Classic Minerals nails $20.1m funding for gold projects, first production set for next quarter
Classic Minerals expects maiden gold production from Kat Gap in the first quarter of next year.
Western Australia-focused explorer Classic Minerals (ASX: CLZ) has signed-off on a two-part financing deal with Los Angeles-based LDA Capital totalling $20.1 million, which will allow the exploration company to complete its first phase of ramp-up to production along with more exploration.
The financing package consists of $15 million in equity capital and a $5.1 million convertible note.
Classic says the deal is significant because it will allow it to ramp-up to production at its Kat Gap deposit, and also accelerate its reverse circulation and diamond drilling across the greater Forrestania area in order to increase its gold resource base.
Puts gold project on world stage
Chairman John Lester said the tie-up with an international investment partner is an outstanding achievement for Classic.
“This is the strongest signal yet that the Kat Gap resource has moved from rural Western Australia on to the world stage where substantial, credible, and internationally renowned investors are comfortable enough to invest in Classic.”
“We can now plan and look forward to gold production during the first quarter of 2023,” he added.
Mining to begin just 7m from surface
Kat Gap is located 170km south of Southern Cross and 50km south of Classic’s Forrestania project.
The Kat Gap deposit was discovered in the 1990s and was the subject of a scoping study in 2003 by the former miner Sons of Gwalia, which collapsed the following year with debts of $800 million.
The deposit is a shallow one and Classic has previously said the first of three mining development stages will begin just 7m from surface.
Classic holds a 100% stake in the gold rights and several other metals including nickel and lithium at Kat Gap.
At Forrestania, Classic has acquired an 80% interest in the gold rights with Hannans (ASX: HNR) retaining the remaining 20% in those rights.
Over all its projects, Classic presently has an inferred and indicated resource of 8.24 million tonnes at 1.52 grams per tonne gold for a contained 403,906oz.