Classic Minerals and AuResources finalise deal to fund Western Australian gold projects

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By Colin Hay - 
Classic Minerals ASX CLZ funding agreement AuResources

Classic Minerals (ASX: CLZ) is firmly on target for its major growth plans with a recently-signed funding agreement now unconditional.

In late February, Classic signed agreements totalling up to $91.8 million to support its development of the Kat Gap gold project in Western Australia.

The company is now preparing to execute the full funding agreement with AuResources AG, pursuant to the completion of due diligence.

In another positive sign, AuResources has committed to transmit the full deposit for the funding agreement to Classic imminently.

Binding term-sheet

The initial binding terms sheet Classic signed with Swiss-based AuResources AG included $15.3m of first-tranche funding to further develop production capacity at the company’s WA gold projects.

The majority of the funding would support expansion of the Kat Gap project and development of the Lady Magdalene and Lady Ada deposits at the company’s Forrestania gold project.

Around $7.3m of that initial funding would be directed at acquiring items such as a ball mill, inline pressure jig, power plant, tailings dam and leaching circuit, along with operational costs at Kat Gap.

The AuResources term-sheet included an option for Classic to receive a further $76.5m in five additional tranches for further development and operational spending at Kat Gap and Forrestania.

Mining and milling activities

Classic is currently focused on trial mining and milling activities at Kat Gap, including the calibration of the processing facility to capture data enabling refinement of the gravity circuit operation.

It is looking to trial mine a good portion of the oxide component of the indicated reserves.

This will provide the company’s geological and engineering teams with the ability to measure structural data first-hand from the walls and floor of the trial pit.

The trial pit design will also allow direct structural measurements to be taken of exposed gold mineralisation.

Just days after announcing the funding agreement with AuResources, Classic successfully lodged a mining lease application over the Lady Ada and Lady Magdalene project areas.

Classic plans to process ore from these two deposits at the Kat Gap processing plant.

BMCP funding

AuResources’ funding obligations are being backed by Luxembourg-based Black Manta Capital Partners (BMCP).

BMCP was founded in Luxembourg in 2018 and runs BMCP GmbH in Munich as a licensed and regulated financial service institute.

In addition to Munich, BMCP also operates in Vienna, Luxembourg, Cork and Shanghai.

AuResources AG’s primary innovation is tokenising future gold production contracts and turning them into digital assets, opening up opportunities for investment much earlier in the gold supply process than traditional markets allow.