StoneBridge Research – Panoramic Resources Limited (PAN)

StoneBridge Research – Panoramic Resources Limited (PAN $2.29) – Achieves record nickel production in FY09

Reiterating BUY recommendation, upgrading price target from $3.00/share to $3.10/share

Key points

• PAN owns and operates the Savannah and Lanfranchi underground nickel mines in Western Australia.
• Both mines are performing strongly and have enabled PAN to report record production in FY09 of 18.75kt contained nickel.
• The Savannah mine is expected to produce around 8.0ktpa contained nickel for the next nine years.
• An increase in ownership at Lanfranchi in November 2008 combined with increasing output from the Deacon deposit underpins further production growth over the next two years.
• Exploration will be a major focus for PAN in FY10 with the company recently entering in to two new exploration joint ventures.
• PAN now has approximately $90M in cash and receivables.
• Higher nickel prices and an in-the-money hedge book should underpin strong earnings growth in FY10.
• We are reiterating our BUY recommendation on the stock and have increased our price target to $3.10/share to reflect the higher than expected cash balance.

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