Pilbara Minerals completes first shipment of +6% spodumene concentrate in 2Q FY19

Pilbara Minerals’ shares are trading flat on the release of quarterly results for the December quarter of Fiscal 2019. The results highlight have been the progress in Pilbara’s Pilgangoora Lithium-Tantalum Project that has grown from first drill hole to production in just four years.

During the quarter, Pilbara Limited (ASX:PLS) has achieved the first shipment of +6% spodumene concentrate 8,800wmt. The company informed that process plant throughput performance has continued to exceed expectations during production ramp-up, achieving 94% of design capacity in December.Â

The company has produced a total of 58,900 dry metric tonnes (dmt) spodumene concentrate year to date at a weighted average grade of 6.11% Li20. Its quarterly sales were reported to 46,682dmt spodumene concentrate and tantalite concentrate of 27,821lb.

Process plant throughput performance combined with improving recovery to the product has driven the strong concentrate production growth, told Pilbara. This translates the growth of spodumene concentrate (Li20) from 11,015dmt production in 1Q FY19 to 47,859dmt in 2Q FY19. Whereas, quarterly production of tantalite concentrate increased to 56,634lb, up from 22,151lb in the first quarter of FY19.

The company is currently operating at Stage 1 rate of 2 Million Tonne Per Annum with production target of 330,000tpa ~6% spodumene concentrate and 321,000lbspa +5% tantalite concentrate. On the back of strong production growth, the December process tonnes throughput has reportedly represented ~85% of the targeted annualized Stage 1 rate of 2 Mtpa.

With respect to the Stage 2 rate of 5Mtpa, the company has completed a Definitive Feasibility Study (DFS) and Final investment Decision during the second quarter of FY19. It is in talks with offtake partners and expects the financing to reach completion by the first quarter of the calendar year 2019. Stage 2 targets production for 800-850,000tpa~6% spodumene concentrate and 800,000lbspa +5% tantalite concentrate. The construction of the plant is scheduled for commencement in Q2 2019 to start production by the first quarter of 2020.

Ken Brinsden, Pilbara Minerals’ Managing Director and CEO stated, the outstanding results of the Pilgangoora Project underlines the development of Stage 2 expansion project that will provide more than double the current mining and processing rate to 5Mtpa

Pilbara has also undertaken the evaluation for the expansion of its Stage 3 to 6.2Mtpa and up to 7.5Mtpa during the quarter. Although spodumene concentrate from Stage 1 and Stage 2 are under 100% agreement, the discussion for Stage 3 production with offtake partners is reportedly underway.

As at 31 December 2018, Pilbara’s cash and cash equivalents were reported to $70.26 million compared to the quarter’s opening balance of $90.59 million. It reflects the cash outflow of $14.91 million from operating activities during the quarter.

In today’s trading session, there has been no movement in the stock price of PLS. However, 4,437,011 shares changed hands on ASX. The stock price last traded at $0.675 with a market capitalization of $1.18 billion. Over the past 12 months, PLS has witnessed a negative performance change of 33.50%.