Pilbara Minerals announces potential expansion of Pilgangoora Operation

Pilbara Minerals Limited (ASX: $PLS) has released the outcomes of a pre-feasibility study (PFS) indicating the potential for an expansion of production capacity at the Company's 100% owned Pilgangoora Operation to more than 2.0 million tonnes per annum (Mtpa). The expansion project, named the P2000 Project (P2000), is expected to result in the first ten years of annual production averaging ~1.9Mtpa, with production of more than 2Mtpa over the first six years after ramp up.

Executive commentary on the P2000 Project

The PFS demonstrates a strong value accretive project with an incremental NPV of $2.6B through this potential future expansion to the operation at Pilgangoora. This study follows the 35% reserve upgrade to 214Mt announced in August last year. 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. This expansion is expected to provide an average 1.9Mtpa production for the first 10 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.

Summary of P2000 Project and outlook

The pre-feasibility study (PFS) indicates the potential for Pilbara Minerals to expand the production capacity at the Pilgangoora Operation to more than 2.0 million tonnes per annum (Mtpa) with an average forecast annual spodumene concentrate production for the first ten years of 1.9Mtpa. The expansion project, named the P2000 Project (P2000), is expected to further extend Pilbara Minerals' position as the largest pure play lithium producer globally. The Company has commenced a feasibility study in relation to P2000 (FS) with outcomes expected in the December Quarter of calendar year 2025 (CY25). Funding requirements will be determined during the FS and FID phases, and Pilbara Minerals will consider all available funding options including the Company's cash balance, cashflows from existing production, new loan facilities or other sources. The expansion will create significant shareholder value with a P2000 incremental net present value (NPV) of $2.6B and incremental internal rate of return (IRR) of 55%. The P2000 Project provides a significant increase in production capacity that, if brought to market, may time favourably with expected deficits within the lithium market as forecast by Benchmark Minerals Intelligence (BMI). The Company will host an investor webcast and conference call to discuss the P2000 PFS today at 7.30am (AWST) / 9.30am (AEST).