PERTH (miningweekly.com) – Base metals company Panoramic Resources has inked a new four-year concentrate sales agreement for all of the concentrate to be produced at its Savannah nickel/copper/cobalt project, in Western Australia.
The offtake agreement with Sino Nickel, a joint venture between Chinese firms Jinchuan and Sino Mining International, will replace the extended concentrate sales agreement that was signed in 2010 and which will expire at the end of March 2020.
The agreement requires that the product consist of a sulphide concentrate with a typical specification of 8% nickel, 4.5% copper, 0.6% cobalt and 46% iron. The contract will start on the date of first shipment, or at the end of March 2019, whichever comes first.
Panoramic said on Friday that the terms of the agreement were highly competitive in the global market for Savannah’s bulk nickel/copper/cobalt concentrate, based on the bids for the concentrate received from a number of parties, and the knowledge that the market for nickel concentrates has tightened significantly in the past 12 months.
The company noted that the new agreement, which would cover concentrate production from both the Savannah and Savannah North orebodies, was an important condition precedent to restarting the Savannah project.
With the offtake agreement now in place, the company could focus on finalising the debt financing before the board took a decision to restart the project. Panoramic said that negotiations with potential financiers were progressing well.
Savannah was placed on care and maintenance in May 2016 as nickel prices plummeted. A 2017 feasibility study on restarting the project found that it would require a capital investment of A$36-million and could produce 10 800 t/y of nickel, 6 100 t/y of copper and 800 t/y of cobalt.