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Pantoro (ASX:PNR) well-positioned to develop WA gold project
Source: Pantoro
  • Australian gold producer Pantoro (PNR) ended the December quarter strong with a cash and gold balance of $64.9 million
  • The miner largely focused on its 50 per cent-owned Norseman Gold Project and its wholly-owned Halls Creek Project in WA
  • Pantoro completed a definitive feasibility study for Norseman which confirmed an initial seven-year project life and pre-tax net cashflow of $486 million at $2600 per ounce of gold
  • The Halls Creek Project produced an impressive 10,143 ounces of gold with an all-in sustaining cost of $1435 per ounce — both of which outperformed Pantoro's guidance
  • Pantoro received $9.96 million in operating cashflow, however, it spent $11.1 million on investing activities
  • With a cash and gold balance of almost $65 million, Pantoro is well-positioned to develop its Norseman Gold Project
  • Company shares are up 6.38 per cent and are trading at 25 cents

Pantoro (PNR) has reported on activities at the Norseman and Halls Creek project during the December 2020 quarter.

Norseman

The gold producer owns 50 per cent of the Norseman Gold Project which it acquired in mid-2019.

The project is situated at the southern end of the prospective Norseman-Wiluna greenstone belt which is located in the eastern Goldfields region of Western Australia.

Historically, the Norseman Gold Project has produced over 5.5 million ounces of gold since operations began in 1935.

Pantoro's focus for the project is establishing a production development plan — part of which involves drilling and converting mineral resources to ore reserves.

Over the December quarter, six drill rigs were operating which focused on the Green Lantern, Scotia, and Sailfish targets.

Additionally, Pantoro completed a definitive feasibility study (DFS) which confirmed an initial seven-year project life and pre-tax net cashflow of $486 million at a gold price of $2600 per ounce.

The project will include a one million tonne per annum processing plant which will source material from the open pit mining centres at Cobbler and Scotia, and from the OK underground mine.

During the quarter, Pantoro initiated the engineering, procurement and construction tender for the project and all tenders have been submitted. The company is now reviewing the submissions and expects to award the contract sometime this month.

Pantoro has also recommenced a 100,000-metre drilling program which will focus on doubling project mining inventory.

Halls Creek

The Halls Creek Project is located in the Kimberley region of WA and includes the Nicholsons and Wagtail mines along with a number of prospects.

Pantoro's focus during the quarter was exploring for mineralisation extensions within its wholly-owned project. Overall, its strategy is to expand mineral resources and ore reserves through aggressive exploration.

Unfortunately due to COVID-19, Pantoro's drilling program were delayed which will mean a number of programs will commence in April or May this year.

Despite the delays, free cashflow from Halls Creek exceeded the company's expectations, reaching $7.6 million.

In total, the project produced 10,143 ounces with an all-in sustaining cost (AISC) of $1435 per ounce — both of which outperformed Pantoro's guidance.

The company remains unhedged with an average realised gold price of $2540 per ounce for the quarter.

Pantoro received $9.96 million in operating cashflow. However, it spent $11.1 million on investing activities, which was largely put towards exploration and evaluation and other non-current assets.

At the end of the December quarter, Pantoro had a cash and gold balance of $64.9 million and remains debt-free.

The strong balance sheet allows the ASX-lister to continue focusing on its development plans for the 50 per cent-owned Norseman Gold Project.

Company shares are up 6.38 per cent and are trading at 25 cents at 2:34 pm AEDT.


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