Pantoro to buy stake in Central Norseman for $45m

Pantoro is set to acquire a 50 per cent stake in the Central Norseman gold project from Norseman Gold in a cash and scrip deal worth $45 million, and will raise $43 million via a share placement to fund the transaction.

Under the deal, Pantoro will pay UK-based Norseman Gold $25 million in cash and $20 million in shares, and form an incorporated joint venture with the vendor.

Additionally, Pantoro will sole fund the first $50 million of project expenditure over a maximum of four years.

To fund the acquisition, the West Perth-based company will conduct a fully underwritten placement of 215 million shares to raise approximately $43 million, which equates to 20 cents per share.

It last traded yesterday at 22 cents.

The placement will be joint lead managed by Bell Potter Securities, Argonaut, and Hartleys.

Bell Potter is the sole bookrunner and underwriter.

Pantoro currently has cash reserves and gold of $23.2 million and its flagship project is the Nicholsons project.

The Central Norseman project has a current mineral resource of 35.5 million tonnes for 4.4 million ounces, and is located in the Goldfields-Esperance region.

Central Norseman has been up for sale since August 2017, and Norsman Gold made a $19.9 million loss after tax for the 2018 financial year.

HopgoodGanim Lawyers advised Pantoro.