Name of the Project
Savannah base metals project.

Location
The project is located 240 km south of Kununurra, in the East Kimberley region of Western Australia.

Client
Panoramic Resources.

Project Description
A feasibility optimisation study on the Savannah project has resulted in an improved mine plan, compared with the February 2017 feasibility study.

The optimisation study demonstrates that, through a combination of modifications to the mine schedule, a range of cost initiatives and favourable by-product credits, the Savannah Operation is financially viable.

The project has mineral resources of 13.9-million tonnes grading 1.63% nickel, 0.75% copper and 0.11% cobalt for 226 400 t of nickel, 104 700 t of copper and 15 300 t of cobalt.

As with the February 2017 feasibility study, the optimisation study is based on mining the remaining ore reserve at Savannah while developing across to the Savannah North deposit.

The proposed access method and development timeframe for Savannah North are unchanged from the feasibility study, which is through a decline from the existing Savannah decline at the 1440 Level.

The optimisation study has focused on:
• increasing the mining rate and the mined nickel grade, resulting in bogging rates in Savannah North increasing from 1 000 t/d to 1 200 t/d using remote technology to bog over shift change;
• accelerated production in the early years, through the inclusion of a vertical pillar in the upper portion of Savannah North, which allows for the development of a second mining front; and
• removing the lower-grade stopes (0.8% to 1% nickel), on the western side of the upper zone, from the mine plan. This results in an estimated 750 000 t of material grading 0.9% nickel being removed from the mine plan. Of importance is that this material is not sterilised and remains accessible for mining at higher nickel prices.

The changes to the mine plan have resulted in a shorter mine life of 8.5 years, compared with 10.25 years in the feasibility study, but with an ore mining rate over the life of the mine averaging 900 000 t/y, compared with 800 000 t/y in the feasibility study.

The optimised mine plan has a mining production target of 7.59-million tonnes at 1.42% nickel, 0.68% copper and 0.10% cobalt, containing 108 100 t nickel, 51 300 t copper and 7 200 t cobalt.

There is no change to the existing Savannah processing plant configuration or capacity. 

The nominal throughput capacity of the Savannah plant is about one-million tonnes a year.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a net present value, at an 8% discount rate, of A$60-million and an internal rate of return of 40%, with a payback of less than three years.

Value
The optimisation study forecasts a low up-front capital investment of only A$20-million to resume production, which is unchanged from the feasibility study estimate.

The low restart cost is due to the mine development already in place to access existing Savannah ore, and the existing mobile equipment fleet, processing plant and supporting infrastructure at Savannah being kept in good condition while under care and maintenance since the suspension of mining operations in May 2016.

The maximum funding requirement has been estimated at A$40-million, including the working capital requirement and no contingency.

Duration
As with the feasibility study, access development from Savannah to first ore at Savannah North is scheduled to take about nine months.

Latest Developments
Panoramic is undertaking further optimisation work, which will assess several 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 completed during the December quarter. In the interim, Panoramic is continuing discussions with potential offtake partners that have expressed an interest in Savannah concentrate.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Panoramic Resources, tel +61 8 6266 8600, fax +61 8 9421 1008 or email info@panres.com.