Panoramic loan slashed by $20m amid Savannah woes

Nickel miner Panoramic Resources will have to tap the market for $20 million in equity after its debt was halved by Macquarie Bank, while today also disclosing deferred payment for the sale of its Canadian project.

Macquarie Bank is the Savannah nickel-copper-cobalt project’s primary financier, and $20 million of its outstanding $40 million will be replaced by a rights issue, following discussions between the bank and Panoramic.

The first repayment of the loan has also been deferred by one quarter to September 30 next year.

The loan amendment comes as Panoramic today revealed its Savannah project averaged 47,000 tonnes of ore for July and August, compared with guidance of approximately 60,000t.

Panoramic blamed a seismic event, software issues affecting remote bogger availability, and a tight labour market for the production shortfall.

In March, Macquarie demanded Panoramic tap the market for at least $19 million in equity, after similar production issues plagued the project.

In return, the bank shifted the repayment schedule on a $40 million loan for the project from March 31 2020 to June 30 2020.

The project was placed in care and maintenance in 2016 as a result of a depressed nickel market.

In July 2018, Panoramic announced it would reopen Savannah.

First shipment from the mine departed Wyndham on February 13.

Additionally today, Panoramic said payment for the sale of its Canadian project would be deferred over three years.

In July, Panoramic entered into a binding agreement to sell its Thunder Bay North platinum group metals project to Benton Resources for an upfront cash sum of $C9 million ($9.8 million).

Panoramic said would now receive $C4.5 million upfront, and the remaining half in three equal tranches across three years.

The transaction is still subject to several conditions, including Benton raising sufficient finance to fund the upfront fee and Panoramic being released from its earn-in, joint venture agreement with Rio Tinto that it signed in 2014.

Panoramic sold its Thunder Bay project as it seeks to divest its non-core operations to focus solely on the ramp-up of the restart of the Savannah nickel-copper-cobalt project.

Last month, Panoramic announced the forthcoming retirement of its managing director Peter Harold after more than 18 years.

Mr Harold will retire by August 2020.

Panoramic is currently in a trading halt, last changing hands at 34 cents each.