Good News & Bad News, page-6737

I am fine SF and I know commodity prices are up, and another advantage for PLS right now is that it seems to me that it has the market cornered.
But things don’t keep going up forever.

And it also seems to me that PLS does have rather a lot of large expenses due.
Thinking about this DOES NOT mean there is anything wrong with me.
- I think it’s a reasonable query.
Hilldweller says Ken has plenty of credit to draw on.

Spoiler : Debt Facilities

The Annual Report had this in it :

…..But I don’t like numbers as I have said before
Having offered this, perhaps someone can explain how much credit PLS can actually get its hands on should it wish?

Cheers

Re potential upcoming costs I have :
POSCO : the plant is supposed to start construction very soon if it has not already, and they want to power up asap to two trains.
-Is PLS expected, as a JV partner, (initially 18%) to contribute to total funding “expected to be between US$700m to $750m”?
If so, when?
Pilbara’s ‘initial’ stake - if it stays that size is - I think - US$126m all up (at $700m) by third quarter next year?

Spoiler : POSCO DEAL

[September Quarterly]
..Subsequent to the end of the quarter, the Company announced that it had executed a Shareholders Agreement with POSCO for the formation of an incorporated joint venture, to develop and operate a 43ktpa lithium hydroxide monohydrate (LHM) Conversion Facility in South Korea (Refer ASX release dated 26 October 2021).

Under revised offtake terms, Pilbara Minerals will supply 315ktpa of chemical grade spodumene concentrate on commercial terms to the Conversion Facility.
This will be sourced from Pilbara Minerals’ existing installed production capacity at the Pilgangoora Project (inclusive of the recently restarted Ngungaju Plant).
Product sold under the offtake agreement will be at prevailing market prices for chemical grade spodumene concentrate sold on a CIF basis.

The project development timeline for the Conversion Facility will see major construction works likely to commence from early 2022, with detailed engineering and early works already underway. Construction of the first train of the Conversion Facility is expected to be completed by mid-2023, with the second train to be completed approximately three months later.

[Market Herald 26/10/21]
Based on studies, the development of the conversion facility is expected to cost between US$600 million and $650 million (A$800 million to $866.7 million). After allowing for initial working capital and pre-production costs, the total JV funding requirement is expected to be between US$700 million and $750 million (A$933.4 million to $1 billion).
The facility will comprise two production trains, each with a production capacity of 21,500 tonnes of LHM per annum.

CALIX?
Word in the December update was trials are going well.
[Original MOU]
.. “The scoping study will run until late 2021. If positive, Pilbara Minerals and Calix intend to form a Joint Venture to build a demonstration facility, starting with a Definitive Feasibility Study (DFS). The contemplated facility will be capable of up to several thousand tonnes of lithium salt annual production capacity, and the JV will also market and export the product from the facility, “on-shoring” significant value into Australia and avoiding the international shipment of thousands of tonnes of waste material (>90% of current spodumene exports) overseas..”
On [December 21]:
“Nextsteps:
o Economic and commercial evaluations contributing to a completed Scoping Study early in the New Year.
o Subject to successful completion of the Scoping Study, progress negotiations for the formation of a joint venture.
o Agree a work program to develop a Demonstration Plant and ultimately commercialise the Mid-Stream Product’s process technology….”


What @GARETH78 wrote about PLS potentially wanting acquisitions from the power position of nearly an $11m MC makes sense as well.
The company is currently valued at a near equivalent to MIN.
Wodgina is still not officially in production and won’t be until third quarter! but ‘on the street’ I have heard the place is ‘pumping’ right now.
What if it starts up earlier than expected with one or even two trains?
I think it would make sense for PLS to exploit its current power and build for even stronger if there was opportunity. And that would likely cost money.

But who knows?
Just time .

Cheers