Nickel miner Panoramic Resources has launched a capital raising for almost $21 million in funding for the restart of the Savannah operation in the East Kimberley of Western Australia.
Panoramic today announced a one-for-seven rights issue for eligible shareholders priced at 34 cents a share to raise $20.9 million. The offer price represents a 11.7 per cent discount on Panoramic’s last trading value on January 22.
The Perth-based company plans to use the funds for “critical-path pre-production activities” to reduce lead times for the Savannah restart, as well as for exploration, general corporate expenses and working capital.
Panoramic decided to move forward with the Savannah restart after completing an updated feasibility study at the project last October.
The update showed that Savannah had potential for annual production of 10,800 tonnes (t) nickel, 6100t copper and 800t cobalt over an 8.3-year mine life
“In order to reduce the lead time for a restart of Savannah, the company believes it is prudent to commence a number of critical-path pre-production activities prior to a formal board decision to restart operations,” Panoramic said in an ASX announcement.
“A decision to restart is contingent on a number of factors, including a sustained recovery in the nickel price, concluding offtake contracts and finalising appropriate financing.”
Panoramic suspended mining at Savannah in May 2016 as nickel prices continued a run of falls. Prices for nickel bounced back last year, however, and currently sit at $US12,810/t.
The mine was commissioned in 2004. Over 12 years it produced 1.22Mt of concentrate containing 94,600t nickel, 53,000t copper and 5000t cobalt.