IGO commits to a further $1.5m spend under Classic nickel JV

Nickel miner Independence Group has agreed to spend a cool $1.5 million on its Fraser Range project joint venture with Classic Minerals over the next two years.

Under the terms of a 2019 agreement, Classic (ASX:CLZ) will receive a straight $500,000 payment from Independence (ASX:IGO) to secure 51% of the Fraser Range project.

IGO has also indicated its intention to spend a further $1 million on tenement exploration over the next two years – a move which would take its stake in the JV to 70%.

Should that take place, the terms of the original agreement state that Classic would be free-carried to the completion of a prefeasibility study.

IGO would also have the option to buy Classic out of the JV, provided the latter had received aggregate value of $4.55 million in cash and tenement expenditure and was also granted a 1% net smelter royalty.

Independence has spent $1.5 million on exploration since the deal was struck to secure the right to earn in on top of an initial $300,000 payment to Classic at the time.

Kat Gap calling

It’s fitting that the latest development on the Fraser Range JV should come at a time when Classic is drawing closer to gold production from Kat Gap, within its Forrestania gold project in WA.

The initial funds received from the gold-focused developer’s deal with IGO were used to fund further exploration efforts at the project.

Two years on, Classic has a Gekko processing plant being transported to Kat Gap ahead of an anticipated first gold pour by the end of August.

Assays from a closely spaced final program of deep reverse circulation drilling are expected by mid-month, and will inform resource model data for optimisation and final pit design work.

Across the Lady Ada, Lady Magdalene and Kat Gap projects, Classic’s Forrestania assets have a combined indicated and inferred 403,906-ounce gold resource.

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.