Very good deal with lots of protection built in.
Positives for me:
Spodumene concentrate will be sold to the JV at market prices with regular price reviews....so no more low ball fixed pricing on this part of production.
If the project costs blow out it looks like PLS will be somewhat protected from it.
Looks to be fully funded....so no CR
The convertable bond A$79.6M is at 1.5% plus RBA cash rate so currently interest repayments will be at only 1.6% which is incredibly low.
The option to increase their stake to 30% give PLS further significant upside gain with no additional risk.
Hopefully the initial 18% increasing to 30% share of the JV should generate decent additional profits on top of the profit from the sale of the concentrate to the JV.
This stops Chinese companies playing games with PLS with the aim to get our Spodumene on the cheap.
All up very solid deal so well done PLS.
Ann: Pilbara Minerals Finalises Agreements for POSCO DSJV, page-51
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