ASX Small Cap Gold Stock: Pantoro

Caroline Mark

Pantoro (PNR)
Under the Radar Rating: SPEC BUY

Industry: Gold Mining
Market Cap: $289M
Net Cash: $54.4M
Price @ 30/04/2021: $0.210

What does Pantoro do?

Pantoro is an ASX listed Small Cap Gold stock trading with the code PNR. It is an Australian based gold producer that has big potential to increase its production via its 50% interest on the giant Norseman Project, which lies 180km south of Kalgoorlie in Western Australia.

From the project, the miner initially aims to produce 108k ounces a year at low cost for seven years. The area is highly prospective with exploration potential of 1 million ounces.
 
The company has a number of projects on the go and while Norseman is the main focus, its smaller 100% owned Halls Creek mine provides valuable cash flow.

The mine produces at a run-rate now of 35k ounces a year. Pantoro also holds approximately 350 square kilometres of prospective tenure in the Halls Creek area, with a focus on increasing the mining inventory for the project.
 

Why we like this ASX Small Cap Gold Miner

SUMMARY: Pantoro has its foot on a high grade low cost gold mine in WA in Norseman (PNR 50%) which is on track to restart in the next 12 months. There are multiple exploration targets of over 1 million ounces in potential. There has been no systematic exploration done since the 1990s. Pantoro is in a good position with a strong balance sheet – net cash of over $54m and cash flow from a producing mine.

THE NORSEMAN PROJECT
The potential upside in exploration from our analysis of the WA based Norseman Gold Project offers real appeal. The mine’s economics indicate that it could be a big money spinner, being high grade and prospective using modern exploration techniques.
 
With over 130,000 metres exploration drilling to date, Pantoro has undertaken the first substantive development and exploration drilling at the project since being sold by Western Mining in 2001. The current mineral resource is 4.2m ounces of gold with an ore reserve of 602 ounces. In phase 1 only 30% of the resource has been considered, primarily for open pit material. Most of the deposits have underground potential as well.

 
Phase 1 is a 7 year mine plant to produce 108k ounces a year at a low average all in sustaining cost (AISC) of A$1,292 an ounce.
 

Low Cost Small Cap Gold Producer

This makes it one of the lowest cost producers in Australia, with the current gold price A$2,285 an ounce.

Risks

  • The company is not diversified like other stocks in Under the Radar Report's coverage, like Northern Star (NST), Evolution Mining (EVN) and OceanaGold (OGC), which means there is significant project risk, both on the production side and on the exploration side.
  • At just under US$1,769 an ounce, the gold price has bounced recently. There is a risk in any gold company that the gold price goes south.

Upcoming Catalysts

  • Updates from the Norseman Project.
  • Halls Creek production meeting expectations.
  • Exploration results from Halls Creek.
  • Gold price strength.
ANALYST SUMMARY:
High grade, low cost Norseman (PNR 50%) mine restart in 2H22. Multiple exploration targets of over 1m ounce potential. No systematic exploration has been done since the early 1990s. Extensive tenure covering the Lake Cowan area, directly on strike from historical high-grade producing mines. Significant funding in place. SPEC BUY.

Unlock our favourite gold stocks to buy right now and supercharge your future.

ASX SMALL CAP GOLD REPORT

Earlier in April we published a full report on Gold and the gold price and the link between the two. Read more about why gold is a hedge and gold stocks are an important part of your ASX share portfolio.
 


 



 

About the Author

Caroline Mark

Caroline Mark is the Founder and Publisher at Under the Radar Report, which provides independent ASX share research to help build investor’s share portfolio. Under the Radar Report is licensed to give general share financial advice only (ASFL: 409518). The author is not licensed to give personal financial advice and this commentary is for general information only.

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