Pantoro Ltd has upsized an institutional two-tranche placement by 13.64% to $100 million after receiving overwhelming support from new and existing, domestic and international institutional investors with funds to restructure its balance sheet and accelerate growth.
This strong show of support comes as the company begins development at the Scotia Underground Mine at its Norseman Project in Western Australia.
Due to the overwhelming demand, and to help grow gold operations at Norseman Project and the company, the board elected to upsize the placement from the initial target of $88 million.
Use of funds
Proceeds will be applied to restructure Pantoro’s balance sheet by closing out a US$29.6 million (A$44.8 million) Term Loan Facility with Nebari Partners LLC, to accelerate exploration and resource definition drilling focused on establishing a third high-grade underground mine and to begin studies for re-commencement of mining in the high-grade Norseman Mainfield.
The Norseman Mainfield has a production history of approximately 3 million ounces and was one of the highest grade producing goldfields in Australia.
“In outstanding position”
Pantoro managing director Paul Cmrlec said: “The placement puts the company in an outstanding position to accelerate growth of the production profile at Norseman. The immediate repayment of the term loan facility removes approximately A$18.5 million in principal and interest payments during FY25.
"Restructuring the balance sheet puts Pantoro in a strong position to bring forward exploration and resource development programs at the Norseman Project.
"Pantoro is focused on growing the size and grade of the ore reserve at Norseman, and the additional funding will accelerate drilling and subsequent mine development works for additional high-grade mines at the project.
"Completion of the upsized capital raising at a premium to the 30-day VWAP demonstrates the strong investor demand for Pantoro to accelerate growth at Norseman.”
Placement details
There will be 1.25 billion new placement shares issued at A$0.08 per share which represents a 1% premium to the 30-day VWAP of A$0.079 on May 9, 2024, and a 7% discount to the last closing price of A$0.086 on May 9, 2024.
Approximately A$88 million will be raised under tranche one of the placement through the issue of 1,103,797,808 new shares. There will be 583,394,757 shares issued in line with the company’s placement capacity under ASX Listing Rule 7.1 and 520,403,051 shares issued under ASX Listing Rule 7.1A.
In addition, approximately A$12 million under the placement will be issued subject to shareholder approval at a general meeting of the company to be held on or around June 24, 2024.
Tranche one is expected to settle on May 17, 2024, with new shares issued on or around May 20, 2024. Tranche two is expected to settle, subject to shareholder approval, on June 27, 2024, with new shares to be issued on or around June 28, 2024.
Petra Capital Pty Limited and Euroz Hartleys Limited are acting as joint lead managers & joint bookrunners to the placement while Canaccord Genuity Limited is acting as a co-lead manager.
Underground development
Meanwhile, development of the Scotia Underground Mine is progressing to plan, with the first cuts taken in both the main access portal and the fresh air ventilation portal last week.
The company’s underground and open pit contractors are integrating their operations to ensure the optimal outcome for the site.
Underground development is expected to be progressed sufficiently to facilitate independent blasting of the underground drives within the next week.
“We are very pleased with the progress being made on site. The Scotia underground mine will materially increase the amount of high-grade ore feeding the processing plant over the coming months and will be the primary ore source by the end of 2024,” Cmrlec said.
"The level of cooperation between our open pit and underground contractors has been testament to the quality of their organisations and to the commitment of everyone involved to ensure the best possible outcomes for site.”