The nickel miner has affirmed its commitment to improving the Savannah asset following Independence Group’s takeover offer.
Nickel company Panoramic Resources (ASX:PAN,OTC Pink:PANRF) has told shareholders to “take no action” regarding Independence Group’s (IGO) (ASX:IGO) unsolicited takeover offer, pointing out that there have already been breaches in the contract proposed by IGO.
IGO announced its intention to take over the company on November 4, informing Panoramic Resources shareholders that the company’s board of directors had not reacted to IGO’s offer at that point.
“IGO has chosen to present this offer directly to Panoramic shareholders following a number of unsuccessful attempts to engage with the Panoramic board on a change of control transaction,” reads a part of IGO’s press release announcing the offer.
Panoramic Resources’ main asset, the Savannah mine in Western Australia’s East Kimberley region, has underperformed since the summer due to reduced availability of some high-grade stopes and software and hardware issues. The company has reduced the mine’s production guidance for 2020.
Guidance has been cut from 10,000 to 11,000 tonnes of nickel to 9,500 to 10,000 tonnes; from 6,000 to 6,5000 tonnes of copper to 5,800 to 6,000 tonnes; and from 600 to 700 tonnes of cobalt to 600 to 650 tonnes. In addition, an operational review has begun at the site.
The review’s key objectives include stabilizing the mine’s short-term performance and ensuring the foundations are in place to meet production targets as outlined in previous feasibility studies.
Due to underperformance at Savannah, Panoramic Resources is also looking for additional funding.
According to the company’s statements, Panoramic Resources takes issue with the conditions of IGO’s takeover offer, some of which may have already been breached. For example, one of the clauses in IGO’s offer states that Panoramic Resources cannot lower its production guidance for 2020, but the Thursday press release did just that.
“The board will keep shareholders informed of further developments and will provide a formal recommendation on the offer in its target’s statement, which will allow shareholders to make an informed decision,” reads a part of the Tuesday press release.
Panoramic Resources’ share price was down 20.69 percent, trading at AU$0.35, as of 10:35 a.m. EST on Thursday. The stock has been on a sharp decline since Tuesday, when it traded for AU$0.435.
Nickel was priced at US$15,520 per tonne on Wednesday (November 13).
Don’t forget to follow us @INN_Australia for real-time news updates!
Securities Disclosure: I, Sasha Dhesi, hold no direct investment interest in any company mentioned in this article.