Pantoro Ltd (ASX:PNR) is a zero-debt company after making its final repayment under the gold pre-payment facility with the Commonwealth Bank of Australia (ASX:CBA).
The payment was due at the end of April 2018, however the board made the decision to close out the facility repayments early.
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Pantoro managing director Paul Cmrlec said “We are very pleased to have completed repayment of the gold prepayment facility ahead of schedule.
“Pantoro would like to thank CBA for its support during the past three years and looks forward to continuing the relationship through hedging arrangements.”
Additional cashflow to complete processing plant upgrade
The pre-payment facility was utilised to facilitate the construction of the Nicolsons mine within the Halls Creek Project in Western Australia.
Importantly, the closing of the facility will result in an additional free cashflow for Pantoro of about $2.6 million per quarter at the current gold price of A$1,730 per ounce.
This will enable the company to complete the current processing plant upgrade and construction of the new Wagtail underground mine, while continuing existing mining and processing operations at Nicolsons.
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Pantoro produced a record 13,841 ounces of gold at the Halls Creek Project during the December 2017 quarter, the 10th consecutive quarter of increases.
The company is well positioned to achieve its planned production rate of 80-100,000 ounces per annum later this year.
Productivity and profitability of Nicolsons operation set to rise
The processing plant upgrade, including ore sorting technology is well advanced with the ore sorter and its base in place at site and all required infrastructure ready for installation.
The ore sorter and new tertiary crusher are expected to be operational during April 2018 with commissioning to be completed during the following two weeks.
Cmrlec added “The capital projects currently underway at site will take the Nicolsons operation to a new level of productivity and profitability in the near term, with everything continuing on the planned time line at the present time.”
New contracts to hedge risks in gold price
Pantoro has entered into new hedging contracts with CBA up to October 2019.
The company has hedged 2,000 ounces per month to underwrite operating costs while ensuring strong leverage to the gold price.
Pantoro has already hedged a total of 38,000 ounces to be delivered at an average price of A$1,724 per ounce, which compares favourably with the hedge price of peers.