Classic Minerals Reports A$8.46M Inflows, Retires Debt with Kat Gap Sale Proceeds

Kat Gap Sale Marks Strategic Shift

Classic Minerals Limited (ASX: CLZ) has successfully completed the sale of its Kat Gap tenements to Bain Global Resources Pty Ltd for A$7 million, a transaction approved by shareholders earlier this year. This divestment represents a pivotal moment for Classic, allowing the company to streamline its asset portfolio and focus capital on its core gold projects in the Forrestania region of Western Australia.

The sale proceeds have been strategically deployed to retire outstanding debt and to fund further exploration activities at the Lady Ada and Lady Magdalene gold project areas. This reallocation of capital underscores Classic’s commitment to advancing its higher-potential assets and improving its balance sheet health.

Quarterly Cash Flow Reflects Asset Monetization

During the March 2025 quarter, Classic Minerals reported cash inflows of A$8.46 million, predominantly from the Kat Gap tenement sale, which accounted for 91% of the inflows. Cash outflows totaled A$8.41 million, covering exploration, staff costs, administration, interest, and investing activities. The near balance between inflows and outflows reflects a quarter of active reinvestment and financial management.

Despite the significant cash outflows, the company ended the quarter with a modest cash balance of A$54,000. However, when combined with unused financing facilities totaling A$18.6 million, Classic Minerals has an estimated funding runway of over five quarters, providing operational stability and flexibility for ongoing exploration and development.

Forrestania’s Gold Resources Remain a Core Focus

Classic Minerals’ Forrestania Gold Project continues to be the cornerstone of its exploration strategy. The company holds inferred and indicated mineral resources totaling approximately 7.27 million tonnes at an average grade of 1.33 grams per tonne, equating to 311,050 ounces of gold. The Lady Ada and Lady Magdalene deposits contribute significantly to this resource base, with Lady Magdalene alone accounting for over 250,000 ounces.

The company confirmed no material changes to its mineral resource estimates since the last reporting period, maintaining confidence in the quality and potential of its gold assets. This stable resource base, combined with fresh exploration funding, positions Classic Minerals to potentially unlock further value in the near term.

Complex Financing Structure Supports Growth

Classic Minerals’ financing arrangements are multifaceted, including a $5 million standby subscription facility with Stock Assist Group Pty Ltd and a $15 million put option agreement with LDA Capital Limited. The latter allows flexible drawdowns over a 36-month period, with associated options issued to LDA Capital as part of the agreement.

Additionally, the company manages a range of unsecured and secured loan facilities from various lenders, with interest rates varying from monthly percentages to annual rates. These arrangements, while complex, provide Classic with diversified funding sources to support its operational and exploration ambitions.

Notably, the company is addressing legacy obligations such as an insurance premium funding debt with Elantis Premium Funding Limited, demonstrating ongoing financial discipline.

Looking Ahead

Classic Minerals’ recent quarter reflects a company in transition, monetizing non-core assets, reducing debt, and concentrating resources on promising gold projects. The Forrestania region remains the focal point for exploration, with the potential to enhance the company’s resource base and shareholder value.

Investors will be watching closely how the company leverages its improved financial position to advance exploration results and whether it can convert its substantial mineral resources into production in the medium term.