Panoramic Resources Limited has advised the outcomes of an updated Ore Reserve and Mine Plan for its Savannah Nickel Project in the East Kimberly region of Western Australia.
Panoramic successfully commissioned and operated the project from 2004 to 2016 before the mine was placed in care and maintenance.
Following the discovery of the Savannah North orebody, the mine was recommissioned in 2018 before being temporarily suspended in April 2020 due to operational uncertainty related to a number of factors including, but not limited to, COVID-19 travel restrictions to the Kimberley region.
Panoramic has now completed an updated Ore Reserve and Mine Plan for Savannah, which has outlined an ‘attractive near-term nickel sulphide mine restart opportunity’.
The Mine Plan and Ore Reserve update was completed by Entech, with oversight and input from the Panoramic management team.
According to the announcement, total Savannah Ore Reserve (including Savannah North) at 30 June 2020 stands at 8.3 Million tonnes (Mt) at 1.23 per cent nickel (Ni), 0.59 per cent copper (Cu) and 0.08 per cent cobalt (Co) for 102 kilotonnes (kt) Ni, 48.5kt Cu and 7kt Co contained metal.
Panoramic notes that the Updated Mine Plan includes some Inferred Resources located near Ore Reserves, which increases the mining inventory to 10.4Mt at 1.22 per cent Ni, 0.54 per cent Cu and 0.08 per cent Co for 127 kt Ni, 56 kt Cu and 8.5 kt Co contained metal.
Some key operational outcomes of the Mine Plan include:
- Increasing the mine life of approximately 13 years, with the majority of ore sourced from the Savannah North orebody.
- Average annual production for years 1 to 12 of 8,810 tonnes of Ni, 4,579 tonnes of Cu and 659 tonnes of Co in concentrate.
- Average site All-in Costs for years 1 to 12 of A$7.54/lb payable Ni (US$5.27/lb payable Ni), net of Cu and Co by-product credits.
Following the positive outcomes of the update, underground pre-production development is expected to recommence in August 2020, with the objective of completing the Savannah North ventilation raise and certain additional underground works to support the future of mining of Savannah North. Panoramic advises that these programs will leave the project significantly de-risked and capable of being restarted in the first half of 2021.
Panoramic’s Managing Director and CEO, Victor Rajasooriar said the updated Mine Plan and Ore Reserve for Savannah underpin the potential future restart of the operation and confirm the significant value of the asset.
“The Mine Plan provides an attractive base case for Savannah, with significant capacity to further enhance the mining inventory by converting the Inferred Resources at Savannah North and the orebody remaining open at depth and along strike. Furthermore, the Project is highly leveraged to upside in nickel prices expected to be driven by the electric vehicle market, as evidenced by the consensus case financial metrics using consensus forecast prices,” Mr Rajasooriar said.
“We now have a firm foundation to recommence underground pre-production development next month, to complete ventilation works for Savannah North and complete areas of capital development to lay further groundwork for a potential restart of operations. This work will be concluded towards the end of the March quarter 2021 and we expect to be in a position where the Project is capable of being restarted in the first half of 2021.”
Mr Rajasooriar concluded by stating: “Any decision to restart the operation will only be made by the Board after due consideration of commodity markets, operational factors and the Company’s broader strategic objectives.”
The full announcement can be found here.