• Long-term off-take agreement executed with leading integrated Chinese lithium producer, Jiangxi Ganfeng Lithium Co Ltd and its subsidiary (“Ganfeng Lithium”) for Stage 1 (2Mtpa operation) of Pilbara’s flagship Pilgangoora Lithium-Tantalum Project in WA.
• The Stage 1 off-take agreement comprises 160,000tpa of chemical grade spodumene concentrate (SC6.0 basis) over an initial 10-year term, with two five year options to extend for up to a further 10 years.
• Upon a decision to develop Stage 2 (4Mtpa), Pilbara will supply Ganfeng Lithium with an additional 25% of the Pilgangoora Project’s expanded Stage 2 production of chemical grade spodumene concentrate.
• Up to 50% of Stage 2 production (maximum 150,000tpa of Stage 2 expanded production in total) to be provided in off-take, contingent on Ganfeng Lithium providing Stage 2 funding commitments commensurate with its final off-take position.
• Complementary funding commitments from Ganfeng Lithium include:
o Firm participation of not less than US$20 million as an investor in Pilbara’s remaining financing to complete Stage 1 of the Pilgangoora Project; and
o Provision of debt funding or off-take pre-payment to support the development of the Stage 2 expansion (4Mtpa) for the Pilgangoora Project, with the funding amount to be commensurate with its final off-take position under Stage 2.
• Pilbara’s Stage 1 chemical grade spodumene concentrate (SC6.0 basis) is now fully sold to both General Lithium and Ganfeng Lithium, paving the way for the Company to complete the balance of funding required for Stage 1 of the Pilgangoora Project.
• Both off-take agreements include downside price protections to provide Pilbara with confidence that it can operate profitably above its expected operating cost base, as well as an attractive off-take pricing formula based on market reference data for battery grade lithium carbonate pricing comprising both Chinese domestic and import price outcomes. This is designed to ensure that Pilbara benefits from both the current and expected future demand for lithium carbonate in China.
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