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Panoramic Resources to Divest Panton PGM Project

THE BOURSE WHISPERER: Panoramic Resources (ASX: PAN) is selling its Panton PGM project and associated tenements to Dubai 2020 Limited, a private family office investor represented by CPS Capital Group.

Panoramic Resources explained the Agreement is consistent with the company’s stated intention to divest non-core assets and focus on its Savannah nickel project in Western Australia.

Panoramic will retain a 20 per cent free carried interest until any decision to mine.

This interest is subject to Dubai 2020 not exercising its right to acquire the remaining 20 per cent of Panton by a further $3 million payment to Panoramic.

“We are pleased to have progressed the sale of the non-core Panton asset as previously outlined,” Panoramic Resources managing director and CEO Victor Rajasooriar said in the company’s announcement to the Australian Securities Exchange.

“We now look forward to working with Dubai 2020 towards a successful completion of the sale of Panton in early December.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Email: info@panres.com.au

 

Web: www.panoramicresources.com.au

 

Panoramic Resources Expects to Make Triumphant Return

THE CONFERENCE CALLER: After what has effectively been a four-year hiatus, Panoramic Resources (ASX: PAN) is on the verge of once again becoming a formidable Australian mid-tier base metals producer as it prepares to fully relaunch its wholly-owned Savannah nickel project in Western Australia’s East Kimberley. By Mark Fraser

The refurbished operation, which originally started life in 2004 sourcing open cut ore, had initially been put on care and maintenance during 2016, but was recommissioned in 2018 following the discovery of the Savannah North ore body. It was temporarily suspended earlier this year due in part to the COVID virus.

In July, Panoramic announced a new mine plan for the project based on a healthy reserve inventory of 8.3 million tonnes grading 1.23 per cent nickel, 0.59 per cent copper and 0.08 per cent cobalt for 102,000 tonnes of nickel, 48,500 tonnes of copper and 7,000 tonnes of cobalt.

With the addition of some further inferred resources (located near the above-mentioned reserves), this inventory increases to 10.4 million tonnes at 1.22 per cent nickel, 0.54 per cent copper and 0.08 per cent cobalt for 127,000 tonnes of nickel, 56 million of copper and 8,500 tonnes of cobalt in contained metal.

Panoramic is now confident the project will enjoy a life of around 13 years, with the majority of ore expected to be sourced from Savannah North. It is currently anticipated that the average annual production for years one to 12 will be 8,810 tonnes nickel, 4,579 tonnes of copper and 659 tonnes of cobalt in concentrate.

Over the mine plan, recoveries should average 83 per cent nickel, 98 per cent copper and 92 per cent cobalt based on the historical plant performance for Savannah ore as well as the metallurgical test work conducted on the Savannah North material during 2017.

Meanwhile, the average site all-in costs for years one to 12 of are $7.54/pound payable nickel (US$5.27/lb) net of copper and cobalt by-product credits.

In addition, there are some attractive base case financials involved – namely a pre-tax cash flow of $468 million and a net present value of $262 million.

Located 240 kilometres south of Kununurra, the Savannah project boasts two nickel sulphide ore bodies (Savannah and Savannah North), the underground mine, a 1 million tonne per annum processing plant, a tailings storage facility as well as a 14-megawatt power station.

All up, this represents a $100 million investment which should, according to Panoramic Resources managing director and chief executive Victor Rajasooriar, enable the operation to be brought into production straight away.

Speaking at the RIU Resurgence Conference, Rajasooriar described Savanah as a high-quality asset, with Savannah North being, “the prize that we were going into”.

“When you look at Australian nickel sulphide projects, they are like hen’s teeth – they are very hard to find (and) the nickel sulphide operations that are currently operating are producing grades of less than 1 per cent – I think that the average grade is about 0.6 per cent – and most of those mines are coming to their natural end as well,” he explained.

“And (in terms of) Australian nickel sulphide projects, we are quite well placed when you look at the nickel equivalent grades.”

Rajasooriar also said the updated mine plan was conservative.

Mine dilution at Savanah, for instance, was 12 per cent – it’s now 22 per cent.

Ditto for plant recoveries, which in the old days was 114 per cent as opposed to the current 90 per cent.

Meanwhile the plant, which can churn through one million tonnes per annum, was now set to process 900,000 tonnes a year.

“We’ve been very transparent – we have put all of the costs into the project so that it is very clear,” Rajasooriar said.

“On a base case we are running on about $7.54/lb, and at the consensus case it’s about $7.14.

“Today’s nickel price is about $9.14/lb, so there is a good margin to be made on this project.”

A recent recapitalisation conducted by Panorama, Rajasooriar said, had erased debt and hedging arrangements as well as provided the company with a sufficient runway to progress development to both enable the operation’s reboot as well as fund near term exploration.

It was therefore not surprising that, on the day of Rajasoorier’s RIU presentation, the resources house announced it had launched an exploration program for both Savanah and Savanah North.

At Savannah, surface activities would complete preliminary nickel prospectivity assessments and look at the previous untested oxide and Stoney Creek intrusions.

Meanwhile, the underground drilling at Savanah North would complete an initial test of a series of strong downhole electromagnetic anomalies that were previously identified in several holes.

Earlier this month the company announced that over half of its planned 468 metre ventilation access drive – which has been designed to establish a platform well above the previous zone of instability at its Savannah North underground mine – had been developed, with the remainder to be finished by the end of September.

Upon completion of this ventilation raise and certain other underground works, the project would be significantly de-risked and capable of being fully rebooted by the end of 2021.

 

Panoramic Resources Says No Thanks to Independence Group Take Over

THE BOURSE WHISPERER: Independence Group (ASX: IGO) rattled the boards of the ASX in November when it declared its intention to make an off-market takeover offer to acquire all of the ordinary shares of Panoramic Resources (ASX: PAN) it does not already own.

At the date of the announcement, Independence Group’s interest in Panoramic consisted approximately 24.9 million shares, representing approximately 3.8 per cent of the target company’s total issued capital.

IGO explained it opted to directly engage Panoramic shareholders following a number of unsuccessful attempts to engage with the Panoramic Board on a change of control transaction.

The company cited Panoramic’s recent operational performance and the lack of engagement from Panoramic’s Board to date as the impetus behind the offer.

The conditions to the offer include a number of conditions that IGO believes to be necessary to confirm the current status of operating performance at Savannah.

The offer is in the form of one IGO Share for every 13 Panoramic shares held, giving Panoramic a share price of 47.6 cents per Panoramic share, which values the company at around $312 million.

IGO indicated its preference is to conduct an expedited and thorough due diligence process, and to proceed with a recommendation from the Panoramic Board rather than seek the confirmations required under the offer conditions, however IGO said it is prepared to see the offer to completion should the offer conditions be satisfied.

“The Offer represents a rare instance of genuine and obvious mutual benefit for both Panoramic and IGO shareholders,” Independence Group managing director and CEO Peter Bradford said in the company’s announcement to the Australian Securities Exchange.

“Panoramic shareholders will be able to crystallise future value from Savannah at a very attractive price and retain exposure to its upside potential, while also gaining exposure to Nova and Tropicana and IGO’s extensive portfolio of belt-scale exploration projects prospective for nickel and copper.

“The company remains leveraged to the nickel market and we believe IGO has the financial, operational and technical capability to fully unlock value from Savannah and Panoramic’s exploration portfolio.

“Given our unique positioning as Australia’s largest independent producer of nickel, to unlock value at Savannah, we have decided to provide the offer for the consideration of all Panoramic shareholders.”

In response, Panoramic did nothing to surprise anybody by recommending its shareholders take no action in relation to the IGO takeover offer.

“The Board will evaluate the offer and Independence Group’s Bidder’s Statement and provide shareholders with a recommendation in due course,” Panoramic Resources said.

“Until then, shareholders should take no action.”

And no action they did take.

The Directors of Panoramic bounced back this week to inform their shareholders that they didn’t think the offer from IGO was in their best interests.

They recommended that having carefully considered the terms and conditions of the IGO Takeover Offer and taking into account the results of the company’s recently announced operational review at Savannah and other information available to them at the current time, shareholders should REJECT the IGO Takeover Offer.

They must have been serious because the recommendation was in capital letters.

The key reasons for the Panoramic Board’s unanimous recommendation were:

The IGO Takeover Offer is opportunistically timed, which could deprive Panoramic shareholders of future potential value;

Panoramic shareholders’ exposure to the company’s assets and potential upside would be diluted through accepting the IGO Takeover Offer;

Panoramic shareholders’ nickel exposure would be diluted through accepting the IGO Takeover Offer;

The IGO Takeover Offer consideration was for IGO shares, which PAN considered, based on several objective measures, to appear to be trading at an elevated valuation, presenting downside risk to the implied IGO Takeover Offer value;

Accepting the IGO Takeover Offer meant shareholders risk missing out if a superior offer from a third party if it emerges;

Panoramic’s largest shareholder, Zeta Resources, which holds 35.17 per cent of Panoramic indicated it does not intend to accept the IGO Takeover Offer; and

The IGO Takeover Offer is highly conditional and there is no certainty it will proceed.

In response, Independence Group said it would not be taking up the offer to use its 38 per cent holding to participate in Panoramic’s announced non-renounceable entitlement offer to raise approximately $31 million stating the Entitlement Offer breaches a condition of IGO’s takeover offer.

We can only assume this is not the end of this discussion.

 

 

THE DAILY ROADHOUSE

 

Stavely Minerals Continues Thursday’s Gossan Growth

THE DRILL SERGEANT: Stavely Minerals (ASX: SVY) reported further news from the shallow, high-grade copper-gold discovery at the Thursday’s Gossan prospect, part of the company’s 100 per cent-owned Stavely copper-gold project in Victoria.

Calidus Resources Hits More Gold in Planned Klondyke Pit

THE DRILL SERGEANT: Calidus Resources (ASX: CAI) reported a further batch of high-grade RC drilling results from the company’s Warrawoona gold project in the Pilbara of Western Australia.

Independence Group Makes Take-Over Bid for Panoramic Resources

THE BOURSE WHISPERER: Independence Group (ASX: IGO) rattled the boards of the ASX by announcing its intention to make an off-market takeover offer to acquire all of the ordinary shares of Panoramic Resources (ASX: PAN) it does not already own.

Galileo Mining Confirms Fraser Range Nickel Target

THE DRILL SERGEANT: Galileo Mining (ASX: GAL) recently completed aircore drilling at the company’s Lantern prospect, within the Fraser Range nickel belt of Western Australia.

Rox Resources Hits Healthy Gold Intersections at Youanmi

THE DRILL SERGEANT: Rox Resources (ASX: RXL) released results of an air core drilling program undertaken at the company’s VMC Joint Venture, located north of the historical Penny West gold mine and the historical Magenta and Columbia gold prospects in Western Australia.

 

Independence Group Makes Take-Over Bid for Panoramic Resources

THE BOURSE WHISPERER: Independence Group (ASX: IGO) rattled the boards of the ASX by announcing its intention to make an off-market takeover offer to acquire all of the ordinary shares of Panoramic Resources (ASX: PAN) it does not already own.

At the date of the announcement, Independence Group’s interest in Panoramic consisted approximately 24.9 million shares, representing approximately 3.8 per cent of the target company’s total issued capital.

IGO explained it opted to directly engage Panoramic shareholders following a number of unsuccessful attempts to engage with the Panoramic Board on a change of control transaction.

The company cited Panoramic’s recent operational performance and the lack of engagement from Panoramic’s Board to date as the impetus behind the offer.

The conditions to the offer include a number of conditions that IGO believes to be necessary to confirm the current status of operating performance at Savannah.

The offer is in the form of one IGO Share for every 13 Panoramic shares held, giving Panoramic a share price of 47.6 cents per Panoramic share, which values the company at around $312 million.

IGO indicated its preference is to conduct an expedited and thorough due diligence process, and to proceed with a recommendation from the Panoramic Board rather than seek the confirmations required under the offer conditions, however IGO said it is prepared to see the offer to completion should the offer conditions be satisfied.

“The Offer represents a rare instance of genuine and obvious mutual benefit for both Panoramic and IGO shareholders,” Independence Group managing director and CEO Peter Bradford said in the company’s announcement to the Australian Securities Exchange.

“Panoramic shareholders will be able to crystallise future value from Savannah at a very attractive price and retain exposure to its upside potential, while also gaining exposure to Nova and Tropicana and IGO’s extensive portfolio of belt-scale exploration projects prospective for nickel and copper.

“The company remains leveraged to the nickel market and we believe IGO has the financial, operational and technical capability to fully unlock value from Savannah and Panoramic’s exploration portfolio.

“Given our unique positioning as Australia’s largest independent producer of nickel, to unlock value at Savannah, we have decided to provide the offer for the consideration of all Panoramic shareholders.”

I response, Panoramic did nothing to surprise anybody by recommending its shareholders take no action in relation to the IGO takeover offer.

“The Board will evaluate the offer and Independence Group’s Bidder’s Statement and provide shareholders with a recommendation in due course,” Panoramic Resources said.

“Until then, shareholders should take no action.”

 

Email: investor.relations@igo.com.au

 

Web: www.igo.com.au

 

Panoramic Resources Moves First Shipment from Recommissioned Savannah

THE BOURSE WHISPERER: Panoramic Resources (ASX: PAN) completed the first shipment of bulk nickel/copper/cobalt concentrate from the company’s recently recommissioned Savannah project in the Kimberley region of Western Australia.

Panoramic Resources loaded the shipment aboard the MV Heemskerkgracht, which departed the port of Wyndham bound for Lianyungang, China with 7,735 wet metric tonnes (wmt) of nickel/copper/cobalt concentrate onboard.

The load represents a preliminary invoice value of approximately $8.6 million.

“It is wonderful to see Savannah concentrate being shipped again from Wyndham,” Panoramic Resources managing director Peter Harold said in the company’s announcement to the Australian Securities Exchange.

“This is a significant milestone in the recommissioning of the mine and processing plant at Savannah and I would like to thank the team at Savannah for their efforts to get the project going again.”

 

Website: www.panoramicresources.com.au

 

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.”