Classic Minerals has secured a $20.1 million institutional funding package – in two parts – for phase 1 development of its Kat Gap Gold Project in WA.

The funding comes in the form of $15m in equity capital signed with US institutional investment group LDA Capital via put option agreement and $5.1m in a convertible note issue.

It’s a significant funding milestone because it allows Classic Minerals (ASX:CLZ) to complete its phase 1 production ramp up – with the target of first gold production in Q1 2023.

Plus, it means the company can accelerate its RC and diamond drilling exploration programs across the greater Forrestania area to increase its total gold resource base.

Targeting gold production Q1 2023

Classic chairman John Lester says LDA Capital’s support recognises the quality of the company’s projects, its production potential, and strategic value within the emerging Forrestania region “as evidenced by the pricing of the associated options package”.

“The cost effective and flexible funding package, coupled with the ~$5.1 million convertible note issue, affords the Company access to immediate funding via the note plus equity funds, if required,” he said.

“LDA Capital’s support has enhanced our certainty and the ability to take our projects into production and to embark on a fully-funded exploration program to allow the company to increase its resource base across the greater Forrestania area.

“This is the strongest signal yet that the Kat Gap resource has moved from rural Western Australia onto the world stage where substantial, credible, and internationally renowned investors are comfortable enough to invest in Classic Minerals Limited.

“We can now plan and look forward to gold production during the first quarter of 2023.” 

Low-cost LDA Capital funding

Classic will be able to access flexible draw down, up to A$15 million, by exercising put options to LDA Capital over the duration of the three-year agreement (Put Option Agreement).

The company can access the A$15 million at its sole discretion – plus the structure of the package is low cost and substantially reduces project financing risk for phase 1 of Kat Gap.

“We look forward to playing a key role as a source of financial support for Classic both in the short and longer-term timeframes to enable the company to grow the full value to a potential world-class gold asset base,” LDA Capital co-founder Anthony Romano said.

LDA Capital’s funding package also includes a 2% facility fee totalling A$300,000 which is payable within 12 months of execution of the Put Option Agreement.

Additionally, Classic has agreed to issue to LDA Capital 59,614,678 options, exercisable at $0.01385 (being 125% of the 5-day VWAP as at market close on 13 December 2022) and expiring 3 years from the date of issue.




This article was developed in collaboration with Classic Minerals Limited, a Stockhead advertiser at the time of publishing.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.