioritised targets which are planned to be drilled later on this year.

At the time Caracal’s CEO Robbie McCrae pointed out that “The first batch of assay results from the RC drilling programme on Kilimapesa Hill has confirmed the extended presence of gold mineralisation, which strongly correlates with our expectations for this key deposit at our Kilimapesa Gold Mine. It also provides us with increased confidence that we will grow and upgrade the total resource at our flagship project, with an overall target of more than 2Moz. With recent operational efficiencies already positively impacting production and profitability, the future looks bright for Kilimapesa and we look forward to receiving the second batch of assay results shortly to deliver additional upside.”

For those not in the know, Caracal Gold is a mid-tier gold producer in the making with a very compelling organic and acquisitive growth strategy in highly prospective East Africa. The company is the old Papillon Holdings which joined the LSE in 2016 as a shell. After a couple of false dawns, the Kilimapesa Gold Mine has been reversed into it together with a highly experienced management team equipped with the necessary funds to recommence production and really get things moving.

Caracal was readmitted to the LSE in August 2021 with big plans to rapidly increase gold production and build a substantial JORC compliant resource base in short order by taking advantage of later stage opportunities in gold projects across Kenya, Tanzania, and Uganda.

The company’s impressive management team has a bold ambition of achieving annual gold production of 50,000 ounces and an MRE of more than 3 million ounces of gold by the end of 2022. Gold production has risen swiftly at Kilimapesa since the reopening to 1,000oz per month. Well-defined development plans are in place to optimise operations to significantly increase production, while rapidly building up the resource base to create a reasonably sized long life mine with good margins.

Recent months have seen the company being able to report the success of the heap leaching pilot plant to process the lower grade material and free up processing capacity to be able to produce more gold. In all, three heap leach plants have been built on site with internal funding. The capex might be very low, but the performance has been tremendous with 40% recovery rapidly achieved and 60% recovery over 90 days. With the updated MRE, the team will be able to quantify the size of the heap leach plant required and then build a far larger facility.

There are also big plans for growth in Tanzania in 2022. The news flow from here is expected to include approval of the acquisition of major gold development projects, an updated JORC resource and reserve and open pit optimisation studies. Already, good people have been recruited to form the Tanzanian Project Team ,who are highly experienced in project development and exploration. The team will be involved in completing development studies and an updated Feasibility Study. All this work ought to pave the way for the commencement of site preparation and mine construction.

There is no doubt in our mind that Caracal has an enviable pipeline of acquisition opportunities to be actioned in 2022. The acquisition pipeline includes one project that is close to production, with a recently finalised Bankable Feasibility Study (BFS). In addition, there is also a Kilimapesa lookalike which is already in production. As before, vendors seem more than happy to take paper as they appreciate that the Caracal team is successfully and rapidly adding value.

Align Research very recently initiated coverage on Caracal Gold with a Conviction Buy stance when the shares were trading at 1.15p, with a target price of 2.73p. At the current price of 0.875p we are more than happy to confirm our stance.


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