Classic Minerals closes-in on first commercial gold production at Kat Gap
Classic Minerals expects site works and construction of Kat Gap will be completed in early May with commercial production to begin “immediately” after.
In its final construction update for the month, Classic Minerals’ (ASX: CLZ) revealed its tailings storage facility and bulk earth works for the Kat Gap gold project are 80% complete as it closes-in on commercial production.
Representatives from Resource Engineering Consultants (REC) are on-site at Kat Gap and are regulating, managing and testing the storage facility’s construction.
The stage one storage facility is approved to hold up to 70,000 tonnes of tailings. It will have capacity to store up to 130,000t through a series of wall lifts.
At the current progress rate, Classic estimates all earth works and supporting infrastructure for the tailings storage facility will be completed and ready for use in early May.
Commercial production at Kat Gap is anticipated to begin “immediately” after.
Kat Gap gold project
Kat Gap is 170km south of Southern Cross in Western Australia and 50km from its Forrestania project.
The asset has a resource of 975,722t grading 2.96 grams per tonne gold for 92,856 ounces.
Classic has secured all the key approvals necessary to construct the mine and requisite infrastructure and begin full-scale operations.
Drilling has continued at Kat Gap to build resources and confidence for mining, including gathering data to facilitate the final pit design and update project modelling.
Development at Kat Gap is funded under a two-part $20.1 million funding agreement secured late last year.
LDA Capital has provided the first part, which comprises $15 million in equity funding.
Under the deal, Classic can draw up to $15 million by exercising put options to LDA over the duration of the three-year agreement.
“The LDA facility was established specifically to ensure the company had access to a reliable source of capital not wholly dependent on volatile, short-term shifts in equity market sentiment,” Classic chair John Lester said.
The second part of the package is a mandate with Still Capital to raise up to $5.5 million via the issue of convertible notes.