Pilbara Releases Pilgangoora DFS, Expansion Moves Forward

Pilbara Minerals (ASX:PLS) has released a definitive feasibility study (DFS) for the second stage of its Pilgangoora lithium-tantalum project in the Pilbara region of Western Australia.

The DFS shows that average annual production will be 800 to 850 kilotonnes of 6-percent spodumene concentrate, along with 800,000 pounds of tantalite over the mine’s estimated 17-year lifespan.

Commissioning of stage one at Pilgangoora is currently ongoing, and the DFS indicates that funding for stage two will be supported by offtake customers who have commitments of up to US$100 million.

Capital costs rose from AU$207 million to AU$231 million in the DFS, but those offtake deals will help support funding. Life-of-mine (LOM) cash operating costs are set at US$263 per tonne.

The additional costs take into account an engineering redesign that introduces an additional 3-million-tonne-per-year (mtpa) processing circuit, as opposed to the 2.5-mtpa processing circuit laid out in the prefeasibility study for Pilgangoora.

The strong results from the DFS have given Pilbara the encouragement to move forward with the expansion, pushing the project’s total capacity to 5 mtpa.

Revenue from the project is also expected to help balance newly discovered costs. The DFS shows a post-tax net present value of AU$2.16 billion at a 10-percent discount, as well as LOM project revenue of AU$12.2 billion and LOM earnings before interest, tax, depreciation and amortization of AU$6.3 billion.

“We continue to be impressed by the quality and scale of the Pilgangoora project. The long life of the operation and its ability to deliver a high quality spodumene concentrate at a low cost to market is what sets us apart globally,” Pilbara Managing Director and CEO Ken Brinsden said in a statement.

Pilgangoora has hit key milestones in the last few months, having sent its first 85,000 wet metric tonnes of direct-shipping ore to China in June. Later that month, just a week after commissioning started at the concentrator, the project produced its first concentrate; the company later produced its first coarse concentrate at Pilgangoora in July.

To learn more about Pilbara, click here to listen to our recent audio interview with Brinsden.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.