Pilbara Minerals More Than Doubles Pilgangoora Ore Reserves

August 22, 2016

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Australian lithium developer Pilbara Minerals Limited (ASX:PLS) is pleased to report a substantial increase in the Ore Reserves for its 100%-owned Pilgangoora Lithium-Tantalum Project in WA’s Pilbara region to 69.8 million tonnes grading 1.26% Li2O paving the way for the completion of a pivotal Definitive Feasibility Study (DFS) in September. The significant increase in the Ore Reserve (beyond that anticipated by the Company from PFS planning) has meant that additional work was required to finalise site footprints including waste dumps, Tailings Management Facility and surface water management designs. As a result, it is expected that the full details of the DFS results and financial model will be released in early September, following review by the Pilbara Minerals Board.

HIGHLIGHTS:

  • Substantial increase in Proved and Probable Ore Reserves for Pilbara’s 100%-owned Pilgangoora Lithium-Tantalum Project to 69.8Mt grading 1.26% Li2O (spodumene), 132ppm Ta2O5 and 1.04% Fe2O3 following highly successful drilling programs undertaken as part of the Definitive Feasibility Study.
  • This represents a 136% increase in the total Proved and Probable Ore Reserve compared with the maiden Ore Reserve used to underpin the March 2016 Pre-Feasibility Study (29.5Mt grading 1.3% Li2O and 134ppm Ta2O5).
  • The updated Ore Reserve contains 883,000 tonnes of lithium oxide and 20.3 million pounds of Ta2O5, sufficient to underpin a planned mine life of approximately 35 years based on a 2Mpta operation – more than double the projected mine life in the
  • Significant opportunities exist to further expand Mineral Resources and Ore Reserves in the future, with studies already underway on a possible future expansion of plant
  • The upgraded Ore Reserve is based on a conservative assumed price for 6% battery grade spodumene concentrate of US$460/tonne, consistent with Pilbara’s strategy to become an extremely low-cost hard-rock lithium producer, operating well into the bottom cost quartile on a long-term
  • The new Ore Reserve will underpin the Definitive Feasibility Study for the Pilgangoora Project, which is now in its final stages and on track to be released in early September 2016, following Pilbara Mineral’s Board

The updated Ore Reserves, which is more than double the maiden Ore Reserve announced in the March 2016 Pre-Feasibility Study (29.5Mt at 1.3% Li2O and 134ppm Ta2O5), is based on the upgraded Mineral Resource announced in early July of 128.6 million tonnes @ 1.22% Li2O containing 1,572,000 tonnes of Li2O. The expanded resource program from February to June 2016 not only increased and upgraded the Inferred and Indicated components of the resource to expand the reserve but also substantially increased the global resource.

The overall Pilgangoora Ore Reserve now comprises 883,000 tonnes of contained lithium oxide and 20.3 million pounds of contained tantalite.

The DFS is being undertaken on the basis of developing a standalone operation at Pilgangoora with an annualised ore throughput rate of 2Mtpa, however the recent increases in both the global Mineral Resource and Ore Reserves will clearly support a future expansion of plant capacity. Studies are already underway to increase production capacity to 4Mtpa in the future, once operations at Pilgangoora have commenced at the initial targeted production rate of 2Mtpa (330,000tpa of spodumene concentrate).

Pilbara Minerals’ Managing Director, Ken Brinsden, said the increase in Ore Reserves reinforced Pilgangoora’s position as a globally significant hard rock lithium-tantalum deposit – highlighting the grade, quality and scalability of the deposit and setting the scene for the upcoming DFS, now in its final stages.

“Of particular note is the fact that the upgraded Ore Reserves have been calculated using a conservative assumed price for 6% battery grade spodumene concentrate of US$460 a tonne, which is well below the current market price and considerably below the medium term prices being forecast by most major investment banks and commodity analysts.

“One of the key attributes of Pilgangoora is that, because of its exceptional grade, scale, low stripping ratio and great location it will be one of the lowest cost hard rock lithium operations in the world. That sets us apart from many of our peers and puts us in a position where we expect to have an extremely robust operation capable of generating strong margins at all stages of the lithium price cycle.

“Moreover, the pegmatite system at Pilgangoora is huge and the deposit remains open in many areas. This offers significant further potential for growth, both in terms of the global resource inventory and ultimately future Ore Reserve growth. While we have made it clear that our strategy is to enter the market in a sensible, staged manner based initially on a 2Mtpa production rate, there is clear potential to grow the operation rapidly and we have already commenced studies to examine this potential.”

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Category: Energy