Name of the Project
Pilgangoora lithium/tantalum Stage 2 expansion project.

Location
Western Australia.

Project Owner/s
Pilbara Minerals.

Project Description
A definitive feasibility study has delivered exceptional results and has reaffirmed the Pilgangoora project’s scale, quality, competitive forecast cash-operating costs, robust operating margins, long life and exceptional economic returns.

The study has outlined a compelling business case for starting the expansion of the Pilgangoora lithium/tantalum project at five-million tonnes a year of run-of-mine (RoM) ore production, and the processing capacity within months of starting the production of spodumene concentrate of two-million tonnes a year in Stage 1.

The Stage 2 openpit mine is based on the processing of five-million tonnes a year of ore feed to produce a chemical-grade spodumene concentrate using an ore reserve of 80.3-million tonnes grading 1.27% lithium oxide or spodumene, 123 parts per million (ppm) tantalum pentoxide and 1.08% iron oxide.

Openpit mining will continue to be delivered by mining contractors using conventional drill-and-blast, load-and-haul operations.

Ore will be hauled using a skyway arrangement to a grade-based finger on the RoM pad from where the ore will be blended and fed into the processing plant. Mine schedules and cost modelling assume that 100% of the ore will be rehandled to feed into the processing plant.

To maximise the upside potential of the processing plant to achieve a feed capacity higher than five-million tonnes a year, the processing plant design will retain the current two-million-tonne-a-year (Train 1) circuit in its current form and introduce a second three-million-tonne-a-year processing circuit (Train 2) to operate in parallel with Train 1. This is in line with the prefeasibility study scenario that proposed two 2.5-million-tonne-a-year configurations.

Designing the circuit in this manner provides processing flexibility (upside) for the plant to achieve higher throughput capacity and/or processing a wider ore feed variation for nominal additional capital.

Waste will be hauled to the tailings management facility as part of cell construction or ex-pit waste landforms.

The mining fleet size in terms of volumetric capacity will remain largely unchanged; however, the number of drills, trucks and excavators needed during the mining operation will increase to accommodate the increased ore and waste mining to feed the processing plant.

The Stage 2 expansion will be a globally cost-competitive operation producing between 800 000 t/y and 850 000 t/y of high-quality spodumene concentrate over its 17-year mine life.

However, Pilbara Minerals is confident that the mine life will be extended through the conversion of mineral resources to ore reserves, based on the recent May 2018 mineral resource update, which showed a 35% increase in the total measured and indicated resource to 129-million tonnes grading 1.35% lithium, 123 ppm tantalum pentoxide and 0.61% iron oxide.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 10% discount rate, of A$2.16-billion.

Capital Expenditure
Stage 2 capital expenditure is estimated at A$230.9-million.

Planned Start/End Date
Construction is expected to start in November 2018, and commissioning and first production is targeted late in the fourth quarter of 2019.

Latest Developments
The Pilgangoora lithium/tantalum project could potentially rival the 1.34-million-tonne-a-year Greenbushes lithium mine in terms of production, Pilbara Minerals MD and CEO Ken Brinsden said on the sidelines of the Diggers & Dealers conference, in Kalgoorlie, on August 3. He said that once fully expanded, the Pilgangoora operation could support a 1.1-million-tonne-a-year spodumene concentrate production rate.

Pilbara approved the staged restart of the Ngungaju plant, previously known as the Altura operations, in June. Pilbara completed the $175-million acquisition in January this year, gaining ownership of Altura’s Pilgangoora lithium project, which has been renamed Ngungaju.

The restart operations are on track for the December quarter, with production to be ramped up to about 180 000 t/y to 200 000 t/y by mid-2022. This will result in the combined annual production capacity of the Pilgangoora project increasing from 560 000 t/y to 580 000 t/y.

The restart of operations will cost about A$39-million, and Pilbara is likely to fund the restart from existing cash; however, the miner has previously said that it would give consideration to the potential restructure of its existing syndicated debt facility, provided favourable terms and conditions could be achieved

Key Contracts, Suppliers and Consultants
Trepanier (geology and resources); AMC Consultants (mining and mine design); Minnovo Engineers (process plant infrastructure, including plant capital and operating estimates); ATC Williams (tailings management facility and geotechnical) and Groundwater Resource Management (hydrogeology and hydrology).

Contact Details for Project Information
Pilbara Minerals, tel +61 8 6266 6266 or fax +61 8 6266 6288.