It’s not just gold anymore. Classic’s acquisition of the FGP tenements gives it access to lithium, nickel and other minerals. Pic: Oleg Breslavtsev via Getty Images.
Mining
Classic has secured full control over the Forrestania Gold Project tenements (FGP tenements) – including the rights to explore for all other minerals – under a binding agreement with Reed Exploration.
The 500km2 FGP tenements are about 120km south of Southern Cross in WA and cover over 50km strike of the Forrestania greenstone belt.
Previous mining had produced 27,146oz of 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.
This potential led Classic Minerals (ASX:CLZ) to acquire 80% of the gold rights on the FGP tenements from a third party in 2017 with Reed – a wholly-owned subsidiary of Hannans (ASX:HNR) – holding the remaining 20% of the gold rights as well as the rights to all other minerals.
Since then, inferred and indicated resources at the known Lady Ada and Lady Magdalene deposits have been updated to a collective 7.27Mt grading 1.33g/t for 311,050oz of contained gold with strong exploration upside.
Testing has also found that the non-refractory ore is highly amendable to gravity recovery with free milling gold.
With trial mining underway at Kat Gap following first gold pour in mid-August, the company has now moved to simplify ownership of the broader FGP tenements.
It has reached a binding agreement with Reed to purchase the FGP tenements – excluding the Kat Gap discovery tenements that it already owns.
Classic will pay a $50,000 non-refundable deposit on execution of the agreement and will pay $200,000 in cash and issue 500 million shares priced at 0.1c each to Reed on or before 30 November 2023 as consideration for the purchase.
It will also pay Reed $106,196 as reimbursement for amounts paid to maintain the FGP tenements in good standing.
This will give the company 100% of all mineral rights – including lithium and nickel – for the FGP tenements.
“This indeed is an exciting opportunity for our company,” chairman John Lester said.
“We now can proceed to exploit the gold resource on this tenement 100% instead of having only 80% of the gold rights. Dean Goodwin will also be able to explore for other minerals for the company’s benefit.”
Stage 1 production at Kat Gap will see Classic trial mine a good portion of the oxide component of the indicated resource.
Besides producing gold, this will also allow the company to update its ore reserve and move to fulltime production soon after.
Ore from Kat Gap is processed through the innovative Gekko gravity plant, which can process 100,000tpa and is a precursor to the integration of the carbon-in-leach (CIL) process, which is currently under construction and installation as part of Stage 2 of the project.
There is also nothing stopping the company from using the Gekko plant to process ore from the newly acquired FGP tenements.
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.
