JOHANNESBURG (miningweekly.com) – Australian lithium developer Pilbara Minerals has delivered a prefeasibility study (PFS) for its flagship 100%-owned Pilgangoora lithium/tantalum project, in Western Australia.
The company reported on Tuesday that the PFS outlined a "compelling business case" for expanding the project to five-million tonnes a year of production and processing capacity within months of starting production of spodumene concentrate from the Stage 1, two-million-tonne-a-year operation in mid-2018.
"The exceptional results of the Stage 2, five-million tonnes a year PFS clearly demonstrate the strong financial and technical merits of the expansion project, paving the way for further definitive assessment through an ongoing definitive feasibility study (DFS), which is targeting completion mid-year," the miner explained.
The PFS results reaffirm the Pilgangoora project's scale, globally competitive forecast cash operating costs, robust operating margins, long life and exceptional economic returns - highlighting its capacity to take full advantage of the current and future expected demand for lithium raw materials over the coming decades.
Pilbara Minerals MD and CEO Ken Brinsden highlighted that the "compelling" results provided a clear pathway to unlock further value in the outstanding Pilgangoora lithium/tantalum resource and, in the process, cement its position as a globally significant, low-cost supplier of lithium raw materials for decades to come.
"The exponential growth which is occurring across the lithium-ion supply chain, as the industry in China and elsewhere gears up for transformational growth to meet demand from the automotive and energy storage sectors, is now becoming better understood.
"The logic of this accelerated expansion strategy was underpinned both by the remarkable growth occurring in the market and the extraordinary success of our exploration team in growing the Pilgangoora ore reserve base to a level which underpinned a mine life of more than 40 years at the two-million tonnes a year production rate," he added.
Headline results include a significant increase in the project's net present value to more than A$2-billion, production of about 800 000 t/y of high-quality spodumene concentrate once the plant has achieved its nameplate capacity, globally competitive cash operating costs and impressive financial metrics over a 17-year mine life.
"Importantly, the Stage 2 expansion can be undertaken quickly, efficiently and cost effectively by leveraging off the existing Stage 1 operation - resulting in the development of a truly world-class mining and processing operation which will be capable of meeting the long-term requirements of our customers who have already committed to offtake agreements supporting 600 000 t/y of spodumene concentrate production," said Brinsden.
Additional reverse circulation drilling is currently under way and will further increase the overall resource and reserve, thereby extending mine life or further optimising future production scenarios.
"Together with confirmatory testwork and DFS technical refinement to be undertaken over the next few months, we are confident this will provide further upside over and above these impressive results. However, the PFS results alone clearly justify a decision to complete the current Stage 2 DFS, which is well under way and on track for completion in the September quarter of this year," said Brinsden.