Pantoro has acquired a 50 per cent share in the Central Norseman gold project (CNGP), giving the company assets in two high-grade gold regions in Western Australia.
The transaction will be funded through existing cash reserves, ongoing cash-flow from its Halls Creek operations and a $43 million fully underwritten placement.
It will result in Pantoro forming an unincorporated joint venture (UJV) with Central Norseman Gold Corporation and its subsidiary, Vendor, with Pantoro aiming to return CNGP to production in the near term.
Pantoro has also declared a trading halt, indicating that it will propose “to undertake a strategic acquisition and a capital raising.”
The UJV involves $10 million in cash where a $2.5 million deposit is payable on signing the binding agreement and the remaining $7.5 is paid on completion.
The CNGP is in the Eastern Goldfields of Western Australia south of Kalgoorlie. It includes a 720,000 tonne per annum processing plant and access to infrastructure in the region.
CNGP has a mineral resource of 4.4 million ounces of gold contained in approximately 35 separate mineral resources.
While a lot of the gold remains along strike and at depth, Pantoro is aiming to establish operations of 100,000 ounces per annum, expanding to 200,000 ounces over the following two to four years.
Pantoro managing director Paul Cmrlec expressed his optimism about the deal, commenting on the potential of the CNGP.
“CNGP was a clear standout for Pantoro with large, high grade mineral resources, and extensive infrastructure already in place at company, local shire and national government infrastructure levels,” he said.
“The acquisition cost of less than $40 per attributable mineral resource ounce is an enviable metric which provides Pantoro with the opportunity to add significant shareholder value in the immediate term.”