Kat Gap Project

Highlights

• It contains a shallow unmined gold deposit discovered in the 1990s, which was the subject of resource estimations and a scoping study by Sons of Gwalia in 2003.
• Kat Gap has an existing 93K ounce JORC Resource with gold mineralisation at Kat Gap being impressive with exceptional shallow high grade gold in its drill holes. Early results include 2 metres at 116 grams per tonne gold whilst recent RC drilling has continued to return some outstanding intercepts including 4 m at 76 grams per tonne incorporating 1 m at a magnificent 304 grams per tonne gold.
• The open-ended deposit lies within a 5km long geochemical gold anomaly that has seen very little drill testing, and there is potential for the discovery of a substantial gold deposit within the project area.
• Previous exploration work includes airborne geophysical surveys; aircore, RAB, RC and diamond drilling; and soil geochemical surveys.
• To facilitate early gold mining and processing, the Company on July 20 announced that it has purchased a Gekko on-site processing plant.
• The Australian made Gekko processing system is a transportable modular design that is scalable and is perfectly suited to the Kat Gap mineralisation. Also, the company is in discussions to generate an early revenue stream by initial toll treatment of ore.
• Classic aims to have the capability to commence production as soon as the mining approvals and a clearing permit have been granted.

History

The Project is located on the southern margin of the attenuated southern portion of the FGB, at the contact between ultramafic and granitic lithologies. The area has been the subject of numerous exploration campaigns since the early 1970s. Modern exploration for gold mineralisation at the Kat Gap prospect dates from the discovery of the Bounty gold mine in 1986. Exploration for gold around Kat Gap was undertaken in 1987-2003.

Previous exploration work includes detailed and regional airborne geophysical data, MagLag geochemical surveys, drilling of ~1000 RAB holes, 74 RC holes, 3 diamond holes, 30 aircore holes, and an auger soil program.

Resources estimated for Kat Gap by Sons of Gwalia (SOG) in 2003 totalled 56,000oz grading 1.4g/t Au at zero grade cut-off and 36,000oz grading 3.9g/t Au at 1.5g/t Au grade cut-off.

The purpose of the study was to identify resources that could be trucked to SOG’s treatment plant at Marvel Loch 150 km NNW of Kat Gap. SOG conducted a scoping level optimisation using various assumptions but, given the extreme trucking distance and the low ($800/oz) gold price at the time, the pit optimisation study identified only modest resources above 50 m depth. Many higher-grade drill intercepts lay outside of the SOG pit shells. A revised resource estimate of 440,000t @ 2.9g/t Au (42,000 contained ounces) was reported in 2003, but no details of the estimation can be located.

It is believed that the old scoping study results do not reflect the prospect's potential, and that a new pit optimisation using the current gold price would deliver a much larger in-pit resource, with the potential to substantially increase the resource by drilling along strike and down dip.

In accordance with clause 5.12 of the ASX Listing Rules, CLZ notes that the historic resource estimations were not reported in compliance with the JORC Code (2012), or any earlier adaptations of the JORC Code. A Competent Person has not done sufficient work to classify the historical estimates as mineral resources in accordance with the JORC Code (2012). It is uncertain that following evaluation and/or further exploration work that the historical estimates will be able to be reported as mineral resources in accordance with the JORC Code (2012). Details that support the resource estimation are not known and therefore cannot be verified. More recent estimations are not known to have occurred.

CLZ intends to undertake drilling work to verify any historical drilling on which the historic estimates are based. This work is planned to commence this year, immediately following a full evaluation of all available digital data sets. It will be funded with currently available cash reserves.

Kat Gap mineralisation

Drilling has shown that primary gold mineralisation is associated with quartz veining developed in granitic rocks at or close to the western granite-greenstone contact of the Forrestania Greenstone Belt, and extends into the overlying oxidised zone.

Significant exploration upside potential

There is potential for additional mineralisation to be identified up-dip and down-dip from existing RC drilling, and along strike to north and south of existing RC drill coverage. Only about half of the 5 km long >50 ppb Au gold-in-soil anomaly has been tested by RC drilling along the granite/greenstone contact.

RAB coverage has not always been effective. In a report dated 2003, SOG noted that “...Much of the RAB drilling at Kat Gap was ineffective, failing to penetrate far enough into the bedrock to properly test the granite-greenstone contact….There remains good potential for further gold mineralisation on the more than 4km of strike of the granite-greenstone contact."

There is a further 5 km of strike of prospective granite-greenstone contact west of the Kat Gap zone within E74/467 that has seen little or no exploration.

CLZ intends to re-evaluate the exploration work to date, with a main focus on re-establishing mineral resources that can be classified and reported in accordance with JORC (2012). To achieve this, the company first intends to commence check-drilling (diamond core drilling), followed by extensional drilling using RC drilling.

CLZ will also start to assess the inclusion of Kat Gap in the FGP Scoping Study and mine plan and will report progress on this as it becomes available.