Operations

Overview 

Panoramic has committed to spend at least $12.5 million on exploration in 2011/12 to advance new and ongoing programs at the Savannah and Lanfranchi Projects and to ramp up exploration activities at the recently acquired Gidgee Gold Project. The Company is also focused on actively developing diversified growth investments through exploration joint ventures with other companies in Australia and around the world.

Australia

Gold

Gidgee Gold Project, Murchison, WA

The Company’s initial strategy for Gidgee is to build up a resource and reserve profile and develop a mine plan which will support the re-commissioning of the existing Gidgee processing plant. The Company has set a target of establishing a Reserve of 500,000oz and to commence production at a rate of 100,000oz per annum within two years.

To achieve this goal, two concurrent exploration strategies have been implemented, the first focusing on Resource Definition Drill Testing and the second on Regional Greenfields Targeting. The Resource Definition Drill Testing Program includes a review of all historical mining areas, re-optimising existing high grade resources at a higher gold price and an initial 15,000 metre RC and diamond drill program planned to commence in the December 2011 quarter.

The Regional Greenfields Targeting Program started in July 2011 with a 20,000 metre drill program to collect data to advance alteration analysis. Multi-element lithogeochemistry and hyperspectral data collected from this program will help identify and characterise gold mineralising alteration systems around the known deposits. This knowledge will then be applied to the discovery of new deposits elsewhere in the belt. This program is targeting a multi-million ounce discovery.

A key opportunity at Gidgee is that both the historical and regional mining areas are under drilled. Less than 3% of all holes are drilled to a depth over 150 metres. There are a total of 210 exploration targets across the project with multiple high grade targets around historical pits and underground operations

The Swan Bitter and Swift prospective targets demonstrate significant potential as high grade extensions to existing resources.

Nickel

Savannah Project, The Kimberley, WA

In 2009/10, Panoramic reported on the Lower Zone Ore Reserve below the 500 Fault and that the Lower Zone orebody was truncated by a fault structure (the 900 Fault) at approximately 900 metres below surface. In 2011/12, Panoramic intends to complete a new hanging wall drill drive from the Lower Zone decline and commence resource definition drill testing of the orebody below the 900 Fault.

Surface exploration at Savannah during 2010/11 involved the completion of a series of deep penetrating fixed loop electromagnetic (FLEM) surveys comprising 30 line kilometres of survey around the mine site. Three deep electromagnetic anomalies were identified by these surveys and have been scheduled for diamond drill testing in early 2011/12 . Precollars for the three diamond drill holes (SMP176, 177 & 179) were completed during 2010/11.

East Kimberley Tenements Joint Venture (EKJV) with Thundelarra Exploration ltd

Since July 2009, Panoramic has spent over $3 million on the EKJV regional tenements, and under the terms of the farm-in agreement with Thundelarra Exploration Ltd we have now earned a 61% interest in these tenements.

In 2009/10 Panoramic commissioned a regional airborne gravity survey of the EKJV area and followed this during the year with a series of airborne electromagnetic (VTEM) surveys (5,307 line kilometres) over selected gravity anomalies. Processing and interpretation of these airborne data sets is now complete with numerous target areas having been identified. Follow-up FLEM ground surveys over these target areas has commenced in order to prioritise drill targets. To 30 June 2011, 22.5 line kilometres of FLEM survey had been completed at Springvale and 40 line kilometres at Savannah West. At Jenner, which is located just to the north of Copernicus, a strong EM conductor associated with a pyroxenite ultramafic body similar to the Copernicus Orebody was identified and drill tested in early 2011/12.

In 2011/12 Panoramic intends to complete the follow-up ground FLEM program and begin systematic drill testing of targets this year. In addition, the Company has commissioned two new VTEM surveys to be flown to identify new target areas.

Lanfranchi Project, Kambalda, WA

2010/11 was an exciting year for exploration at Lanfranchi with the discovery and subsequent delineation of the high-grade Helmut South Extension Orebody and the completion of the Cruickshank infill resource drill program and subsequent resource upgrade.

Helmut South Extension

The Helmut South Extension Orebody is ideally situated for mining, being located adjacent to existing Helmut South and Deacon underground development on the eastern flank of the Deacon channel, immediately down plunge of the Helmut South Orebody . Fifty seven drill holes were completed in early 2011 to define the Resource. The initial Mineral Resource contains 181,700 tonnes at 3.90% Ni for 7,080 tonnes contained nickel and is open at depth. Recently released drill intersections (HS610 and HS661), down-plunge of the Resource, demonstrate the ongoing potential of the eastern flank of the Deacon/Helmut channel system to host further discoveries of high-grade nickel sulphide mineralisation.

Mine planning studies are underway to convert the Indicated Resource to a maiden Reserve.

Deacon/Schmitz Channel Extensions

Underground exploration drilling in the Deacon/Schmitz channel systems continued to return positive results in 2010/11 . On the eastern flank of the Deacon channel, holes HS610 and 661 were drilled to target previously defined EM anomalies. Both holes intersected significant mineralisation with the HS661 intersection possibly indicating the discovery of a new high-grade zone of mineralisation located to the east of the Helmut South Extension Orebody.

 

To the west of the Deacon channel, drill holes HS663 and HS664 were drilled targeting previously defined EM anomalies. Drill hole HS663 intersected graphitic sediments at the target depth which would explain the source of the anomaly, while drill hole HS664 intersected an un-mineralised ultramafic basalt contact on the southern edge of the EM anomaly. The source of this anomaly remains unexplained.

Three platform electromagnetic (EM) holes (SMT211, SMT212 & SMT213) were also drilled from the Deacon 5920 hanging wall drill drive south westwards across the theoretical down-plunge extension of the Schmitz Orebody. All three holes were successfully cased in preparation for EM surveying.

Towards the end of 2010/11, the exploration drill rig was relocated to the 7666 drill cuddy at the base of the Deacon decline to begin a series of long platform EM holes designed to explore 450 metres down-plunge from the Deacon and Helmut South Extension orebodies. The first two holes of this program (HS692 & HS693) have been completed. Both holes identified strong EM anomalies in the Deacon channel position and intersected broad zones of moderate grade nickel sulphide mineralisation (15.7 metres at 1.55% Ni in HS692) on the basalt ultramafic contact.

The drill program to test down-plunge of Deacon and Helmut South is ongoing and will continue well in to 2011/12. Based on the results to date, Panoramic has commenced development of the 7400 Deacon hanging wall drill drive, which when completed, will enable detailed resource definition drilling to commence.

Cruickshank/Northern Dome

Cruickshank is an undeveloped nickel sulphide deposit located six kilometres north-east of Lanfranchi in the vicinity of the overturned Northern Dome. In 2010/11, Panoramic commenced a study of possible development scenarios for Cruickshank. As part of the study, an infill resource drill program was completed, involving fifty four drill holes (comprising 5,619 metres of RC and 7,888 metres of diamond core) for a program total of 13,508 drill metres. At the completion of the drill program, the Cruickshank Mineral Resource was re-estimated to contain a total resource of 2.63 million tonnes grading 1.28% Ni for 33,560 tonnes Ni contained, including an Indicated Resource total of 2.02 million tonnes grading 1.42% Ni for 28,720 tonnes Ni contained. The total resource figure of 2.63 million tonnes represents a 26% increase from the previous resource estimate completed in 2007.

During the course of the infill drill program, it was recognised that the Northern Dome overturned fold structure, located on the surface just to the north of Cruickshank, was beginning to interact with the deposit at depth . During the June quarter 2011, the Company deepened six recently completed infill resource drill holes (involving a total of 822 drill metres) to determine if the Cruickshank deposit was folded around the overturned fold structure and therefore not closed-off at depth. Although these six holes were not ideally situated to test the concept, all six deepened holes drilled through the fold axis and re-entered the Cruickshank ultramafic host lithologies on the underside of the fold. More importantly, five of the six deepened holes intersected encouraging zones of low-grade mineralisation on the underside of the fold as follows:

 

• 7.00 metres at 0.50% nickel in TD8174;
• 5.00 metres at 0.73% nickel in TD8195A;
• 1.00 metre at 0.54% nickel in TD8197A;
• 9.00 metres at 0.60% nickel in TD8199A; and
• 6.00 metres at 0.60% nickel in TD8205A.

 

The intersections of these broad zones of low-grade mineralisation on the underside of the Northern Dome overturned fold are highly encouraging. The intersections indicate that the Cruickshank deposit has been folded and that with new, better positioned surface drill holes, the central higher grade core of the Cruickshank deposit may be intersected further down-plunge on the underside of the Northern Dome overturned fold structure . More drilling from surface to test this concept is planned for 2011/12.

Lanfranchi Orebody

Development of the new, 150 metre long, hanging wall drill platform above the Lanfranchi Orebody was delayed during the year due to poor ground conditions. The drive is being developed to enable drill testing of the Lanfranchi deposit to 300 metres down-plunge of the existing resource and to follow-up on the exciting West Lanfranchi drill intersections from 2009/10. When completed, the drive will also enable several long platform EM drill holes to be drilled further down-plunge to test the continuation of the Lanfranchi system 500 to 600 metres below the base of the existing resource.

With the delay to the Lanfranchi drill drive in 2010/11, drilling from the drive was restricted to six drill holes. Four of the holes intersected significant mineralisation including:

 

• 2.80 metres at 5.19% nickel (LAN212);
• 1.74 metres at 6.98% nickel (LAN214);
• 0.29 metres at 11.49% nickel (LAN215); and
• 3.69 metres at 1.19% nickel and 0.88 metres at 3.99% nickel (LAN200).

 

After completing these holes the drill rig was relocated to undertake the Helmut South Extension drill program.

Panoramic has re-designed the Lanfranchi hanging wall drill drive and intends to complete the drive in 2011/12 enabling the Lanfranchi down-plunge drill testing program to resume.

Cowan Project (100% Panoramic, Nickel Rights only)

The Cowan Nickel Project is located in the Widgiemooltha-Higginsville-Chalice-Democrat region of the Eastern Goldfields, Western Australia, and comprises two project areas over approximately 500 square kilometres. Panoramic commenced work on the Cowan Project in mid 2008.

Panoramic continued to explore the Cowan Project tenement package during 2010/11. Exploration activities to date have principally been via the application of moving loop electromagnetic (MLEM) surveys of prospective ultramafic horizons and RC drill testing of MLEM anomalies. MLEM techniques can detect the presence of buried nickel sulphide mineralisation and is an invaluable exploration tool to generate drill targets.

In the past twelve months, an additional 15 line kilometres of MLEM survey have been completed at Cowan, bringing the total completed to date to 383 line kilometres. In addition, a further nine MLEM anomalies were tested by RC drilling. Five of the nine anomalies were tested with graphitic black shales intersected on three of the five anomalies tested. All three drill holes that intersected the black shale horizons intersected the shales in the anticipated position of the EM anomalies explaining the source of the anomalies. One drill hole was terminated short of target due to excessive water, while the remaining hole failed to intersect a recognisable conductor. A subsequent EM survey of this hole returned a clear off-hole anomaly at the target depth. The remaining drill holes of the program were completed without intersecting any sulphide mineralisation.

In the second half of 2010/11, Panoramic initiated a review of the Cowan Project to determine what work remains to be completed. The review identified four prospective areas for MLEM coverage and fifteen RAB and MLEM anomalies that warrant drill testing. Panoramic is planning to complete this program of work in 2011/12.

Other Exploration Activities

Bluebush Copper-Gold Exploration Agreement with TUC Resources Limited- Cu/Au in N.T.

In July 2009, Panoramic entered into a farm-in Agreement with TUC Resources Limited to earn up to 80% in the Bluebush copper-gold Project in the Tennant Creek region. The Bluebush Project is located between the Tennant Creek mineral field and the Rover mineral field where recent exploration success has provided renewed interest in an area that has historically produced over five million ounces of gold and 500,000 tonnes of copper.

The exploration focus of the Project was five well defined geophysical targets, considered analogous to Iron Oxide Copper Gold (IOCG) style systems. Three of the five targets were tested in 2009/10 without success. The remaining two targets were tested in the first half of 2010/11 without success. A 1,000 metre RAB/AC drill program targeting conceptual phosphate and copper/gold targets has been scheduled for completion in early 2011/12.

Drake Resources Exploration Alliance – Base Metals in Scandinavia

In July 2010, Panoramic and Drake Resources Limited formed an alliance to identify, explore and develop base and precious metal opportunities across Scandinavia.

Finland

As part of the alliance, two joint ventures areas were finalised in 2010 to explore for Palaeoproterozoic volcanic massive sulphide (VMS) style Cu-Zn mineralisation in Finland. The Kangasjarvi and Savia JV areas are located in the Pyhasalim-Vihanti region of the Fennoscandian Shield of Finland. The Fennoscandian Shield is one of the most intensely and varied mineralised Palaeoproterozoic terrains in the world, including VMS, iron oxide Cu-Au, orogenic gold and layered intrusions.

In August and September 2010 detailed airborne VTEM surveys, comprising a total of 2,740 line kilometres, were completed over both the Kangasjarvi and Savia JV areas. The final survey was received, processed and interpreted by January 2011. In total, 53 VTEM anomalies were identified and ranked, including 10 priority anomalies in six areas that were selected for drill testing. Three of the priority drill targets were deemed to require follow-up ground EM prior to drilling while the remainder were deemed ready to drill test.

Follow-up ground EM was completed on the three priority VTEM anomalies early in 2011. Drill testing of the priority VTEM targets commenced in May 2011. By early August, nine targets had been completed on the Kangasjarvi and Savia JVs for a cumulative total of 2,043 metres.

Assay results have been received from AKA 11 and AKA 7. At AKA 11, the best intercept was 1 metre at 242 ppm Cu, 552 ppm Ni. Target AKA 7 returned a number of anomalous results with up to 0.325 % Zn including several samples ranging between 0.1 to 0.3 % Zn and up to 717 ppm Cu. One sample assayed 0.129 % Ni.

A review of the drilling is currently underway and it is expected that some holes will require down-hole EM to test for “off-hole” conductors and to confirm that the target was intersected. This is expected to take place in the second quarter of 2011/12.

During August 2011, a review of the VTEM surveys identified a number of additional, highly prospective targets (including targets in the newly acquired Keitele survey). Seven of these targets will be followed up with ground geophysics in 2011/12. Drilling is planned for the 2011/2012 northern winter to access these targets, most of which are located in swampy areas.

Norway

In July 2011 as part of the ongoing Panoramic/Drake Generative Alliance, Panoramic agreed to establish three new joint ventures to explore for copper-rich massive sulphide mineralisation in Norway. The three Norway project areas are Lokken, Hersjo and Sulitjelma. Exploration on these areas is scheduled to commence in the first half of 2011/12.