Pantoro Ltd (ASX:PNR, OTC:PNTOF) will focus on unlocking the full potential of the Norseman Gold Project after entering a binding agreement for the sale of the Halls Creek Project in Western Australia to Kimberley Minerals Group Pty Ltd (KMG) for $8 million.
Proceeds from the sale will bolster the financial position of Pantoro as it expands operations and production capacity at Norseman.
Nickel and PGE leverage
Pantoro will also be leveraged to success at Halls Creek as it will hold a 15% free-carried interest in nickel and platinum group elements on the tenure, which are held via a Mineral Rights Agreement. The free carry will extend to first production.
KMG Minerals Pty Ltd is a member of the KMG Group, a privately held exploration and mining house based in Perth with interests in Western Australia, Canada and Chile.
Company’s first mine
Managing director Paul Cmrlec said: “The Halls Creek Project was the first full mine developed by Pantoro in 2015 and was a critical element in the evolution of the company.
"We firmly believe that now is the right time to focus our effort and resources on growth at Norseman, which provides the best upside potential for our investors.
“We wish KMG the best of luck in the further development of the Halls Creek Project and, with our free carry interest, will take a keen interest in its future.”
Pantoro placed the Halls Creek Gold Project on care and maintenance in June 2023, having operated successfully since 2015, as the company dedicated its focus to the growth of the Norseman Gold Project.
Consideration
The total $8 million consideration for Halls Creek will be paid by KMG in tranches over the next 24 months:
- $3 million payable on completion.
- $2 million payable 12 months after completion.
- $2 million payable 24 months after completion.
- 1% royalty capped at $1 million commencing 24 months after completion.
The deferred sale consideration is secured via a mortgage over the Halls Creek Gold Project tenure, including the package of regional exploration projects. Completion of the sale process is expected within the current quarter.
Director to retire
Pantoro has also thanked independent non-executive director Colin McIntyre for his contribution to the company after he announced his intention to retire from the board at the Annual General Meeting on November 27, 2024.
The company has started a search for a new independent non-executive director with a strong technical background to join to the board.
Pantoro chairman Wayne Zekulich said: “Colin has been an important part of the integration of Pantoro and Tulla personnel and systems, following the merger in June 2023, and has been a key technical resource for Tulla Resources over the past decade.
"With the integration complete, and operations at Norseman in a strong position, Colin has decided to pursue other opportunities and will continue to stay active in the mining industry.
"On behalf of all of the board and shareholders, I thank Colin and wish him all the best in the future.”