Pilbara Minerals (ASX:PLS) has signed an off-take agreement for the sale of spodumene concentrate (a source of lithium) from its Pilgangoora Project in the Pilbara region of Western Australia.
The company’s shares were last trading 22% higher intra-day on Tuesday, at $0.415.
The binding off-take agreement comprises 160,000 tonnes per annum of spodumene concentrate over an initial 10-year term to integrated Chinese lithium producer, Jiangxi Ganfeng Lithium Co.
Pilbara’s new agreement, together with the previously announced binding off-take agreement with General Lithium, supports the sale of 300,000+ tonnes per annum of spodumene concentrate.
Significantly, this represents 100% of the mine’s Stage 1 chemical grade spodumene concentrate production.
Ganfeng Lithium is listed on the Shenzhen Stock Exchange and has a market capitalisation of circa US$4.6 billion.
It is one of China’s largest integrated lithium producers, with a total capacity of around 30,000 tonnes per annum of lithium carbonate equivalent.
As part of Ganfeng Lithium’s commitment to Stage 1 development of the Pilgangoora Project, it has also signed a financing agreement to contribute not less than US$20 million.
The completion of the Stage 1 off-take will now enable Pilbara Minerals to work towards the final financing for the Pilgangoora Project in the near term.
This together with receipt of the final Mining Proposal approval from the Department of Mines and Petroleum, which is expected shortly, will pave the way for the commencement of major site works.
Pilbara’s agreements with Ganfeng Lithium and General Lithium underscores the importance of the Pilgangoora Project as a world-class supply solution to meet the increasing demand for lithium.