THE BOURSE WHISPERER: Panoramic Resources (ASX: PAN) has taken receipt of results of the Feasibilty Study conducted at the company’s Savannah nickel operation.
Panoramic Resources said the study demonstrates that mining of Savannah North extends the mine life at the Savannah operation with globally competitive cash costs and minimal pre-production capital requirements.
Panoramic placed the Savannah operation on care and maintenance last year due to the low price of nickel and the detrimental effect it was having on the operation’s bottom line.
The Feasibility Study was based on mining the remaining Ore Reserve at Savannah, whilst developing across to the Savannah North deposit.
Access development from Savannah to first ore at Savannah North is scheduled to take approximately nine months, with full production from Savannah North reached 15 months after commencement of development.
The FS forecast a low up-front capital investment of only $20 million to resume production.
Panoramic said the low restart cost is due to the mine development already in place to access existing Savannah ore and the existing mobile equipment fleet, processing plant and supporting infrastructure at Savannah being kept in good condition under care and maintenance since the suspension of mining operations in May 2016.
“The release of the Savannah Feasibility Study confirms the potential to extend the mine life of Savannah by at least ten years,” Panoramic Resources managing director Peter Harold said in the company’s announcement to the Australian Securities Exchange.
“The company’s decision to place Savannah onto care and maintenance in May 2016, thereby preserving the remaining Ore Reserve during this current cycle of weak nickel prices, will allow us to resume operations with a short lead time and minimal capital investment.
“The forecast annual metal production rates, combined with the forecast low cash costs, are capable of driving strong cash flows when the nickel price recovers to a level consistent with long-run industry forecasts.”