Shares in Pilbara Minerals surged yesterday after the company confirmed it had signed a funding and off-take arrangement with China’s Jiangxi Ganfeng Lithium for its Pilgangoora lithium project.
Pilbara Minerals shares jumped 7¢, or 20.6 per cent, to a 41¢ close after it emerged from a trading halt to confirm a WestBusiness report it had signed up with the Chinese lithium major over a lithium concentrate deal.
The deal locks away 160,000 tonnes a year of Pilbara Minerals’ planned 300,000t concentrate production for the first stage of Pilgangoora.
The company had already signed a deal with China’s General Lithium for the first 140,000t, meaning all of its planned output is now locked up.
Ganfeng has agreed to kick in up to $US20 million in equity to support construction of the lithium mine, with the Chinese company to emerge with no more than a 4.9 per cent stake in Pilbara Minerals when the deal is closed.
It will also contribute funding for Pilgangoora’s second stage, and will take up half of the 150,000t additional capacity in off-take.
Pilbara Minerals said the agreement would underpin the case for debt financing of the $214 million lithium project. It said it was nearing receipt of its final mining approvals from the Department of Mines and Petroleum, which would clear the way for construction work to begin when funding was finalised.
By Nick Evans
The West Australian