PERTH (miningweekly.com) – Base metals producer Panoramic Resources has revised its production targets for the 2020 financial year, after the Savannah nickel/copper/cobalt operation, in Western Australia, failed to meet its production targets in both July and August.

Panoramic told shareholders that the Savannah project averaged 46 000 t a month of ore production during both July and August, which was below the budget of around 60 000 t a month.

The decrease in production was driven by the reduced availability of some high-grade stopes due to a seismic event in July, as well as intermittent manning issues at both company and contractor level, and reduced remote bogger availability.

Based on the lower production, and a review of both the Savannah and Savannah North production schedules for the remainder of the 2020 financial year, Panoramic has revised its forecast production.

Nickel production has been downgraded from between 10 000 t and 11 000 t, to between 9 500 t and 10 000 t, while copper production expectations have decreased from between 6 000 t and 6 500 t, to between 5 800 t and 6 000 t, while cobalt production is expected at between 600 t and 650 t, down from the previous estimate of between 600 t and 700 t.

Meanwhile, Panoramic has also amended an existing financing agreement over the Savannah project, with Macquarie Bank, reducing the current A$40-million outstanding debt to A$20-million, which will be funded by way of an equity raising.

The repayment schedule for the remaining debt has also been adjusted with the first repayment date being deferred by one quarter, until the end of September 2020, with the final repayment deferred until the end of March 2022.

Furthermore, the project’s minimum liquidity has been reduced from A$7.5-million to nil.

While no additional hedging will be required, the existing contracts will be rolled forward to match the new loan repayment schedule from the September quarter in 2020 to the March 2022 quarter.

Meanwhile, Panoramic on Tuesday also amended the sales agreement over its Thunder Bay North platinum group metals project, in Ontario.

Panoramic in July signed a C$9-million sales agreement with TSX-V-listed Benton Resources to divest of the asset.

The two companies have now agreed to amend the payment terms, with the first C$4.5-million payable in cash on the completion of the transaction, and the remaining C$4.5-million payable in three deferred tranches of C$1.5-million each.

The first tranche payment will come due on the anniversary of the transaction completion, with the second tranche following a year later, and the third tranche a year after that.

The sales agreement was still subject to the signing of a definitive agreement, as well as regulatory and shareholder approval, and Benton raising sufficient finance to fund the initial C$4.5-million purchase price.

Mining major Rio Tinto’s exploration arm is earning a 70% interest in the Thunder Bay project by spending C$20-million over a five-year period, starting from 2015. The mining major at the start of 2017 confirmed that it had achieved its minimum spend of C$5-million.