Monsters of Rock: There’s a $20m check in the mail for recharged nickel producer Panoramic, and that’s just the start
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Another strong day for ASX Materials, which is up almost 2% for the week, and 7% over the past month.
Metals prices are strong across the board.
Gold and iron ore remain steady above $US1,800/oz and $US118/t, respectively – which is very healthy – while nickel gets comfy above $US20,000/t, a level it retook earlier this week.
Currently at ~$US9,650/t, copper has also been on an upward trend since mid-December.
SFR wants to become a 500,000tpa copper miner in five years, something that would propel it towards global ‘Big Boy’ status.
A major step towards this goal is the $2.57bn acquisition of the MATSA copper mining complex, which has now been approved by Spanish authorities.
The deal is unconditional and will proceed toward completion on or around 31 January 2022.
MATSA – which replaces SFR’s depleting DeGrussa copper mine in WA – includes three underground mining operations and 4.7Mtpa central processing facility.
It promises to be a 110,000tpa-plus producer over its remaining 12 year mine life.
SFR is also building the Motheo copper mine in Botswana, which will produce 60,000tpa copper and 2.7Mozpa silver. First production is pencilled in for Q4 FY23.
Rejuvenated WA producer PAN is officially generating cash again from the Savannah operations, and its timing couldn’t be better.
A maiden 10,865t shipment of nickel-copper-cobalt concentrates to China is now complete, with PAN expecting payment of $20.4m in the first week of January.
A second 8,00t -10,000t shipment is planned for February. Each 1,000t shipped equals about $2m in revenue, the company says.
“It is pleasing to see the final piece of the puzzle coming together to bring the revenue stream into the operations,” MD and CEO Victor Rajasooriar says.
“With nickel, copper and cobalt prices strengthening, and forecast to remain buoyant into 2022, we look forward to more successful shipments in 2022.”
Nickel’s fortunes and PAN’s efforts to revive Savannah have excited investors, who may also be pricing in a takeover.
IGO (ASX:IGO) failed with a bid to purchase PAN for $312M in IGO shares back in 2019, but could be back in the market after offering $1.1 billion to take over Western Areas (ASX:WSA), which owns 19.9% of PAN.
Andrew Forrest’s Wyloo Metals and BHP’s reborn Nickel West division could also be hungry to swallow up some WA nickel plays after duking it out for most of the year over $600 million Canadian nickel explorer Noront Resources.