Pilbara Minerals moves toward major production ramp up at Pilgangoora lithium project

Pilbara Minerals (ASX: PLS) is set to dramatically increase production rates at its wholly-owned Pilgangoora lithium project in Western Australia after receiving impressive pre-feasibility study (PFS) results.

The in-depth PFS identified that the newly named P2000 project expansion plan would lead to an average annual production of approximately 1.9 million tonnes over the first ten years, with production exceeding 2mtpa during the first six years after ramp-up.

To achieve this, P2000 would require an estimated capital expenditure of $1.2 billion for the construction of a new whole-of-ore flotation plant at Pilgangoora.

Realising full value

Pilbara Minerals managing director and chief executive officer Dale Henderson said the P2000 PFS was aimed at obtaining full value from Pilgangoora’s world-class ore reserve, which the company has increased by 35% to 214mt at 1.19% lithium oxide.

The increased value was confirmed through mine planning studies focused on accelerating production from existing ore reserves with a target to support ore feed to a third processing facility to be constructed on-site.

The PFS concluded that an increase in ore supply rate to 12.4mtpa is achievable and has confirmed the potential for project expansion through the third on-site concentrator generating a significant increase in the spodumene concentrate supply rate.

Tier 1 asset

“The PFS demonstrates a strong value-accretive project with an incremental net present value of $2.6b through this potential future expansion to the operation at Pilgangoora,” Mr Henderson said.

“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 scale benefits of this expansion [to 2mtpa] will further build on Pilbara Minerals’ position as one of the major leading lithium suppliers globally.”

Full feasibility study

Pilbara Minerals is now preparing to undertake the next level of feasibility study, targeted for completion in the December quarter of 2025.

“As we have done in the past, the timing of the final investment decision will be considered in conjunction with prevailing market conditions and will only proceed when it makes sense to do so,” Mr Henderson said.

In parallel with the feasibility study, the company will consider the full suite of opportunities associated with this expansion including funding, offtake strategy and downstream partnerships

The current Pilgangoora ore reserves are considered sufficient to underpin the P2000 production profile with a revised life of mine of 23 years.