THE MINING EXECUTIVE MAGAZINE JANUARY/FEBRUARY 2020 EDITION

The
MINING EXECUTIVE
Magazine FEBRUARY 2020
The offer would materially de-risk
shareholders' investment in Panoramic
through both receipt of up-front value for their
Shares and through being part of the
combined group; a stronger, larger, more
diversified and more liquid vehicle.
In this regard, IGO strongly projected that due
to the risk factors currently faced by
Panoramic, it is possible that, without IGO's
Offer, the Panoramic share price would fall
below the pre-Offer Panoramic Share price
and the implied Offer value in future.
Shareholders would have an opportunity to
participate in the realisation of the full value
potential from Savannah and its surrounding
geology through IGO's technical, financial
and operating capability than on a standalone
Panoramic basis whilst at the same time
retaining and enhancing exposure to attractive
nickel market dynamics.
Panoramic Shares have not traded at the
implied Offer value of $0.476 per Panoramic
Share since 1 March 2019, prior to
Panoramic's first equity raising of last year
announced on 11 March 2019. IGO's Offer, in
IGO's view, a rare opportunity for Panoramic
Shareholders to realise a very attractive and
significant premium for their Panoramic
Shares.
The offer would come with benefits from
IGO's attractive shareholder returns. But it
goes without saying that there are also reasons
why Panoramic would want to hold on to its
assets considering the amount of work and
effort the company has put into restarting the
project. PANORAMIC Resources has
conceded that its guidance for the current
financial year may not be met due to a number
of operational ailments like the seismic issues
as well as the paste fill equipment which is
poorly performing.
According to Zeta Resources, the targeted
shareholder, IGO launched this takeover bid at
a time when the value for the full ramp up of
mining at the Savannah nickel-copper-cobalt
in the Kimberley region of Western Australia
has not been achieved.
To this effect, the company performance was
and is as expected to be below expectation as
the funds required for this ramp up had just
been invested. In its guidance review, the
company projects FY2020 7000-7500 tonnes
of Nickel (Ni) 4500-5000 tonnes Copper (Cu)
and 400-500 tonnes Cobalt (Co). This
according to Zeta has given IGO the leverage
to inflate share price on offer in order to
acquire the Panoramic shares at a deflated
price.
Change of Course
Panoramic aims to subsequently
transition from the Savannah remnant
orebody to the Savannah North
orebody and is optimistic that the year will
fundamentally change the company's fortunes
as confidence dwindles by the day. The
company maintained a stronghold counter,
"Take no action" stance from the date the
offer was given opening up its doors to other
prospective suitors till IGO recoiled and
retracted its offer recently. Changes in project
financing, along with Panoramic's potential
failure to meet production guidance, likely
breach the conditions set out by Independence
Group (IGO) in its takeover offer. The
company had reforecasted its cash flow and,
in the horizon, saw a need for additional
short-term refinancing scheme of up to AUD
$30 Million.
The bid for Panoramic, though medium a
project in stature compared to other players in
the same field developed an investment ripple
within the nickel market with other
competitors unleashing their purses on
prospective. In a sudden change of tone,
Panoramic opened up its books on 22nd of
November 2019 to potential suitors in the
wake of the November offer by IGO but still
maintaining the “take no action stance”.
This had potential to turn into a bidding war, a
war that if Panoramic would have lost or
looses the company certainly knows that it
would have yielded the best value for its
shareholders. Amongst the suitors who are
believed to have sought access to Panoramic's
Data Room is Western Areas and Black
Mountain Metals.
The data room provides information to
interested parties to conduct due diligence and
gives them the opportunity to put forward
alternative proposals. At the bottom of the
barrel, the catch is, with the electric revolution
taking place, a nickel demand earthquake may
take place in the coming years potentially
sending prices skyrocketing.
This may explain why companies like BHP
are holding onto the nest of the nickel quiver
in their Nickel West mine even when the
company would go through challenging times
with the operation.
Since Nickel so that strategic, if Panoramic
falls, so will other small players start falling
one by one which includes Mincor and
Poisedon as bigger companies like Glencore
and Rio Tinto have also thrown their hats into
the ring in search of new sources of the
mineral.
Shares of Panoramic Resources have been on
a rise since the November announcement. The
game is on and just like a game of Chess, the
strongest will survive. Until then, Panoramic
continues the juggling game.
Early January 2020, IGO seemingly on the
verge of not gaining much success decided to
rescind the offer offering upon lapse of the
offer on 17th of January 2020, a right to
withdraw their acceptance to all Panoramic
Shareholders who had self pollinated and
vested their confidence in IGO by jumping
the Panoramic ship on the offer. As a result,
this would give these shareholders a right to
deal with their normal panoramic shares upon
completion of processing of the withdrawal.
Peter Bradford, Managing Director and CEO
of IGO stated: "IGO recognises that under the
customary terms of IGO's Offer, Panoramic
shareholders who have accepted the Offer
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would be unable to trade their Panoramic
shares until after the Offer has lapsed on 17
January 2020.
To alleviate the potential disadvantages of this
for accepting Panoramic shareholders, IGO
has determined, in line with its values and
standards, to grant Panoramic shareholders
who have accepted the Offer a right to
withdraw their acceptances prior to the Offer
lapsing. This will provide accepting
Panoramic shareholders the opportunity to
freely deal with their Panoramic shares earlier
than they would be able to in the ordinary
course.”
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