Lending Association

Crisis deepens for Panoramic Resources

The prospects for Panoramic Resources (ASX:PAN) and its beleaguered Savannah nickel, copper, gold mine have taken a significant hit with the recent appointment of receivers, adding to the company’s existing challenges following the earlier appointment of administrators.

Receiver managers were appointed late last week, exacerbating the already precarious situation. Typically, the appointment of receiver managers supersedes the role of administrators as they are court-appointed at the behest of a creditor, while administrators are appointed by the company itself.

Receivers assume control of a company’s affairs with the primary objective of assessing its financial standing and exploring options for salvage, sale, or liquidation. Their duty lies in representing the interests of creditors, aiming to maximize the recovery of debts owed to them. Shareholders typically hold the lowest priority in this process.

In contrast, administrators act in the interest of shareholders and subsequently creditors. Their role involves securing necessary funds to sustain operations, as well as restructuring and recapitalizing the business.

Panoramic Resources had $27.3 million in cash reserves as of December 31, which the receivers, or the secured creditor, seek to secure if possible.

The crux of the ongoing dispute between administrators and receivers revolves around control of the cash reserves in Panoramic’s bank account.

In a statement issued to the ASX on Monday morning, FTI, the administrators, disclosed the appointment of Thomas Birch and Jeremy Nipps of Cor Cordis as Receivers and Managers. This appointment, made on March 7, 2024, was at the behest of Trafigura Pte Ltd, a major commodity trader, based on a specific security deed dating back to April 3, 2021.

The scope of the Receivers’ authority, including the property under their purview, remains under discussion between the administrators and the receivers, with a particular divergence of opinion regarding Panoramic’s cash reserves.

The administrators emphasize the urgency of resolving this matter in the best interests of Panoramic and its creditors, including Trafigura, especially in light of the ongoing efforts to sell or recapitalize the business, a strategy being pursued in tandem with Treadstone Resource Partners.

Trafigura, Panoramic’s “offtake partner,” has been purchasing nickel and other products from the company. According to Panoramic’s December quarter report, revenue from Trafigura totaled US$18.1 million, with payments inclusive of all metals contained in the concentrate.

The report also disclosed Panoramic’s repayment activities, indicating two scheduled debt repayments totaling US$1.10 million during the quarter, and a total drawn debt of US$36.5 million as of December 31, 2023.

With the appointment of receivers, Panoramic’s future remains uncertain, as stakeholders await further developments in this evolving situation.