Classic Minerals upgrades gold resource at Kat Gap project
Classic Minerals (ASX: CLZ) has labelled a major lift in indicated resource numbers as a “game changer” for the company and its Kat Gap gold project in Western Australia.
The company says its confidence in the commercial future of the project has increased significantly with studies upgrading 20,488 ounces of the previously inferred gold resource at Kat Gap to the indicated level.
Chief executive officer, Dean Goodwin, has confirmed that the company will now look to accelerate developments at Kat Gap as its progresses with stage 1 extraction, processing and monetisation activities.
Significant drill work
The positive upgrade from a 2020 estimate comes on the back of two years’ worth of additional drill data, including the successful drilling of approximately 360 more holes drilled across the deposit.
Mr Goodwin said the upgrade has opened the door for mine planning work that will gauge the economics of Kat Gap and contribute to better assessment of the company’s greater Forrestania project area.
“This is a game-changer for Classic Minerals. Upgrading the resource to the indicated category is a significant step towards realising the full potential of the Kat Gap project. We are now better positioned than ever to fund our own way forward, increasing the ounces within our global resource and setting the stage for continued success,” Mr Goodwin said.
Historic gold field
The project is strategically located some 170 km south of Southern Cross and approximately 50 km south of the company’s Forrestania gold project.
Kat Gap has been the focus of the majority of Classic’s recent exploration effort since the project’s acquisition was finalised in January 2019.
The project is the site of significant historic gold exploration, with modern techniques used by companies such as Sons of Gwalia (SOG) from 1987.
SOG produced a historic resource estimate totalling 56,000 ounces grading at 1.4 grams per tonne gold with a zero grade cut-off and 36,000 ounces grading 3.9g/t gold with a 1.5g/t cut-off grade.
Long term plans
The company says the results of the new dataset highlights the company’s long-term commitment at Kat Gap project and its vision to become a profitable gold miner.
The re-estimation work was carried out by Cadre Geology and Mining Pty Ltd, who confirmed that the modelling process it utilised ensured a reasonable prospect of eventual economic extraction.
Classic says the advantages provided by the project’s gold grade and the near-surface nature of the Kat Gap ore supports that.
Mine studies to begin
Classic now plans to undertake detailed staged mine planning activities, with a major focus on the benefits the upgraded indicated resource provides for initial stage one trial mine extraction.
The company already owns a state-of-the-art processing facility which will also benefit project economics and fast-tracking the project’s progress towards gold production.
New power plant in place
Earlier this month the company installed a power plant with a capacity of 2 megawatts (MW).
The power plant is assessed to have the capacity to provided more than sufficient electricity to service the current infrastructure and additional processing equipment at the Kat Gap gold processing facility.
It has been designed to allow for future expansion whilst accommodating a scaling up of processing throughput.
Importantly, the successful installation of the Cummins powered generators means Classic is able to energise its Gekko processing plant.
“Classics’ robust infrastructure provides a competitive advantage, enhancing its ability to capitalise on the upgraded resource and further expand its gold production capabilities,” Mr Goodwin said.