Future Metals’ Panton Project Scoping Study (announced 7 December 2023) demonstrates potential for a long-life, globally significant PGM operation. Key highlights include:
- Study leverages off >A$50m investment into Panton to date, inc. prior feasibility studies, ~45,000m drilling, decline access to orebody & comprehensive bulk metallurgical testwork
- Study demonstrates potential for Panton to be one of few long life, globally significant PGM operations in the western world
- Robust project economics, low capital intensity versus industry benchmarks and strong leverage to PGM price appreciation, with:
- 1.5Moz PdEq2 mining inventory from 9.8Mt @ 3.60g/t PGM3E1, 0.25% Ni, 12.6% Cr2O3 (4.77g/t PdEq2) for 1.1Moz PGM3E1, 25kt Ni, 1.1Mt Cr2O3 concentrate
- Initial ~9-year mine life (study’s mine plan covers just 26% of the current defined Reef & High Grade Dunite material and only 10% of the overall MRE)
- PGM production averaging 117,000oz pa from high grade feed of 3.60g/t PGM3E1
- PdEq2 production averaging 161,000oz pa (inc. nickel and chromite by-products)
- Low All-in Sustaining Costs (AISC), averaging US$789/oz (projected to be in the 2nd quartile), thereby providing resilience throughout the metal price cycle
- Conventional flowsheet (crush, grind & flotation), producing high grade PGM & chromite concentrates, analogous to several current South African PGM operations
- Upside potential via resource growth, additional by-product credits (copper, cobalt, rhodium & iridium), & further optimisation of mine design, processing & logistics
- Potential for future Cu-Ni-PGM resources at Eileen Bore Project to be included in the next stages of feasibility work
- Future Metals is planning initiation of a PFS, targeted for completion in Q4 2024
Study Highlights
The Scoping Study demonstrates the potential for Panton to be one of few significant primary PGM operations in the western world. The Study supports a high-grade, initial 9-year operation processing both Reef and High-Grade Dunite material through a conventional crush, grind and flotation flow sheet, producing:
| Avg. Production | PGM (Oz pa) |
Chromite Conc. (Tpa) |
Nickel (Tpa) |
PdEq2 (Oz pa) |
| 1,250ktpa | 117,000 | 134,000 | 1,200 | 161,000 |
Robust economics with Panton demonstrating strong financial metrics that reflect the high-grade and low capital intensity of the Project:
|
Valuation (1,250kt) |
Pre-Production Capex (A$m) |
NPV10% (A$m) (pre / post tax) |
IRR (%) (pre / post tax) |
||||||
| Base Case | 267 | 250 / 153 | 26% / 21% | ||||||
| PGM 5yr Avg Case | 477 / 311 | 39% / 31% | |||||||
| PGM Basket | By-product credits | |||||||||
| Prices |
Platinum (US$/oz) |
Palladium (US$/oz) |
Gold (US$/oz) |
Rhodium* (US$/oz) |
Basket Price (US$/oz) |
Nickel (US$/t) |
Chromite (US$/t) |
|||
| Base Case | 1,285 | 1,400 | 2,000 | 4,450 | 1,556 | 20,000 | 282 | |||
| PGM 5yr Avg Case | 1,040 | 2,115 | 1,870 | 12,450 | 2,200 | 20,000 | 282 | |||
* Note Rh not included in Panton Scoping Study economic evaluation. Included for comparison to South African PGM Basket Price only.
- Panton Base Case long term PGM pricing aligns with the ~85th percentile of the cost curve (see Figure One), with the current South African PGM4E basket price at an unsustainable ~65% percentile (i.e. ~35% of current global operations losing money), near all-time lows
- Panton’s estimated AISC of US$789/oz (projected 2nd quartile) provides the opportunity for the planned future operations to generate robust operating margins in all phases of the PGM price cycle (see Figures One & Two)
- Study includes just 26% of Reef & High Grade Dunite material – mine life extension and valuation uplift to be targeted via progressive uplift in Resource categorisation
- Average annual operating free cash flow A$72m – clear value-add of mine life extensions
- Panton has the opportunity to achieve an accelerated pathway to production, driven by:
- Project’s location on granted Mining Leases
- >A$50m invested in the Project to date including an established portal and decline, comprehensive metallurgical test work, >45,000m of drilling & prior environmental studies
- Strong relationships with local stakeholders including the Traditional Owners
- Panton is optimally located, with good access to established infrastructure:
- East Kimberley region of Western Australia, a top-tier mining and investment jurisdiction
- ~1km from a sealed highway utilised by other mining operations
- ~70km from a sealed airstrip for employee and contractor transportation
- 300km from deep-water port at Wyndham, with easy access into key potential markets
Figure One | PGM Industry’s Cost Curve and Panton Project’s positioning.
Source: SFA (Oxford)
*Further details for the industry cost curve analysis are shown under PGM Industry Cost Curve Position section in the body of this announcement
Figure Two | South African PGM4E Basket Price.
Source: Bloomberg & Company estimates
*The PGM4E basket price is calculated based on the weightings of Pt, Pd, Au and Rh production for the South African PGM industry. All other metals production is considered a by-product and credited towards an operations’ cost base
- Significant upside potential for Panton over and above the Scoping Study outcomes from:
- The Panton orebody is open at depth and interpreted to have improving thicknesses and grades; further drilling may support mine life extensions
- Inclusion of other payable metals including rhodium, iridium, copper and cobalt
- Resource delineation and inclusion of processing feed from nearby projects such as Eileen Bore Project or other discoveries within Future Metals’ 176km2 exploration acreage
- Pricing upside associated with ‘Western premiums’ for scarce and critical resources located in Australia supporting supply chain development outside of China, Russia and South Africa
- Expansion potential from the significant near-surface Bulk Dunite mineralisation which is not included within this Scoping Study
Cautionary StatementThe Scoping Study Report (“Scoping Study” or “Study”) referred to in this announcement has been undertaken to evaluate the potential development of the Panton PGM-Ni-Cr Project (“Panton” or the “Project”). The Project is 100% owned by Future Metals NL (“Future Metals”, “FME”) or the “Company“). The Scoping Study comprises a preliminary technical and economic study of the potential viability of the Project. It is based on low accuracy level technical and economic assessments that are not sufficient to support estimation of Ore Reserves. Additional infill drilling, evaluation work and appropriate studies are required before Future Metals will be able to estimate Ore Reserves or provide assurance of an economic development case. The Scoping Study has been completed to a level of accuracy of +/- 35%.
Of the Mineral Resources scheduled for extraction in this Scoping Study’s production target, approximately 86% are classified as Indicated and 14% as Inferred over the first five years and 50% are classified as Indicated and 50% as Inferred over the evaluation period. There is a low level of geological confidence associated with Inferred Mineral Resources, and there can be no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target will be realised.
Under prior owners, the Project has previously had a JORC (2012) Mineral Resource Estimate (“MRE”) with the majority of that estimate in the Measured & Indicated categories. This supported a Bankable Feasibility Study which was completed on the Project. Additional conservatism has been applied when estimating Panton’s current JORC MRE, however, the Company believes that this is relevant information when assessing the results and confidence levels applied in this Scoping Study.
Future Metals notes that the majority of the upfront capital required is projected to be repaid in the years where Indicated Resources comprise a majority of the production schedule. The Company believes that it has a reasonable basis for providing such forward-looking statements and the forecast financial information based on material assumptions outlined in this announcement. One of the key assumptions is that funding for the Project will be available when required. While the Company considers all of the material assumptions to be based on reasonable grounds, there can be no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved.
To achieve the range of outcomes indicated in the Scoping Study, funding in the order of approximately A$267m will likely be required in pre-production capital expenditure. There is no certainty that the Company will be able to raise that amount of funding when needed. It is also possible that such funding may only be available on terms that may be dilutive to, or otherwise affect, the value of Future Metals’ shares. It is also possible that Future Metals could pursue other value realisation strategies such as a sale, partial sale or joint venture of the Project. If it does, this could materially reduce the Company’s proportionate ownership of the Project. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Scoping Study.
