Do we Snapback on our Algo Short today ?, page-67

Shorters days are numbered.
Major resource upgrade to kick-start pivotal two months for Pilbara Minerals

The speculative heat may have come out of the junior lithium sector – for the time being at least – but there’s still plenty of action at the bigger end of town, particularly for those companies which are either already in production, or close to it.
The merger between General Mining Corporation (ASX: GMM) and Galaxy Resources (ASX: GXY) has anchored their market valuations.
And this week’s drilling update from Pilbara Minerals (ASX: PLS) served as a timely reminder that its development plans for the giant Pilgangoora deposit in WA remain firmly on track.
Drilling as part of the looming Definitive Feasibility Study is already complete and an expanded 28,000m “Phase 2” drill program is also nearing completion.
The results so far have been spectacular, with more thick, high-grade drill hits announced this week confirming significant extensions to the main resource area and also unearthing two significant new discoveries on either flank of the deposit.
Pilbara says that all of the new drill data will be incorporated into its next major resource upgrade, which is on track for “early July”.
Given that it has previously flagged expectations of a “major” upgrade above the current resource of 80.2 million tonnes at 1.26% Li₂O, market expectations are that the next upgrade will drive significant growth in the Reserve of 29.5 million tonnes at 1.31% Li₂O.
That, in turn should push out Pilgangoora’s mine life to beyond 20 years and significantly enhance project economics above what was published in the March Pre-Feasibility Study.
Investors won’t have to wait long to find out.
The company has flagged two months of intensive news-flow in July/August once the new resource is on the table, with possible off-take agreements, financing updates and the DFS due in mid-August (hot on the heels of the Diggers & Dealers forum in Kalgoorlie, where Pilbara makes its debut this year).
Earlier this month, big UK broker Numis Securities added its voice to the growing chorus of analysts who believe that Pilbara is the “go-to” name in the emerging Australian lithium space.
“The DFS should be a near-term catalyst, with commercial production in 2018,” said Numis analyst Jonathon Guy in an initiation note, putting an 85c price target on the stock.
“We expect the shares to re-rate as the company publishes an updated Resource, completes the DFS and moves towards commencing development before the end of 2016,” he added.
Numis is not the only broker who believes that Pilbara Minerals shares are worth considerably more than their current 55c (following some serious pre-end of financial year profit-taking in recent weeks).
Blue Ocean Capital has a 95c price target and “strategic target” of $2.20 for Pilbara while Foster Stockbroking values the company at 78c-a-share.
http://resourcesrisingstars.com.au/infopage/8520