Classic Minerals (ASX:CLZ) has signed a binding agreement with Hannans (ASX:HNR) subsidiary Reed Exploration to purchase the mining tenements comprising the Forrestania Gold Project in Western Australia.
In 2017, Classic acquired 80% of the gold rights on the Forrestania project tenements from a third party, with Reed Exploration retaining its 20% interest in the gold rights associated with the tenements.
Classic, which has a $12.04 million market capitalisation, has now agreed to purchase the Forrestania tenements.
To buy the tenements, Classic will pay $50,000 as a non-refundable deposit on the execution of the binding tenement sale agreement.
Classic will then pay Reed $200,000 in cash and issue to the seller 500 million CLZ shares at a deemed issue price of $0.001 per share. On top of this, Classic will pay Reed $106,196 as reimbursement for amounts paid to maintain the project tenements in good standing.
These considerations must be completed by Classic on or before 30 November 2023.
Once all of the sale conditions have been met and satisfied, the title of the Forrestania project tenements will be transferred to Classic.
Commenting on the acquisition, Classic Minerals Chairman John Lester says: “This indeed is an exciting opportunity for our company. We now can proceed to exploit the gold resource on this tenement 100% instead of having only 80% of the gold rights.
“We now can proceed to exploit the gold resource on this tenement 100% instead of having only 80% of the gold rights”
Dean Goodwin will also be able to explore for other minerals for the company’s benefit.”
The Forrestania Gold Project is located 120km south of Southern Cross, Western Australia, and contains the Lady Ada and Lady Magdalene deposits.
Classic Minerals is an Australia-based explorer holding a pipeline of projects covering 578km-square in Western Australia.
As of 30 June 2023, the company had $17,000 cash and cash equivalents at hand and $19.53 million in unused financing facilities, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Classic Minerals
