Pantoro Ltd (ASX:PNR) is delivering strong margins with cost reductions at its Nicolsons Gold Project in the Halls Creek region of WA and this is placing the company in a strong cash position.
The company had $23.2 million in cash and gold at the end of the March quarter compared with $21 million at the end of the previous quarter and this comes at a time of extensive development works.
Operating cashflow for the quarter was $7.8 million, and free cashflow after major capital project and exploration costs was $1.9 million.
READ: Pantoro’s gold production at Halls Creek exceeds feasibility study target
Managing director Paul Cmrlec said: “The continuing cash build during the quarter has been pleasing given the extensive mine development works that are ongoing both in underground and open pit mine extensions.
“The site team is to be commended for the tight cost management displayed throughout the period which was an excellent outcome considering that two underground mines and an open pit cut back are now in operation.”
On track for production target
There were 11,280 ounces of gold produced during the March quarter and the AISC was $1,217.
Pantoro remains on track to achieve its increased annual production target rate of plus-80,000 ounces around the middle of 2019.
At Wagtail underground mine capital development continued during the quarter with ore development on the 2200 level and access drives approaching Rowdies and Wagtail North on the 2185 level by March 31.
The decline face position was around 45 metres from the third level access on the 2170 level.
READ: Pantoro upgrades Wagtail mineral resource and ore reserve as mine development continues
Wagtail North’s underground ore reserve was increased by 20% to 74,000 ounces following inclusion of Rowdies drilling results into the resource estimate.
This continues the ongoing upgrades that Pantoro has achieved at Nicolsons throughout the operations life since mining began in 2015.
Outstanding grades have been returned in early ore development on the 2200 Level at Wagtail with 2,996 tonnes at 10.84 g/t recorded.
Wagtail South cutback underway
Approval for the Wagtail South cutback was achieved ahead of expectation on February 18, 2019, and work began immediately.
Wagtail South is expected to be cashflow positive from June 2019.
Cmrlec said: “The company has done the hard work in preparing for anticipated production upgrades, with all major items now in place, and access to ore at both Wagtail North underground and Wagtail South open pits increasing each month that the development continues.”
Ore sorting continues to achieve impressive results and during the quarter this was used primarily for lower grade material.
As ore supply increases from Wagtail, the full benefit of ore sorting will be realised.
READ: Pantoro drill results extend high-grade gold to new depths at Nicolsons
Pantoro has also received impressive results from drilling down plunge and entirely outside of the mineral resource at Nicolsons.
These include:
- 3.55 metres at 95.89 g/t, including 1-metre at 317.0 g/t;
- 2.43 metres at 53.64 g/t, including 0.75 metres at 114.0 g/t; and
- 4.60 metres at 49.52 g/t.