Pacton Gold Inc (CVE:PAC) announced encouraging news today as it entered a binding letter of intent to acquire 100% of the shares in Drummond East Pty Inc, an Australian exploration company wholly owned by Impact Minerals Ltd. The market responded positively to the news, with shares up 30.6%, closing at C$0.64.
Drummond East holds seven tenement licences, comprising 1,126 sq/km of prospective ground for gold in the Pilbara region of Western Australia.
"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 a chief executive officer, Alec Pismiris. “Pacton continues to further consolidate the region through key property evaluations, and the addition of Drummond East increases our land holdings to 2,227 sq km.”
Under the letter of intent, Pacton will purchase 100% of the shares in Drummond East, by issuing 2,125,000 common shares of Pacton and paying Impact Minerals C$350,000.
A bonus of C$500,000 will be paid to Impact Minerals if Pacton publishes measured, indicated, or inferred gold resources of over 250,000 ounces on the property. A 2% net smelter royalty will be agreed upon between the parties and Pacton Gold will retain exclusive rights to purchase 50% of the of the net smelter return back from Impact Minerals for C$500,0000.
Exploration in the area looks bright
There are a number of projects in the area, and exploration potential is encouraging, in particular to the west and east of Marble Bar, as well as close to to the Beatons Creek gold deposit near Nullagine. Previously recorded results of up to 11.2 g/t gold have been recorded at the Glen Herring project, 10km west of Marble Bar.
Neighbours include Novo Resources Corp and Kairos Minerals Ltd.
Pacton will also benefit from the expertise of Dr. Mike Jones, Impact Minerals’ managing director, whose PhD studies focused on conglomerate-hosted gold in the northern source areas for the Witwatersrand Basin.
"The Impact Minerals team, led by Dr. Mike Jones, have successfully assembled a significant portfolio of advanced gold projects that present excellent prospectivity for discovery upside for the shareholders of Pacton,” said Pismiris.
“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 company said a finders fee may be paid.