Panoramic Resources (ASX: PAN)--which just took out its 25% partner in the Lanfranchi mining operations in Kambalda--is telling Australian investors that it will realise nickel prices in excess of the current forward nickel price over the next 18 months for about 35% of its forecast production.The Perth-based company has just struck a deal to acquire the 25% of the Lanfranchi operations held by Brilliant Mining Corporation (TSX-V: BMC) for 12 million shares and three M options - giving the Canadian company a 6% stake in Panoramic.Panoramic is the second Kambalda nickel miner to show its still in the money on nickel production. Late last month Independence Group NL (ASX: IGO) disclosed that after some efficiency moves its Long Shaft mine was still running economically, despite the dour nickel price.A roadshow by Panoramic now underway is telling investors and stockbrokers that in the December 2008 half year it had revenue of $A113 M ($US72.7 M), net profit of $A9 M ($US 5.79 M) which was defrayed by write downs of $A17.6 M ($US11.32 M) to give a net loss of $A8.6 M ($US5.53 M). Despite this, Panoramic declared a 1 cent fully franked dividend.At December 30 the company had liquid assets of $A80 M ($US51.47 M) and the hedge book was $A74 M ($US47.6 M) in the money.As well as the Lanfranchi mine (one of the original WMC Resources mines before its sell down and subsequent takeover by BHP Billiton), Panoramic owns the Savannah nickel-cobalt mine in the Kimberley region of Western Australia, and 60% of the nearby Copernicus nickel-copper-cobalt mine - a joint venture with Thundelarra Exploration Ltd (ASX: THX) with development halted due to the metal prices' downturn.Chief Executive Peter Harrold's upbeat presentation said the plan was to increase annual production to at least 20,000 tonnes of contained nickel (output in the December half was 9,285t).In the short term Panoramic will defer all discretionary capital projects, focus on resource expansion both in the Kambalda region and Kimberleys, implement a 10% salary reduction -- estimated annual saving $A5 M ($US3.21 M) - reduce the workforce from 650 to 500.In the longer term the objectives are to improve offtake agreements, gain better metallurgical recoveries, reduce its reliance on diesel power at the remote Savannah mine, including examining hydro and solar power.
Exploration in the past year has lifted resources, including a 44% lift in Savannah's reserves in the Upper Orebody only to 2.9 Mt @ 1.29% Ni and resources to 4.7 Mt @ 1.48% Ni. One of he new discoveries at Kambalda has been the Deacon orebody which now has a resource of 2.5 Mt @ 2.92% Ni and an initial reserve of 1.7 Mt @ 2.54% Ni.