Pantoro Gold Ltd (ASX:PNR, OTC:PNTOF, FRA:RKN) last week outlined further progress at the Norseman Gold Project in Western Australia, highlighting strong drilling results and a new funding and processing agreement that is expected to enhance production margins.
Managing director Paul Cmrlec said ongoing drilling at the Scotia deposit continues to deliver encouraging results, with the central zone extended by at least 50 metres below the current mine plan. He noted that the zone remains open at depth, with “big, wide, high-grade hits” reported, including intercepts exceeding 10 metres in width and grades of up to around 10 grams per tonne.
Cmrlec indicated that the extension could add approximately one year to the production life of the central zone. He added that Scotia has evolved from a single ore source into three distinct production areas, including new development in the northern zone and extensions to historical workings.
In parallel, Pantoro Gold has entered into a funding and processing partnership with Mega Resources Pty Ltd to support stage two mining at the Rama Open Pit. Under the agreement, the company will provide up to $20 million in funding, earning interest while securing access to high-grade ore feed.
Cmrlec explained that the ore from Rama is expected to grade above 4.7g/t and will replace lower-grade stockpile material currently being processed. He said the arrangement would enable Pantoro Gold to maintain stronger margins while preserving lower-grade material for future use.
The company is also set to retain between 20% and 30% of gold revenue generated from the processed ore, in addition to loan repayments linked to production. Cmrlec described the agreement as a “real win win,” adding that it brings a previously stranded asset into production while delivering economic benefits for both parties.
Looking ahead, Cmrlec said Pantoro Gold remains focused on its transition to higher-grade underground production. He highlighted upcoming catalysts, including additional underground mines coming online in the main field and an extension to the Gladstone open pit.
He added that the company’s strategy of maintaining positive cash flow while investing in growth is beginning to deliver results, with further progress expected over the coming year.
Key highlights
- Pantoro Gold reports strong drilling results at Scotia deposit
- Central zone extended 50m below mine plan, still open at depth
- High-grade intercepts: >10m widths, up to ~10g/t gold
- New funding and processing deal with Mega Resources
- Up to $20M provided to fund Rama Open Pit mining
- Ore grade expected above 4.7g/t, boosting mill feed quality
- Agreement replaces low-grade stockpile processing
- Pantoro retains 20–30% of gold revenue plus interest income
- Scotia now hosts three ore sources, increasing production potential
- Strategy focused on transitioning to higher-grade underground feed
- Strong balance sheet supports growth and expansion plans
Proactive: Welcome back to Proactive Investors. I’m your host, Kerry Stevenson. I’ve asked Paul Cmrlec, Managing Director of Pantoro Gold, to come back and chat with us. The company now has the 100% owned Norseman Gold Project in the Eastern Goldfields of WA, with some strong high-grade results. Paul, give us an update.
Paul Cmrlec: G’day, Kerry. We’ve had a couple of announcements over the last few days. There’s ongoing drilling at Scotia, where the central part has been expanded by at least 50 metres below the current mine plan. It remains completely open, with big, wide, high-grade hits.
We’ve also announced a deal with Mega Resources. We’re using our balance sheet to help fund mining at the high-grade Rama deposit. In return, that ore will be processed through our plant. The material is expected to grade over 4.7 grams per tonne and will replace lower-grade stockpile feed while we bring additional underground mines online.
Proactive: Can you explain how the Rama deal works?
Paul Cmrlec: It’s effectively a processing partnership. We’re providing up to $15 million, with an option for another $5 million. We earn 5% interest on that funding. The loan is repaid at $1,000 per ounce as material is processed.
On top of that, we retain 20–30% of the gold revenue. Mega handles mining and delivers ore to our plant, and we process it and share the returns.
Proactive: Is the agreement ongoing?
Paul Cmrlec: It’s tied to the next stage of the open pit, expected to run for about six to eight months. It will contribute around 15–20% of our mill feed, replacing lower-grade material.
Proactive: What’s the rationale behind the deal?
Paul Cmrlec: It’s economically driven. The high-grade ore improves margins compared to processing low-grade stockpiles. It also allows us to preserve those stockpiles for later use, while bringing a stranded asset into production.
Proactive: Let’s go back to Scotia results—can you provide more detail?
Paul Cmrlec: The central zone at Scotia is very wide, often over 10 metres, with grades up to around 10 grams per tonne. Extending the zone by 50 metres effectively adds about a year of production.
We’re also developing additional ore sources in the northern zone and from historical extensions. Scotia has grown from one ore source to three, and the system remains open at depth.
Proactive: What would you say to investors?
Paul Cmrlec: We’re firmly in a development and growth phase. We’ve maintained positive cash flow while investing heavily in drilling. Results will become more evident over the next year as new underground mines come online and open pit operations extend.
The strategy of replacing lower-grade feed with higher-grade underground ore is coming together, and the outlook for Norseman is very strong.
Proactive: Thanks, Paul.
Paul Cmrlec: Thanks, Kerry.