Panoramic Resources Ltd (ASX:PAN) is on schedule to deliver first ore next month from the large, high-grade Savannah North ore body at the Savannah Nickel-Copper-Cobalt Project in far north Western Australia.
This milestone will occur within just 16 months of Panoramic’s decision to reopen the mine, which is northeast of Halls Creek, after it was shuttered in 2016.
Managing director Peter Harold told the Paydirt 2019 Australian Nickel Conference in Perth today that first ore would come from development drives being constructed to access the ore body which is in proximity to the Savannah ore body.
Employee numbers grow
The re-opening has seen employee numbers on-site increase from eight to more than 200, with Savannah North expected to hit full production rates as early as the New Year.
He said, “The future of this mine is all about Savannah North.
“We had mined Savannah for 10 years and didn’t even know the Savannah North ore body was there until we took a punt and drilled a blind hole to the west. It is a big ore body, about 175,000 tonnes of nickel starting about 800 metres below surface.”
“We don’t even know how yet how big it is, but we estimate around two kilometres in strike and we have only drilled out about a third of the potential strike,” he said.
“Importantly, Savannah North’s output at full speed will be around 950,000 tonnes of ore a year at about 1.5% nickel – better grades than Savannah and we will mine it at a higher rate than the previous of 750,000 tonnes.
“So, it has been a remarkable effort to get to this point so quickly.”
Twin decline well advanced
Development of the mine’s twin decline is well advanced with construction also progressing on a 900-metre ventilation shaft, which is due for completion in the June quarter of 2020.
Savannah North has forecast mine production of 5.97 million tonnes @ 1.49% nickel for 88,900 tonnes of contained nickel plus significant copper and cobalt credits.
The ore body’s annual metals in concentrate output is estimated to be about 10,800 tonnes of nickel, 6,100 tonnes of copper and 800 tonnes of cobalt.
Debt obligations halved
This comes as the company has halved its total senior and mezzanine debt obligations to Macquarie Bank, with senior debt now sitting at only $20 million.
Harold said, “Debt can be difficult during ramp-up so it’s critical we get into Savannah North and its cash flow potential, as quickly as we can.”
Shares were up as much as 5% to an intra-day high of 32.5 cents.