Pantoro Ltd (ASX:PNR) has completed the transformative acquisition of 50% of the Central Norseman Gold Project (CNGP) in southern WA and has taken management control of the property.
One of the first tasks at CNGP is drilling and Pantoro expected extensional and infill programs to start at initial focus areas by the end of this month.
The project has produced more than 5.5 million ounces of gold historically and currently has a measured, indicated and inferred resource of 4.4 million ounces.
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All outstanding conditions of the transaction were satisfied or waived on or by July 9, 2019, and Pantoro has paid Central Norseman Gold Consolidated Pty Ltd (CNGC) $7.5 million in cash and 100 million shares at 20 cents per share.
Pantoro’s managing director Paul Cmrlec said: “The board of Pantoro is delighted to have closed the transaction at Norseman.
"We would like to thank the directors and staff of CNGC for the positive relationship which has developed over the past nine months.
"Our team has planning for commencement of drilling in hand and the first drill rig is expected to arrive on site towards the end of July.”
Drill contracts awarded
Pantoro has awarded drilling contracts for the first 40,000 metres of extensional and infill drilling.
This initial drilling will focus on immediate open pit mining opportunities while planning for drilling programs at the OK underground mine is underway.
There are a number of large anomalies ready for drilling and initial testing is to be prioritised with a view to assessing potential new large-scale deposits.
A review of greenfield exploration targets is also being carried out.
Key personnel, including project general manager, senior project geologists, project managers, technical staff and field staff have been appointed.
Cmrlec said the Central Norseman transaction provided an outstanding growth opportunity.
“The project consists of a large number of quality gold deposits, and our focus is to develop a sustainable long-term mine plan during the coming 12-month period.”
Pathway to mid-tier gold miner
Pantoro aims to be in a position to recommence mining during the next 12–18 months.
The 50% CNGP acquisition along with the existing Hall’s Creek operation in WA’s north provides the company with a pathway to transition into a mid-tier gold miner.
At the end of the June quarter Pantoro had $56 million in cash and gold following a successful capital raising to fund acquisition and project advancement activities at CNGP.
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There were 9,557 ounces of gold produced at Halls Creek during the quarter, which was lower than expected.
Cmrlec said: “Total production for the quarter and the planned ramp-up to increased production rates by the end of the June quarter was below Pantoro’s expectation due to a number of factors.
“The primary driver to the lower production was the slower than anticipated ramp-up in mining at Wagtail North in the latter part of the quarter.
“As a result, lower grade material mined from Nicolsons was processed to assist in gold output.”
Wagtail South open pit advances
During the quarter the Wagtail South open pit advanced in line with schedule and reached the top of the main ore shoot by June 30.
The open pit expansion pre-strip was completed in the first week of July.
This is expected to be a significant contributor to production during the coming two quarters as the main veins are fully exposed and mined.
Wagtail South is expected to produce between 4,000 and 5,000 ounces during the current quarter.
At the Nicolsons underground mine drilling continues to indicate strong grades well below the development and current ore reserve, which is to be updated this quarter.
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“We remain focused on maximising production from the combination of Nicolsons, Wagtail underground and open pit ore during the September quarter,” Cmrlec added.