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