Western Areas Maintains Stake in Panoramic Resources | KOSEC

Industry News

& Articles

Western Areas Maintains Stake in Panoramic Resources


Back in May 2020, Western Areas Limited (ASX: WSA) announced that it will be acquiring an ownership of Panoramic Resource Limited (PAN). More recently, following the completion of Panoramic Resources capital raising, an additional 108,611,863 shares were awarded to Western Areas. Yet, despite the issuance of shares, WSA's 19.9 per cent ownership remains. The shares were available at AUD0.07 per share, totalling to AUD28.6 million that WSA paid to PAN. WSA is now a substantial stakeholder in PAN; congruent with plans to increase exposure to New Energy Vehicles markets.

Investing in PAN through their recent capital raising was a strategic move for WSA, with the company expecting an upward trajectory for nickel, copper, and cobalt. Due to manufacturing trends shifting to battery-powered vehicle solutions. PAN has produced over 180,000 tonnes of nickel, 60,500 tonnes of copper and 4,900 tonnes of cobalt sulphide from its mines between 2004 and 2016. This makes it an opportune business for WSA’s growth strategy, synergising with its existing nickel portfolio in Flying Fox, Spotted Quoll and other development and exploration sites.

Financial strength has allowed WSA to move quickly and take advantage of the opportunity while continuing development and maintaining its mines. With AUD181.4 million cash availability, very little debt, commodity reserves, new production capabilities through Cosmos and Forrestania region mines, WSA has capitalised on this growth opportunity. WSA now has the right to have a representative seat on the PAN board, as well as two representatives from both companies being appointed to provide technical assistance in the Savannah mine, which shows strength in collaboration, boding well for future cooperative plans.

WSA found itself in an infrastructurally sound position to become a substantial stakeholder through mining operational performance. As of March 2020, guidance for nickel tonnage sits between 21,000 and 22,000, with 15,812 tonnes already mined. Production costs are projected to be AUD2.90/lb and AUD3.30/lb, with mine development costs estimated to be between AUD33 million and AUD38 million, and the Cosmos region development estimating to cost between AUD75 and AUD85 million.

Property, plant, and equipment costs are estimated to be between AUD7 and AUD10 million. However, March levels have already pushed to 7.1 million. Exploration is expected to cost between AUD14 and AUD17 million, which has been spread between Mt Alexander, Cosmos Nickel Project, Forrestania Nickel Project and Western Gawler Project. All of this data has been given in the context of the COVID-19 pandemic, where delays in consumption are expected.

Looking at the financial history of WSA, revenue has been steadily increasing since 2016, as has net operating cash flow. However, other fundamental data points such as operating margin, net profits after abnormals, return on equity (ROE) and earnings have all been sporadic. From the current mining operations and the recent acquisition of PAN, WSA looks healthy as a company; supported by projections that there will be an increase in nickel consumption in electric vehicles and green energies becoming more viable in the future.

By Caroline Wong 

Click here for a 7 days access to our Lotus Blue Portal.

Caroline Wong

Caroline Wong is a Research Analyst at KOSEC – Kodari Securities. She writes on markets and focuses on ASX Top 300 companies. Email Caroline at c.wong@kosec.com.au.

Comment on this company

Latest Stories

Wesfarmers Flags Strong Sales Growth During FY21

Wesfarmers (ASX: WES) has today released a……

RBA Keeps Rates Unchanged and Turns all Eyes to July Meeting

The RBA Like many central banks across the world, has…

Infomedia Completes Acquisition of 100 per cent of Simplepart

Infomedia (ASX: IFM) has today confirmed the completion of…..

More for you

Link Administration Holdings (ASX: LNK) Confirm PEXA Listing for June

Link Administration Holdings (ASX: LNK) have today provided an update to……

Australian Ethical Investment Issues Upbeat Earnings Guidance

Australian Ethical Investment Ltd (ASX: AEF) has released to the ASX… …

ALS Releases Strong FY21 Results amid COVID-19 impacts

ALS Limited (ALQ) has today achieved a 35.1 per cent increase of full-year net.. …

Altium Shares Rebounds Alongside Strength in US Tech

Altium Limited (ASX: ALU) has experienced significant strength in recent……

Data#3 Stands Strong Amid General Tech Weakness

Data#3 (ASX: DTL) remains at the forefront of providing companies with… …

Qanats Airways Edges Slightly Higher on Positive Trading Update

Qantas Airways (ASX: QAN) has today released another key…….

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.



KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.


Latest TV Commercial