A gearing ratio of ~50% of external debt has been agreed between...

• A gearing ratio of ~50% of external debt has been agreed between parties, but with the ability for this to increase to 65% if required. This ensures that Pilbara Minerals’ initial 18% equity participation in the JV will be largely funded through the previously announced A$79.6M 5- year Convertible Bond Agreement being provided by POSCO (see ASX: 28th February 2018).

Looks like there will be little or no additional debt or CR required from PLS

• Product sold under the offtake agreement will be at prevailing market prices for chemical grade spodumene concentrate sold on a CIF basis.

This appears to be a reasonable long term arrangement that provides a level of income surety for PLS. How will 'prevailing market prices' be determined?

• In recognition of the annual offtake quantity increasing from 240ktpa to 315ktpa for the expanded 43ktpa LHM Conversion Facility, the JV will provide Pilbara Minerals with a second ranking secured US$25 million product prepayment facility which may be used for general working capital or to partly fund any future expansions of the Pilgangoora Project.

Additional cash to apply to upgrades etc.

• The 315ktpa offtake agreement will not impact the Company’s ability to continue to supply product under its existing offtake arrangements with other customers.

Any additional production from Ngungaju may be able to be sold on BMX until required by POSCO JV, at which time the Ngungaju fines circuit should be operational.

• The Conversion Plant will play an integral role in POSCO’s overall strategic objective of becoming one of South Korea’s largest battery materials producers, supporting South Korea’s (and the world’s) rapidly growing market for lithium-ion batteries for EVs, energy storage and other mobile power applications.

Less reliance on Chinese customers