Panther Metals (PALM) has signed two option and purchase agreements over properties 50 kilometres east of the famous Thunder Bay in Canada.
The company will acquire an option on the Winston mine site from First Quantum Minerals for C$100,000, with a further option to extend after 12 months for an additional C$50,000, with the ultimate purchase price amounting to C$3 million, plus a net smelter royalty.
Simultaneously it will also acquire an option on the nearby Pick Lake deposit from Frontier Energy for A$100,000 plus a series of monthly payments to be offset against the exercise price of A$2.75 million.
The combined transactions consolidate a project area comprising both freehold patented, leased and crown land mining claims covering two high-grade zinc deposits - Pick Lake and Winston Lake - and also include the Winston Lake mine site infrastructure as well as highly prospective exploration targets.
The new project will be called Winston, and Panther will be able to hit the ground running with it.
A 2021 feasibility study for mine redevelopment at Winston outlined a scenario that generated average life of mine annual EBITDA of C$67.64 million, and which gave the project a pre-tax net present value of C$175.8 million.
The internal rate of return was estimated at 26%.
The project also has strong exploration potential for defining additional resources and reserves from the two main deposits, as well as additional near-mine VMS exploration targets.
The capex in the 2021 study was reckoned at C$145.1 million.
The unit pricing for copper, gold and silver, exchange rates, grading of the concentrates and payable percentages have moved in a positive direction since 2021, providing scope for additional value uplift.
Panther plans to build value by extending the mine life, building the resource, taking advantage of tax efficient flow-through funding, and investigating the potential for near-term cashflow by reprocessing an existing historical tailings storage facility.
“Securing and advancing this asset represents a transformational moment for our company,” said Darren Hazelwood, Panther’s chief executive.
“The strategic consolidation of First Quantum’s Winston mine site and Frontier’s high-grade Pick Lake deposit has created a unique brownfield opportunity with immediate development potential and long-term value. With key infrastructure already in place—including grid power, quality road access, and the crucial tailings storage facility — we now option to control a project that is materially de-risked and significantly ahead of the curve compared to typical peers at this stage. The underlying economics are compelling, reflective of a mid-tier asset with strong margin potential. Our initial focus will be on extending mine life, and with fresh eyes on the asset, we believe there is a genuine opportunity to achieve this even prior to deploying new drilling.”
View from Vox
This is a transformational deal for Panther. The 2021 feasibility study assumed production of 69,800 tonnes per year of zinc concentrate, and 5,300 tpa of copper concentrate over an initial 8.5 year mine life, with additional gold and silver. The feasibility study positions the project in the lowest quartile of operating costs globally. Winston is located only 20km from the trans-Canada highway and rail transport links, and has a 115kv power line on site, so it’s ticking a lot of boxes. Shareholders have had to be patient, but now it looks as though Panther is about to repay their faith in spades.