Classic Minerals (ASX:CLZ) secures $20.1m institutional funding package

• Classic Minerals (CLZ) secures $20.1 million in funding to allow for the execution of its phase one project development in the Forrestania area in Western Australia
• The funding will be received via a $15 million put option agreement from US institutional investment group LDA Capital and a $5.1 million convertible note issue
• The company says the funding validates the underlying value of its gold projects, allowing it to execute a plan to transform Forrestania into a world-class gold producing region
• Shares in Classic are down 9.09 per cent, trading at one cent as of 11:47 am AEDT

Classic Minerals (CLZ) has secured $20.1 million in funding to allow for the execution of its phase one project development in the Forrestania area in Western Australia.

The funding will be received in two forms: a $15 million put option agreement from US institutional investment group LDA Capital and a $5.1 million convertible note issue.

As part of its agreement with LDA Capital, the company will able to draw the funds by exercising put options to LDA over the duration of the three year agreement.

The company said the structure of the package is low cost and substantially reduces project financing risk for phase one of the Kat Gap gold project in WA.

Further, it validates the underlying value of Classic’s gold projects and allows it to execute a definitive plan to transform the Forrestania gold belt into a world class gold production region.

Chairman John Lester welcomed LDA’s support as an international investment partner and considers it an “outstanding achievement” for Classic.

“LDA Capital’s support has enhanced our certainty and the ability to take our projects into production and to embark on a fully-funded exploration program to allow the Company to increase its resource base across the greater Forrestania area.”

Concurrently, Classic had entered into a mandate with Still Capital to raise $5.5 million via a proposed issue of convertible notes, each with a face value of $5,000.

The notes will be convertible into company shares up to 18 months after issue and any that is not converted will be redeemed.

Noteholders will also be entitled to one free attaching option for every two shares issued on conversion, exercisable at 2.5 cents on or before December 1, 2025.

As part of the mandate, Still will be entitled to a sign-on fee of $100,000 to cover associated costs, a six per cent capital raise fee and 30 million new options.

Shares in Classic were down 9.09 per cent, trading at one cent as of 11:47 am AEDT.