Classic Minerals to acquire 100% of Forrestania gold tenements from Hannans

Classic Minerals (ASX: CLZ) has entered into an agreement with Reed Exploration to purchase the tenements which make up the Forrestania gold project in Western Australia.

Classic currently holds an 80% beneficial interest in gold rights over various parts of Forrestania through a joint venture arrangement secured with a third party in 2017.

It includes a 100% interest in the Kat Gap gold project and non-gold rights including (but not limited to) nickel and other metals.

Reed — which is a wholly-owned subsidiary of Australian company Hannans (ASX: HNR) — maintains a 20% interest in the Forrestania gold rights excluding Kat Gap.

The acquisition of 100% of Forrestania will give Classic the right to explore for all minerals on the tenements including lithium and nickel.

Terms of the agreement

Under the terms of the agreement, Classic will pay Reed a non-refundable $50,000 upfront deposit and an additional $200,000 before end November.

It will also issue 500 million fully paid ordinary shares at a price of $0.001 each.

Classic has agreed to pay Reed $106,196 in reimbursement costs for maintaining the Forrestania tenements in good standing.

Exciting opportunity

Classic chairman John Lester said the acquisition was an “exciting opportunity”.

“We now can proceed to fully exploit the gold resource on this tenement instead of having only 80% of the rights,” he said.

“We will also be able to explore for other minerals for the company’s benefit.”

Transition to battery recycler

Hannans non-executive chairman Jonathan Murray said the Forrestania disposal marks the final step in the company’s transition from explorer to lithium-ion battery recycler.

“We have access to leading technology and significant tailwinds in the regulatory and funding environments in the European and UK markets… we are now totally focused on executing our strategy to become a meaningful player in the battery materials value chain,” he said.

Trial mining

In August, Classic elected to potentially fast-track its assessment of ore reserves at Kat Gap with a proposed trial mining exercise via a Stage 1 pit.

It is expected to create important data which could be used to finalise an ore reserve for the project and will assist in the calibration of a mining and metallurgy framework prior to full-scale mining and production.