And not a word about this in the NRW conference call just one day earlier although it has clearly been under negotiation for some time.
No material impact?
But an *ouch* for Panoramic which appears to be having a rough time :/
It raised $40m in a book build just a few weeks ago which was not supported by its largest (21%) holder IGO , and -according to The Australian - it has serious debt issues.
Maybe Primero was pleased to make a tidy exit?
I wonder how many of the 80 Primero people who are working up there will accept the Panoramic offer to stay on?
FWIW here’s a bit of background information;
* Press reports on problems/raise
Speculation is mounting that the base metal mining and exploration company Panoramic Resources could be poised to tap the market.
DataRoom understands that broker Canaccord has been sounding out prospective investors for the raise on behalf of the Perth-based group.
The understanding is that the company is pressing up against a debt deadline with lender Trafigura as it faces operational issues with its Savannah Nickel Project in Western Australia.
Some believe that the group could be in search of about $40m.
IGO has 21 per cent of the company, after inheriting the stake through its acquisition of Western Areas.
This month, Panoramic Resources told the market that nickel-copper-cobalt concentrate production had resumed as normal from Savannah as a filter press was successfully repaired and recommissioned after the fabrication and installation of a new filter press head unit.
This was after cracks occurred in the filter press head unit last month and required a replacement.
The company told the market that it had $US45m of debt drawn with Trafigura Group in a $US30m tranche due 2026, based on scheduled minimum monthly payments, and another $US15m tranche that was extended until December this year.
It also has $22m of cash.
In May, its market value was $349m, but it has since fallen to $185m.
The group raised $90m at 7c a share in 2020, and at the time Western Areas took a 19.9 per cent strategic stake in the business after weighing a buyout proposal for Panoramic.
IGO purchased Western Areas in a $1.25bn buyout last year.
Panoramic’s shares closed at 9.2c.
In 2020, Panoramic raised to repay creditors including Barminco, Macquarie Group and its shareholder Zeta Resources, backed by well-known investor Duncan Saville.
Before the offer, Zeta had 35.2 per cent and it now has 13.1 per cent.
The company was subject to a $312m or 47.6c per share takeover bid by IGO, which has recently been dealing with troubles of its own, namely a write down of up to $980m on its of Western Areas acquisition on the reassessment of operating and capital costs of the two nickel projects in Western Australia, Cosmos and Forrestania.
Panoramic at the time was advised by Azure Capital, while IGO worked with Citi.
But IGO let its takeover bid for Panoramic lapse in December 2019 and walked away.
Panoramic’s Savannah nickel sulphide mine in WA’s Kimberley region had struggled to return to production in the years that followed its 2016 closure.
It’s a tough time to be going cap in hand to investors if you are a nickel miner, with scepticism among some investors following the IGO write down and with Poseidon shelving development plans.
But the attraction for suitors in the past is that Panoramic offers exposure to the materials used for electric vehicles, which are anticipated to be the transportation mode of the future, with its Savannah Project in Western Australia that mines nickel and cobalt, both used to make batteries.
And it is the only pure play Australian independent nickel producer.
Jordan MurrayThe West Australian
Wed, 26 July 2023 11:55AM
Panoramic Resources’ Savannah nickel mine in the East Pilbara. Credit: Wayne Riley/supplied
Panoramic Resources is rattling the tin after weather and equipment failures at the battery metals producer’s Savannah nickel mine made a significant dent in the company’s balance sheet in the June quarter.
Details of the $40 million raise were disclosed to the Australian Securities Exchange on Wednesday, the same day Panoramic blamed external factors for stalling output and rising costs at Savannah.
The placement, which will involve the issuing of 800 million shares at 5¢ each — a steep discount of nearly 50 per cent on Panoramic’s last closing price — is fully underwritten and will be conducted in two tranches, with a second tranche valued at $24.6m subject to shareholder approval.
That’s in addition to a share-purchase plan to raise $5m with oversubscriptions allowing for a final sum of up to $8m, as well as amendments to the company’s Trafigura debt facility, which will include a 12-month delay in maturity of a $22.7m revolving credit facility
Panoramic managing director Victor Rajasooriar blamed “recent operational setbacks” for seeking additional funding, with proceeds intended to bolster the company’s balance sheet and remove working capital pressure caused by recent issues at Savannah.
“By taking these steps we will have the balance sheet strength to support our operations and provide a platform for future growth,” he said.
Panoramic’s financial year 2024 guidance is for significant increases in nickel and copper production and more modest growth in cobalt output.
Shares in the company last traded at 9¢ each.
Does anyone else have thoughts on this please?
cheers
NWH Price at posting:
$2.64 Sentiment: None Disclosure: Held
(20min delay)