A granted 21-year mining lease over two gold deposits set to join Classic Minerals’ (ASX: CLZ) stable of operations will give the company what it says is a bigger play at its Forrestania project area near Southern Cross in Western Australia.
The new 1804-hectare lease at the Lady Magdalene and Lady Ada gold deposits – which Classic is in the process of buying from Reed Exploration – will complement the company’s existing Kat Gap mining operation. The grant by the Department of Mines, Industry Regulation and Safety will also clear the pathway to a significantly-expanded operation after all other required mining proposals and other regulatory processes are completed.
A purchase package of $306,196 and 10 million Classic shares in exchange for full ownership rights at the tenements is expected to be considered by the company’s shareholders on Friday.
The proposed purchase follows Classic’s 2017 acquisition of 80 per cent of the gold rights on the Lady Ada and Lady Magdalene ground, with Reed retaining the remaining 20 per cent. Management has proposed the establishment of a haul route which would allow feedstock to be brought south from the two deposits in the new mining lease to the Kat Gap gold processing plant – a distance of about 60km.
In January 2020, Classic announced a resource upgrade for the Forrestania gold project – including both Lady Ada and Lady Magdalene – comprising a combined mineral resource of 7.27 million tonnes at a grade of 1.33 grams per tonne gold for a total of 311,050 ounces. A scoping study for Forrestania was undertaken in 2017, but Classic has now engaged Auralia Mining Consulting to update the study in view of today’s considerably higher gold price.
Classic expects to kick off its mining operations at Forrestania during this financial year, subject to completing key milestones that include scheduling its mining activities to begin either upon depletion of the Kat Gap resource or to run concurrently with activities at that operation.
Additionally, the company will negotiate a mining agreement with local Native Title claimants and says it maintains strong ties with the Ballardong People under the existing Indigenous Land Use Agreement. Management also plans to seek a suitable mining partner to ensure optimal mining practices, upgrade its scoping study to a prefeasibility study (PFS) and obtain all necessary regulatory approvals.
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