A feasibility study on Panoramic Resources Ltd.'s Savannah nickel-copper-cobalt property in Western Australia indicated that mining remaining reserves while developing across to the Savannah North deposit will extend the mine life of the property by 10.25 years, compared to a 7.75-year mine life outlined in a January 2016 scoping study.
The study's base case outlined a pretax net present value, using an 8% discount, of US$190 million with a 115% internal rate of return and a payback period of less than two years. The base case uses metal prices of US$6 per pound of nickel, US$2.57 per pound of copper and US$14.42 per pound of cobalt.
Total revenue is estimated at US$1.49 billion, according to the Feb. 2 news release.
Annual metal-in-concentrate production is expected to average 9,700 tonnes of nickel, 5,000 tonnes of copper and 670 tonnes of cobalt, for total life-of-mine production of 99,200 tonnes of nickel, 51,500 tonnes of copper and 6,900 tonnes of cobalt.
Panoramic noted that the feasibility study indicates initial CapEx of US$20 million to resume production, with life-of-mine CapEx totaling US$230 million. The company placed the Savannah operations on care and maintenance in May 2016 due to low nickel prices.
Life-of-mine operating cash costs are forecast to average US$3.30 per pound of nickel on a payable-nickel basis and net byproducts.
The study includes an initial JORC-compliant reserves estimate for the Savannah North deposit. Probable reserves contain 94,500 tonnes of nickel, 40,900 tonnes of copper and 6,700 tonnes of cobalt within 6.65 million tonnes at 1.42% nickel, 0.61% copper and 0.10% cobalt.
Including the Savannah North deposit, the Savannah property hosts proven and probable reserves containing 112,600 tonnes of nickel, 52,400 tonnes of copper and 7,600 tonnes of cobalt within 8.2 million tonnes at 1.37% nickel, 0.64% copper and 0.09% cobalt.
Savannah North is expected to achieve full production 15 months after the start of development.