Ann: Great Wall Motor Backs Pilgangoora Stage 2 Expansion, page-4

CHINA’S GREAT WALL MOTOR COMPANY BACKS
PILGANGOORA STAGE 2 EXPANSION WITH LANDMARK
OFF-TAKE, FUNDING DEAL AND EQUITY INVESTMENT
Binding terms for off-take agreement for 75,000tpa of Stage 2 production with ability to secure a
further 75,000tpa on provision of Stage 2 debt funding, plus upfront A$28M equity subscription
• Binding terms sheet executed with Great Wall Motor Company and its wholly-owned subsidiary, Hong Kong-registered Billion Sunny Development Limited (“Great Wall”), one of China’s largest automotive
manufacturers, for Stage 2 (5Mtpa) off-take from Pilbara’s flagship Pilgangoora Lithium-Tantalum Project
in Western Australia.
• Off-take pricing is largely consistent with existing off-take agreements, using a market-linked price
reference to Battery Grade Lithium Carbonate sold in China to determine spodumene pricing.
• Great Wall’s Stage 2 off-take to comprise 75,000tpa of chemical grade spodumene concentrate (SC6.0 basis) over an initial 5-year term, with the ability to extend for up to a further 10 years via two 5-year options.
• Under the agreed off-take terms, Great Wall has the ability to secure a further 75,000tpa of Stage 2 off-
take, for a total off-take volume of 150,000tpa, by providing Pilbara with US$50 million of debt financing for its Stage 2 expansion either via a debt or off-take pre-payment facility.
• Together, the Great Wall and Jiangxi Ganfeng Lithium Co Ltd (“Ganfeng Lithium”) off-take arrangements will underpin the Stage 2 expansion of the Pilgangoora Project, while also providing an off-take-linked debt financing solution for a significant proportion of the Stage 2 capital requirements.
• Subscription Agreement also executed with Great Wall for an upfront A$28M equity investment in Pilbara Minerals with the proceeds to contribute towards completion of Stage 1 of the Pilgangoora Project and financing of the Stage 2 Definitive Feasibility Study (“Stage 2 DFS”).
• This equity subscription will be completed when the parties formalise the binding off-take terms and enter into a more comprehensive off-take agreement, which is to occur by no later than 30 October 2017, after
which Great Wall will indirectly own approximately 3.5% of the current issued shares in Pilbara.