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
The project 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 a month for the first 12 months, and averaging about 80 000 t a month thereafter;
• 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.

An operational review of the Savannah project at the end of 2019 updated the life-of-mine schedule and cost forecasts for the project, which has resulted in a slight decline in forecast mined tonnes and nickel grades, compared with the 2017 feasibility study on the Savannah project. The contained nickel in concentrate expectation has now declined by about 7%, from 90 200 t to 83 700 t, while copper in concentrate declined by about 7%, from 50 700 t to 46 900 t, and cobalt in concentrate by about 9%, from 6 700 t to 6 100 t.

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
An operational review of the Savannah project has confirmed the integrity of the overall mine design and operating parameters while confirming the absence of any fatal flaws in the overall project design and operating plan.

Panoramic Resources launched the review of the project in November 2019, as the operation continued to perform below expectations.

The company said at the time that the underperformance was driven by the underperformance of the underground paste filling system, which impacted on the stoping sequence; lower nickel grades, owing to the hanging wall failure and the paste dilution in two stopes; and continuing equipment availability issues.

The reliability and productivity opportunities assessed in the operational review will be rapidly implemented, including the diversification of backfill sources and use, development acceleration, increased operational reliability and productivity gains through a planned transition to a predominantly contract mining model.

Panoramic has also updated the life-of-mine schedule and cost forecasts for the Savannah project, which has resulted in a slight decline in forecast mined tonnes and nickel grades, compared with the 2017 feasibility study on the project.

The miner has revised its production guidance for the 2020 financial year to between 7 000 t and 7 500 t of contained nickel, 4 500 t to 5 000 t of contained copper and between 400 t and 450 t of contained cobalt.

Panoramic noted that additional potential productivity, cost and life extension opportunities had also been identified by the operational review, and would further assess, including the concurrent development of the Savannah North upper crown area with the development of the Savannah North upper central zone, infill drilling of the adjacent inferred resource around Savannah North, and drilling multiple extensional targets.

Panoramic has, meanwhile, told shareholders that the company has accessed first development ore from the Savannah North deposit, with production of first stoped ore still on target for the March quarter.

The ramp-up of stoped ore volumes is expected throughout the remainder of 2020.

Further, Panoramic has said that the results of the operational review will be used to further the board’s consideration of the takeover offer presented by fellow-listed Independence Group, with KPMG having been commissioned to prepare an independent expert’s report on the offer.

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.