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Pacton Gold – Is It The Next Breakout Gold Mining Stock?

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Pacton Gold Inc. (TSX.V:PAC.V)  (OTC:PACXF) has gained immensely in the last week or so, thanks to the consistent flow of positive news from the company. In the past five days (the week from 21st to 25th May), the stock has gained over 50%, while in the last one-month or so, it is up over 150%.

It must be noted that all these news are no short-term boosters, rather are productive investments from PAC to carry forward its growth in the long-term. Earlier this month, the company announced private placement for gross proceeds of $5,550,500. According to the company, the proceeds from the offering will be used for exploration work on the properties in Canada and Australia, and also as working capital.

The funds will provide the much-needed flexibility to the company to explore more opportunities, and finance its latest strategic acquisitions. Further, the most recent announcement that pushed the stock was PAC becoming the third-biggest landholder in Australia’s Pilbara gold rush. The company entered into a binding letter of intent with Drummond East Pty Ltd to acquire 100% of its shares.

Drummond East Pty – owned by Impact Minerals Limited (ASX: IPT) – owns seven tenement licenses for a total of 1,126 sq km. This will be a crucial acquisition for PAC as the “previous exploration indicates at least 90 km of prospective Fortescue Group conglomerates occurring at or near-surface on its granted licenses,” the company said. Also, the worth of these licenses can be gathered from the fact that all these sites are close (and some are adjacent) to key sites managed by Kairos Minerals Ltd. (ASX: KAI) and Novo Resources Corp.

Pacton Gold is already in the process of acquiring CTTR Gold Pty Ltd, which holds nine tenement licenses in the Pilbara Region of Western Australia. Also, in April, PAC entered into a letter of intent to acquire 80% ownership interest in an Australian proprietary limited exploration company – Arrow Pty Ltd.

“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,” Alec Pismiris – Interim President and CEO of Pacton, said in a press release.

Along with these micro factors, the macro environment is also in favor of the companies operating in the metals and mining industry. Analysts expect the industry to report double-digit growth this year. Also, many believe (based on the PE) that the industry might be a bit undervalued compared to the wider market

Despite the expectations of the double-digit growth a fact that can’t be ignored is that metals and mining industry has reached a maturity phase. Thus, the industry is getting highly competitive and is witnessing a consolidation trend. PAC is clearly aware of this, and thus, has been aggressive in grabbing lucrative properties.

Talking of the financials, though the company is still incurring losses, the loss numbers are surely coming down. Overall, PAC is poised well to hit encouraging growth numbers, and in turn, earn handsome returns for the investors.

 

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