Panoramic Reduces Annual Guidance for Savannah

Panoramic Resources (ASX:PAN,OTC Pink:PANRF) has reduced its production guidance for the 2020 financial year (FY2020) after its Savannah asset underperformed in July and August.

Located in Western Australia’s East Kimberley region, Savannah saw significant improvement over the June quarter as production averaged 47,000 tonnes of ore per month. Average monthly production for July and August was docketed for 60,000 tonnes; however, the asset only hit 46,000 tonnes.

The drop came due to several reasons, including reduced availability of some high-grade stopes after a seismic event in July and reduced remote bogger availability due to software and hardware issues.

The company has adjusted its production guidance for FY20 to 9,500 to 10,000 tonnes of nickel, 5,800 to 6,000 tonnes of copper and 600 to 650 tonnes of cobalt. This is down from previous expectations of 10,000 to 11,000 tonnes, 6,000 to 6,500 tonnes and 600 to 700 tonnes, respectively.

Aside from Savannah’s lower production, the drop in guidance also comes as a result of production schedules out of the Savannah North orebody. Located 600 meters north of the Savannah mine, the asset is currently being developed by the company.

Panoramic anticipates that it will be mining development ore by November and producing from stopes by the March 2020 quarter. Savannah North’s forecasted mine production is 5.97 million tonnes at 1.49 percent nickel for 88,900 tonnes of contained nickel.

Despite the recent drop in production, concentrate shipments maintained a regular monthly average of 6,000 to 8,000 wet metric tonnes.

The company also amended its Savannah financing agreement with Macquarie Bank, which entailed a AU$20 million reduction of its current AU$40 million debt; it’s set to be funded from new equity raised.

Furthermore, the repayment schedule was adjusted so the first repayment date will be delayed by a quarter to September 30, 2020, with the final repayment also delayed one quarter to March 31, 2022.

In Australia, Panoramic’s share price rested at AU$0.34 as the company entered a trading halt shortly before Tuesday’s (September 3) announcement.

As of Tuesday, nickel prices came to US$17,900 per tonne on the London Metal Exchange.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.