PERTH (miningweekly.com) – Junior explorer Classic Minerals has secured funding to start production at its Kat Gap gold project, in Western Australia.
The ASX-listed company has signed a binding term sheet with Goldvalley Brown Stone which would provide up to A$10-million in non-recourse funding for the extraction and processing of Kat Gap ore.
Classic will supply ore containing the current near 90 000 oz mineral resource, and the parties would share the net profits from the gold production on a 70:30 basis, in Classic’s favour.
The term sheet is conditional upon the completion of satisfactory due diligence, and Goldvalley entering into binding agreements with the owner of a registered gold mill to toll treat the Kat Gap ore, as well as Classic obtaining any statutory approvals.
“The Kat Gap project has reached an exciting stage with a clear path to mining and processing of gold now laid out, which will bring benefits to shareholders,” said Classic chairperson John Lester.
“We have begun the transition from explorer to producer and shareholder patience will be rewarded.
Lester emphasised that with Goldvalley as a partner, funding the extraction and processing of ore, Classic is provided with a low capital way forward whilst retaining a solid proportion of the profits and avoiding dilution. He said it has always been the company’s strategy to retain control of the project and ensure greatest shareholder benefits.