Consensus community valuation
08-Sep-2024: I used to follow Pantoro, but they've done some stuff that's made me question their management's competence, which I won't waste anybody's time going into now. Suffice to say that their one year chart makes them look like winners, but their 3-year and 5-year charts tell a different story - down from 37 cps in January 2022, to a low of 3 cps in October 2023 (a -92% drop) and now back up to 11.5 cps, having made a year high of 13 cps (intraday) on August 30th (one week ago), so they closed on friday at less than one third of their 2022 high of 37 cps.
The decisions they made that took them down to 3 cps (and an intraday low of 2.7 cps) in October (2023) is the stuff that worries me, so I just trade this one now. I made some coin on them in their intial rise based on the potential of Norseman when Halls Creek not only looked like it had more gold, but possibly also some mineable PGMs as well, and then I used some small change here to buy them at 4 to 5 cents/share and sell them at 7 to 8 cps, and I have made some similar trades in real life with small amounts of money, but not lately.
All of that potential at Halls Creek seemed to come to nothing, and they seemed to stuff up the Norseman project enough to require additional capital and an acquisition (Tulla Resources), which was anything but smooth (very rocky) and it all smacked to me at the time of inexperienced management who were not making good decisions in the best interests of their ordinary retail shareholders, as is often the case when you have a smallish company with insufficient management ownership to provide proper alignment of interests with shareholders.
Two members of the current PNR Board, Kevin Maloney and his son Mark Maloney own 16.82% of PNR due to their company Tulla Resources Group Pty Ltd being issued 875.33 million PNR shares when PNR acquired Tulla - and that's why the Maloneys are on the Board of PNR, however PNR's MD, Paul Cmrlec holds less than 9m PNR shares, currently worth just over $1 mil, and PNR's Chairman, Wayne Zekulich owns even fewer shares, just 650,126 shares, with a current value of just under $75 K (@ 11.5 cps).
The other two Board members own bugger all also - Fiona Maanen holds just 238,321 PNR shares, worth $27.4 K, and Colin McIntyre holds 991,560 PNR shares, worth $114 K. So, sure, they all have skin in the game, technically, but apart from the Tulla boys (Tulla founder Kevin Maloney and son Mark), the skin in the game of the MD, the Chairman and the other two NEDs is less skin than you'd lose off your knuckles in a Norseman bar fight.
It's not a big town by the way.
So, yeah, nah, PNR is just a trading stock for mine, and only with small change.
There are better options on the ASX for gold exposure IMO - as I outlined here: https://strawman.com/forums/topic/9782#post-29127
30-Nov-2022: Halls Creek Gold was probably best viewed as providing the cashflow to keep the company going until they got Norseman up and running, which they now have. Norseman is going to be a much bigger operation and generate much more revenue, even though Pantoro only hold 50% of Norseman and they own 100% of Halls Creek. The interesting bit about Halls Creek is their recent PGE (platinum group elements) discovery - and whether they sell that off or try to develop that themselves.
Chalice Mining (CHN) were a gold miner and then they unearthed the largest PGE discovery in Australian history at their Gonneville deposit within the Julimar nickel-copper-PGE project in Western Australia. Now Chalice is all about Julimar and is no longer regarded as a gold company - which is why I removed them from my Gold Sector (Gold ETFs and Miners) watchlist over in the Gold as an Investment thread.
Further Reading: https://www.australianmining.com.au/features/is-australia-about-to-go-platinum/ [April 2022]
"As part of a maiden indicated and inferred mineral resource estimate published in November 2021, the Julimar discovery contains 10 million ounces of palladium, platinum and gold – collectively called 3E (3 elements) – plus more than 900 thousand tonnes of base metals, paving the way for the emergence of a new world-class critical minerals industry." - from that Australian Mining (.com.au) article linked to above.
Now Pantoro's Halls Creek PGE discovery is not even close to being in that league, but I'm just saying they could go off in that direction, which certainly seemed to pay off for CHN - particularly in 2021 when their SP went from around $4 to almost $10.
But of course I would not expect that sort of upside with PNR anyway, because they haven't found very much up there yet.
But, yes, I certainly regard their Halls Creek Gold operation to be at risk of being put on care and maintenance (C&M) or being sold off, possibly sold off along with the Halls Creek PGE tenements, now that Norseman is up and running.
In one respect, I think Pantoro is probably de-risked somewhat now that they are producing gold at Norseman, despite what happens up at Halls Creek. However, they are a small producer with just two production centres, and probably soon to be just the one, and they only own half of Norseman. Probably the best comparison is GOR - Gold Road, who only own half of one gold producing mine (Gruyere), however Gruyere is a lot bigger than the Norseman gold project, and they've been producing there for a few years now. Also, GOR own a massive amount of land in that area, especially to the east of Gruyere, which is mostly desert but could easily contain more decent gold deposits. I do hold some GOR shares in my SMSF. They're a longer term play. I think they will either (a) get bought out by their JV partners (Gold Fields Ltd, listed on the JSE in South Africa) or (b) they'll make another decent discovery of their own. Of course the other possible outcome is (c) neither - they just keep on making money from Gruyere until the gold runs out and then they eventually get wound up if they don't buy something else first.
I have sold out of Pantoro because I have previously identified this time as being one of the riskier times to be a shareholder of a gold miner - when they are commissioning and ramping up a new mill, and ironing out any problems or bottlenecks they encounter. The share price spikes tend to come:
- When they make a decent discovery, especially if the gold grades are high, even better if it's close to surface and easy to get to and process., or
- When they get their finance sorted and are building a mill to process that ore to get at that gold, or
- When the mill is running at or above nameplate capacity and they are upgrading production guidance, or
- When they become the focus of M&A activity, i.e. someone wants to buy them out.
And of course if they keep finding more gold, that's always good too. And if they start paying dividends and then keep paying them, that can move them up into a new level of interest from the market as well and give their SP some support.
But those periods in-between those milestones I mention there above tend to be times when the share price tends to head south east rather than north east, until the next milestone is achieved and they get a little rocket under the SP again. The underlying gold price will of course make a huge difference as well. If the gold price is rising strongly, people only seem to see the positives about gold miners, but when the gold price is falling, very little can prop up their falling share prices.
In the last little while, the A$ gold price hasn't been moving around too much, so we get to see that usual gold project development cycle with the associated share price spikes on positive announcements and the fall-backs in-between.
Apart from identifying this as a riskier period in which much can go wrong, I also sold Pantoro because I felt I was spreading my gold sector investments a little too thinly - so holding too many different companies, and having tried to work out a risk vs potential upside scenario for each of them, the ones I kept stacked up better (on paper at least) than Pantoro (PNR), Capricorn Metals (CMM), Emerald Resources (EMR) and Alkane Resources (ALK). I sold ALK a while back and the other three (from my real life portfolios) more recently. PNR and CMM are still in my Strawman.com virtual portfolio, for now, but not ALK or EMR (were previously, but not anymore). I prefer the larger more diversified gold producers, plus CAI and BGL as my two speculative project developers/emerging producers.
I still think Pantoro is OK, just not one of the best available options in my opinion at this point in time.
Yeah @Gprp , I tend to agree that sort of thing is probably an Orange light, or an orange flag. Not a red flag (or red light), but cause for caution. I don't mind companies prioritising ESG and embracing sustainability, but I want to see the evidence, or the actual progress rather than this sort of thing. I think they're trying to cast a wide net, we got gold, we got PGE, we got Lithium! And we're clean and green too! OK, good for you. But you're not one of the best options on the market for any one of those things right now, in my opinion.
14-Oct-2022: First gold poured at the Norseman Gold Project
Disclosure: I did hold Pantoro (PNR) shares, but sold them earlier this month for reasons I disclosed at the time (to consolidate the number of individual exposures I have to gold).
PNR closed at $0.175 today (Tues 18th October 2022), being lower than where they closed on each of the five trading days last week (a range of 18c to 19c/share), so pouring first gold is not a milestone that causes a share price spike generally speaking. What will be more important is how quickly they can ramp up their plant to nameplate production, and what issues they encounter along the way.