Pilbara Minerals lifts lithium spodumene offtake costs to US$6,300 - Earning Funda

Pilbara Minerals lifts lithium spodumene offtake costs to US$6,300


Pilbara Minerals (ASX: PLS) mentioned it achieved a ‘important enchancment in pricing outcomes’ with main offtake prospects, lifting its common spodumene value to roughly US$6,300/dmt.

Pricing energy

The revised offtake pricing will apply for all shipments to the corporate’s main offtake companions from December 2022 onwards.

So as to add some perspective, the typical realised promoting value in FY22 was US$2,382/dmt at manufacturing prices of roughly US$565/dmt (76.8% margins).

Market costs for spodumene was US$5,480/dmt, in accordance with the corporate’s FY22 outcomes presentation.

Inflation hits growth plans

On 29 June 2022, the Board accepted the capital funding for the ‘P680 Mission’ to spice up the Pilgan Plant’s annual manufacturing by 100,000 dmt to ~640,000 to 680,000 dmt.

The P680 Mission was set to value $297.5 million for bigger crushing facility and rejection circuit. Nevertheless, the elevated value of supplies, tools and portions of labor has bumped prices 35.9% increased to $404 million.

Eyes on 1 million tonnes

In parallel, the Board accepted pre-FID (last funding determination) funding for the P1000 Growth Mission – set to extend annual spodumene manufacturing to as much as 1 million tonnes each year.

The $38.3 million pre-FID funding will assist front-end engineering design and the procurement of long-lead tools to assist the supply of P1000.

“The supply of the P680 and P1000 growth initiatives will cement Pilbara Minerals’ place as a significant provider of important lithium uncooked supplies required for the worldwide vitality transition,” mentioned CEO Dale Henderson.

Dividends on the horizon

On 16 December, Macquarie reaffirmed an OUTPERFORM ranking for PLS with a $7.60 goal value.

The analysts forecast FY23 adjusted income to return in at $2.72 billion, up 385% from the $561.4 million in FY22. It will feed right into a maiden dividend of 34 cents per share, which divided by the goal value, assumes a dividend yield of 4.5%.

PLS chart

Pilbara Minerals 12-month value chart



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