Australian lithium developer Pilbara Minerals Limited has taken an important step towards its objective of unlocking the full potential of its flagship 100% owned Pilgangoora Lithium-Tantalum Project ("Pilgangoora Project") in WA.

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Aerial photograph of current construction progress with Stage 2 3D model overlay (Stage 1 shown in yellow, Stage 2 shown in blue)

The released PFS outlines a compelling business case for commencing the expansion of the Project to 5Mtpa of production and processing capacity within months of starting production of spodumene concentrate from the Stage 1, 2Mtpa operation in mid-2018.

The PFS results re-affirm the Pilgangoora Project's scale, globally competitive forecast cash operating costs, robust operating margins, long life and exceptional economic returns - highlighting its capacity to take full advantage of the current and future expected demand for lithium raw materials over the coming decades.

Pilbara Minerals' Managing Director and CEO, Ken Brinsden, said "The compelling results of the Stage 2 PFS provided a clear pathway to unlock further value in the outstanding Pilgangoora lithium-tantalum resource and, in the process, cement its position as a globally significant, low- cost supplier of lithium raw materials for decades to come."

The exponential growth which is occurring across the lithium-ion supply chain as the industry in China and elsewhere gears up for transformational growth to meet demand from the automotive and energy storage sectors is now becoming better understood.

Mr Brinsden acknowledges that Pilbara Mineral's that the accelerated expansion strategy was underpinned both by the remarkable growth occurring in the market and the extraordinary success of the company's exploration team in growing the Pilgangoora Ore Reserve base to a level which underpinned a mine life of more than 40 years at the 2Mtpa production rate.

"An expansion to 5Mtpa was deemed to be the optimal production rate to unlock the full value of the deposit and maximise the financial returns to shareholders. This decision has been fully vindicated by the PFS results, which have shown a significant improvement in several key areas compared to the 2Mtpa operation currently being constructed," said Mr Brinsden.

Based on the proposed 5Mtpa stand-alone mining and processing operation, the PFS indicates that Pilgangoora will be a robust, high margin project with current forecast life-of-mine revenue of A$11.5 billion (real) and life of mine Project EBITDA of A$6.52 billion (real) over an estimated 17-year mine life.

For the first 5 years of operations, revenues are expected to be A$3.12 billion generating Project EBITDA of A$1.85 billion (real) inclusive of ramp up in both Stage 1 and Stage 2.

"Importantly, the Stage 2 expansion can be undertaken quickly, efficiently and cost effectively by leveraging off the existing Stage 1 operation - resulting in the development of a truly world-class mining and processing operation which will be capable of meeting the long-term requirements of our customers who have already committed to off-take agreements supporting 600,000tpa of spodumene concentrate production," added Mr Brinsden.

Source: www.pilbaraminerals.com.au

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