Pilbara Minerals Confirms The Outstanding Economics At Pilgangoora Lithium-Tantalum Project

Pilbara Minerals Limited (ASX: PLS) today declared the commercial production at the Pilgangoora Lithium-Tantalum Project in the release of its quarterly activity report for the three months ended 31 March 2019.

The lithium player has announced the March quarter production of 52,196 dry metric tonnes of spodumene concentrate, significantly up from December quarter’s production of 47,859dmt. However, the sales of spodumene concentrate declined to 38,562dmt in March quarter from 46,598dmt in the previous quarter, primarily due to the delay of one shipment following Tropical Cyclone Veronica in late March 2019. The product was reportedly a blend of coarse and fines concentrate to achieve contracted grade specification and was shipped to offtake partners in north Asia at a price of US$675/dmt based on SC6.0.

During the quarter, Tantalite concentrate production stood at 33,374 lb and sales at 30,356 lb.

Managing Director and CEO of Pilbara Minerals, Ken Brinsden stated that “The March Quarter was another busy period for Pilbara Minerals as it continued to make further operational progress at the Pilgangoora Project, whilst maintaining momentum with the company’s long-term growth initiatives – including the Stage 2 and 3 expansions and its strategy to diversify operations into the downstream chemical conversion industry.”

Pilbara’s Stage 1 Pilgangoora Project has finally reached commercial production effective from 1 April 2019 which marks the significant achievement just over four years since exploration work first commenced at the site.

Mr Brinsden declared “With the Stage 1 project now in commercial production, Pilbara’s proposed expansion plans are taking shape with the completion of a Stage 3 Scoping Study highlighting the outstanding economics of increasing production to 1.2 million tonnes per annum of spodumene concentrate.”

Having said that, the Pilbara’s management pointed out the highly-engaging results the company received in the Scoping Study for Stage 3 project expansion with LOM project revenue of A$16.6B and LOM Project EBITDA of A$10.3B. The study confirmed the substantial increase in the processing capacity to 7.5Mtpa that underscores the delivery of about 1.2Mtpa of SC6.0 spodumene concentrate average annual production and ~1.1Mlbspa of 30% tantalite concentrate over 15-year mine life.

The company further reported the continued progress of early works, engineering and ordering of long lead items for the Stage 2 development as well as the ongoing progression of Stage 2 funding initiatives. On the capital cost front, Stage 2 expansion requires A$231M and Stage 3 A$226M.

Following the completion of the Stage 3 Scoping Study, Pilbara Minerals started a partnering process to consider Stage 3 offtake as well as the potential sale of a minority project-level interest of between 20% and 49% in the Pilgangoora Lithium-Tantalum Project.

During the Quarter, the company progressed several improvement projects aimed at delivering progressive increases in production to support Pilbara Minerals' objective of achieving nameplate process plant recovery by the end of CY2019.

Pilbara’s cash balance as at 31 March 2019 was A$103.9M compared to A$70.2M as at the beginning of the quarter. This reflects the cash inflow from the proceeds from issues of shares worth A$50M.

In today’s trading session, PLS stock price declined by 4.58% to trade at $0.625 on 29 April 2019 (2:36 PM AEST). Over the past 12 months, the stock has witnessed a negative price momentum of 25.57% despite a surge of 3.15% recorded in the past three months.

Also Read: Pilbara’s Board Exercises An Option To Enter Into An Incorporated Downstream Joint Venture With POSCO


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