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Panoramic Resources set to reopen its Savannah Nickel-Copper-Cobalt Project by March

Last updated: 16:12 21 Sep 2018 AEST, First published: 02:12 21 Sep 2018 AEST

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Panoramic has a four-year offtake agreement with Sino Nickel

Panoramic Resources Ltd (ASX:PAN) says the company is on track to make its first shipment of concentrate out of a restarted Savannah Nickel-Copper-Cobalt Project in Western Australia’s Kimberley region by the March quarter of next year.

The Perth-based company said today it expected to kick off refurbishing its plant next month as planned and finish the 3-metre lifting of its tailings by November.

Activities increase on-site

Panoramic managing director Peter Harold said activities had significantly increased on-site since the company’s July 16 decision to restart the operation.

Harold said: “We are excited about being back in production and generating cash flow after a  2.5-year hiatus.”

The company’s decision to reopen its Savannah project in the Kimberley followed the inking of a four-year offtake agreement with Sino Nickel — known as the Jinchuan/Sino Mining JV — and a $40 million project financing facility deal with Macquarie Bank.

The company reported today it planned to make its first drawdown on the facility agreement in late October.

Panoramic has already met the initial hedge condition-precedent of the facility, which was 7,000 tonnes of nickel for delivery between February 2019 and June 2021 at an average achieved forward price of $8.51 a pound and 3,000 tonnes of copper for delivery between February 2019 and June 2021 at an average achieved forward price of $3.71 a pound.

Harold said: “The process plant refurbishment, which commenced in the March 2018 quarter, is on track.

“We have now committed to all other site works required for the restart of operations and development of the Savannah North orebody, including the ventilation rise, the tailings storage wall lift and recommissioning of other site infrastructure.”

People support project

The company is also recruiting and on-boarding site personnel and is finding the project has strong community support in nearby areas such as Halls Creek.

Harold said: “We have commenced the recruitment drive and have had overwhelming interest from potential employees.

“We have secured key personnel as we ramp up to the full complement of around 250 personnel.”

Panoramic first commissioned the $65 million Savannah Project in late 2004 and put the project on care and maintenance in May 2013 as it waited for a nickel price recovery.

Company hopes to become a major

Eight days ago the company announced it would sell off its shuttered Lanfranchi Nickel Project, near Kambalda, to Black Mountain Metals for $15.1 million in cash.

Lanfranchi was put on care and maintenance in November 2015.

Panoramic has a market capitalisation of about $237.3 million and expects to bank the proceeds from the divestment in the December quarter, beefing up its balance sheet.

The company ended June 30 with $19.6 million available and restricted cash, and no bank debt.

Panoramic also holds platinum group metals and gold assets and hopes to broaden its production base.

The company’s goal is to become a major diversified mining company among the entities listed on the Australian Securities Exchange.

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