Company overview - Pilbara Minerals Limited is a strategic metals producer. The Company is engaged in the exploration, development and mining of mineral resources. It owns the Pilgangoora Lithium-Tantalite Project, which is located in the Pilbara region of Western Australia. The Pilgangoora Lithium-Tantalite Project is located approximately 120 kilometers southeast of Port Hedland in Western Australia. The Pilgangoora Lithium-Tantalite Project is a spodumene (lithium-mineral) deposit. It has a farm-in and joint venture agreement over approximately six tenements comprising its West Pilbara project. The Pilgangoora Lithium-Tantalite Project has an Indicated and Inferred Resource of approximately 128.6 metric tons grading over 1.22% lithium oxide containing approximately 1.57 metric tons of lithium oxide and over 40 metric pounds of tantalum pentoxide. Its subsidiaries include Tabba Tabba Tantalum Pty Ltd, Sturt Resources Ltd, Sturt Resources PNG Ltd, Star 15 Limited and New Global Limited.
 

PLS Details
Grant of the main mining lease for the Pilgangoora Lithium–Tantalum Project: Pilbara Minerals Ltd (ASX: PLS) has been granted the main mining lease for the Pilgangoora Lithium–Tantalum Project M45/1256 by the Western Australian Department of Mines and Petroleum (DMP). DMP has granted the mining lease post finishing many prerequisite steps that comprised the signing of a Native Title Agreement with the Njamal people, the traditional owners of the land and after the signing of an Access and Compensation Deed with the pastoral lease holders within the Project area. Moreover, PLS had finished the environmental, water and waste characterization studies enabling a solid foundation for the balance of the Pilgangoora Project’s approvals processes to start major construction works and mining operations.
 
Core Mining Licence at Pilbara Mineral’s Pilgangoora Project(Source: Company Reports)
 
Appointed Dr Wenbo Wang as the key personnel: PLS appointed Dr Wenbo Wang, who is among Australia’s foremost lithium oxide flotation process specialists. Dr Wang has a long-served Greenbushes lithium mine experience and will join Pilbara Minerals from mid-January 2017. He would offer his expertise in the optimization and performance of the Pilgangoora plant test-work, design, commissioning and plant ramp-up. Moreover, Dr Wang was in the Talison Lithium’s Greenbushes Operation and was closely involved in the commissioning of a new lithium processing plant and further optimization of the performance.
 
Starting the Sileach pilot plant which was terminated prematurely: The group announced about starting a 24-hour commissioning run of the Sileach pilot plant which was terminated prematurely as a consequence of a hardware failure. The commissioning run of the Sileach pilot plant was required for the processing of spodumene concentrates supplied by Pilbara Minerals Limited and was a part of LIT and PLS’s joint efforts toward the commercialization of Sileach on Pilgangoora concentrates. The equipment got repaired while pilot testing restarted on December 21, 2016. The group planned to further piloting operations from January 2017. Additionally, ANSTO Minerals (a division of the Australian Nuclear Science and Technology Organization) had ensured PLS that components are readily available to get the repair done which would finish the commissioning process before the festive season. Therefore, PLS had announced the re-commencement of pilot testing at ANSTO Minerals. In addition, Sileach is the only hydrometallurgical process capable of recovering lithium from spodumene.
 
Other important agreements finalized and signed: PLS intends to fast-track their development and accordingly is progressing towards their major access arrangements. As a result, PLS finished several other access agreements and development milestones at Pilgangoora. PLS has signed two key road separate access agreements recently with required rail operators for road access rights over their respective rail corridors. The key access agreements are finalized with the local pastoralist at Pilgangoora, to facilitate final access to the Pilgangoora mine and infrastructure areas. The process water supply locations and corridors have now been secured for the project and the pump testing and aquifer analysis has confirmed the respective bores’ capacity to deliver sufficient water for the Stage 1 (2mtpa) project. The bore licensing for these locations is now underway as part of the broader project approvals. Additional, preliminary site work is nearing completion in preparation for the Stage 1 relocation of the accommodation camp supporting Pilgangoora exploration and development.
 
Acquired Lynas Find Lithium Project:PLS has acquired Lynas Find Lithium Project that directly adjoins the Pilgangoora Lithium-Tantalum Project, to further expand their world-class resource inventory in the Pilgangoora district of WA. This project would also offer them with an early access of higher grade tonnes as well as enable a further flexibility for the location of key infrastructure components for the development of the Pilgangoora Project. The acquisition also includes the maiden JORC Indicated and Inferred Minerals Resource of 7.3Mt @ 1.25% Li₂O, 85ppm Ta₂O₅ and 0.99% Fe₂O₃ as per the binding acquisition agreement with Dakota Minerals Limited.
 

Bulk earthworks underway at the Pilgangoora Lithium-Tantalum Project, Western Australia (Source: Company Reports)
 
First ground broken at Pilgangoora Lithium-Tantalum Project: PLS had announced the start of the development activities at Pilgangoora Lithium-Tantalum Project with the start of bulk earthworks required for the project’s accommodation village. This marked a major milestone for the company and indicated that the company is on track to start the run of ore mining in the second quarter of CY 2017. Moreover, the bulk earthworks are now underway for the Stage 1 relocation of the camp to Pilgangoora and comprised an initial 60 accommodation rooms as well as common central facilities.
 
Further resource upgrade:PLS finished their 2016 exploration program and derived strong results given their strategic development drilling at the Far East, South End and Monster pegmatite zones, at Pilbara’s 100%-owned Pilgangoora Lithium-Tantalum Project in WA. The total of 111 holes for 14,293m are finished since the resumption of drilling in September. The strategic development drilling at east of the Altura tenement boundary indicated the ongoing and thickening of the pegmatite zones. Moreover, the Reconnaissance exploration drilling at the Houston Creek pegmatite to the north of the Eastern Domain has given encouraging shallow ore grade intercept and the resource extension drilling at Monster while delivered major widths of high-grade mineralization down dip of the currently defined resource. 

Cross section at Southern Area (Source: Company Reports)
 
Building client prospects for Lithium: Pilbara Minerals is building relationships in the Lithium industry for offtake agreements. The group made an off-take agreement with General Lithium Corporation, a leading Chinese producer of lithium carbonate and hydroxide products. The proposed deal is making an AUD$17.75 million equity investment into Pilbara Minerals, as well as an agreement to consider potential joint venture for offshore downstream processing. Despite this, the group also made an off-take agreement to supply Direct Shipping Ore to the Chinese lithium group, Shandong Ruifu. Under this arrangement, Pilbara Minerals would deliver crushed but unprocessed run-of-mine ore from July 2017. This would enable an early access to raw material for their customers while at the same time support their fast-track development strategy. Meanwhile, Pilbara also made an agreement with Mineral Resources to remove the impact of the right of first refusal over all of the future lithium sales, a right they acquired after their recent acquisition of the Wodgina mining assets. This Resolution would lead to the extinguishment of both the 2.5% net smelter royalty and right of first refusal in exchange for the issue of shares.
 
Stock Performance:PLS stock has fallen 18.66% in the last six months (as of January 10, 2017) but generated over 9% returns in this year to date. In fact, the stock surged about 102% in the last one year (as of January 10, 2017). PLS achieved several milestones in the last two years while drilled more than 95,000m. As a result, the group witnessed several major resource and reserve upgrades, PLS finished complex feasibility studies at a very high standard. Moreover, the group even strengthened their balance sheet by raising over $130 million in equity. PLS expanded their resource base via Lynas Find tenement package from Dakota Minerals. The group’s prestigious Pilgangoora Lithium–Tantalum Project development is on track which would lead to a significant value generation. We believe PLS stock has upside momentum and maintain our bullish stance. We give a “Buy” recommendation on the stock at the current price of – $ 0.54

 
PLS Daily Chart (Source: Thomson Reuters)

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