Classic Minerals Ltd. entered into a nonbinding memorandum of understanding with Tianye SXO Gold Mining Pty. Ltd. for treatment of ore extracted from the company's Forrestania gold project in Western Australia.

Tianye SXO owns the Southern Cross operations, which include the recently refurbished Marvel Loch processing plant located about 80 kilometers from the Forrestania project.

Under the MOU, the companies will agree to either a profit-sharing or an ore sales deal for gold-bearing ore produced from Forrestania, Classic Minerals said March 20.

A scoping study on Forrestania indicated the project will be economically viable and estimated production of 111,000 ounces of gold over a 2.5-year life.