PERTH (miningweekly.com) – An optimisation of the feasibility study (FS) for the Savannah base metals project, in Western Australia, has lowered the expected C1 cash and operating costs of the operation, while targeting higher nickel, copper and cobalt output, owner Panoramic reported on Thursday.
Compared with a February FS, the optimised study decreased C1 cash costs from $2/lb to $1.40/lb nickel in concentrate, while operating costs have decreased from $4.50/lb to $3.10/lb of nickel.
The optimised FS also expected nickel production to increase from the previously estimated 9 700 t/y to 11 000 t/y, while copper production will increase from 5 000 t/y to 5 800 t/y and cobalt production for 670 t/y to 760 t/y.
However, the project’s mine life has also decreased from the initially estimated 10.25 years to 8.5 years, while revenue expectations have decreased from $1.5-billion to A$1.2-billion.
Savannah’s expected up-front capital requirements remained unchanged at A$20-million.
“The release of the Savannah FS optimisation demonstrates the potential for Savannah to be a financially robust project, even at today’s historically low nickel prices,” said Panoramic MD Peter Harold.
“The optimisation work focused on higher production rates, higher grade ore and lower input costs. This has resulted in an improved mine plan compared with the February FS, and has delivered significantly lower C1 cash costs and all-in sustaining costs.”
Harold said that the short lead time and minimal capital investment required to resume operations placed Panoramic in an enviable position, compared with greenfield project developers, which typically have greater funding requirements and longer preproduction development timeframes.
Panoramic in January 2016 took the decision to idle the Savannah operation on the back of declining nickel prices. The operation was placed on care and maintenance in May 2016. The FS is based on mining the remaining ore reserve at Savannah, while developing across to the Savannah North deposit.
Panoramic is now undertaking further optimisation work, which will assess a number of other initiatives that could add significant value to the project, including alternative truck technology, drilling automation and battery loaders. This work is expected to be complete during the December quarter.
In the meantime, Panoramic will continue discussions with potential offtake partners that have expressed an interest in Savannah concentrate.