PERTH (miningweekly.com) – ASX-listed junior Pantoro, previously known as Pacific Niugini, has reached an agreement with fellow listed Bulletin Resources to acquire the remaining 20% interest in the Halls Creek project, in Western Australia.

The Halls Creek project contains the Nicolsons mine, which started operations in April of last year and poured its first gold in September.

Pantoro MD Paul Cmrelc said on Monday that with the mine progressed through the initial capital intensive start-up phase and settling into steady operations, the joint venture (JV) parties have agreed that consolidation of ownership would better serve the interest of both shareholder groups.

“With the operation now producing around feasibility levels, and gold trading at around A$1 700/oz, timing for consolidation of project ownership is ideal. Less than half of the projected production is currently committed in existing hedges, providing good leverage to the rising gold price, particularly given the large reserve overall, which has been consistent with the commencement of production,” Cmrlec said.

He noted that the consolidation of the Halls Creek asset would allow Pantoro to operate the mine in the most effective manner possible, ensuring maximum benefit to shareholders.

Under the terms of the agreement, Pantoro would issue Bulletin with 130-million of its own shares, as with at least 90-million of these shares being distributed to Bulletin shareholders.

Bulletin would pay its 20% share of all costs incurred in relation to the project up to, and including the end of April this year, while Pantoro would assume Bulletin’s financing facility obligations with the Commonwealth Bank of Australia, which was a 1 376 oz pre-payment facility and a 3 504 oz gold hedging facility.

Both JV partners would be protected from gold price movements with market-to-market gold price adjustments when the hedges are delivered, distributed to both parties on a 50/50 basis.

Furthermore, Bulletin would be entitled to 20% of the bullion poured at Halls Creek, up to May 1.

Bulletin non-executive chairperson Paul Poli said on Monday that the completion of the transaction realised the benefit of the start of the Nicolsons gold mine to shareholders.