Pilbara Strikes Motherlode at Pilgangoora

Pilbara Minerals shares jumped yesterday after announcing new ore reserves of lithium oxide at its key WA mine.

The news saw a temporary end to a weeklong selloff that saw the share price lose around 10% in value up to Tuesday.

Pilbara shares staged a 5.3% rise to a day’s high of $1.975 but the shares lost that and a little bit more to close lower once again at $1.87, down 0.2%.

It was an ending that was at odds with the early enthusiasm for the news of a rise in reserves at the company’s attractive lithium mine and prospect in WA.

There was a 47% increase in the size of the lithium oxide reserve at the fully-owned Pilgangoora Lithium-Tantalum Project in WA’s Pilbara region.

“The quality and scale of the Pilgangoora project confirms Pilbara Minerals as a leading hard rock lithium producer and truly sets the scene for our expansion to 6.3 million tonnes per annum and continued growth beyond that,” CEO Ken Brinsden said in an update to the ASX on Wednesday.

Pilgangoora’s ore reserve now stands at 1.9 million tonnes of contained lithium oxide and is based on the company’s mineral resource estimate of 308.9 million tonnes grading at 11.4% lithium oxide and 105 parts per million tantalum oxide.

The ore reserve is based on a $US588 ($A806.32) per tonne of spodumene concentrate price and a long-term price projection of $US700 per tonne for Pilgangoora’s smaller pits.

“The continued growth in ore reserves reflected the successful integration of the Ngungaju project area and the highly successful development drilling program undertaken this year,” Mr Brinsden said in the statement.

In an update in early September, the company promised to have a new ore reserve estimate for Pilgangoora, by October 2021 which was delivered in Wednesday’s release.

Pilbara said the discovery of new pegmatite domains, together with integration of the Ngungaju Resource led to the upgrade.

The company completed a $201 million acquisition of the Altura lithium project (now Ngungaju operations) in Western Australia, which has also increased Pilgangoora output.

Ngungju, in combination with the existing Pilgan plant, is expected to produce between 560,000 dry metric tonnes per annum and 580,000 dry metric tonnes per annum of spodumene from Pilgangoora.

The company had previously reported a mineral resource estimate at June 30 2021 of 308.9 million tonnes (Mt) grading 1.14% Li2O (as spodumene), 105 ppm Ta2O5 and 0.59% Fe2O3 at a cut-off grade of 0.2% Li2O.

Management revealed a 47% rise in the contained lithium oxide at the project to an estimated 162 million tonnes grading 1.2% Li2O, 100 ppm Ta2O5 and 1.0% Fe2O3.

The Pilgangoora project has a mine life of around 26 years. This is based the combined 6.3 Million tonnes per annum (Mtpa) operations, consisting of the 1.3 Mtpa Ngungaju process plant and the proposed Pilgan 5 Mtpa expanded process plant.

The company said there were “Significant opportunities exist to further expand the Mineral Resources and Ore Reserves, with further drilling campaigns expected during FY22.”


About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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