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(Asx: PLS) | Pilbara Minerals

Jan 13, 2022

Sentiment: Bullish

Type of Trade: High Growth

Industry: EV - Electric Vehicles - Lithium

Sector: Materials

Pilbara Minerals (PLS) is a leading ASX-listed pure-play lithium company, with 100% ownership of the world-class Pilgangoora Lithium-Tantalum Project – the largest independent hard-rock lithium operation in the world. This Pilgangoora Project has an outstanding scale, long life and low-cost operation.

✅ World’s largest independent hard rock lithium operation with project located in Western Australia’s resource rich Pilbara region, out of two separate processing plants.

✅ The project is high-grade lithium resource, valuable tantalum by-product.

✅ Outstanding scale and flexibility supports a low cost operation in the Pilgangoora Project.

✅ The company has a flexible operating regime, with two separate processing facilities offering the potential for a multistage expansion and significant optionality to respond to customer and market requirements.

✅ Pilbara Minerals has solid offtake agreements in place with some of the world largest battery manufacturers; to sell its Spodumene concentrate. PLS clients includes: Ganfeng Lithium, Great Wall Motors, POSCO, and Yibin Tianyi (an associate of CATL).

The company is also developing a lithium chemical conversion facility in South Korea in partnership with POSCO .

Macro Environment for Electric Vehicles

The company also plans to expand its projects to meet future demands generated by EV revolution.

✅ Sustainable Financing with Power Purchase Agreement not only to save energy but also footprint a Clean Energy wth 6MW Solar Farm commitment, with displaces 3.8 million litres of diesel fuel per annum, saves over 9,900t CO2 per annum over the contract period; potential for future expansion and inclusion of battery storage Commissioning expected late June 2022.

By taking advantage of the really on lithium prices, the company has managed to produce and increase its cash reserves quite drastically.

✅ PLS has increasing its revenue YoY with reduced debt.

🚩 Key threat for any lithium producer is the price of the commodity itself or in the event of another type of battery that does not need lithium is ever invented and become viable.

Pilgangoora Operations & Project

  • This project operates out of one operation, but two Processing Plants
  • Targeting expanded production capacity to 560-580,000 tpa spodumene concentrate by mid-CY2022, maximising participation in rapid demand growth
  • Products: ~5.5% – 6% Li2O spodumene concentrate and ‐ +5% primary tantalite concentrate

Pilgan Plant

  • In production and operating at nameplate capacity ~330,000tpa
  • Improvement projects underway to increase capacity by a further 30-50,000 tpa (10-15% increase)
  • Potential phased expansion, increasing nameplate capacity incrementally to ~800-850,000 tpa, subject to prevailing market conditions

Ngungaju Plant (pronounced – Nuh-ga-ju)

  • Altura Lithium Operation acquired during FY2021, whilst on care and maintenance
  • FID made for staged restart, targeting 180-200,000 tpa in production capacity by mid-CY2022
  • Engineering underway to improve performance and integrate operation
  • Future expansion opportunities aimed at achieving a combined nameplate processing capacity from both plants supporting+1 Mtpa spodumene concentrate and the production of value-added products.

Technical Analysis

Pilbara Minerals is definitely an investment grade stock, since it is not an explorer but one of the key world producer of Lithium spodumene. If you have invested on (Asx: PLS) 52 weeks ago, you would have made 259% as per the tarde on 13/01/2022. The stock is trading in an extremely bullish trend and it is currently sitting at the FOMO area or 32% above the SMA 40. The last resistance of $2.5 has now become a support and investors or traders should considering buying at the $2.5 level if the stock falls as best entry opportunity.

Volumes show the stock price continue to pick up as demand for lithium keeps on rising.

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