Classic Minerals (ASX: CLZ) has secured a mining lease for its wholly owned Kat Gap project paving the way for the company to advance its development and production plans.
The company revealed this morning the Western Australian Department of Mines, Industry Regulation and Safety had granted the lease for Kat Gap which allows it to be mined until 2042.
Classic chairman John Lester said securing the mining lease was a “major company defining moment”.
“We are now able to formally transform Classic from an explorer to a miner in a move we believe will provide value accretion for our shareholders.”
“The directors and I have the confidence that, as we have achieved this milestone, Classic will continue to progress and become a producer of note shortly.”
He added the company’s strategy was now to cement its place as on of WA’s gold producing companies.
Kat Gap project
Located 170km south of Southern Cross, Kat Gap has a resource of 92,869 ounces of gold at 2.96 grams per tonne.
Continued “aggressive” drilling at the project is expected to lead to a “significant” resource upgrade. Last year, Classic completed 81 infill holes for 5,588m of infill drilling.
Highlight results from previous drilling were 4m at 76g/t gold, including 1m at 304g/t gold from 79m; 3m at 62.1g/t gold, including 1m at 181g/t gold from 36m; and 10m at 30.77g/t gold, including 2m at 116.1g/t gold from 28m.
Test work has shown gravity and conventional cyanide leaching can achieve recoveries of 95-96% from both fresh and oxide ore samples.
Classic noted the deposit remained open and within a 5km-long geochemical anomaly that has “seen very little” drilling – leaving the potential for further discoveries.
Processing through Gecko plant
Once mining has begun at Kat Gap, Classic plans to process the ore through its Gekko plant which has a 30t per hour capacity and can be scaled to process 250tph.
The plant is modular, which enables Classic to increase and decrease capacity.
Additionally, Classic pointed out the flexibility of a modular plant allows the company to install the plant close to the orebody to minimise haulage and processing costs.