Panoramic begs for cash as nickel mine shuttered
The troubled WA nickel producer is seeking cash after mothballing its Savannah nickel mine in the Kimberley region.
Troubled West Australian nickel producer Panoramic Resources has flagged the need for a fresh cash injection after mothballing its Savannah nickel mine in WA’s Kimberley region and citing the impact of coronavirus lockdowns and movement restrictions.
Panoramic has tapped the market three times over the past 13 months as it struggled to return its only remaining nickel operation to sustainable production.
It temporarily gave up the attempt on Wednesday, putting more than 250 jobs at risk by shutting down the mine in the face of fresh difficulties in moving staff to site due to lockdown and movement rules introduced by the WA government.
The decision caps a horror year for Panoramic, which was struggling with the restart of Savannah well before the impacts of the coronavirus made work at its Kimberley mine more difficult.
Most mines in WA have won exemptions from internal movement restrictions and increased the length of work shifts to reduce the number of people moving within the state.
Panoramic’s Savannah mine sits in the remote Kimberly region, which has tougher movement restrictions than the rest of WA because of fears the virus could devastate vulnerable indigenous communities.
Panoramic said last month it believed it could operate the mine despite the restrictions, but the board had now been forced to mothball Savannah.
“There are currently no cases of COVID-19 reported at the Savannah nickel mine. However, the situation is rapidly evolving and has changed materially since the company provided its 27 March COVID-19 update,” Panoramic said in a statement.
“In particular, the pandemic is adversely impacting operations, including transportation, availability and cost of personnel, equipment and supplies at site, and controls at site, particularly given the heightened sensitivity within the Kimberley region and communities close to the operation.”
Panoramic suspended trading in its shares ahead of the announcement, and said it was still seeking to resolve ongoing funding requirements to complete the ramp-up of Savannah during its period in mothballs.
“Essential services, safety and environmental monitoring will continue, with the underground operations to cease in an orderly manner and processing of ore expected to cease by the end of this week,” the company said.
Early this year Panoramic rejected a $216m hostile takeover offer from Independence Group, saying it undervalued the company, and instead opted for a $31m capital raising at 30c a share.
It was the third time the company tapped the market in a year, after a 28c-a-share issue for $28.2m in September 2019 and a $19.8m placement and entitlement issue at 38c in March.
Panoramic flagged the need for a further cash injection in Wednesday’s announcement.
Panoramic last traded at 12c.
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