Texas miner continues local nickel pursuit

Panoramic Resources has agreed to sell the Lanfranchi nickel project for $15 million to Texas-based Black Mountain Metals, showing the American business is still on the hunt for nickel opportunities in Western Australia.

The Lanfranchi project, located south of Kambalda, is fully owned by Panoramic.

It operated as a mine until AUgust 2015, when it was placed on care and maintenance.

The transaction will be completed in the December quarter.

Panoramic will use the cash to strengthen its balance sheet, the company said, and its focus would now turn to restarting the Savannah nickel/cobalt project in the East Kimberley.

That is on schedule to deliver concentrate in the March quarter of 2019, Panoramic said.

Panoramic managing director Peter Harold said the company bought the Lanfranchi mine in 2005, and it had been profitable for a 10-year period.

“While we see Lanfranchi as a potential future source of nickel ore, with considerable exploration upside, its relevance to Panoramic has been displaced by the much larger and higher margin Savannah Project, which is where we see the next chapter of growth for our company,” he said.

“We believe Savannah is a tier one base metals asset, offering robust operating margins and a long mine life, as well as considerable exploration upside still to be fully evaluated.

“We are very excited about the restart of operations at Savannah and expect the project to deliver robust returns from its nickel, copper and cobalt production over the initial mine life of eight-plus years.

“With the Savannah Project development fully funded, the sale proceeds from Lanfranchi will strengthen our balance sheet, placing the company on a sound footing as we ramp up to full production … as well as providing flexibility to fund regional exploration activities and other growth initiatives.”

In August, Black Mountain made a takeover bid for Poseidon Nickel, which is working to reopen the Black Swan nickel project near Kalgoorlie.

Black Mountain offered $66 million to acquire Poseidon.

However, the deal was withdrawn when Poseidon opted to enter into a $74.6 million capital raising, with backing from magnate Andrew Forrest.