A potentially lucrative base metals joint venture project between Classic Minerals and Independence Group in the revered Fraser Range nickel province of WA has been quietly bubbling away at the same time as the ASX-listed junior explorer looks to develop its flagship Kat Gap gold project about 170km south of Southern Cross.
Perth-based Classic says its JV partner has recently completed a significant block of reconnaissance exploration work at their Fraser Range JV project area, located about 40km north-east of Independence’s Nova nickel-copper mining and processing operations in the Fraser Range district.
Independence, which produces nickel, copper and cobalt in concentrate from the Nova underground mine about 160km east-north-east of Norseman, has been actively working the JV project ground, including more than 1,100 auger-assisted soil samples in the past quarter.
In mid-2019, Independence entered into a farm-in agreement to earn an initial 51 per cent stake in the Fraser Range project from Classic by spending $1.5 million on exploration over two years, on top of an up-front cash payment of $300,000.
With an additional cash payment of $500,000, the base metals and gold producer can elect to increase its interest to 70 per cent by a further $1 million of expenditure on the project over two years or to buy out Classic for a received aggregate value of $4.55 million in cash and overall JV exploration expenditure.
Under the 70 per cent scenario, Classic would be free carried on the project through to the completion of a pre-feasibility study, and in the case of full divestment, it would walk away with a one per cent net smelter royalty.
A buy-out by Independence would provide a useful boost to the coffers of Classic, whose cash position currently stands at approximately $1 million.
Either way, the JV deal allows Classic to focus on fast-tracking the Kat Gap gold project into production while retaining exposure to the upside potential of Fraser Range.
Independence holds massive landholdings on the Fraser Range mineral field and has been sinking millions into the quest to uncover more Nova-style nickel-copper-cobalt orebodies.
Secondary targets include volcanogenic massive copper-zinc sulphide mineralisation and lode-style gold mineralisation.
Classic released an inferred mineral estimate for Kat Gap about seven months ago of 975,722 tonnes at 2.96 g/t for 92,856 ounces of contained gold and is currently working towards upgrading the resource numbers.
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