THE BOURSE WHISPERER: Pilbara Minerals (ASX: PLS) has inked a second off-take agreement with a Chinese lithium group for the early supply of direct shipping ore (DSO), from the company’s 100 per cent-owned Pilgangoora lithium tantalum project, located near Port Hedland in Western Australia.
Pilbara Minerals described the deal as being another step towards financing and development of the Pilgangoora project.
The off-take agreement is with Shandong Ruifu and provides for the delivery of crushed but unprocessed ROM ore, from as early as July 2017, from either the Pilgangoora project or, at Pilbara’s election, the adjoining higher grade Lynas Find lithium project, once it has been completed.
Under the agreement, Pilbara is to supply a total of 1.9 million tonnes of unprocessed ROM product with a specification of 1.5 per cent lithium dioxide (Li2O) and 5 per cent moisture level (shipment rejection below 1.4 per cent Li2O).
The ROM off-take agreement is subject to:
Regulatory approvals in China;
Pilbara securing access to the bulk export facilities in Port Hedland (being Utah Point) for the nominated capacity and the obtaining of authorisations for shipment of the ROM product;
Pilbara’s Board approval; and
A final investment decision for project development and the commencement of mine construction.
“The delivery of early run-of-mine ore to interim processing facilities in China represents a fantastic innovation for the lithium industry, providing earlier access to raw material for our customer while at the same time supporting Pilbara’s fast-track development strategy by providing early cash-flows from the project,” Pilbara Minerals managing director Ken Brinsden said in the company’s announcement to the Australian Securities Exchange.
“This will provide the opportunity to mobilise the mining fleet earlier than had been otherwise planned, accelerate the development of the open pit, construct the tailings facility and prepare the ore stockpiles for subsequent process plant commissioning.
“With DSO shipments targeted to commence in July next year, this will provide us with the opportunity to generate early revenue – well ahead of our original timetable – which should deliver important strategic benefits as we complete the construction, commissioning and ramp-up of the concentrator.
“Importantly, the delivery of early run-of-mine ores will not impact the delivery of the overall two million tonnes per annum ore processing and spodumene concentrate plant, as presented in our recent DFS study release.
“Pilbara remains on track for commissioning of the full mine site facilities from late 2017, establishing the company as a leading low-cost supplier of spodumene concentrate to global markets.”