The commodities have been the critical factor in the growth of the economy. It has been the dominant element in defining the status of the balance of payments of the countries through import and export. The demand for the commodity has kept on changing from time to time based on recent development and requirements. For example, platinum used in diesel engines faces wrath with dropping prices due to the stricter emissions norms and consumer switching over gasoline, favouring palladium use in the catalytic converter.
The commodity price fluctuation determines the fate of projects commercialization- generally higher price aid exploration activity while lower mergers and acquisition. In the milieu of which it is quintessential to analyse the projects vis-à-vis its commodity stance to strategise the plan. The metal sector has been facing many difficulties from trade tensions between the United States and China in last year to Coronavirus now apart from currency fluctuation, changing monetary or government policy to mention few. Also, it is worth mentioning that the gold has been reaping well in the lap of global uncertainty and batteries metals possessing high prospect for future demand coming from the advent of electric vehicle (EV’s).
For the same, Classic Minerals Limited (ASX: CLZ) a gold exploration and development company, creates significant opportunities with its project namely, Forrestania Gold project, Kat Gap project and Fraser Range project identified with high-grade Au, Ni, Cu and Co etc.
Let us now glimpse through the CLZ’s assets and its commodity content.
Forrestania Gold Project – Surge in Gold Resources
Forrestania gold metal is owned by the CLZ and Hannans Ltd (ASX: HNR) in the ratio of 80:20 respectively. The gold metal content grew by 71% and 38% in Lady Ada and Lady Magdalene respectively post the drilling to ~7.27 million tonnes at 1.33% gold grade. Also, the previous scoping study had demonstrated positive viability of the project both financially and technically.
The company is looking to develop new Scoping Study on the Forrestania Range project and planning to finalise the JV mining and treatment contracts with professional miners and process ore by the first half of 2020.
Interesting Read: The Surge in Forrestania Gold Resources: A Glance Through Viability
Kat Gap Project – High-Grade Gold Intercept
Kat Gap is 100% owned by the CLZ and poses significant gold mineralisation zones across granite-greenstone contact. It is down-dip as well as possibly down-plunge at depth besides along strike on the southern side of the Proterozoic dyke. The total 21 RC holes drilling for 1,580m and three diamond holes drilling for 527.55m validates that most holes are delivering gold mineralisation.
The company is planning to continue RC drilling along the north and south strike from existing drilling along with the granite-greenstone contact and deeper drilling to understand the plunge component of shallower high-grade gold mineralisation.
To know more about Kat Gap deposit, Please Read: Share Price 50% Up Post KAT GAP Drilling Update: High-Grade Gold Intercept Continues.
“Australia is the 2nd largest producer of gold with the key export markets being China followed by India, US and Hong Kong, to mention few. The safe-haven investment has been the first choice of investors at the time of global turmoil, witnessing the surge in LME gold price by 19% from US$1282.3/oz on 2 January 2019 to US$1521.9/oz on 31 December 2019. Therefore, projects containing gold is likely to aid the explorer in advancing toward the commercialisation of the projects.”
Must Read: Equity Charmer, Gold's 2020 Outlook
Fraser Range project – Mammoth Ni-Cu Discovery
The 100% owned Fraser Range project of Classic Minerals is recently entered into Earn-in & Joint Venture agreement with Independence Group NL (ASX: IGO) through its wholly-owned Independence Newsearch Pty Ltd subsidiary, permitting free-carried exploration at the project.
For the same, the amount of A$300,000 cash payment is made to the CLZ, which is likely to be used for the development of high-grade Kat Gap Gold project.
The Fraser Range project is highly prospective for Nova-style nickel-copper-cobalt, VMS copper-zinc and gold mineralisation. The AC and diamond drilling persisted to systematically advance exploration targets of the projects and anticipated to continue drilling along the entire length of the project to identify the target, requiring follow-up work in 2020.
“Australia stands at 7th and 6th position in terms of copper producer and nickel miners, respectively in the world. Where, the copper ore and concentrate exports are positioned second in the business with the key export destination as China followed the US, Germany, Japan and South Korea. Whereas, Nickel key consumers for the export market are China followed by the European Union, Japan and the US. As per the Department of Industry, Innovation and Science of the Australian Government, the copper price is expected to surge in coming years due to the rising consumption and limited production. Also, rising demand from EVs and stationary energy storage market is likely to increase the price of copper along with nickel due to the consumption outpacing the production.”
Hence, the Classic Minerals projects are seemed to be optimistic because of economic factors supporting gold price along with significant high-grade gold prospects. The previous scoping study depicting positive viability of Forrestania Gold project will also aid optimism toward nearby Kat Gap project. Also, the cash received from IGO will help in proceeding toward the company 2020 planning.
Interested in Dec Quarter Update, Do Read: Classic December Quarterly Update: Successful Drilling Result at Forrestania Gold and Kat Gap Project
Stock Price Information – CLZ presently trading at A$0.002 (AEDT: 3:37 PM) on 12 February 2020. Its 52 weeks high and 52 weeks low stand at A$0.004 and A$0.001, respectively, with a market cap of A$14.4 million.