Classic Minerals (ASX: CLZ) one step closer to cash flow

By Jonathan Jackson. Published at Nov 26, 2020, in Small Caps

Classic Minerals (ASX: CLZ) was today given the green light to move forward with its intended gold production planning.

Following Western Areas Ltd (ASX: WSA) withdrawal of its objection for the registration of tenement application MLA 74/249, CLZ is now free to continue its development of its Kat Gap project in Western Australia.

Kat Gap is strategically located approximately 70 kilometres south-southeast of the company’s Forrestania Gold project containing the Lady Magdalene and Lady Ada gold resources.

“Classic is very pleased to be able to report this important milestone.... it paves the way for the grant of a Mining Lease over the planned production area and is a critical development step for Kat Gap to become the next production asset for the company,” Classic Minerals Chairman, John Lester, said.

The objection by Western Areas was originally lodged due to potential issues regarding a fresh water supply pipeline which runs below the Classic Minerals tenements and directly supplies some of WSA’s operations.

Following the completion of studies over this matter, the companies have now come to an amicable agreement that CLZ’s operations would not affect the pipeline or supply to WSA’s operations.

This announcement moves CLZ a step closer to cash flow as it eyes production in 2021.

CLZ can now focus its full attention on major pre-production milestones that are expected to revalue the its profile between now and early February 2021.

These milestones include:

  • Mining Access Application – now complete by the lifting of the Objection;
  • Commencement of Native Title Negotiations (expected completion 26 Dec 2020);
  • Consent of Native Title Approval;
  • Mining Lease Approval MLA 74/249, and
  • Mining Plan lodgement

CLZ will soon complete all studies and documentation required for lodging the Mining Plan Application.

The application will be lodged immediately on Grant of Mining Lease Approval MLA 74/249.

In conjunction, CLZ has begun preparing a pre-feasibility study at Kat Gap expected to show that the project will be rapidly brought into production by utilising a low-cost recovery method that will enable it to generate early cash-flows.

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