Pantoro Gold backs high-grade Rama project with funding, processing deal and underground option Proactive uses images sourced from Shutterstock

Pantoro Gold Ltd (ASX:PNR, OTC:PNTOF, FRA:RKN) has struck a funding and processing partnership with privately held Mega Resources Pty Ltd that brings a new high-grade ore source into its Norseman operations — and opens the door to a potential underground mine beneath the Rama Open Pit.

Under the agreement, Pantoro will provide up to $20 million to fund stage 2 mining at the Rama Open Pit in Western Australia’s Forrestania region, with the advance secured against the project and repaid from gold production over a relatively short timeframe.

The deal adds a near-term source of higher-grade material while giving Pantoro an exclusive option to assess and potentially develop an underground extension — a combination that could extend the life and value of the broader Rama project.

Funding structure tied to production

Pantoro will initially advance $15 million, with a further $5 million available if required, to support development and clear existing debt tied to the project.

Repayment is structured directly against production, with Mega delivering gold that will be credited at $1,000 per ounce until the funding is repaid, or within eight months of commencement — whichever comes first.

The loan carries a 5% annual interest rate and is backed by a first-ranking security interest over Mega’s assets, including the project tenure.

Immediate feed for Norseman plant

Crucially for Pantoro, the partnership provides additional ore feed for its Norseman processing plant, where Rama material will be treated in batches.

Mega is targeting delivery of about 115,000 tonnes grading 4.7 grams per tonne gold, with a minimum delivery obligation of 17,700 ounces.

Pantoro will pay Mega between 70% and 80% of the value of gold produced, depending on grade, while retaining the balance as part of the processing and funding arrangement.

Managing director Paul Cmrlec said the agreement allows Pantoro to bring higher-grade material into the mill, replacing lower-grade stockpiles currently being processed at Norseman as the company ramps up additional underground sources.

Underground potential emerges

Beyond the open pit, Pantoro has secured an exclusive option to assess and develop a potential underground operation beneath the Rama deposit.

The company will work with Mega on an infill drilling and development program, with any future underground mining expected to operate under a profit-sharing structure.

The option period extends through the life of the open pit and up to six months after its completion, with a further six months available to commence agreed underground work.

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Pantoro said drilling to date points to a robust orebody at depth, supporting confidence in a potential high-grade underground extension.

Strategic fit with Norseman growth

The agreement aligns with Pantoro’s broader strategy of expanding production and mine life at its flagship Norseman Gold Project, where recent drilling has continued to highlight high-grade mineralisation and potential for additional underground developments.

By integrating third-party ore through its processing infrastructure while securing optionality over future mining, Pantoro is effectively leveraging its balance sheet and plant capacity to capture additional margin and growth opportunities.

While the Rama open pit offers near-term production benefits, the real upside may lie beneath it — where Pantoro now has a clear pathway to evaluate and potentially develop another high-grade underground asset within its broader WA portfolio.

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