Lithium developer Pilbara Minerals has forecast that the stage two expansion to more than double capacity at its Pilgangoora project in Western Australia will cost $207 million.
Pilbara plans to start the stage two project within months of launching production from its stage one, 2 million tonnes a year (Mt/y) operation in mid 2018.
The company today delivered its stage two pre-feasibility study (PFS), which assessed expanding operations to increase production and processing capacity to 5Mt/y.
Pilbara believes the PFS results “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,” which it is targeting by mid 2018.
It added that the PFS re-affirmed Pilgangoora’s scale, globally competitive forecast cash operating costs, robust operating margins, long life and economic returns.
Pilbara managing director and chief executive Ken Brinsden said the “compelling results” of the PFS provided a clear pathway to unlock further value in the Pilgangoora resource.
“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,” Brinsden said.
“It was against this backdrop that we commenced the stage two expansion studies at Pilgangoora last year in parallel with construction of the stage one, 2Mt/y project.
“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 2Mt/y production rate.”
Brinsden said the expansion to 5Mt/y was deemed to be the optimal production rate to unlock further value in the deposit.
“This decision has been fully vindicated by the PFS results, which have shown a significant improvement in several areas compared to the 2Mt/y operation currently being constructed,” Brinsden said.
“Headline results include a significant increase in the project’s net present value to over $2 billion, production of circa 800,000t/y of high quality spodumene concentrate once the plant has achieved its nameplate capacity of 5Mt/y, globally competitive cash operating costs and impressive financial metrics over a 17-year mine life.”
Brinsden added the stage two expansion could be undertaken quickly, efficiently and cost effectively by leveraging off the existing stage one operation.