Panoramic Resources Signs New Savannah Sales Agreement

THE BOURSE WHISPERER: Panoramic Resources (ASX: PAN) reported a new four-year Concentrate Sales Agreement over concentrate that may be produced from the company’s Savannah nickel-copper-cobalt project in the East Kimberley of Western Australia.

Panoramic Resources announced that Sino Nickel Pty Ltd, Jinchuan Group Co., Ltd and Savannah Nickel Mines Pty Ltd (a wholly owned subsidiary of Panoramic) have executed a new four-year Concentrate Sales Agreement.

The agreement covers 100 per cent of the concentrate that may be produced from the Savannah nickel-copper-cobalt project.

This new Agreement replaces the Extended Concentrate Sales Agreement struck in 2010, which was due to expire on 31 March 2020.

Panoramic said the terms of the new Agreement will be applicable from the first shipment of concentrate from the recommissioned Savannah project and incorporate improved payabilities for certain contained metals compared to the 2010 Extended Concentrate Sales Agreement.

Panoramic declared the terms of the Agreement are highly competitive in the global market for Savannah’s bulk nickel-copper-cobalt concentrate, based on the bids for the concentrate received from several parties and the knowledge that the market for nickel concentrates has tightened in the past 12 months.

The general terms and conditions of the new Agreement are as follows:

Product – sulphide concentrate with a typical specification of 8 per cent nickel, 4.5 per cent copper, 0.6 per cent cobalt, 46 per cent iron, less than 1 per cent manganese oxide;

Quantity (in-bulk) – 100 per cent of production from the Savannah Project;

Load Port – Wyndham, Western Australia;

Payable metals – nickel, copper and cobalt;

Price basis – agreed per centage of LME cash price for nickel and copper and agreed per centage of Metal Bulletin Co price; and

Life of new contract – four years commencing from the date of the first shipment or 31 March 2019, whichever occurs first.

“The new Agreement, which will cover concentrate produced from the Savannah and Savannah North orebodies, is an important condition precedent to restarting the Savannah project,” Panoramic Resources said in its ASX announcement.

“Now that the new offtake has been concluded, the finalisation of the project debt financing is the last remaining condition precedent to the Board making the decision to restart the project.

“Negotiations with potential financiers on the debt funding are progressing well and the company should be a position to make an announcement on project debt funding shortly.”