Pilbara Minerals has announced the results of the pre-feasibility study at its Pilgangoora Operation.
The study determined that production capacity could be expanded to an annualised production volume of more than two million tonnes per annum (Mtpa).
Pilbara Minerals said that such an expansion is expected to result in the first ten years of annual production averaging approximately 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).
Pilbara Minerals’ existing Pilgangoora Ore Reserves solely underpin the P2000 production profile with a revised life of mine of 23 years.
The project would require construction of a new whole of ore flotation plant at Pilgangoora with an estimated capital expenditure of $1.2 billion (-20/+30 per cent accuracy).
The timing of P2000 is expected to 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).
Pilbara Minerals said that 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 of 55 per cent.
The company has commenced a feasibility study in relation to P2000 with outcomes expected in the December Quarter of calendar year 2025. A potential FID will follow the feasibility study outcomes.
Funding requirements will be determined during the feasibility study and FID phases. Pilbara Minerals said it will consider all available funding options including the company’s cash balance ($1.8 billion as of 31 March 2024), cashflows from existing production, new loan facilities or other sources.
P2000 is expected to deliver significant additional spodumene concentrate annual production capacity for offtake and strategic partnership opportunities which Pilbara Minerals will explore in parallel with the feasibility study and FID.
Pilbara Minerals’ Managing Director and CEO, Dale Henderson, said, “The PFS demonstrates a strong value accretive project with an incremental NPV of $2.6 billion through this potential future expansion to the operation at Pilgangoora. The study follows the 35 per cent reserve upgrade to 214Mt announced in August 2023. 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.
“The expansion is expected to provide an average 1.9Mtpa production for the first ten 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.”
The Pilgangoora Operation is located in the Pilbara region of Western Australia, approximately 140km to the port of Port Hedland via road, where the company’s spodumene concentrate is shipped to international customers.
First production was achieved at the Pilgangoora Operation in 2018. Over the past six years, Pilbara Metals has pursued a staged and incremental expansion strategy growing the production capacity from the mine as the lithium market has grown.
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