With the backing of conglomerate gold heavyweights Sprott Capital Partners, Canadian-listed Pacton Gold has the financial clout to accelerate exploration over the Pilbara Gold project according to joint venture partner Arrow Minerals.
The TSX-V listed gold play has inked definitive agreements with Arrow to buy up to an 80% stake in Arrow’s wholly-owned subsidiary Arrow Pilbara which holds two exploration licences and two exploration licence applications over 609 square kilometres in the Pilbara region.
The agreements have been submitted to the TSX-V for final acceptance.
The project is highly prospective for conglomerate and basement gold targets, with prospectors discovering several gold nuggets at the Project in late 2017.
Pacton entered into its first transaction in the Pilbara region in February through an option to acquire 100% of CTTR Gold Pty Ltd. The deal with Arrow is the second transaction in the area and demonstrates Pacton’s desire to be a significant gold explorer in the region.
Arrow’s Managing Director Steven Michael said Pacton, with the backing of Sprott Capital Partners, had the financial and market expertise to raise sufficient capital to undertake significant exploration work at the project and its other tenements in the Pilbara.
Arrow will have direct exposure to the project through its initial 49% project interest and potential longer-term free carried 20% interest,” he said.
“In addition, Arrow will continue to benefit through its shareholding in Pacton.”
Pacton can acquire an initial 51% interest in the project by paying C$500,000 cash in instalments.
In addition, Pacton will issue C$250,000 of shares to Arrow at C$0.23 per share with a 1 for 1 attaching warrant (3-year term, exercisable at C$0.35).
Arrow will receive 1,086,957 common shares and 1,086,957 warrants in Pacton, which will be held in escrow for four months from the date of issue.
Pacton than has the option to increase its holding to 80% by spending C$500,000 on exploration within 12 months and issuing Arrow with C$250,000 worth of Pacton shares.
Once Pacton has reached an 80% interest, Arrow will be free-carried for the first C$5 million of project expenditure. Arrow will receive a Discovery Bonus of C$500,000 in cash upon Pacton publishing a gold resource at the project of over 100,000oz
Arrow will focus its exploration efforts on the highly prospective Strickland gold project, where a 26,000m drilling programme is underway, and the Malinda lithium project, where drilling is scheduled for July 2018.
Shares in Arrow remain unchanged at 2.5c Monday morning.