PERTH (miningweekly.com) – Lithium developer Pilbara Minerals was readying for its first revenue from direct shipping ore (DSO) operations at the Pilgangoora lithium/tantalum project, in Western Australia.
Pilbara told shareholders that the first revenue from a mine gate sales agreement with fellow-listed Atlas Iron was due shortly. All conditions precedent to the agreement with Atlas have now been satisfied, including the receipt of the $3-million prepayment required to help fund the establishment costs associated with the DSO project.
Under the terms of the agreement, Pilbara will deliver a minimum of one-million tonnes of unprocessed run-of-mine lithium/tantalum material to Atlas on a mine gate sale basis, based on a delivery schedule which is designed to allow Atlas to ship 100 000 t/m of DSO to offtake customers.
Ore deliveries from Pilgangoora’s Monster pit have now started to the DSO run-of-mine pad.
Pilbara said on Tuesday that the agreement is expected to deliver a healthy operating cash margin, underpinned by an attractive fixed US-dollar base price per tonne of mine gate material sold, subject to adjustments in the final product specifications shipped, and the actual shipping costs realised.