A recently report by Blue Ocean Equities highlighted Pilbara Minerals Limited (ASX:PLS) recently announced PFS results for the Pilgangoora Lithium-Tantalite Project in Western Australia.
As quoted from the report:
The PFS for Pilgangoora very much galvanised our view that PLS is on track to become the go-to name in the ASX lithium space. The PFS envisages a 2mtpa project producing 330ktpa of spodumene for an initial 15 years for capex of A$184m. Project economics are very robust with 54% EBITDA margins, a 2.2 year payback and 44% IRR at conservative prices of US$456/t, 24% below current price of US$600/t. PLS remains our top pick in the ASX lithium space.
While the PFS is very robust, we see substantial upside potential on both spodumene prices and mine life. The PFS reserve is 29.5mt only a fraction of the 80mt resource (and ~105mt Exploration Target). The company is targeting a mining inventory of ~54mt in the DFS, which would increase the mine life to 27 years and open the door to a potential expansion to 3mpta (in due course).
Given the sheer scale advantage of the Pilgangoora resource compared to its ASX spodumene peers, PLS’s low-risk jurisdiction in WA, and the lower technical risks associated with spodumene projects (compared to their brine counterparts), we believe Pilbara Minerals is likely to have superior appeal with global institutional investors.
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