Pantoro and Tulla Resources have entered into discussions about a possible consolidation of the joint Norseman gold project under Pantoro’s umbrella.
The two miners have owned the Norseman project (previously known as the Central Norseman mining operation) in Western Australia on a 50:50 basis since May 2019.
Both companies have announced the negotiations to the ASX, with the deal likely to be worth more than $100 million.
Pantoro also announced it will suspend mining at its Halls Creek gold mine in WA’s Kimberley region to focus on Norseman.
Operations will continue at Halls Creek for about six months until being placed on care and maintenance, with Pantoro citing rising costs and the availability of skilled labour as the reasons for the suspension.
“Pantoro and Tulla Resources confirm that they are in detailed discussion on consolidation of the Norseman gold project into a single entity,” Pantoro managing director Paul Cmrlec said in a statement.
“Details of the potential transaction are being finalised, with both parties negotiating in good faith with the intention to enter into a binding term sheet.
“There is no certainty that a transaction will be documented, announced or completed.”
Norseman is located about 200km south of Kalgoorlie and was closed in 2014 when Pantoro bought its 50 per cent stake for $61 million. The Perth-based gold miner also agreed to fund the first $50 million of project expenditure, which was completed in April 2021.
The project poured its first gold bar under Pantoro management in October 2022 and has an average production of 108,000 ounces a year during its initial seven-year project life.
Pantoro also revealed in October that it has spent $179 million at Norseman, with $56 million spent on exploration, $84 million on construction and $39 million on pre-production.
In its latest ASX update, Pantoro said open-pit mining rates had continued to improve since a new fleet arrived on site.