Australian Investment Blog

ASX:PLS 03/08/2018

Pilbara push on with Pilgangoora

Stock

Pilbara Minerals (PLS) $0.91 as at 3/08/2018

Event

Lithium miner Pilbara has bucked the sectors weakness today to push higher following the release of a feasibility study for their Pilgangoora project. The mine looks to have a 17 year life, producing 800,000-850-000 tons of high-quality lithium containing spodumeme per annum. The Western Australian project has an expected capital cost of $231m, but is expected to generate $6.3b of EBITDA over the mine’s life. All in all a good update from PLS, which has risen 7.1% today to 11.45AM, compared to other lithium names Orocobre falling 2.03%, and Galaxy Resources which is unchanged. Pilbara Minerals (PLS) Chart Pilbara Chart

Market Matters Take/Outlook

While the announcement is clearly positive and another box ticked towards being a notable global lithium producer, there is a contrast between Lithium names that need financing and facing higher borrowing costs, and those who are close to or currently in full-scale production so we prefer other names in the space. Lithium has come under some pressure recently over fears that future supply will outstrip demand in the immediate term. Read our views on Lithium stocks in our recent weekend report here

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