Pilbara Minerals Ltd’s (ASX:PLS) shares are trading 12% higher intra-day at $0.93 after executing a landmark agreement with multi-billion dollar South Korean conglomerate POSCO (KRX:005490).
Feb 27, 2018 at 5:34pm PST
The new deal establishes a long-term strategic relationship and secures first-mover position for Pilbara in the fast-growing South Korean lithium raw materials market.
New agreement diversifies lithium concentrate sales
Pilbara has signed a binding life-of-mine off-take deal with POSCO for an initial 80,000 tonnes per annum (tpa) of chemical grade spodumene concentrate from the Pilgangoora stage II project.
This will increase to 240,000 tpa upon Pilbara’s joint venture participation in a downstream 30,000 tpa lithium carbonate/lithium hydroxide conversion plant in South Korea.
Importantly, the new off-take agreement further diversifies Pilbara Mineral’s concentrate sales, with up to 30% of its entire proposed production from stage I and II to be sold in the South Korean market.
Spodumene concentrate pricing will be on commercial terms based on battery grade hydroxide and carbonate pricing in the South Korean market.
Upfront $79.6 million equity investment from POSCO
Pilbara has signed a binding subscription agreement with POSCO for an immediate upfront $79.6 million equity investment in Pilbara Minerals.at $0.97 per share.
The proceeds will contribute towards accelerating the stage II (5 million tpa) development of Pilbara’s Pilgangoora Lithium and Tantalum Project this year.