Pacton Gold, which is supported by Sprott Capital Partners, intends to acquire an 80% interest in Arrow’s wholly-owned subsidiary, Arrow (Pilbara) Pty Ltd.
Arrow Pilbara holds two exploration licences and two exploration licence applications covering 609 square kilometres.
Prospectors discovered several gold nuggets within these licences in late 2017.
Arrow’s managing director Steven Michael said: “I am excited to introduce Pacton Gold as our partner in the Pilbara Gold Project.
"Through its arrangement with Sprott Capital Partners, Pacton has the financial and market expertise to raise sufficient capital to undertake significant exploration work at the project and its other tenements in the Pilbara.”
Letter of intent signed
The parties have signed a letter of intent and intend to formalise the arrangement through a definitive agreement.
Pacton can earn 51% ownership through payment to Arrow of C$500,000 in cash and C$250,000 in Pacton shares.
Pilbara gold exploration tenements with Arrow and Pacton tenements highlighted.
It can increase this to 80% by incurring exploration expenditure of C$500,000 within 12 months and issuing Arrow with a further C$250,000 worth of Pacton shares.
Once Pacton has reached 80%, Arrow will be free-carried for the first C$5 million of project expenditure.
Arrow will receive a discovery bonus of C$500,000 in cash upon Pacton publishing a resource at the project of at least 100,000 ounces of gold.
In addition, Arrow will retain all rights to explore for, mine and extract lithium, caesium and tantalum from the Pilbara project.
Pacton’s second Pilbara investment
This is Pacton’s second transaction in the Pilbara and follows an option agreement in February 2018 to acquire 100% of CTTR Gold Pty Ltd.
Michael said: “This demonstrates Pacton’s desire to be a significant gold explorer in the region.”
Pacton recently appointed Sprott Capital Partners, a division of Sprott Private Wealth LP, to assist with marketing arrangements, including providing strategic capital advice.
Focus on Strickland
“The Pilbara Gold transaction will enable Arrow to focus its exploration efforts on the highly prospective Strickland Gold Project and the Malinda Lithium Project,” Michael said.
A 26,000-metre drilling program is underway at Strickland and drilling is scheduled for July 2018 at Malinda.