Panoramic Resources has emerged as a possible buyer of Norilsk Nickel's WA operations.

Sources say Panoramic had almost closed a deal for Norilsk's Lake Johnston asset in December before the Russian group axed the deal amid upheaval in Moscow.

As WestBusiness reported earlier this week, Norilsk has set an April deadline for a sale of Lake Johnston, with the mine to be mothballed if no buyer is found.

Panoramic spent the past year developing gold projects in an effort to diversify from nickel, and may also have expressed interest in acquiring Norilsk's Waterloo project, which includes the namesake nickel mine but also the Thunderbox gold asset.

Panoramic managing director Peter Harold would not comment on the Lake Johnston speculation.

He said his "number one focus" was reducing costs at Panoramic's two WA nickel mines, which were hit hard by low nickel prices.

In 2010 Mr Harold had publicly expressed an interest in Norilsk's nickel projects, naming the Black Swan and Silver Swan asset as of particular interest.

Industry sources this week said most of WA's nickel players would have "at least kicked the tyres" of Norilsk's assets after talk of a Russian exit circulated. However, the limited mine life at Lake Johnston made it unattractive unless at a low price. High capital costs to restart Black Swan, which suffered a pit wall collapse after it was mothballed during the global financial crisis, would also be an issue.

Panoramic fell to a $13 million loss in the six months to December 31, with revenue down 18.3 per cent to $94.8 million. The company said the loss was primarily because of the recognition of non-cash depreciation and amortisation expenses of $26.9 million, with its nickel business achieving an underlying before-tax profit of $13.5 million.

Margins on nickel sales plunged during the half. Panoramic's average received prices were $7.39 a pound, down from $8.88/lb in the previous corresponding half. Payable cash costs including royalties climbed to $6.71 from $5.94.

Panoramic said it was hoping measures, including a 5 per cent reduction in its workforce, would strip $10 to $15 million from its yearly cost base. The company is also working with suppliers to cut operating costs.

Shares in Panoramic, which declared a 1¢ interim dividend, firmed 1¢ to 45¢. Not much fat 68¢ Panoramic's margin, per pound of nickel produced, based on its payable cash cost of $6.71/lb and a received price of $7.39/lb.

The West Australian

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