PERTH (miningweekly.com) – Nickel miner Panoramic Resources has launched an operational review of its Savannah project, in Western Australia, with the miner warning that the full year production guidance would not be met as the operation continued to perform below expectations.

The ASX-listed company on Thursday said that after the below-budget operational performance of the Savannah project during the September quarter, the operation had continued to underperform during the month of October.

The underperformance has been driven by the underperformance of the underground paste filling system, which impacted the stoping sequence, lower nickel grades owing to the hanging wall failure and the paste dilution in two stopes, as well as continuing equipment availability issues.

Panoramic said that while initiatives to improve the mining rates were being implemented, the company’s current expectation was that the short-term operational performance could remain below previous forecast, particularly during the next four months, but also into the June quarter of next year, while mining transitions away from the Savannah orebody and into the Savannah North orebody.

An updated production guidance would be provided on the completion of the operational review, the miner said.

Meanwhile, Panoramic has raised the need for additional funds, given the below-budget production and the reduced revenues, with the company saying that it was now assessing a range of potential funding options.

The final structure and terms of the funding would be determined by the board in consultation with the management and advisers, and at the completion of the operational review, Panoramic noted.

Meanwhile, the miner has maintained its advice that shareholders take no action regarding a takeover offer from fellow-listed Independence Group, noting that a number of clauses within the offer had likely been breached by the fact that the 2020 production guidance would not be met, and that Panoramic could need to amend its existing financing agreement with Macquarie Bank.

Independence is offering one of its own shares for every 13 Panoramic shares held, valuing the takeover target at A$312-million.