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Pilbara Minerals Increases Lithium Exposure through acquisition of Latin Resources

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THE BOURSE WHISPERER: Pilbara Minerals (ASX: PLS) made a lithium splash this week by announcing a binding Scheme Implementation Agreement to acquire 100 per cent of Latin Resources (ASX: LRS).

Pilbara Minerals will now take on Latin Resources’ Salinas lithium project in Minas Gerais, Brazil, which it considers having top 10 hard rock lithium operation potential.

In May, Latin Resources announced a material upgrade to its global Mineral Resource Estimate to 77.7 million tonnes at 1.24 per cent lithium oxide (Li2O) with greater than 85 per cent sitting in the Measured & Indicated categories.

On the other side of the coin, Latin Resources shareholders will see Salinas benefit via de-risking of funding and development through Pilbara Minerals’ proven experience in developing and operating hard rock lithium projects, such as the latter’s Tier 1 Pilgangoora operation.

“This acquisition is on-strategy, diversifying the business with what we believe is a counter-cyclical, accretive extension that further builds out Pilbara Minerals’ position as one of the leading lithium materials suppliers globally,” Pilbara Minerals managing director and CEO Dale Henderson said in the company’s ASX announcement.

“The acquisition will deliver our second 100 per cent-owned, Tier 1, hard rock lithium asset, which is expected to be low-cost and accretive for our shareholders.

“It provides Pilbara Minerals with optionality to sequence new supply and diversify into new growth markets for lithium such as Europe and North America.”

Latin Resources has been progressing a DFS for Salinas which had been anticipated to be completed by the end of the September Quarter 2024 based on a standalone development of Salinas.

Once the DFS is completed and ongoing Stage 1 fast-tracked permitting is finalised, Pilbara Minerals has the optionality to consider a final investment decision.

“I’m in no doubt that Pilbara Minerals’ expertise’ in lithium mining will be an enormous benefit not only to Latin Resources and its 100 per cent-owned Brazilian subsidiary, Belo Lithium, but to Brazil itself,” Latin Resources managing director Chris Gale said.

“Brazil’s Lithium Valley will now well and truly be on the world’s global lithium map as one of the best lithium mining jurisdictions in the world.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Pilbara Minerals Increases Pilgangoora Resource to 309Mt

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THE DRILL SERGENT: Timing, they say, is everything in this world and Australian lithium producer, Pilbara Minerals (ASX: PLS) announced a substantial increase in the Mineral Resource at it’s the company’s 100 per cent-owned Pilgangoora lithium-tantalum project just days out from the New World Metals Conference in Perth.

Located in the Pilbara region of Western Australia, Pilbara Metals said the update to the project’s Resource estimate has reinforced its claim to be the world’s premier hard rock lithium operation.

The updated Resources represents a 39 per cent increase in the total Measured, Indicated and Inferred Resource, growing to 308.9 million tonnes at 1.14 per cent lithium oxide (Li2O), 105ppm tantalum pentoxide (Ta2O5) and 0.59 per cent iron (III) oxide (Fe2O3), containing 3.5 million tonnes of Li2O and 71.7 million pounds of Ta2O5.

The numbers also show a 59 per cent increase in the total Measured and Indicated Resource to 210.2 million tonnes grading 1.17 per cent Li2O, 103ppm Ta2O5 and 0.56 per cent Fe2O3, containing 2.46 million tonnes of Li2O and 47.7 million pounds of Ta2O5.

With an increased cut-off grade of 0.5 per cent Li2O, the total Measured, Indicated and Inferred lithium Resource amounts to 277.2 million tonnes at 1.22 per cent Li2O containing 3.4 million tonnes of Li2O.

All this before the tantalum by-product credits are taken into consideration.

The updated JORC 2012-compliant Mineral Resource incorporates all historical data including drilling data acquired through several exploration campaigns completed by Pilbara Minerals between November 2014 and June 2021.

The update also includes the integration of the former Altura lithium operations Mineral Resource.

“This landmark Resource upgrade is another clear indication of Pilgangoora’s position as the world’s premier hard-rock lithium asset,” Pilbara Minerals managing director and CEO Ken Brinsden said in the company’s ASX announcement.

“The scale of the endowment is quite remarkable, with the integration of the adjoining Ngungaju Resource, combined with highly successful development and drilling programs, taking our Resource inventory well and truly to the next level.

“We are looking forward to completing an updated Ore Reserve next month that will underpin operations for many decades to come.

“Against the backdrop of surging global demand for lithium raw materials, Pilgangoora is incredibly well positioned to play a pivotal role in the accelerating global energy transformation.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

 

 

Web: www.pilbaraminerals.com.au

 

Producer “Forged in Fire” as Market Turnaround Looms

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THE CONFERENCE CALLER: Just before speaking on the opening day of the Diggers & Dealers Mining Forum in Kalgoorlie-Boulder, Ken Brinsden’s company – Pilbara Minerals (ASX: PLS) – gave delegates a taste of what to expect via a release sent to the ASX earlier in the day. By Mark Fraser

The release was in the form of an operational update for the mid-tier miner’s wholly-owned Pilgangoora lithium-tantalum project in Western Australia’s north west, the document was reasonably upbeat, but nevertheless somewhat cautious, as it tried to impress upon investors Pilbara Minerals’ preparedness to fully embrace the market, “as demand conditions improve”.

Recent operational tweaks in its production of spodumene and tantalite concentrate, the WA-based producer indicated, positioned it, “well” to take advantage of the expected turnaround in the lithium market, “when that occurs”.

Despite a rise in sales during the September quarter, the company said, spodumene concentrate pricing remained weak, reflecting the sustained lower pricing and demand being experienced across the entire lithium raw materials and chemicals supply chain.

The news, however, was not all bad: “Production levels in the September quarter exceeded quarterly sales in preparation for delivering into contracted customer sales from early October 2020,” the announcement espoused.

During his Diggers & Dealers presentation, managing director and CEO Brinsden infused his narrative with a similar combination of optimism and caution, although there seemed to be a little more of the former in his telling of the story as he described how Pilbara Minerals was now at the back end of something of a horror run.

Over past 18 months, he explained, the “amazing tail wind in the lithium world” came to a sudden stop – primarily because of China.

Plus, there was the “combination” of cyclones, material changes in the industry’s dynamics, having to raise the right amount of money to see the project come to fruition and – “last, but not least” – a homicide (in the coastal mining town of Port Hedland earlier this year).

“I can assure you that was not something I expected to experience in my mining career,” Brinsden told his Kalgoorlie-Boulder audience.

“So, we’ve seen the lot.”

However, in a funny kind of way, it had been a genuine case of “being forged in the fire” for Pilbara Minerals.

Despite this turmoil, Brinsden noted, the company still managed to establish the next largest lithium raw materials operation outside of Greenbushes in WA’s south west – a project that was started 25 years ago and is now “universally recognised as the gold standard”.

“We’ve got that to design recovery, which I can assure you is no mean feat,” he said.

“We’ve got to the point now that when the plant is operating, we are really, really confident of its reliability and what it is going to deliver, which translates to a very low-cost base.”

As part of its operational update, Pilbara Minerals told the market there had been an increase in plant run-time and utilisation, which represented around 70-75 per cent utilisation across the September quarter (compared with just 40% during the previous three months).

Meanwhile, higher plant utilisation and continued high product recovery contributed to a lower average unit cash operating cost of US$355 per dry metric tonne (Cost, Insurance and Freight – China) for the quarter.

Lower mining costs during the moderated production period were now expected to be partly offset by the combination of strong product recoveries and increased plant run-time (through higher product demand), supporting unit cash operating costs trending towards the company’s targeted unit cost of US$320-350 per dry metric tonne (CIF China).

Overall, Brinsden said, this was a “pretty amazing outcome”.

Located around 100 kilometres due south of Port Hedland, Pilgangoora enjoys a current mine life of over 40 years.

Stage one of the operation, which kicked off commercial production during April 2009, has a nameplate capacity of around 330,000 tonnes per annum of combined concentrate, with this output set to increase to about 800-850,000tpa during stage two (which is currently the subject of a soon-to-completed phased expansion study).

Brinsden indicated Pilbara Minerals would not pursue the mooted nameplate production boost until phase one had been concluded.

“Out of all of that we are absolutely the horse to back in the lithium materials sphere because we have an amazing asset base, very low cost of production and the expectation that the demand conditions have already started to improve,” he added.

 

 

Web: www.pilbaraminerals.com.au

 

 

 

Pilbara Minerals Gives Pilgangoora Stage 2 the Nod

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THE BOURSE WHISPERER: Pilbara Minerals (ASX: PLS) has made the Final Investment Decision (FID) for the Stage 2 expansion to five million tonnes per annum of the company’s 100 per cent-owned Pilgangoora lithium-tantalum project in Western Australia’s Pilbara region.

Pilbara Minerals’ Board endorsed the continued expansion of Pilgangoora, subject to obtaining necessary regulatory approvals and securing the balance of project funding.

The company said the decision followed completion of a Definitive Feasibility Study, 100 per cent of the Stage 2 offtake being sold to high-quality customers and general support from the customer base to continue to expand the Pilgangoora operations.

Pilbara Minerals outlined progress with a number of funding alternatives for Stage 2, including debt and/or offtake prepayment funding from customers linked to accessing Stage 2 product as well as other alternate finance structures.

Stage 2 project works are continuing with the company confident of meeting its objective of commissioning Stage 2 from the December quarter, 2019.

Stage 1 development continues to progress with Pilbara Minerals’ shipping its second shipment of spodumene concentrate from Port Hedland in the second half of October with 6.3 per cent lithium oxide (Li2O) onboard.

Production from Pilgangoora Stage 1 is also sticking to the script with the progress being made in the continued ramp-up and optimisation of production.

“Pilbara Minerals has established a track record of getting things done – developing at scale, successfully executing a rapid build and ramp-up of the Stage 1 project and confirming our ability to deliver high-quality products to our customers,” Pilbara Minerals managing director Ken Brinsden said in the company’s announcement to the Australian Securities Exchange.

“These achievements and more have allowed us to attract and grow production with premium customers in the global lithium-ion supply chain.

“Against a backdrop of significant demand growth for lithium raw materials over the coming decade, the quality and scale of the resource at our Pilgangoora project demands further expansion.

“This will ensure it becomes a mainstay in the next generation of large-scale, low-cost mines to support the significant growth in downstream lithium hydroxide capacity.

“In much the same way as we got on with the job in Stage 1, we will work to the same tune in Stage 2.”

 

Website: www.pilbaraminerals.com.au