Restart of WA Savannah Nickel Operations to support 320 jobs

Panoramic Resources’ Board has approved the restart of operations at the Savannah Nickel Operation in Western Australia following a 12-month review as well as implementation of operational strategies that will help improve profitability and reduce operational and financial risks of the project. 

“It is pleasing to see that Savannah, one of the most advanced nickel sulphide development asset in Australia, is forecast to come into production as the battery thematic continues to grow worldwide. 

“This process of optimisation combined with the improved outlook for Savannah's high-quality nickel, copper and cobalt product, has given the Board confidence in approving the restart with a target of first shipment from Wyndham Port by the end of 2021,” Panoramic Managing Director and CEO Victor Rajasooriar said. 

In line with the announcement of Savannah's restart, Panoramic Resources has signed letters of intent with two contractors – one for the provision of mining services and another for the operation and maintenance of the Savannah project. 

The first letter of intent has been signed with Perenti's subsidiary, Barmico. The contract is expected to have a value of over $280 million for a four-year term. Over the coming weeks, Barminco and Panoramic Resources will work together to finalise the documentation for the contract award. 

Barminco's contract scope will cover mining services at the Savannah Nickel Operations, including underground mine development as well as production works. The company is expected to begin mobilisation on site in July 2021, with major works to begin in August. 

“We are very pleased Panoramic has elected to restart the Savannah Nickel Project and we look forward to finalising the contract details for Perenti to support the recommencement of operations at this long-life project,” Perenti Managing Director and Chief Executive Officer Mark Norwell said. 

“Since the award of the initial Savannah contract in February 2020, Barminco has delivered underground development services to Panoramic and our existing knowledge of the Savannah Project holds us in good stead to continue to provide safe, efficient and high-quality underground mining services and deliver value and certainty for our client,” Perenti Mining Chief Executive Officer Paul Muller said. 

The second letter of intent for a $35 million operation and maintenance (O&M) contract has been signed with NRW Holdings’ wholly owned subsidiary, Primero Group. 

The initial three-year contract will cover the operation and maintenance of the processing and surface infrastructure facilities associated with the mine, with provisions to extend contract terms another two years. 

“This agreement further strengthens the annuity revenue stream that our Minerals, Energy and Technology divisions has been building through its various businesses. RCR and its product support and maintenance business, DIAB through its shutdown and maintenance activities and now this significant award to Primero for a three year plus two-year option delivering operations and maintenance services to the Savannah Nickel Project,” NRW CEO Jules Pemberton said. 

Ore processing activities are anticipated to begin in November 2021, with the first shipment of concentrate targeted for December 2021. 

The Savannah Nickel Operations has an expected mine life of 12 years.

“Barminco and Primero are leading contractors in their respective fields and have a reputation for delivering safe and productive services. Through their significant combined expertise, we expect that this new operating model will capitalise on the high-quality nature of the Savannah resource to generate significant value for our shareholders. 

“The restart decision is expected to create 320 positions that will largely be filled bu the contracted service provider workforce, with Panoramic maintaining a relatively low direct employee headcount of around 40. Strict COVD-19 protocols will continue to be in place for our Kimberley workforce as required by government guidelines,” Mr Rajasooriar said. 

Source: Panoramic Resources; Perenti; NRW Holdings; Australian Mining