Pacgold Secures White Dam Gold Operation, Eyes Swift Production Restart

Acquisition Completion and Strategic Significance

Pacgold Limited (ASX – PGO) has officially completed the acquisition of the White Dam Gold Operation in South Australia from GBM Resources Ltd. This acquisition marks a significant milestone for Pacgold as it transitions from exploration towards production. White Dam, operational from 2010 to 2018, boasts a history of producing approximately 180,000 ounces of gold from heap leaching, with a remaining JORC 2012 resource estimated at 4.6 million tonnes grading 0.7 grams per tonne gold, equating to around 102,000 ounces.

The operation includes two open pits, Hannaford and Vertigo, alongside a fully operational gold extraction plant and supporting infrastructure such as a heap leach pad and personnel camp. This turnkey setup offers Pacgold a ready platform to generate near-term cash flow, a strategic advantage in the competitive gold mining sector.

Pathway to Production Restart

Pacgold is moving swiftly to recommence production, with re-lining of leach ponds completed and cyanide irrigation scheduled imminently. The company anticipates modest initial capital expenditure of approximately AUD 600,000, primarily for maintenance and power system upgrades. This relatively low capital requirement underscores the operational readiness of the site and the strength of the business case for a restart.

The company’s Managing Director, Matthew Boyes, highlighted the dual benefit of near-term production and substantial growth potential through existing resources and exploration targets. Pacgold’s phased approach begins with retreatment and re-crushing of existing heap leach material, followed by resource drilling and mine optimisation, and eventually regional exploration and potential acquisitions to extend mine life.

Financial and Strategic Considerations

The acquisition consideration package includes a $1.2 million cash payment, 15 million fully paid ordinary shares subject to a 12-month voluntary escrow, and a contingent payment of $2.2 million payable upon achieving commercial production of at least 5,000 ounces of gold. This structure balances upfront investment with performance incentives, aligning interests between Pacgold and the vendor.

Strategically, White Dam’s location approximately 80 kilometres southwest of Broken Hill situates it near established mining services and workforce, enhancing operational efficiencies. Moreover, the acquisition complements Pacgold’s existing Queensland projects, including the Alice River and St George gold-antimony projects, broadening the company’s resource base and exploration footprint.

Looking Ahead

Pacgold’s immediate focus is on extracting remaining gold from the heap leach pad and upgrading resource classifications through drilling. The company plans to update environmental and mining approvals as it progresses towards full-scale mining. This methodical, phased development reduces execution risk while positioning Pacgold for sustainable growth.

While the acquisition offers clear near-term upside, the contingent payment and regulatory approvals introduce some uncertainty. Investors will be watching closely for operational updates and production milestones as Pacgold navigates this pivotal transition.