Page 36 - pd277-Nov19-mag-final-web_Neat

NICKEL CONFERENCE REVIEW

Savannah North opportunity widens

t may have been his last appearance at the Australian Nickel Con-
Iference, but at least Panoramic Resources Ltd managing director
Peter Harold could bow out as a nickel miner once again.
Following the conference, Panoramic announced Victor Ra-
jasooriar would be its new managing director, replacing Harold
after his 18 years in the role. It seems an appropriate time to leave
given Panoramic has managed to ride the unrelenting waves of the
nickel sector over nearly two decades, at various times developing
two mines, placing them on care-and-maintenance and pursuing
other commodities.
In 2019 however, the company has returned to its roots, restart-
ing the mothballed Savannah nickel mine in the Kimberley, West-
ern Australia with a target of producing 11,000 tpa nickel, 6,800 tpa
copper and 800 tpa cobalt over an initial nine-year mine life.
Panoramic’s decision to switch Savannah back on was in part
due to changing nickel market fundamentals but it is more than
a simple restart story. At the heart of the move is the Savannah
North orebody from which the company expects to mine 5.97mt @
1.49% nickel over the life-of-mine. In comparison, the main Savan-
nah orebody will contribute just 1.68mt @ 1.18% nickel.
First shipment from Savannah came in February but the project
has since struggled to meet guidance.
Harold admitted operations were still feeling the effects from
some missteps during the ramp-up which began in December last peter Harold
year.
“Mine production was down in the September quarter,” he said. “We were slow to start mining, so we were eventually running
around looking for some high-grade material. We took some in
March which was high-grade, but the engineers didn’t realise the
knock-on effects from that and we had the seismic event in July
because we didn’t do some paste filling when we should have
done. As a result, we had some floor heave which left 150,000t we
couldn’t get to. We will get to that material this quarter.”
Energising the future. availability and a tight labour market “which we underestimated a bit”.
Harold said mining rates had also been frustrated by equipment
Harold, though, remains unperturbed by the slow progress, par-
ticularly as mining from Savannah North is yet to begin.
He said first ore was expected from the new jewel in the crown
Electric cars are the future of transport. in November.
Electric cars need high quality nickel - and batteries “We are only 70m away from the orebody now so will be in de-
with more nickel run for longer. velopment ore next month and stoping will start early next year,”
We are transforming and supplying nickel to the Harold said.
battery materials and electric vehicle industries.
We’ve been here for 50 years and we’ll be here for a To smooth the ramp-up to full production Panoramic restruc-
long time to come. tured its balance sheet earlier in the year. The company took a $40
We’re proud to be a part of something big. million facility with Macquarie Bank to finance redevelopment. A
$28 million rights issue in September allowed Panoramic to reduce
the debt to $20 million and Macquarie has also agreed to restruc-
ture repayments and hedging requirements.
“We have had to restructure a couple of times because of pro-
duction being behind schedule,” Harold said. “We’ve now got no
minimum liquidity which has freed up the structure and all the
hedging has been pushed back to the start of September 2020. It
is a major coup because the hedge is about 30% below the spot.”
A successful start to production from Savannah North should
ease Panoramic’s debt burden, allowing it to pursue growth oppor-
tunities. Given the impact of the orebody, the obvious place to start
looking for growth is at Savannah North.
“It remains open in all directions and we think it is a 2km-long
system and have only drilled 600m,” Harold said. “Once it is going
bhp.com and generating cash flow, we will put a drive 400m out to the west
and drill deeper.”
– Dominic Piper

Page 36 NOVeMBeR 2019 aUSTRaLIa’S PaYDIRT