Pantoro Gold Funds $20M to Develop High-Grade Rama Open Pit with Underground Option

Strategic Funding Partnership to Unlock Stranded Asset

Pantoro Gold Limited (ASX:PNR) has entered a significant partnership with unlisted Mega Resources to finance and develop the high-grade Rama Open Pit in Western Australia’s Forrestania region. Pantoro will advance up to $20 million to fund stage two of the open pit mining, secured by a first-ranking interest over the project tenure. This deal effectively leverages Pantoro’s balance sheet to unlock value from a previously stranded asset owned by Mega.

The funding arrangement is structured with Pantoro recouping its advance at $1,000 per ounce of gold delivered by Mega, with a repayment deadline eight months from the agreement’s commencement. Mega will deliver approximately 115,000 tonnes of ore grading 4.7 grams per tonne, though Pantoro cautions that the resource estimates remain unpublished due to Mega’s unlisted status and lack of reporting obligations.

Ore Processing and Profit Sharing Model

Ore delivered by Mega will be processed at Pantoro’s Norseman facility, with ownership and risk transferring upon delivery to the ROM pad. Payment to Mega is based on a sliding scale: 70% of gold value for ore at 2 g/t, rising to 80% for ore grading 4 g/t or higher. This structure ensures Pantoro retains a substantial margin, supplementing the repayment of its advanced funds.

Managing Director Paul Cmrlec highlighted the deal as a “win-win” that replaces lower-grade stockpile feed with higher-grade material from Rama, supporting Pantoro’s broader strategy of bringing additional high-grade underground mines online. This fits alongside recent expansions at Norseman, such as the ongoing development of new underground mines, including the third underground mine set to boost production in FY27, as reported in Pantoro’s production surge plans.

Exclusive Underground Mining Option Could Extend Project Life

Beyond the immediate open pit operation, Pantoro has secured an exclusive 12-month option to develop the high-grade underground mine beneath the Rama Open Pit through a profit-sharing agreement with Mega. The option includes a work program for infill drilling, development, and production planning, with negotiations on profit-sharing terms to be conducted in good faith during the option period.

This underground potential is backed by encouraging drilling results within the Rama deposit, which Pantoro describes as a robust orebody. The option extends six months beyond the completion of the open pit, with an additional six months allowed to commence underground works, potentially adding significant value and mine life to the project.

Risks and Ambiguities Around Resource Transparency

While the partnership offers clear strategic benefits, the unpublished Mineral Resource for the Rama Open Pit injects uncertainty. Mega’s status as an unlisted company without reporting obligations means investors lack independent verification of resource size and grade. The agreement also remains subject to customary conditions precedent, adding another layer of potential variability.

Market watchers will want to track ore delivery volumes and grades closely, alongside progress on the underground option and repayment of advanced funds. The deal’s success hinges on Mega’s operational execution and the eventual confirmation of underground resources, which could materially influence Pantoro’s production profile and financial returns.