Pil­bara Min­er­als dou­bles lithium out­look

Pilbara News - - News - Stu­art McKin­non

Pil­bara Min­er­als has flagged a po­ten­tial dou­bling of planned pro­duc­tion for its Pil­gan­goora lithium-tan­ta­lum project in the Pil­bara.

The com­pany last week re­leased a de­fin­i­tive fea­si­bil­ity study that es­ti­mated it could bring on­line a two mil­lion tonnes per an­num op­er­a­tion for just $214 mil­lion in cap­i­tal costs.

How­ever, it also re­leased a prefea­si­bil­ity study that sug­gested the op­er­a­tion could be ex­panded to 4Mtpa shortly af­ter for an ex­tra $128 mil­lion.

The de­fin­i­tive fea­si­bil­ity study for the 2Mtpa op­er­a­tion showed an es­ti­mated mine life of 36 years, life-of-mine project rev­enue of $9.23 bil­lion and life-of-mine project earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion of $4.22 bil­lion for av­er­age an­nual EBITDA of $121 mil­lion (or $133 mil­lion in the first 15 years).

Pil­gan­goora was given a net present value of $709 mil­lion, up from $407 mil­lion in the March pre-fea­si­bil­ity study, with pay­back within 2.7 years and an in­ter­nal rate of re­turn of 38.1 per cent.

The study es­ti­mated a spo­dumene con­cen­trate price of $US537 a tonne and freight and op­er­at­ing costs of $US196 a tonne.

The com­pany will now move to­wards se­cur­ing project fi­nanc­ing and be­gin­ning con­struc­tion in the last quar­ter of cal­en­dar this year, with com­mis­sion­ing tar­geted for the fourth quar­ter of cal­en­dar 2017.

Pil­bara Min­er­als man­ag­ing di­rec­tor and chief ex­ec­u­tive Ken Brins­den said the study was a huge achieve­ment that put the com­pany firmly on track to be­come Aus­tralia’s next ma­jor lithium pro­ducer and a key player in the rapidly chang­ing global lithium land­scape.

“What stands out from the vast amount of work that has been com­pleted as part of the de­fin­i­tive fea­si­bil­ity study is the ex­cep­tional tech­ni­cal, eco­nomic and fi­nan­cial fun­da­men­tals of the Pil­gan­goora project — which is with­out doubt the world’s lead­ing lithium de­vel­op­ment project, char­ac­terised by the scale, grade and qual­ity of the re­source, its low fore­cast op­er­at­ing costs and its scal­a­bil­ity,” he said.

“The favourable re­sults from the study strongly sup­port that be­lief, and pro­vide us with the frame­work now to progress this world-class as­set to­wards fi­nanc­ing and pro­duc­tion.”

Mr Brins­den said re­cent re­source up­grades had also boosted the com­pany’s con­fi­dence of ex­pand­ing pro­duc­tion at Pil­gan­goora to 4Mtpa from the third year of op­er­a­tion.

“This work (in a sep­a­rate prefea­si­bil­ity study) has also de­liv­ered very com­pelling re­sults which clearly would take the project to a new level,” he said.

Picture: Robert Duncan

Pil­bara Min­er­als chief ex­ec­u­tive Ken Brins­den and non-ex­ec­u­tive di­rec­tor Neil Bid­dle.

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