said March 31 thatit has entered an agreement to sell its mining interest at the Doherty's gold project to Perth, Australia-basedAccelerated Mining Pty Ltd.for a total consideration of A$4 million.
AcceleratedMining will pay A$500,000 upon signing and A$3.5 million on or before June 23.
By signing theagreement, Classic Minerals granted Accelerated Mining the right to explore, mine,process and sell gold ore from the project, subject to a 7.5% net smelter royaltyto the seller on ore mined by the buyer.
Classic Mineralswill retain 100% ownership of the tenement and will be responsible for maintainingcommitments on all rents, expenditures and rehabilitation.
The seller willalso pay an agreed commercial introductory fee of 7.5% of the total considerationon settlement, and will also pass on 2.5% of the retained net smelter royalty andissue 26,000,000 shares to the introductory party.
AcceleratedMining, on the other hand, will provide and assist the seller with the appropriateinformation to meet reporting obligations.
"It's anexciting time for both Classic Minerals and Accelerated Mining. The gold marketis presently stimulated and, with the Doherty's project being a very high gradehistorical mine, it is a great time to head into gold mining," said JustinDoutch, managing director of Classic Minerals.
"On theconclusion of this transaction, Classic [Minerals] will be in a cash strong positionand this will see the company virtually debt free. This transaction is of strategicimportance to our company and the Fraser Range still has our attention," Doutchadded.