PERTH (miningweekly.com) – An operational review of the Savannah project, in Western Australia, has confirmed the integrity of the overall mine design and operating parameters, while also confirming the absence of any fatal flaws in the overall project design and operating plan.

ASX-listed Panoramic Resources last month launched the review of its Savannah project, 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 the stoping sequence, lower nickel grades due to the hanging wall failure and the paste dilution in two stopes, as well as continuing equipment availability issues.

Panoramic on Wednesday told shareholders that key reliability and productivity opportunities assessed within the operational review, would now be rapidly implemented, including the diversification of backfill sources and use, and 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 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 7%, to 83 700 t, while copper in concentrate has declined by 7%, to 46 900 t, and cobalt in concentrate by 9%, to 6 100 t.

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.

Meanwhile, all-in sustaining costs for Savannah have now been estimated at $3.77/lb.

Panoramic noted that additional potential productivity, cost and life extension opportunities have also been identified by the operational review, and would be further assessed, 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 of the 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 of next year.

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

The ASX-listed company said that the results from the operational review would 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.

Panoramic has again urged shareholders not to take any action regarding the offer, until a board recommendation has been made.

Independence is offering one of its own shares for every 13 Panoramic shares held, valuing the takeover target at A$312-million.