PERTH (miningweekly.com) – Nickel miner Panoramic Resources on Friday announced that it would start the development of the Jury-Metcalfe decline, at its Lanfranchi operation, in Western Australia, following an amendment of the existing toll treatment and concentrate purchase agreement with mining major BHP Billiton.
Earlier this week, Panoramic signed an amendment to the 2004 agreement with BHP, to include potential deliveries from the Jury-Metcalfe orebody to the Nickel West operations.
Panoramic said at the time that the amendment was an important step in the company’s efforts to extract value from lower-grade resources at the Lanfranchi operation.
The current ore tolling and concentrate purchase agreement will run until 2019, and gave Lanfranchi significant opportunity to benefit from any future exploration success, Panoramic told shareholders on Friday.
Panoramic would now start the six- to nine-month predevelopment activities at the Jury-Metcalfe resource, developing a decline that would allow the company access to the orebody and exploration drill platforms to continue further exploration of the area.
The decision to start production from the Jury-Metcalfe orebody would be dependent on the prevailing and forecast nickel prices during the June 2015 quarter, Panoramic said.
Assuming that a decision was made to start production at Jury-Metcalfe, the Lanfranchi operation could be transitioned from a base load of ore sourced from the Deacon orebody, which would likely be depleted by the end of the June quarter next year, to a base load of ore source from the Jury-Metcalfe orebody.
Ore would also be sourced from the Lanfranchi, Schmitz and Helmut South Extension orebodies.
Again, assuming that the decision to mine the Jury-Metcalfe orebody was positive, steady-state production of around 15 000 t/m could be reached by the September quarter of next year, with the orebody expected to have a mine life of 16 months.
The transition to the Jury-Metcalfe orebody was expected to result in a reduced production profile at the Lanfranchi operation from the current production levels of between 11 000 t and 12 000 t of nickel expected in 2015, to between 5 000 t and 6 000 t of nickel.
Panoramic added, however, that it remained positive on the short- to medium-term outlook for Lanfranchi, as a number of forecasters expected the nickel price to rise strongly in 2015. Furthermore, Lanfranchi had a number of exploration targets which Panoramic could follow up, including known electromagnetic conductors, possible extension to orebodies within existing channels and the potential for new channels.