Classic Minerals has been given the green light to begin production at its Kat Gap gold mine near Southern Cross after officially receiving WA Department of Mines, Industry Regulation and Safety approval.
The Kat Gap deposit hosts almost 93,000 ounces of an inferred mineral resource at 2.96 grams per tonne gold and is the principal contributor to the company’s total gold inventory of more than 400,000 ounces.
The approved project management plan provides confirmation that Classic’s occupational health and safety management systems satisfy state mining legislation.
The company is continuing to work with the department to secure the necessary approvals for on-site processing and has also submitted a works approval application to the WA Department of Water and Environmental Regulation. The remaining required approvals to deliver the processing facility and remaining infrastructure are expected in November.
The approval continues a run of good news for the company after last week’s announcement of a cash injection worth up to $10 million in non-recourse funding for the extraction and processing of gold at Kat Gap as part of an agreement with Perth-based private mining operation Goldvalley Brown Stone.
The deal will see the company and its financial backer split the revenues minus the cost of gold production at Kat Gap 70/30 in favour of Classic.
Classic Minerals Chairman, John Lester said: “The completion of the extensive health, safety and environmental approvals process by the DMIRS is significant milestone for the company, securing the necessary approvals to enable full-scale mining activities to commence.”
Just last year Classic received state approval to excavate up to 49,000 tonnes of material from Kat Gap to fine-tune the processing plant and optimising pit design at the project.
The company has been busy over the past six months including an extensive 109-hole infill RC drilling campaign at the site.
Drilling highlights include a 1m section grading 40.1 g/t gold from 33m within a broader 2m intercept running 21.07 g/t from 33m.
Another hole intercepted a 2m section at 17.2 g/t gold from 53m and included a higher-grade 1m hit grading 19.9 g/t from 53m.
In July the company received an unexpected bonus after it hit a substantial body of water in its first exploratory hole at the site.
The water bore is strategically positioned with the area’s main haul road, just over 1km from Classic’s processing hub where the Perth-based miner has already set up a pair of process water tanks and a gold processing shed.
The company says all on-site clearing has been completed for major infrastructure including mine administration offices, workshop areas, laydown yards, main access roads, camp site, mine construction and all surface development.
Mining approval and the recent cash injection for the Kat Gap gold mine show that Classic’s diligent efforts in the Goldfields operation is on the cusp of paying off.
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By Matt Birney
