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.

Project Owner/s
Panoramic Resources.

Project Description
An update of the Savannah feasibility study has enhanced the fundamentals of the project. As with the February 2017 feasibility study, the update is based on mining the remaining ore reserve at Savannah while extending development across to the Savannah North deposit. The proposed access method will be through a decline from the existing Savannah decline at the 1440 Level, with access development from Savannah to first ore at Savannah North scheduled to take about nine months.

Changes to the mine plan and schedule since the February 2017 feasibility study have focused on smoothing the development and mining rates to achieve more effective equipment use, better management of ventilation requirements and delivering more consistent ore tonnages and higher grades to the mill. This has resulted in:
• ore mining rates averaging 65 000 t/m for the first 12 months, thereafter averaging about 80 000 t/m;
• the vertical pillar in the upper portion of Savannah North, which had been included in the July 2017 optimisation, no longer being required; and
• the removal from the mine plan of lower-grade stopes (0.8% to 1% nickel) on the western side of the upper zone, resulting in an estimated 750 000 t of material grading 0.9% nickel being removed from the plan. This material is not sterilised and remains accessible for mining at higher nickel prices.

These changes have resulted in a shorter mine life of 8.3 years, compared with 10.25 years in the February 2017 feasibility study, but with an ore mining rate over the life-of-mine (LoM) averaging 920 000 t/y, compared with the February feasibility study LoM ore mining rate of 800 000 t/y.

Average yearly metal-in-concentrate production is forecast to average 10 800 t nickel, 6 100 t copper and 800 t/y cobalt, with 90 200 t nickel, 50 700 t copper and 6 700 t cobalt-in-concentrate produced over the LoM.

The project has an estimated mineral resource of 13.20-million tonnes grading 1.65% nickel, 0.75% copper and 0.11% cobalt for 218 300 t of nickel, 99 100 t of copper and 14 900 t of cobalt.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The updated feasibility study estimates a pretax net present value, at an 8% discount rate, of A$210-million and an internal rate of return of 100%, with a payback of less than two years.

Capital Expenditure
The updated feasibility study forecasts a preproduction and ramp-up capital investment of A$36-million, which is higher than the A$20-million estimated in the February feasibility study.

Planned Start /End Date
Not stated.

Latest Developments
Panoramic Resources has received firm commitments for an initial A$5-million capital raise, and has announced a 1-for-13 pro-rata renounceable entitlement offer to raise a further A$14.8-million.

Panoramic recently announced the need to raise at least A$19-million as part of amendments to its current financing agreement over the Savannah project, after a slower-than-expected ramp-up.

The company has said that an initial 13.16-million shares will be placed to institutional and sophisticated investors, priced at 38c each, to raise the initial A$5-million.

The company is also offering eligible shareholders the opportunity to take part in a 1-for-13 entitlement offer, also priced at 38c each, to raise a further A$14.84-million.

The offer price represents a 17.4% discount to Panoramic’s last closing price of 46c a share.

Panoramic has noted that shareholder Zeta Resources has provided a partial commitment to follow its rights under the entitlement offer, and to provide a sub-underwriting of A$4.6-million. A second tranche placement to Zeta of up to 6.84-million new shares, to raise up to A$2.6-million, will be subject to shareholder approval.

The funds raised will be used to ramp up production at Savannah and expedite the development drive to the higher-grade Savannah North orebody while satisfying the minimum liquidity requirements of the facility agreement, and to replenish funds used to undertake a short-term nickel put option price protection programme.

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.