WA Gold-focused Classic Minerals has entered into a non-binding Memorandum of Understanding, or “MoU” with private company Barto Gold Mining for the toll treatment of ore from the company’s flagship Kat Gap gold deposit in WA. The non-binding MoU comes shortly after the ink dried on Classic’s terms sheet with another private company, Goldvalley Brown Stone, for $10 million in non-recourse funding to facilitate the extraction and processing of its ore.
The agreement with the nearby gold processor Barto provides the company with a solution as it awaits final approvals to use its innovative and mobile “Gekko” gold processing plant.
Barto is the owner of the Southern Cross Gold Operation centred around Marvel Loch located 30km south of Southern Cross. Its milling operation is about 130km north of Kat Gap and is capable of processing 1 million tonnes per annum with all the associated infrastructure in place for a successful gold production operation.
The non-binding MoU with Barto brings Classic one step closer to closing a formal agreement with Goldvalley. The company says it has been working with Goldvalley towards the finalisation of the mining and logistics required to extract up to 50,000 ounces from the deposit. The terms sheet will see the pair share the net profits from gold production at Kat Gap 70/30 in favour of Classic.
The toll treatment of ore and the proposed profit share arrangement is in-line with Classic’s low-cost approach to achieving gold production whilst keeping ownership of the project.
Classic Minerals Chairman, John Lester said: “The Company is excited to move forward and is determined to keep costs down whilst not seeing ownership of the project diminished. “We are working closely with Goldvalley and the toll processing deal with Barto moves us closer to production.”
The Kat Gap deposit near Southern Cross in WA hosts almost 93,000 ounces of gold in an inferred mineral resource of 975,722 tonnes and is notably the highest-grade contributor to the company’s total gold inventory of 403,906 ounces
The spot price of the precious yellow metal appears to have started October well after climbing to a 30-day high of US$1726 per ounce on October 4 before returning to the US$1650 level today. Notably, just last month on September 26 the metal’s price bottomed out at a yearly low of US$1621, its lowest point since falling from a graceful high of US$2052 on March 8.
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.
With the MoU ink freshly dried, there is little doubt Classic will be itching to progress towards gold production.
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By Matt Birney
