Pacton takes big land position in Australian gold rush area
Two gold nuggets recovered from Pacton Gold's Arrow Project in the Pilbara region of Western Australia. Source: Pacton Gold Inc.
Pacton Gold Inc. [PAC-TSXV; PACXF-OTC] shares rallied sharply Tuesday May 22 after the company said it has become the third largest land holder in Australia’s Pilbara Gold Rush. The company said it has significantly expanded its gold-bearing conglomerate portfolio.
Investors reacted by sending Pacton shares up 24.49% or 12 cents to 61 cents on volume of 3.48 million. That made Pacton the most actively traded stock on the TSX Ventures Exchange, Tuesday. The 52-week range is 59 cents and 55 cents.
In a press release Tuesday, Pacton said it has entered into a binding letter of intent to acquire 100% of the shares of Drummond East Pty Ltd. an arms-length Australian exploration company which is wholly-owned by Impact Minerals Ltd. [IPT-ASX].
Drummond East holds seven granted tenement licenses, comprising a total of 1,126 km2 of strategic conglomerate hosting exploration properties.
“We are pleased to make accretive acquisitions that strategically place Pacton as the third largest land holder in Western Australia’s Pilbara conglomerate-hosted gold region,” said Pacton’s interim President and CEO Alec Pismiris. Pacton continues to further consolidate the region through key property evaluations, and the addition of Drummond East increases its land holdings to 2,227 km2.
Pismiris went on to say that the Impact Minerals team, led by Dr. Mike Jones, has successfully assembled a significant portfolio of advanced gold projects that present excellent prospectivity for discovery upside for shareholders of Pacton.
“The Impact transaction solidifies our presence in the region and is directly in line with our mandate to become one of the leaders in the Pilbara Gold Rush. With a strong treasury and financial backers, we are aggressively reviewing other opportunities.”
The seven 100%-owned licenses in the Pilbara region were staked after an extensive review by Impact, following the discovery of gold in conglomerates by Artemis Resources Ltd. [ARV-ASX].
The Artemis find indicated that a significant breakthrough had been made in the search for conglomerate-hosted gold deposits of a similar age to the Witwatersrand Basin of South Africa in Pilbara. Impact aggressively applied for available prospective ground in the early stages of the Pilbara staking rush.
Under the terms of the letter of intent, which will be formalized by a definitive agreement among the parties, the company will purchase a 100% ownership interest in Drummond East by paying Impact a total of $350,000 and issuing to Impact 2.12 million common shares of Pacton.
Also, Impact will receive a bonus of $500,000 if Pacton publishes a measured, indicated, or inferred gold resource of over 250,000 ounces on the property. Impact will retain a 2% net smelter return royalty (NSR). Pacton will retain the option to purchase 50% of the NSR for $500,000.