The two companies signed a deal in June which proposed that Marindi would receive C$2 million cash and shares equivalent to 9.9% of TSX-V listed Pacton, as well as $2 million in future milestone payments.

However, Marindi said today that the letter of intent would not progress to a definitive agreement.

The collapse of the deal comes only two days after Eric Sprott-backed Pacton agreed to a letter of intent with Gardner Mining over the Yandicoogina and Boodalyerrie gold projects in the Pilbara.

Marindi managing director Simon Lawson said the company remained fully committed to maximising the strategic value of the project for shareholders.

"We have continued to progress low-cost value-creating exploration activities at the Bellary Dome project during t...