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Pilbara Minerals Limited (ASX:PLS) is into the production of lithium and tantalum. The company has a wholly owned project which based on lithium and tantalum, Pilgangoora. Currently, the company focuses on the development of Pilgangoora which is one of the worldâs largest project.
The company has recently announced to have entered an agreement which is non-binding with POSCO. The Memorandum of Understanding consists proposals of a larger joint venture interest which will help the companies to evaluate a larger downstream chemical opportunity.
As per the sources, this decision to some extent is driven by the strong demand from the South Korean customers. The company has already started the due-diligence on the proposed joint owned facility development in South Korea.
With the process of due diligence, the company has also started the detailed process of documentation on the important commercial terms and conditions related to the proposed joint venture with an objective to complete licensing arrangements during the first quarter of 2019.
Post these arrangements any further development on the agreement (MOU) will be enhanced, subject to final approvals by the boards of the company. Pilbara has also started a recent study on a stage three project expansion. The Pilgangoora project is poised for future production growth if it gets proper support from the market for such expansion because the current scale of existing resources at a low cost of operations and high-quality product coupled with the increasing demand from the customers is certainly promising.
The managing director and CEO of the company, Ken Brinsden said that POSCO has significant experience in research of battery raw materials and development in the lithium sector for approximately ten years. The company is pleased to work and develop a new lithium raw material supply chain for the market of South Korea. The company will be on a lookout for synergies in the development of various stages with an objective of reducing the combined costs on the same.
The company will be engaged in further engineering studies and assessments of the stage three expansion to optimize the overall existing capacity of the two-MTPA stage one project and five MTPA stage two project.
The company in one of its recent announcements also discussed the developments on the proposed funding by its key customers. It stated that its customer supported to provide the balance of funding required for stage 2, 5 MTPA expansion of the Pilgangoora project.
The stock of Pilbara Mines is currently trading at $0.720 with a current market capitalization of $1.09 billion. The stock opened at $0.690 and posted a dayâs high of $0.735. The company posted a negative YTD return of 47.03% and produced a negative return of 27.75% over the last six months period, with a 52-week high price of $1.245 and a 52-week low price of $0.570.
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