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Panoramic Resources lifts nickel production at Savannah by 64%

The company also achieved quarterly improvements in ore milled, metallurgical recoveries and concentrate shipped.
New Epiroc truck
A new Epiroc truck arriving at Savannah in June to augment the mobile fleet

Panoramic Resources Ltd (ASX:PAN) has set new quarterly marks as production ramps up at the restarted Savannah Nickel Project in the East Kimberley region of WA.

Most impressive is a 64% lift in nickel production to 1,518 tonnes with other new quarterly improvements made in ore milled, metallurgical recoveries and concentrate shipped.

After a period on care and maintenance due to low nickel prices, the company restarted Savannah operations with first concentrate shipped from Wyndham port on February 13, 2019.

Ramp-up continues

Ramp-up of operations continues with good progress being made in mining, paste filling and milling, although not yet at budgeted rates.

Panoramic mined 141,613 tonnes at 1.27% nickel, 0.61% copper and 0.06% cobalt during the June quarter, an increase of 31% on the previous quarter, with the mined nickel grade up 19%.

Recoveries improving

Metallurgical recoveries improved with nickel recovery up 19% on the March quarter at 84.8%, which is close to the target recovery, while copper and cobalt recoveries also improved.

These results led to the production of 1,518 tonnes of nickel, 814 tonnes of copper and 80 tonnes of cobalt in concentrate.

The amount of concentrate shipped increased by 68% on the previous quarter to 21,467 dry metric tonnes.

As far as safety is concerned there was also a significant improvement during the three months with no lost time injuries recorded.

Strong cash position

Panoramic is well cashed with $26.6 million in available and restricted cash at June 30 as underground development also gains momentum.

Development at Savannah North advanced 869 metres in the three months, an increase of 38% on the March quarter.

Advance rates of the twin declines have improved since a contractor was mobilised during May.

After slow penetration rates of the raise bore reaming the main ventilation rise early in the quarter, the reaming head diameter was reduced to 4.1 metres resulting in improvement rates.

At June 30 the raise bore had advanced 96 metres and the ventilation rise is now scheduled for completion early in the second quarter of 2020.

READ: Panoramic Resources signs C$9 million deal to divest non-core asset and focus on Savannah Nickel Project

As well as the proceeds from concentrate sales, the company’s cash position was boosted by a rights issue and a conditional placement to major shareholder Zeta which raised $17.4 million before costs.

During the quarter Benton Resources Inc (CVE:BEX) approached the company seeking to acquire the 100%-owned Thunder Bay North PGM Project in Northern Ontario, Canada.

In June, Panoramic accepted the purchase price of C$9 million and a letter agreement was signed on July 2, 2019, with the company anticipating financial settlement by the end of the year.

READ: Panoramic Resources closes pro-rata entitlement offer and notice of shortfall

The Lanfranchi project near Kambalda was sold in December 2018 to Black Mountain Metals LLC for total cash consideration of $15.1 million, providing additional financial support.

In early June, Panoramic accepted an offer of $1.5 million from Black Mountain to settle the outstanding purchase amount.

READ: Panoramic Resources adds operational expertise to executive team with COO appointment

Panoramic’s vision is to broaden its exploration and production base with the aim of becoming a major, diversified mining company in the S&P/ASX 100 Index.

Shares are up more than 3% today to 32.5 cents, an increase of more than 15% since the start of the week.

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