The September 2017 Quarter marked another active and highly successful period for Australian lithium developer, Pilbara Minerals Limited (ASX: PLS) with construction and development activities at the Company’s flagship 100%-owned Pilgangoora Lithium-Tantalum Project in Western Australia (Pilgangoora Project, Pilgangoora or Project) moving into full swing. Furthermore, the Company secured a landmark agreement with one of China’s largest automotive manufacturers, Great Wall Motor Company (Great Wall), to support the proposed Stage 2, 5Mtpa expansion of the Pilgangoora Project.
The agreement with Great Wall – which encompasses off-take of up to 150,000tpa of Stage 2 chemical grade spodumene concentrate, potential Stage 2 debt financing support and a A$28 million upfront equity subscription for Pilbara shares – is the first direct investment by an automobile manufacturer into an upstream supplier of lithium raw materials.
It represents a significant development for the rapidly evolving lithium-ion raw materials supply chain, highlighting the strategic importance for global automotive manufacturers of securing access to large scale, consistent, high quality sources of battery raw materials in low-risk jurisdictions.
The Stage 2 expansion of the Pilgangoora Project from 2Mtpa to 5Mtpa is currently being investigated in response to the strong appetite for spodumene concentrate globally. A Definitive Feasibility Study (DFS) for the Stage 2 expansion commenced during the Quarter targeting chemical grade spodumene concentrate (SC6.0 basis) production of approximately 800,000tpa, with completion of the DFS expected by mid-2018.
Together with the previously announced off-take agreement with Ganfeng Lithium, the latest off-take agreement with Great Wall underpins sales of between 150,000tpa and 300,000tpa of additional chemical grade spodumene concentrate from the proposed Stage 2 expansion, together with potential funding solutions to be negotiated with both parties representing close to 100% of the capital requirements for the development of the Stage 2 expansion.
Construction of the Stage 1 Project development is advancing well, with site works now well underway and the award of a series of key milestone contracts over the September Quarter putting the Company on target to commence commissioning and shipment of product during Q2 of 2018.
Reflecting the imminent transition to production, Pilbara appointed highly experienced mining executive Dale Henderson as Project Director during the Quarter to lead the completion of Stage 1 construction and commissioning and then manage the ongoing operations at Pilgangoora.
Exploration drilling continued during the Quarter with further outstanding exploration results being achieved, highlighting the continued growth potential and endowment of Pilbara’s 100% owned Pilgangoora project.
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