Pilbara Minerals (ASX: PLS) has received positive outcomes of a pre-feasibility study (PFS) which determined that production capacity at the company’s 100% owned Pilgangoora Operation in WA could be expanded to more than 2.0 million tonnes per annum (Mtpa).
Such an expansion is expected to result in the first 10 years of annual production averaging ~1.9Mtpa, with production of more than 2Mtpa over the first six years after ramp up. The expansion project will be named the P2000 Project (P2000).
Highlights
- The P2000 PFS establishes that the Pilgangoora Operation could be expanded to an annualised production volume of more than 2Mtpa with an average forecast annual spodumene concentrate production for the first ten years of 1.9Mtpa (spodumene concentrate (SC) 5.2% grade).
- The company’s existing Pilgangoora Ore Reserves1 solely underpin the P2000 production profile with a revised life of mine (LOM) of 23 years.
- P2000 would further extend Pilbara Minerals’ position as the largest pure play lithium producer globally. The timing of the P2000 Project will be subject to the successful outcome of the next level of feasibility study, project approvals and the market outlook at the time of the financial investment decision (FID).
- P2000 would require construction of a new whole of ore flotation plant at Pilgangoora with an estimated capital expenditure of $1.2B (-20/+30% accuracy). The new plant would complement existing processing flowsheets in use at the Pilgangoora Operation.
- The expansion will create significant shareholder value with a P2000 incremental net present value (NPV) of $2.6 billion and incremental internal rate of return (IRR) of 55%.
- Pilbara Minerals has commenced a feasibility study in relation to P2000 (FS) with outcomes expected in the December Quarter of calendar year 2025 (CY25). A potential FID will follow the FS outcomes.
- Funding requirements will be determined during the FS and FID phases. Pilbara Minerals will consider all available funding options including the company’s cash balance ($1.8 billion as at 31 March 2024), cashflows from existing production, new loan facilities or other sources.
- P2000 will deliver significant additional spodumene concentrate annual production capacity for offtake and strategic partnership opportunities which Pilbara Minerals will explore in parallel with the FS and FID.
“The PFS demonstrates a strong value accretive project with an incremental NPV of $2.6B2 through this potential future expansion to the operation at Pilgangoora. This study follows the 35% reserve upgrade to 214Mt announced in August last year. The growth of the reserve, and the optionality to incrementally expand production, further reinforces Pilgangoora’s position as a Tier 1 asset of global significance,” Pilbara Minerals’ Managing Director and CEO, Dale Henderson, said.
“This expansion is expected to provide an average 1.9Mtpa production for the first 10 years and more than 2Mtpa over the first six years after ramp up. The scale benefits of this expansion will further build on Pilbara Minerals’ position as one of the major leading lithium suppliers globally.
“The next level of feasibility study will now commence with expected completion in the December Quarter CY25. As we have done in the past, the timing of the FID will be considered in conjunction with prevailing market conditions and only proceed when it makes sense to do so. In parallel to the feasibility study, the Company will consider the full suite of opportunities associated with this expansion including funding, offtake strategy and downstream partnerships.”
