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Monday, May 25, 2020 - 2:25:15 PM
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Mining News Pro - Panoramic Resources has found a saviour in Western Areas as part of plans to raise up to $90 million to undertake development activities prior to re-starting the Savannah mine in Western Australia and to repay debt.
Nickel producer, Western Areas, intends to acquire up to 19.9 per cent shareholding in Panoramic through participation in the equity placement as a partial sub-underwriter.
Panoramic temporarily suspended operations at the Savannah nickel sulphide mine and processing plant in the East Kimberley region in April due to the coronavirus’ impact on operations.
However, Panoramic announced on Monday that undertaking key development activities at Savannah, including completion of critical ventilation infrastructure, would pave the way for eventual re-opening of the mine. No exact date was announced.
The funds raised would firstly be spent on repaying Panoramic’s loan under the Savannah facility agreement, followed by the loan issued under the Zeta facility.
The remaining capital would be used as general working capital and care and maintenance costs, as well as to conduct development and exploration activities at Savannah project.
Western Areas managing director Dan Lougher said the strategic investment would increase his company’s exposure to the new energy vehicle (NEV) market.
“We are encouraged by the development potential of the Savannah North orebody and believe that Panoramic’s decision to continue to invest in capital development will position the operation well for the projected upswing in nickel, copper and cobalt demand driven by the NEV thematic,” he said.
In a fully underwritten pro-rata renounceable entitlement offer, Panoramic is offering 1.15 new placement shares to its investors for every existing shares held.
Panoramic has priced the shares at 7 cents each, a 41.7 per cent discount to the 12-cent traded price on April 9. The company is hoping to raise up to $61 million from the entitlement offer.
The company is also looking to raise another $28.6 million capital through a fully underwritten capital raising with institutional placement of approximately 410 million fully paid ordinary shares.
Western Arears owns the Forrestania nickel project, 400 kilometres east of Perth in Western Australia, which produces approximately 21,000 to 22,000 nickel tonnes in concentrate per year.
Panoramic’s newly-appointed independent non-executive chairman, Nick Cernotta, welcomed Western Arears to the list of Panoramic shareholders.
“… We believe that their strategic investment in Panoramic provides strong encouragement for our decision to continue capital development and review the mine plan at Savannah for an eventual restart in operations. We look forward to collaborating with Western Arears to maximise the full potential of Savannah North,” he said.
Savannah is a significant sulphide orebody with an initial 8.3 year mine life and total resource of 209,800 tonnes nickel, 94,200 tonnes copper and 13,700 tonnes cobalt.
Upon completion of the capital raising, Western Arears will be granted the right, but not the obligation, to appoint one representative to the Panoramic board.
Western Arears and Panoramic will also form a technical committee comprised of two representatives nominated by the Western Arears and two representatives from Panoramic to provide technical assistance to the Savannah project.
Short Link:
https://www.miningnews.ir/En/News/535328
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