StoneBridge Research – Panoramic Resources Limited (PAN $2.52)

StoneBridge Research – Panoramic Resources Limited (PAN $2.52) – Rising production with exploration upside

$3.00/share price target

Key points

• PAN owns and operates two underground nickel mines in Western Australia.
• We recently attended a site visit to both operations.
• Savannah and Lanfranchi are operating in line with expectations and are on track to meet FY09 production guidance of 17-18kt contained nickel.
• Production is expected to rise 15% in FY10 due to increased output at Lanfranchi and PAN owning 100% of the project for the full-year.
• Exploration success at Savannah has extended the mine life to nine years while Lanfranchi has at least six years remaining.
• A solid hedging strategy has left PAN well placed to take advantage of the recent strength in the nickel price and we are reiterating our BUY recommendation on the stock and set a price target of $3.00/share.

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