INDEPENDENCE Group (ASX: IGO) has increased the pressure in its takeover bid for Panoramic Resources (ASX: PAN), after Savanah downgraded its FY20 guidance at the Savannah nickel project in the East Kimberley, WA.
Citing ongoing difficulties at the Savanah project, including underperformance of the paste filling system that impacted the stoping sequence, low nickel grade due to hanging wall failure, and continuing equipment availability, IGO has requested expedited and thorough due diligence to be completed.
Panoramic had indicated it would need to raise additional capital, potentially through an entitlement offer in the near term, and that there would likely be a breach of several conditions of the off-market takeover offer bid made on November 4.
“Given the material change to the operational and financial position of Panoramic announced today, and the breach, or likely breach, of IGO’s Offer conditions, IGO is reviewing all of its options,” it said.
“[IGO] has demonstrated its willingness to engage directly with the Panoramic Board.
“The due diligence conditions of the Offer were included to protect the interests of IGO shareholders and, in the context of today’s announcement by Panoramic detailing the ongoing operational issues at Savannah and deteriorating financial position of Panoramic, those conditions were clearly justified.”
While Panoramic has continued to resist IGO’s request to conduct due diligence, this latest announcement will ramp up pressure on the board to concede, and IGO said that due diligence would be required for the company to proceed with its offer.
Panoramic has maintained its recommendation that shareholders take no action until the board issues a formal recommendation.
