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Mining Through the Crisis: The Restructuring of Panoramic Resources Amid a Nickel Market Downturn

Daniel Woodhouse, Hayden White and Kate Warwick of FTI Consulting were appointed Voluntary Administrators of Panoramic Resources Limited and certain of its subsidiaries (‘the Group’), which operates the Savannah Nickel Mine in the remote East Kimberley region of Western Australia. This appointment followed operational issues that had resulted in lower production and higher unit costs than had been forecast. These challenges coincided with the nickel price trading at historically low levels, reflecting a deteriorating global nickel market.

Our Impact

FTI Consulting successfully completed the sale of the Group in a depressed nickel market, where a number of other significant nickel producers were also transitioned to care and maintenance.
The sale and recapitalisation keeps Panoramic’s key assets and business intact, ready to restart when the nickel price improves. All priority employee entitlements were paid in full, with employment continuing for existing care and maintenance staff and a superior return provided to unsecured creditors.
The outcome was supported by the secured creditor, who has preserved the value of its outstanding principal and interest in full.

Our Role

FTI Consulting worked closely with all key stakeholders to enable the safe continuation of existing operations while it prepared the business to undertake a dual-track sale and/or recapitalisation process.
Continuation of operations was a significant achievement given the business’ remote location, being more than 2,500km (1,750 miles) from the nearest capital city and its single sources of supply for key inputs and logistics.
Determining that it would be financially unviable to continue operating the mine in light of the prevailing weak nickel market sentiment, our experts made the decision to wind down operations and placed the mine into care and maintenance.
Following a comprehensive campaign to sell or recapitalise the business, the Group’s creditors voted to support a recapitalisation by way of a Deed of Company Arrangement.