Caracal Gold plc / EPIC: GCAT / Market: Main / Sector: Mining

15 August 2022

                                                           Caracal Gold plc ('Caracal' or the 'Company')                          

Q2 2022 Operations Summary

Caracal Gold plc, the expanding East African gold producer with over 1,300,000oz JORC-compliant gold resources, is pleased to announce an update on its operations and exploration activities in Kenya and Tanzania for the quarter ended 30 June 2022 (the 'Quarter' or 'Q2'); specifically, the Company's Kilimapesa Gold Mine and Processing Operation in Kenya ('Kilimapesa' or the 'Project') and its high grade, shallow gold exploration projects in Tanzania.

Q2 HEADLINES

·    Exploration on the Kilimapesa Hill Deposit ('KHD'), which began in December 2021, culminated in an updated Mineral Resource Estimate ('MRE') being completed during the Quarter (see RNS 12 July 2022).

·    A revised Share Purchase Agreement ('SPA') was signed to acquire 100% of Tyacks Gold Limited ('Tyacks'), the holder of the licences collectively referred to as the Nyakafuru Project ('Nyakafuru' or the 'Project') in Tanzania, paving the way for completion of the acquisition.

·    The US$500,000 payment due under the Tyacks SPA was made.

·    The pilot heap leach project at Kilimapesa progressed well with the first gold production from the project, completion of pad two construction and good progress on the commissioning of the third leach pad.

·    The Kilimapesa expansion project continued to be progressed some significant milestones included the orders for various long lead items being placed, geotech drilling for the main heap leach pad was completed, the talings circuit was taken offline for optimization work to be carried out.

·    Underground operations focussed on development and establishing mining blocks to provide the required output and flexibility going forward for the expansion project and open pit mining was stopped for a period during the quarter to alleviate pressure on the excessive stockpiles at the processing plant.

·    Reverse Circulation ('RC') drilling on the Kilimapesa Hill and the Maghor target was completed, and the rig was moved to the larger Vim-Rutha target which is a wide target in the south of the licence and stretches across the full strike of the exploration licence.

·    Diamond Drilling ('DD') on Kilimapesa Hill was completed and the rig was moved to and started drilling on the Vim Rutha target.

Robbie McCrae, CEO of Caracal, said,

"The team and I are pleased with the all-round performance during the quarter, significant progress has been made across the board and we are on track for an exciting third quarter.

"The results of the updated Mineral Resource have shown a significant increase in the quality of the resource at Kilimapesa Hill.  We are very excited to find and prioritise the next sources of production to complement the growth on Kilimapesa Hill and the existing mining licence. The positive results in the earlier MRE update have further strengthened the Project team's confidence and justifies our decision to expand production at Kilimapesa to 24,000oz per annum. The ounces contained in the Measured and Indicated category are now able to be converted into reserves for the mining and processing plant.

"We are looking forward to seeing the results come in from our regional exploration programme, especially the Vim Rutha target which is currently being drilled.

"The Kilimapesa expansion project continues to progress and we are on target for completion by the end of 2022.

"Signing the revised Share Purchase Agreement with Tyacks Gold in Tanzania has allowed our team to begin site work at the Nyakafuru Project in preparation for the confirmatory resource study, including drilling, to begin in October 2022. We are excited about the new gold mine development opportunity this will present as Nyakafura more than doubles our total resource base and exploration potential for the Company."

Operations

·    21,743 tons of ore at 1,84g/t gold ('Au') were delivered to the plant from the mine (26,329 in Q1 2022), down on the previous quarter but in line with the strategic plan.

·    20,490 tons of tailings at a grade of 1.08 g/t Au (27,792 Q1 2022) were delivered to the plant.

·    A total of 58,722 tons were processed through the plants for gold production of 746 oz of gold during the quarter (1,266 oz Au in Q1 2022) down but in line with the strategic plan.

·    The closing stockpile at the plant was 22,757 tons at a grade of 1,68g/t Au (22,744 tons at 1,72g/t Au in Q1 2022).

·    First production was achieved from the pilot heap leach plant with 16,213 tons now on the pads at an average grade of 1.48g/t Au (3,915 tons at 1.5g/t Au in Q1 2022). Average recovery of 49.2% was achieved from the leach pads. 

·    Construction and commissioning of the second pad was completed and the third pad construction was 80% complete during the Quarter.

Exploration

·    A total of 1,145m DD and 5,088m of RC drilling was completed during the quarter.

·    The RC drilling programme on Kilimapesa Hill was completed and the rig moved to the Maghor prospect as part of the 1^st phase of the regional exploration programme.

·    The DD drilling program on the Kilimapesa Hill was completed and the rig moved to the Vim Rutha prospect as part of the 1^st phase of the regional exploration programme.

·    Exploration drilling (both DD and RC), trenching, rock grabs sampling and mapping on the regional targeted areas is set to continue in the broader exploration licences during the following quarter.

The updated MRE was completed during the Quarter with the results reported on 12 July 2022. Highlights of the updated MRE are as follows:

·      Expanded Measured, Indicated and Inferred Resource of 12.15Mt @ 1.5g/t gold for 565.7koz contained gold for the Kilimapesa Hill Deposit, following successful resource expansion drill campaign.

·      Significant 202% increase in the Measured and Indicated category, with 56% of the contained ounces (317.6koz) now in Measured and Indicated (previously 105koz).

·      Result supports at least a 10-year Life of Mine for the current Project expansion, targeting 24,000oz per annum production.

·      The significant increase in the Measured and Indicated Resource 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.

·      Overall Project Mineral Resource now stands at 14.05Mt @ 1.56g/t gold for 705koz contained gold.

Safety, Health, and Environment

·    The Environmental Impact Assessment ("EIA") on the heap leach pant was submitted to NEMA Narok County during the quarter with licence granted on 28 June 2022.

·    The EIA for the exploration drilling and open pit mining progressed well during the Quarter.

·    No accidents or incidents were reported during the quarter.

Tanzania

·    The revised SPA between Caracal Gold plc and Tyacks Gold whereby Caracal will acquire Tyacks and the Nyakafura project was signed and announced at the end of May 2022.

·    The Caracal technical team (including mining, exploration and drilling) conducted a site visit to the project.

·    Key processes towards completion of the transaction are being finalised with the assistance of Dentons Law in Tanzania including the Financial Conduct Commission, the Tanzanian Revenue Authority and the Minerals Commission submissions now in process.

·    Site preparation for the commencement of the exploration programme will be concluded by the end of September and drilling is planned to start early in October 2022.

Outlook For the Next Quarter

Output from the underground mine and the open pit are planned to steadily increase of the next six months with mining and processing capacity planned to reach the targeted rate of 24,000oz pa by year-end.

Exploration focus has moved to the Vim Rutha regional target on which both drilling and trenching is planned.  The Company will provide the market with updates on this target.

In Tanzania the focus will be on preparation work for drilling to commence in Q4 2022.

**ENDS**

For further information visit www.caracalgold.com or contact the following:

Notes

Caracal Gold plc is an expanding  East African focused gold producer with a clear path to grow production and resources both organically and through strategic acquisitions. Its aim is to rapidly increase production to +50,000ozs p.a. and build a JORC compliant resource base of +3Moz within 18 months from its listing in August 2021.  We are progressing a well-defined mine optimisation strategy at our 100% owned Kilimapesa Gold Mine in Kenya, where there is significant mid-term expansion potential and ability to increase gold production to 24,000oz p.a. and the resource to +2Moz (current JORC compliant resources of approx. 706,000oz). Our experienced team, with proven track record in successfully developing and operating mining projects throughout Africa, is reviewing other complementary and strategically located gold mine and development projects in East Africa.

Caracal is a responsible mining and exploration company and supports the positive social and economic change that it contributes to the communities in the regions that it operates.  It is a proudly East African-focused company: it buys locally, employs locally, and protects the environment and its employees and their families' health, safety, and wellbeing.

Caracal's shares are quoted on the Main Market of the London Stock Exchange (LON: GCAT) and on the Frankfurt Stock Exchange (FSE: 6IK); a listing on the Nairobi Securities Exchange is underway.