Panoramic Resources (ASX: PAN) said on Tuesday its board has approved the restart of the Savannah nickel project in Western Australia, a year after suspending operations due to the covid-19 pandemic.
The decision follows the completion of a review and implementation of operational strategies aimed at improving and de-risking the project, it said.
Panoramic also announced it had secured a five-year nickel and copper concentrate offtake contract for the project from commodities trading firm Trafigura. Additionally, the base metal miner and explorer noted it had obtained a $45 million secured loan financing facility from Trafigura.
“Production from Savannah is now committed until February 2028, or for about half of the current 12-year mine life,” CEO and managing director Victor Rajasooriar said in the statement.
Shares in Panoramic shot up on the news. They climbed 14.8% in their biggest intraday percentage gain in three months, before closing 11.11% higher at 15 Australian cents each.
The Perth-based company had invested more than A$100 million ($76.36 million) in Savannah before having to suspend operations in 2020.
Panoramic plans to resume underground mining in August with strategies in place to improve and de-risk the project. First concentrate shipment from Savannah is scheduled for December this year.
The company said it would use underground mining contractor Barminco for the operation and Primero to operate and maintain the Savannah processing plant for three years.
The East Kimberley-based nickel project was commissioned in 2004 and produced until 2016, when it was placed on care and maintenance.
Panoramic brought it back online two years later, after discovering the Savannah North orebody, but had to halt operations again last year due to the coronavirus pandemic.