Pantoro Ltd (ASX:PNR) continues to lower costs breaking another production record at its high-grade gold operation within the Halls Creek Project in Western Australia.
During the December quarter Pantoro produced a record 13,841 ounces of gold at the project, the 10th consecutive quarter of increases.
The majority of this, 41,846 tonnes at 8.76 g/t gold for 11,780 ounces, was from the Nicolsons underground mine with the remainder from Wagtail.
Open pit operations at Wagtail were completed on 21 December 2017 with the company focused on setting up for underground production.
Existing stockpiles of 82,000 tonnes at 3.35 g/t gold for circa 8,900 ounces underwrite a sustained production profile ahead of the new underground project.
During the December 2017 quarter the company’s processing plant operated at an annual rate of 240,000 tonnes for a second consecutive quarter with total throughput of 60,443 tonnes at 7.67 g/t gold and recovery of 92.9%.
READ: Pantoro’s golden run sets new record
Clearly the upgrades undertaken by Pantoro to reach this rate are working well, with excellent reliability in the plant reported.
Significantly, all-in sustaining costs (AISC) per ounce fell below the A$1,000 mark to A$990 ($US 780) for the recent December 2017 quarter.
The record gold production quarter saw costs fall from A$1,019 in the prior September quarter and A$1,165 in the June 2017 quarter.
C1 cash costs were also lower, at A$809 per ounce, down from A$853 in the prior September quarter and A$944 in the June 2017 quarter.
With the AUD gold price currently at A$1,680 per ounce, Pantoro’s gold operation will continue to generate strong cash flows.
Well funded with $15.2 million in cash and gold
Furthermore, Pantoro ended the December quarter in a strong financial position with $15.2 million in cash and gold.
Importantly, Pantoro’s cash balance increased quarter on quarter, even after repaying $2.5 million worth of gold under its pre-pay facility with CBA, and re-investing $2.2 million in exploration.
The company is expected to be debt free after April 2017 and its cash balance should grow rapidly thereafter.
Production set to continue to increase over the next 12 months with 80-100,000 ounces per annum forecast
Pantoro will continue to increase production and reduce costs at the project during 2018.
The Halls Creek Project includes the Nicolsons and Wagtail mines.
It is easy to forget that Pantoro commenced production on a shoe string budget with aspirations of achieving production of 25,000 – 30,000 ounces per annum.
Only 10 quarters since commencement, Pantoro has doubled its targeted output, already expanding to an annual production rate of 55,000 ounces.
The company has stated that it will further increase its production rate to between 80,000 and 100,000 ounces per annum by the end of 2018.
Pantoro has laid out is plans for expansion with the purchase and delivery of a Steinert Multisensor Ore Sorter finalised in the December quarter and plans to increase output from Nicolsons mine in the second half of 2018 in parallel with development of a new underground mine beneath the recently completed Wagtail open pits.
READ: Pantoro bringing in new ore sorter to facilitate expansion of gold production
The ore sorting project includes an upgrade of the crushing circuit to replace the mobile crusher with a fixed unit, and installation of several ore conveyors to accommodate the ore sorter.
Remarkably, the crusher and ore sorting project is only budgeted to cost A$2.2 million – an almost insignificant investment for such a large production increase.
It is expected that the upgraded circuit including the ore sorter will be fully operational in April 2018.
Preparations for Wagtail underground
Preparatory work is well underway and sumps below the planned portal positions and portal platforms have been established in the Wagtail North and Wagtail South open pits.
Pantoro is finalising approvals documentation and intends to start development and mining immediately after the wet season in April 2018.
Mineral resource modelling is underway at Wagtail, with a new mineral resource and ore reserve expected to be published before underground mining begins.