Monsters of Rock: US private equity cashes in on gold miner Capricorn Metals

Mark Clark chaired gold miner Capricorn Metals (ASX:CMM) has defied a bearish market for gold stocks over the past year.

Established producers have crumbled in the face of commodity price malaise, rising costs and fears about the onset of interest rates rises.

But Capricorn has been rewarded by investors for what has so far been a record of delivery at its new Karlawinda gold mine in the Pilbara and the savvy $40 million purchase of the mothballed Mount Gibson gold mine in the Mid West this year.

Capricorn stock is up 58.6% so far in 2021 to a near record $2.95 today, and more than 500% on a five year basis.

Fresh off its AGM, Capricorn was up another 3.15% today despite falling gold prices taking some shine of the sector in general.

No one has taken advantage of the run quite like Hawke’s Point Holdings, a US private equity firm that swooped into the WA gold sector in recent years.

Hawke’s Point entered a then $48.7 million Capricorn via a $10 million placement at 11.7c a share in February 2017 and built up a ~16% stake in the gold miner through future raisings.

Capricorn is now worth a tick under $1.1 billion and Hawke’s Point has been happy to take some profits off the table over the past 15 months.

Substantial shareholder disclosures to the ASX since August last year show Hawke’s Point has raked in at least $89.9 million from a string of share sales.

The latest, revealed to the market today, came with the sale of 8 million shares for $22.36 million, equivalent to $2.795 a share.

It will no longer be a substantial shareholder, but by the Monster’s (possibly erroneous) calculations is still sitting on an investment valued at around 4x its initial outlay, top-ups not withstanding.

Capricorn Metals hit its full production rate at Karlawinda during the end of the September quarter and it due to report costs for the first time in the December term. Can Clark and Co. keep the golden run going? We’ll wait and see.

Capricorn Metals share price today:

Miners quiet as oil price drives energy stocks to the summit

Energy stocks led the way as oil prices rose overnight amongst the large caps and the materials sector lost 0.16%.

Iron ore stocks remained largely sound, holding their gains from yesterday, but gold miners fell across the board.

Mining stocks were more prominent among the mid-caps, with rare earths and mineral sands play Australian Strategic Materials (ASX:ASM) up 5.1% to an all time high of $13.40 and Tim Goyder-chaired lithium developer Liontown Resources (ASX:LTR) up 2.56%.

Coincidentally, Goyder ended his 15 year run at Chalice Mining (ASX:CHN) today, stepping down as chair for Derek La Ferla just weeks after the company announced the maiden resource for its world class Gonneville nickel-copper-PGE discovery.