WA-focused gold explorer Classic Minerals has received final approval from the state regulator to produce gold from the company’s flagship Kat Gap project south of Southern Cross in WA. The company says over the coming months it will move from a pure explorer to gold producer. Classic intends to take a staged mining approach at Kat Gap as it looks to reduce early overhead costs and mitigate risk.
The deposit near Southern Cross in WA hosts almost 93,000 ounces of gold in an inferred mineral resource of 975,722 tonnes and is the highest-grade contributor to the company’s total gold inventory of 403,906 ounces. The company says with strong grades and near-surface mineralisation when production does kick off it will not take long to attain full-scale production.
In preparation for production, the gold explorer has already received approval for an account with the Perth Mint for the facilitation of early gold sales.
The company says the low base metal content of its ore will result in a very low reagent consumption and lower operating costs than many other gold processing operations. Classic also believes its ability to beneficiate low-grade ores and reject uneconomic waste materials will minimise its cost per tonne processed.
In its recent pilot work, the company achieved a high gold recovery at a relatively coarse grind size. Classic says the low energy requirement of a coarse grind will also work to minimise greenhouse gases and operating costs.
Classic Minerals Chairman, John Lester said: “The Ministerial approval was the final remaining hurdle required and the Company was now poised to begin full scale mining and processing gold ore using its own on-site facilities.”
“Classic expects to be the only other gold processing plant in the region apart from Marvel Loch gold mine.”
“The new plant will process gold ore from the Company’s Kat Gap mine, generating approximately 10 construction and 50 ongoing jobs in the region.”
Last month the explorer kicked off a 3000m 20-hole RC drilling campaign at its flagship deposit to test for down-plunge gold extensions of an undrilled area adjacent to recently reported near-surface hits. Assay results from the RC campaign are expected to start trickling in shortly.
The company believes if the in-progress deep campaign leads to a discovery, it could add significant ounces to its inventory.
The potential for more of the precious yellow metal is hardly a problem to have and there is no doubt Classic will be cheering on the price of gold as it continues to reclaim further lost ground this month. Gold dipped below US$1620 per ounce on November 03 and has since climbed back to above US$1770 this week.
Interestingly according to the World Gold Council, about half of all gold mined today is made into jewellery — representing the single largest use for the metal.
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By Matt Birney
