Funds will be used to expand gold production at Classic Minerals’ gold projects. Pic via Getty Images.
Classic Minerals to raise $2m to advance Kat Gap and Forrestania gold projects
Mining
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- Up to $2m to be raised for exploration and development of Kat Gap and Forrestania
- Money to be used for acquisition of Forrestania and plant assembly and upgrades
- Money raised is on top of an expected US$10m of funding through a forward sales deal with AuResources
Special Report: Gold producer Classic Minerals is raising up to $2m to for the exploration and development of the Kat Gap and Forrestania (FGP) gold projects after recently securing further mining leases.
Classic Minerals (ASZ:CLZ) was recently granted a 21-year mining lease for its Lady Ada and Lady Magdalene gold projects at Forrestania, WA, covering its FGP tenements that it’s purchasing from Reed Exploration.
Mining lease M77/1310 covers the FGP tenements that the company is acquiring from Reed Exploration – a 500km2 package that covers ~50km strike of the Forrestania greenstone belt 120km from Southern Cross.
Previous mining produced 27,146oz gold from the processing of 95,865t of ore grading 8.81 grams per tonne (g/t) gold, highlighting the potential from high-grade open pit mining.
The tenements have a combined inferred and indicated mineral resource of 8.41Mt @ 1.45 g/t for 391,417oz of gold.
CLZ is looking to expand on trial mining of Kat Gap, which generated $482,000 in gold sales during the December quarter.
Capital raise details
$2m is being raised through a non-renounceable pro rata offer available to shareholders on the basis of one new share for every share held at an issue price of 0.4c, with one bonus option for every two shares subscribed for, exercisable at 2c.
The purpose of the offer is to raise capital to support the company’s exploration and development activities, with a particular focus on the development of the Kat Gap gold project and the Forrestania gold projects.
CLZ is targeting infill drilling at both Kat Gap and Forrestania, plant assembly, infrastructure and upgrades.
US$60 million funding
The moves come on top of securing a US$60m funding deal with AuResources via a forward sales agreement.
AuResources will initially advance US$10 million to CLZ to further develop production capacity at Kat Gap and progress development of the Lady Magdalene and Lady Ada deposits at the Forrestania gold project.
Repayment of this first tranche will be carried out in six quarterly payments starting from 30 October 2024.
Payments can be made in gold bullion at CLZ’s discretion if it has started commercial production at Kat Gap during the facility period.
This article was developed in collaboration with Classic Minerals, 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.
