Australian mining company Pilbara Minerals has secured funding from two of its key customers, in order to expand its Pilganoora lithium ore deposit.
The funding is comprised of a US$25 million offtake pre-payment facility provided by Chinese automotive manufacturer, Great Wall Motor Company, a $50m equity placement to Ganfeng Lithium, and a proposed new $50m Nordic bond to be implemented in the current quarter, with bondholder consent.
The funding package will be combined with Pilbara’s existing cash reserves and future cash flow from stage 1 operations of the Pilganoora resource to fully fund the second stage of operations. Pilbara is targeting commissioning of stage 2 from the March quarter 2020.
“We’re out of the blocks early in the new year with the announcement of a funding package which, once completed, should ensure that our next major growth step, to 5 mega tonnes per annum, is fully-funded,” said Pilbara managing director Ken Brinsden. “Upon completion of the expansion by the March quarter of 2020, Pilgangoora will be elevated to an annualised production rate of up to 850,000 tonnes per annum (tpa) of spodumene concentrate.”
In October 2017, Pilbara completed a $28m equity placement with Ganfeng— China’s largest compounds producer— having also signed a 10-year offtake agreement for the supply of 160,000tpa of 6% spodumene concentration from stage 1 production of Pilganoora.
BEST Battery Briefing reported last September that Ganfeng had agreed to supply a fifth of its production to Tesla— and the US carmaker would designate its battery suppliers to buy lithium-hydroxide products from Ganfeng.