Panoramic Resources could potentially extend the mine life at its Savannah nickel operations by up to 10 years, following the release of the project’s feasibility study.
The Savannah operations, located around 240km south of Kununurra in the East Kimberley region of Western Australia, consists of the Savannah, Savannah North and Copernicus resources, a processing plant and associated infrastructure.
It had been placed in care and maintenance since May last year, as it awaited a stronger recovery in the US nickel price.
Panoramic managing director, Peter Harold, said, “The release of the Savannah feasibility study confirms the potential to extend the mine life of Savannah by at least 10 years.”
“The company’s decision to place Savannah onto care and maintenance in May 2016, thereby preserving the remaining ore reserve during this current cycle of weak nickel prices, will allow us to resume operations with a short lead time and minimal capital investment.
“The forecast annual metal production rates, combined with the forecast low cash costs, are capable of driving strong cash flows when the nickel price recovers to a level consistent with long-run industry forecasts.”
Panoramic commissioned the project in 2004 and over 12 years it produced 1.22 million tonnes of concentrate containing 94,600 tonnes nickel, 53,000t copper and 5000t cobalt.
The metal in concentrate production is forecast to average 9700 nickel, 5000t copper and 670t copper per year with 99,200t nickel, 51,500t copper and 6900t cobalt in concentrate produced over the life of mine.
The feasibility study also identified a low up front capital investment of $20 million to resume production, as the project already has existing developments to access the Savannah ore, a mobile equipment fleet, processing plant and supporting infrastructure.
In the 2016 financial year, the Savannah project mined 9845t nickel, 6011t copper and 476t cobalt in concentrate produced.