Savannah Project

Resources and Reserves

Geology

The original Savannah sulphide rich nickel, copper and cobalt orebody is hosted by the layered mafic-ultramafic Savannah Intrusion which is enveloped by aluminous metasediments and para-gneisses of the Tickalara Metamorphics. The Savannah Orebody is mostly confined to a marginal norite unit up to 40 metres thick developed above the base of the intrusion. Areas of massive, matrix and disseminated sulphide mineralisation, dominated by pyrrhotite, chalcopyrite, pentlandite and minor pyrite occur throughout the marginal norite unit.

Prior to the development of the Savannah Open Pit, the marginal norite unit outcropped as a prominent 250 metre long limonite-goethite gossan with fresh sulphide mineralisation developing approximately 20 metres below surface. At approximately 500 metres below the surface, a significant sub-horizontal fault, the 500 Fault, cuts the orebody and offsets it 200 metres to the northwest.  A similar fault at approximately 900 metres below surface, the 900 Fault, offsets the orebody a further 250 metres to the northwest. Mineralisation above the 500 Fault is referred to as the “Upper Zone”, between the 500 and 900 faults as the “Lower Zone” and below the 900 Fault as the “sub 900 Fault Zone”.

Mining

The orebody was mined continuously between 2003 and 2016 when the mine was placed on care and maintenance. Mining was initially via open pit and then underground with the majority of the ore mined via long-hole open stoping, a highly mechanised and low cost method. Access to the top and bottom of the ore block was established by decline from which ore drives and slot raises were developed to facilitate blasting and recovery of the ore blocks. Once the ore block was blasted and extracted, the stope voids were filled with paste (tailings and cement mix) to stabilise the void and allow extraction of adjoining ore blocks. The minimal waste material mined was either stockpiled underground or trucked to surface.

Mining recommenced at Savannah in December 2018 with the first shipment of Savannah concentrate departing Wyndham port in February 2019.  The Company is currently focussing on the ramp up phase to full production from the Savannah orebody and the development access drives to the higher grade Savannah North orebody, which was discovered in February 2014 approximately 600 metres to the north of the Savannah mine.

Forecast mine production from Savannah North is 5.97Mt @ 1.49% Ni for 88,900t Ni contained.

Development of twin decline access to Savannah North and construction of a new 900 metre deep Savannah North ventilation shaft are underway.

First ore production from Savannah North is scheduled for Q4 2019.

Savannah Process Plant

The process plant at Savannah was commissioned in August 2004 and comprises a single stage crusher, SAG mill, flotation, thickening and filtering stages to produce a bulk nickel, copper, cobalt concentrate. Over the 2004 to 2016 initial operating period, metallurgical recoveries averaged  86-89% for nickel, 94-97% for copper and 89-92% for cobalt.  The plant was originally designed for a throughput of 750,000 tonnes per annum, but consistently outperformed the design specifications with rates exceeding 1 million tonnes on an annualised basis.  

Marketing

Savannah Nickel Mines Pty Ltd executed a new Four Year Concentrate Sales Agreement (“Agreement”) with Sino Nickel (a joint venture company owned 60% by Jinchuan and 40% by Sino Mining International Limited).

The terms of the new Agreement commenced from the first shipment of concentrate from the recommissioned Savannah Project (February 2019) and incorporates improved payabilities for certain contained metals.   Panoramic believes that the terms of the Agreement are highly competitive in the global market for Savannah’s bulk nickel-copper-cobalt concentrate.

The general terms and conditions of the new Agreement are as follows:

  • Product – sulphide concentrate with a typical specification of 8% Ni, 4.5% Cu, 0.6% Co, 46% Fe, <1.0% MgO;
  • Quantity (in-bulk) – 100% of production from the Savannah Project;
  • Load Port – Wyndham, Western Australia;
  • Payable metals – Ni, Cu and Co;
  • Price basis – agreed % of LME cash price for Ni and Cu and agreed % of Metal Bulletin Co price; and
  • Life of new contract – 4 years commencing from the date of the first shipment (February 2019).

Between 2004 and 2016 the Company shipped over 1.2 million dry metric tonnes (dmt) of nickel-copper-cobalt concentrate, worth in-excess of US$1.4 billion, from Wyndham Port through to Jinchuan’s smelter/refinery in Gansu province, northwest China. Panoramic is delighted to have completed the new offtake arrangements with Jinchuan/Sino Nickel on mutually agreed terms, which further cements the already strong relationship between the organisations. Based on the long association with Jinchuan/Sino Nickel and the competitive terms of the new Agreement, it is Panoramic’s view that the unique characteristics of the Savannah concentrate (payable Ni, Cu and Co, low MgO, and no penalty elements) make it an ideal feed for Jinchuan’s smelter.

Jinchuan Group Limited

Jinchuan is a Chinese state-owned enterprise located in Jinchang City, Gansu Province, northwest China with total assets of US$18 billion (2017). Jinchuan mines, smelts and refines nickel and copper sulphide ores and currently has an installed capacity of 150,000 tonnes per annum (“tpa”) nickel, 800,000 tpa copper and 10,000 tpa cobalt.

Sino Mining International Limited

Sino Mining International Limited (“Sino Mining”) is a resource investment and trading company controlled by China Minmetals Group. Sino Mining’s business charter is to secure raw material supplies for the Chinese non-ferrous metals industry and to take strategic investments in resource projects outside China. As at 30 May 2018, Sino Mining had total assets of US$132 million.  Sino Mining has a long-term alumina supply agreement with Alcoa under which it regularly ships smelter grade alumina to China. Sino Mining also owns the agency business, Sino Mining Trading, which facilitates raw materials trading.

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