Pilbara Minerals Limited (ASX: PLS), an Australian lithium and tantalum producer, announced that the company received A$50 million from Jiangxi Ganfeng Lithium Co. Ltd under the subscription Agreement released by the company in early January.
The equity placement of A$50 million by the company is in lieu of a debt facility for Ganfeng to secure an additional 75,000 tonnes per annum of spodumene concentrate under its stage 2 offtake agreement.
Stage 2 offtake agreement consists of a total of 150,000 tonnes per annum of spodumene concentrate. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
The A$50 million equity subscription by the company comprises of the issue of 77,663,871 ordinary fully paid shares of the company to Jiangxi at an issue price of $0.6438 per share, and it also utilised a part of the company’s existing placement capacity under the Listing Rule 7.1. The issue price of $0.643 decided for being the 5-day Volume Weighted Average Price before the execution of the Subscription Agreement on 28th December 2018.
As per the Managing Director, Ken Brinsden, the equity subscription by the Ganfeng, a key partner in the development and expansion of the Pilgangoora Project and investor of the company signifies the confidence of the investor and partner Jiangxi Ganfeng in the ability of the company to deliver a quality product.
Ken Brinsden also mentioned that the funds raised from the placement would be used for stage 2 development and expansion of the Pilgangoora Project approved by the board of the company previously.
Pilgangoora is a significant project of the company, and the company is dedicated to expanding the project over the long term. In another announcement by the company, it mentioned that the Stage 3 scoping study outcomes of the project were positive and supports the long-term growth of the project. The key outcomes of the study were the project economy including 15 years Life of Mine (LOM) (based upon reserves) and LOM project revenue (excluding tantalite) of A$16.6 billion. And the company’s Stage 3 pre-production capital has been reported A$225.8 million.
Pilgangoora stage 3 scoping also increased the processing capacity to 7.5 million tonnes per annum that could deliver an annual average production of approx. 1.2 million tonnes per annum of SC6.0 spodumene concentrate along with 1.1Mbspa of 30% tantalite concentrate over the mine life of 15 years.
In the recent event, a Cyclone named Veronica passed through the Pilbara region which forced many companies, which operate in the region to temporarily suspend the operational activities.
Pilbara Minerals mentioned in an update that there had been no material impact of the Cyclone Veronica to its Pilgangoora operations in the north Pilbara.
As per the company, its personnel and contractors were all safely housed within the site’s camp facilities during the red-alert period of the cyclone’s impact. The site’s camp acts as a cyclone rated shelter for the company.
The senior representatives of the company surveyed the operation site post the “all clear” announcement issued by the Bureau of Metrology on 25th March 2019 from the Port Hedland and reported minimal damage.
Mining and processing activities restarted with 72 hours disruption caused by the Veronica.
However, the haulage operations are still suspended amid the high flow on the river Turner and are also expected to resume in the coming days.
The ship-loading activities within Port Hedland harbour are still suspended by the Pilbara Ports Authority, which might delay the company’s shipping schedule over the coming weeks.
Pilbara Minerals recently completed its first shipment in 2QFY19 from the port.
PLS stock closed the day’s session at A$0.700, up 1.5% as on 27 March’19.
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