13/12/2017 - 13:45

Pilbara Minerals to spend extra $50m

13/12/2017 - 13:45

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Pilbara Minerals has announced multiple changes to its Pilgangoora lithium project, with the company planning to: spend an extra $50 million on development; export unprocessed ore to boost early cash flow; and outsource ore crushing to Mineral Resources.

Pilbara Minerals to spend extra $50m
Pilgangoora has an updated capex of $274 million.

Pilbara Minerals has announced multiple changes to its Pilgangoora lithium project, with the company planning to: spend an extra $50 million on development; export unprocessed ore to boost early cash flow; and outsource ore crushing to Mineral Resources.

The cost of its stage 1 lithium concentrate plant, currently under construction, has been increased by $40 million to $274 million.

It has committed to spend a further $5.5 million, mainly on earthworks, to support its planned stage 2 expansion.

In addition, it plans to spend $4.5 million on road improvements to pave the way for the haulage of unprocessed ore, or direct shipping ore.

In that regard, it is seeking to follow the lead of Mineral Resources, which pioneered DSO lithium exports from the nearby Wodgina project this year.

Pilbara said it has awarded a crushing contract to MinRes subsidiary CSI, to partially offset the extra spending.

The company said it expects to finance the rest of the extra expenditure from existing sources including project contingency, management reserve, additional equity capital previously raised and DSO product sales and customer pre-payments.

Managing director Ken Brinsden said the additional capital represented an investment both in the near-term benefits to be generated by DSO sales and the longer-term benefits of a tier-1 spodumene concentrate operation with the ability to scale-up to meet demand.

“Demand for DSO products reflects the current shortage of lithium units in China,” he said

“We are in a position to meet this demand in the near term through a DSO program which will facilitate further investment in downstream processing capacity in China, that will ultimately benefit our longer-term spodumene concentrate business.

“It’s important that we differentiate our product quality from our peers and I am confident that we have designed and are now delivering the plant that can achieve these goals.”

 

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