Classic Minerals gears up to commence production at Kat Gap
Western Australian focused gold exploration and development company Classic Minerals Limited (ASX:CLZ) has confirmed that its processing plant will be delivered to Perth during the first half of August 2020.
This is a Gekko gold gravity processing plant to be used for future on-site processing of gold ore at its flagship Kat Gap Gold Project which is the subject of an extensive exploration program.
Commissioning of this plant will allow the company to generate income from its near-surface high-grade ore, and management has commenced negotiations to toll treat any initial parcels of ore from Kat Gap, while the full-scale plant is configured to suit Kat Gap ore.
Kat Gap is approximately 120 kilometres from Southern Cross, Western Australia and it has an existing resource with strong exploration upside and scope for high-grade open pit mining.
An early-stage mineral resource estimate established an inferred resource of nearly 976,000 tonnes at approximately 3 g/t gold for 92,856 ounces gold.
This has an in-ground value of approximately $250 million based on the current Australian dollar gold price, fairly impressive for a company with a market capitalisation of around $20 million.
Highlighting Classic’s heavily discounted valuation, the group’s market capitalisation is equivalent to approximately 1000 ounces of gold (about 1% of the Kat Gap resource), yet when also taking into account the resources at its Lady Ada and Lady Magdalene projects the company has a global mineral resource of 404,000 ounces of gold.
While the bottom line depends on actual ore produced and the deduction of production costs, Classic should be left with plenty of cash to fund further exploration and grow the resource at Kat Gap.
Gekko provides mobility and flexibility to target various ore sources
Gekko is a world leader in the manufacture of gold processing plant and machinery with their plants boasting small footprints and low environmental impact.
An added attraction to Classic is that the Australian-made Gekko plant is modular and mounted on containerised elements providing for scalability and ease of modification.
The plant has a 30 tonne per hour (tph) capacity and is scalable to a Gekko Python plant with a processing capacity of 250 tph.
Classic’s purchase is for a two-stage gravity concentration plant from Gekko which will be provided fully refurbished to new condition.
The two-part plant will form the basis of the processing facility to be set up and operated by Classic at its Kat Gap gold deposit.
Classic is now on track to set-up, commission and test the Gekko plant and commence processing of the gold-rich ore at Kat Gap.
The Gekko plant is ideally suited to processing Kat Gap ore which has a unique high gravity gold concentration.
Classic will have the capability and capacity to commence production as soon as the mining approvals (MLA 74/249) have been granted.