Panoramic Resources (ASX:PAN) will lose about 140 jobs after managers decided to suspend mining activities at the company's troubled Savannah Nickel mine in Western Australia's Kimberley region.
It was the miners' second decision in a week; On Friday, Core Lithium confirmed it would suspend operations at its Finiss lithium mine in the Northern Territory and would continue processing stock ore to maintain cash flow.
The news about Savannah comes 26 days after Panoramic appointed FTI administrators on Dec. 12 after trying to save cash and cut costs.
The managers said at the time of the appointment that they would continue operations at the Savannah mine to generate cash and help pay down debt and other liabilities.
However, the price slump has not done the company any favors, as metal from Indonesian-owned mines and processing facilities continues to create a global nickel glut.
In fact, due to the boom in Indonesian metal production, nickel prices fell by 45% in 2023.
"While operations continued, including the delivery of approximately 10,000 tonnes of nickel concentrate on 3 January 2024, nickel prices continued to move lower," the administrators said in a statement to the Australian Securities Exchange on Tuesday morning.
"After further engagement with key creditors, key suppliers and other stakeholders, the administrators have decided that operations at the Savannah Nickel project will be suspended in the coming days.
"While we intend to proceed with the Savannah Nickel project transaction and retain the employment of the operating team as we explore opportunities for a sale or recapitalization of the Panoramic business, after consulting with major creditors and key suppliers, it is clear that the likelihood of achieving an operational and financial turnaround in the near term is low."
"The administrators, with the assistance of Treadstone Resource Partners, will continue to pursue a two-track strategy to sell or recapitalize the Panoramic business.
"This process will continue regardless of the operational status of the Savannah Nickel project and will seek to realize the full value of the ore bodies, extensive infrastructure and exploration potential identified by the project," the statement concluded.
