Classic Minerals appears set to fully own its Forrestania gold project after it entered into an agreement with Hannans subsidiary Reed Exploration to purchase the final 20 per cent of the operation.
Forrestania sits near Southern Cross in Western Australia and boasts an indicated resource of 7.27 million tonnes at 1.33 grams per tonne gold for 311,050 ounces. Combined with its Kat Gap project, the company’s total resource around Forrestania comes to 8.41 million tonnes at 1.45g/t gold for 391,417 ounces.
In 2017, Classic acquired 80 per cent of the gold rights on the Forrestania tenements from a third party, with Reed retaining its 20 per cent interest in the gold rights. Management says once all conditions of the deal have been satisfied, the company will have the rights to explore for gold and all other minerals, including lithium and nickel, at the operation.
According to the agreement, Classic will pay a $50,000 non-refundable deposit to Reed on execution of the binding tenement sale. Before the end of November, it is also set to pay Reed $200,000 as a cash consideration, in addition to issuing 500 million ordinary shares at a deemed price of 0.1 cent each.
The company will also pay Reed $106,196 as reimbursement for maintaining the Forrestania tenements in good standing.
Classic Minerals chairman John Lester said: “This indeed is an exciting opportunity for our Company. We now can proceed to exploit the gold resource on this tenement 100% instead of having only 80% of the gold rights. Dean Goodwin (chief executive officer) will also be able to explore for other minerals for the Company’s benefit.”
In August, Classic revealed it would begin trial mining at its Kat Gap project as it looked to calculate an ore reserve prior to moving into full-scale gold mining and production. The company says the pit will take about two months to complete, cost about $1.5 million and will target fully-oxidised high-grade ore, representing about half the indicated resource, to about 45m.
In the same month, Classic’s “Gekko” plant produced the company’s inaugural gold bar from Kat Gap during testing, using a 989-tonne section of ore taken from a 6504-tonne stockpile. Performance of the plant was found to be consistent with the results of earlier bench-scale metallurgical tests that reported 5 per cent mass recovery and gravity gold recoveries of between 65 per cent and 75 per cent.
The “Gekko” gravity circuit is a precursor to the company’s planned integration of a carbon-in-leach (CIL) process, which is currently under construction and installation. Once completed, the CIL process is projected to further enhance gold recovery rates to an impressive 98 per cent.
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By Michael Philipps
