Pantoro Limited (ASX:PNR) Managing Director, Paul Cmrlec provides an update on production at the company's Nicolsons Mine in Halls Creek, exploration activities and its growing tenement footprint.
Rachael Jones: Hello I’m Rachael Jones for the Finance News Network. Joining me from Pantoro Limited (ASX:PNR) today is Managing Director, Paul Cmrlec. Paul, welcome to FNN.
Paul Cmrlec: Thanks Rachael, nice to be here.
Rachael Jones: First up, could we start with an introduction to your company?
Paul Cmrlec: Pantoro is a goldminer in Western Australia; we’ve got operations near Halls Creek in the Kimberley region. The mine is particularly high-grade and we’ve enjoyed success over the last few years. We developed the mine in 2015 and we’ve rapidly grown the production to 55,000 ounces today. We’re increasing that again to somewhere between 80,000 and 100,000 ounces per annum.
Rachael Jones: Let’s talk about your Halls Creek projects. What can you tell me about the Nicolsons mine?
Paul Cmrlec: Nicolsons has been the mainstay for production since we commenced mining. So we developed an underground mine from an existing open pit, that was mined back in the mid-1990s. It’s proven to be a very high-grade producer, our average mill feed rate is between 7.5 and eight grams per tonne. Typically we’ve experienced about 1,500 ounces per vertical metre. So it’s a very rich mine and it’s operated very successfully.
Rachael Jones: What can you tell me about Wagtail?
Paul Cmrlec: Wagtail is a new mine and heading into underground mining now. So we mined it as a series of open pits over the past year, finishing in last December. We’re in the process now of establishing operations ready for underground mining, later this month.
Rachael Jones: What about your recent acquisitions?
Paul Cmrlec: The recent acquisitions really represent our expansion into the region generally. We’ve got the only processing plant within 300 kilometres, so there’s no other gold processing plants within the Kimberley region. And these new acquisitions really represent the opportunity to step outside. The Nicolsons resource has really built our resource and reserve basin, ensure long term operations at elevated production rates.
Rachael Jones: Now to your exploration, what can you tell me about Western Reef?
Paul Cmrlec: Western Reef is a historical mining area at Nicolsons, just like the Nicolsons mine and the Wagtail mines, where it’s been mined to very shallow depth. It’s only sort of five metres below surface and was backfilled by previous operators. The recent intersections that you see there, above 12 grams per tonne, are all between 20 and 30 metres below surface. So there’s a very good chance there that we can define some more open pits, in the near term.
Rachael Jones: And Paddock Well?
Paul Cmrlec: Paddock Well’s similar again, so we’ve got an outcropping quartz vein on surface, which is high-grade. We’ve stepped outside and drilled some deeper holes there, 50 metres below surface. And we’ve had some very nice returns of a metre at 28 grams a tonne, two metres at 12.5 grams a tonne. So once again, there’s really good potential there to define some high-grade resources to continue plant feed, for the project overall.
Rachael Jones: Now let’s talk about financials. Can you give me a snapshot of the company?
Paul Cmrlec: First of all really importantly I think, we paid all of the debt out earlier this month, so the company’s now debt free. We’re producing very profitably; our all-in sustaining cost is sitting around $1,000 per ounce Australian. And that’s resulted in good capital growth for our shareholders; we’ve got a market capitalisation at the moment of approximately $250 million.
Rachael Jones: Now to a more general question, what is the long-term ambition?
Paul Cmrlec: We continue to be focused on Nicolsons and the Halls Creek project, and producing as much as we can at the highest profit margin, out of there. Outside of that, we are looking at other acquisition opportunities in the future. When we’ve got Nicolsons operating at the level that we believe is optimal, we’ll certainly look at opportunities to grow our project portfolio overall.
Rachael Jones: To the last question now. Why should investors consider adding Pantoro to their portfolio?
Paul Cmrlec: Pantoro, despite the growth that we’ve seen recently in the share price, offer some outstanding value. Most of the metrics, such as EV to free cash flow, EV to EBITDA, we’re still sitting in the middle of the pack and sometimes below the middle of the pack. So as we increase that production going forward throughout this year, I expect our valuation to look very competitive, compared to a number of the gold companies on the market. And our profit margins are very strong.
Rachael Jones: Paul Cmrlec, thank you very much for the update.
Paul Cmrlec: Thanks Rachael, nice to be here.