Classic Minerals one step closer to near-term gold mining opportunities: inks MOU

Published at Mar 20, 2018, in Small Caps

Classic Minerals (ASX:CLZ) today revealed it has penned a non-binding memorandum of understanding (MOU) with Tianye SXO Gold Mining for treatment of the ore extracted at its Forrestania Gold Project in Western Australia.

Tianye is the owner of the Southern Cross Operations (SXO), including the recently refurbished Marvel Loch Processing Plant, which is situated around 80 kilometres from Forrestania — this makes for an economically viable processing solution.

Leading Australian mid-tier gold miner, Minjar Gold, also manages the SXO and runs the Marvel Loch Plant.

This deal sets a framework for CLZ and Tianye to delineate, study and mine gold deposits at Forrestania, with processing to take place at the Marvel Loch Processing Plant.

Mining processing plant

Marvel Loch Processing Plant

The Forrestania Project contains an existing JORC-compliant mineral Resource of 5.3Mt at 1.39 grams per tonne for 240,000 ounces of gold, with a recent scoping study suggesting both the technical and financial viability of the project.

On top of this, CLZ also holds significant exploration targets at the Kat Gap deposit, which had earlier Resources estimated by Sons of Gwalia in 2003, totalling 56,000 ounces grading 1.4 grams per tonne of gold at zero grade cut-off and 36,000 ounces grading 3.9 grams per tonne gold at 1.5 grams per tonne gold grade cut-off.

Due to the near-surface, easily accessible ore at both the Lady Ada and Kat Gap deposits, these are both of keen interest to CLZ, with hopes to extract and treat the ore at Marvel Loch in the next 12 to 24 months. Environmental, feasibility and permitting work is currently underway at both of these deposits.

Of course, as with all minerals exploration, success is not guaranteed — consider your own personal circumstances before investing, and seek professional financial advice.

The MOU is predicated on the assumption that both parties will agree to either a profit sharing or ore sales arrangement for gold-bearing ore produced from the Forrestania Project.

Under the terms of the agreement, CLZ will be responsible for drilling deposits to a JORC 2012 level, carrying out initial metallurgical work, securing necessary approvals and completing economic analysis of the deposit of interest.

Once this work is completed, the deposit will be submitted to Tianye for review and the opportunity to carry out its own economic analysis. Following that, Tianye will be entitled to make an offer to process the ore under either a profit share or ore purchase scenario.

Should Tianye decline to make an offer, CLZ may elect to wholly fund the mining, haulage and processing of the ore, with processing being undertaken under an ore-purchase agreement, with commercial terms yet to be negotiated between parties. If mining does occur, Tianye will pay CLZ either its profit share or ore purchase proceeds on a monthly basis.

Importantly, the ore will also not be blended with that of other parties — this will enable CLZ to prove the quality of the ore.

Additionally, the MOU allows for monthly parcels of 20,000 to 30,000 for a period of 36 months.

CLZ CEO, Dean Goodwin, said: “Although the company’s primary focus remains growing the resource and mining inventory via systemic exploration, this MOU is a much-welcomed development.

“The close proximity of the Marvel Loch Plant means that the deposits are no longer ‘stranded’ assets and we can start looking at near-term mining opportunities to bolster the cashflow of the company,” Goodwin noted.

“Importantly, we are also very happy to be partnered with a reputable operator like Minjar Gold Mining, which has had many instances of mining, development and commercial success in the gold mining industry in Australia.

“In addition, when Lady Ada was mined by SOG in the early 2000s, it was processed at the Marvel Loch Plant then, so there is already plenty of metallurgical and processing data/experience that both parties can draw upon to maximise recoveries when CLZ is ready to send ore to the plant. We are very excited,” added Goodwin.

tags

GOLD

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X