Power generation company Pacific Energy has secured a new electricity supply contract for Panoramic Resources’ Savannah mine – taking its total contracted capacity to a record 391MW.

Pacific will restart the existing 12MW diesel power station in November, and immediately upgrade and expand the existing 12MW diesel generator, but the contract had built-in flexibility “to convert to alternative fuel sources in future”, the company told investors.

The contract has a term of 8.3 years — in line with the initial mine life at Savannah — with the option for Panoramic to extend that by a further five years.

Pacific Energy now has total contracted capacity of 391MW — up from 371MW in FY18 — and expects to make about $55 million in FY19.

Pacific Energy (ASX:PEA) growth since 2011.
Pacific Energy (ASX:PEA) growth since 2011.

The Pacific (ASX:PEA) share price, which was steady at 51c, has traded between 50c and 62c over the past 12 months.

Panoramic Resources (ASX:PAN) is on track the ship the first nickel, copper and cobalt from its Savannah mine in early March 2019 after a two-year hiatus.

Panoramic’s  Savannah nickel, copper and cobalt project in the Kimberley region of Western Australia mine will produce 10,800t nickel, 6100t copper, and 800 tonnes cobalt each year over an initial mine life of 8 years.

Prices for these concentrates is strong and is forecast to grow further as lithium-ion battery demand picks up pace.