Classic Minerals and Independence Newsearch have signed an Earn in and Joint Venture Agreement over the Classic’s Fraser Range tenements, with Independence Newsearch.
|Fraser Range Project tenure (in red). Image source ©Classic Minerals|
This is an exciting development for Classic as the agreement sees a highly regarded exploration and mining company commit significant funds towards advancing the Fraser Range Project.
Under the Agreement, Independence will continue to advance the Fraser Range Project allowing Classic to focus exploration efforts on its emerging high-grade Kat Gap Gold Project located in the Forrestania area of Western Australia.
Under the agreement, initial cash payment to Classic of AU$300,000 will be made within five days of completion of the Condition Precedent. Independence will be able to elect to earn a 51 per cent interest in the project by expending AU$1,500,000 on exploration over two years (first earn in period). The minimum expenditure of AU$640,000 must be incurred prior to Independence withdrawing.
The JV will be shaped with 49 per cent ownership remaining with Classic and 51 per cent with Independence.
If Independence elects to earn a 70 per cent interest in the project, Classic will be free carried to the completion of a pre-feasibility study; or If Independence elects to buy-out Classic, then Classic will have received aggregate value of AU$4.5 million, in cash and tenement expenditure, and will retain a 1 per cent net smelter royalty from this transaction.
Completion remains subject to a condition precedent which is the Ministerial consent for the transfer of tenure within the first year of grant.
Classic will use the funds to continue drilling at the Kat Gap gold project.
Classics Chairman, John Lester, and CEO Dean Goodwin jointly commented sees this as an exciting development for Classic shareholders.
“The Agreement we have reached with Independence demonstrates the highly prospective nature of our Fraser Range tenements. Independence is a highly regarded exploration and mining company and we look forward to working with them for both parties’ mutual benefit. Their commitment to inject cash and tenement expenditure to a maximum of A$4.5 million and providing a 1 per cent NSR gives the Company confidence in the value of these tenements.”