Classic Minerals has retained Australian mid-tier miner IGO Limited as an exploration joint venture partner at its Fraser Range nickel-copper prospect in WA. It will pocket a $500,000 payment from IGO for 51 per cent of the prospect and the senior partner has committed a further $1 million for ongoing exploration. The deal leaves Classic to focus on becoming a gold producer at Forrestania.
The Classic-IGO joint venture ground is about 40 kilometres north-east of IGO’s Nova nickel-copper mine, the region’s sole production asset. The miner is known to be eager to extend the operating life of its near-new Nova production infrastructure through exploration success, corporate activity or both.
Classic and IGO signed an earn-in agreement in mid-2019.
Under the terms of the deal, IGO needed to spend $1.5m on exploration of the Fraser Range tenements over two years to acquire a 51 per cent stake. Having met its obligations, IGO has now elected to complete the transaction and earn a further 19 per cent of the tenement through the additional $1 million exploration spend.
For Classic the Fraser Range exchange comes at an opportune time as it seeks to move its 100 per cent owned Kat Gap gold project at Forrestania, south of Southern Cross, towards production.
Kat Gap has a 92,869-ounce inferred resource going 2.96 gram per tonne gold. Classic was granted a mining lease by the Department of Mines, Industry Regulation and Safety in April and the company is in the process of transporting its 30 tonnes per hour gold processing plant to the site.
It has lodged Kat Gap’s two remaining environmental approval applications with the WA government in late May. With receipt of the final approvals it can look to transition to gold producer status later in 2021.
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