Pilbara Minerals has announced the pre-feasibility study (PFS) for the P2000 Project, which could significantly expand lithium production at its Pilgangoora operation in Western Australia.
The P2000 Project, named for its production target, is expected to yield 1.9mtpa for the first ten years, with more than 2mtpa during the initial six years post-ramp-up.
This expansion aligns with the company's strategic growth objectives and the rising demand for lithium.
The project is expected to position the company as the world's largest pure play lithium producer, with an anticipated increase to more than 2mt per annum.
Progression of the P2000 Project will depend on the results of the forthcoming feasibility study, necessary project approvals and the market conditions at the time of the financial investment decision.
The proposed expansion includes the construction of a new flotation plant, estimated to cost A$1.2bn ($797.9m), which will operate alongside the current processing facilities at Pilgangoora.
The anticipated shareholder value from the P2000 expansion is substantial, with an incremental net present value (NPV) of $2.6bn and an internal rate of return (IRR) of 55%.
These figures underscore the project's potential profitability and its impact on the company's financial performance.
A feasibility study for the P2000 Project is under way, with results expected by the end of 2025. Following the study, a financial investment decision will be made.
Pilbara Minerals is exploring various funding options for the project, including its existing cash reserves, production cash flows, new loans or other financial sources.
In addition to increasing production capacity, the P2000 Project is set to open up new opportunities for spodumene concentrate offtake and strategic partnerships.
Pilbara Minerals is actively pursuing these opportunities concurrently with the feasibility study and financial investment decision processes.
Pilbara Minerals managing director and CEO Dale Henderson said: “The PFS demonstrates a strong value accretive project with an incremental NPV of $2.6bn through this potential future expansion to the operation at Pilgangoora.
“This study follows the 35% reserve upgrade to 214mt announced in August last year. The growth of the reserve, and the optionality to incrementally expand production, further reinforces Pilgangoora’s position as a Tier 1 asset of global significance.
“This expansion is expected to provide an average 1.9mtpa production for the first ten years and more than 2mtpa over the first six years after ramp-up. The scale benefits of this expansion will further build on Pilbara Minerals’ position as one of the major leading lithium suppliers globally.”
