PLS

3.17%

$3.05 pilbara minerals limited

Ann: Results of Third BMX Auction, page-89

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danu01

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27/10/21

11:23

Post #: 57107510
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Originally posted by bakker ↑

Summary from a broker house …seems that some are never fully satisfied.

Pilbara Minerals (PLS AU)Third spot sale completedKey points PLS has completed its third spot sale of a 10kdmt cargo of 5.5% lithia spodumene concentrate at a price of US$2,350/dmt.
The 5% higher price than the previous sale is equivalent to a Benchmark CFR China price of US$2,629/dmt and was lower than we expected.
Spot sales continue to generate higher prices, but we note that the 5% rise lagged the ~30% lift in Chinese lithium prices over the same period.
Event• PLS has completed the third sale on its Battery Material Exchange (DMX) platform.Impact• Third spot sale completed: PLS has undertaken the third auction on its BMX platform for a cargo of 10kdmt of 5.5% lithia grade spodumene concentrate for delivery in February 2022. A total of 25 bids were received with PLS accepting the highest bid of US$2,350/dmt.•
Realised price materially higher than our forecast:
The realised price rose 5% from the second auction completed in mid-September and translated to an equivalent benchmark 6.0% lithia grade spodumene concentrate price of US$2,629/dmt. The price is 64% higher than our forecast peak price of US$1,600/dmt for the 4QFY22 and 100-140% higher than our average price forecasts for the next three years.•
Price increase lagged spot price move:

The 5% rise in the spot sale realised price compared to the last sale in mid-September has lagged the move in Chinese domestic lithium prices. Over the same period, spot prices in China are up 32% for battery grade lithium carbonate and 30% for lithium hydroxide.

Earnings and target price revision• No change

Price catalyst• 12-month price target: A$2.80 based on a 50/50 Blend of 12.0x forward EV/Ebitda and NPV methodology.

• Catalyst: PLS is set to release its 1QFY22 production result on 28 October with guidance on forward realised pricing a key potential catalyst for the stock.
Action and recommendation• Maintain Outperform: The third spot sale has seen the positive price momentum continue for PLS, although the 5% rise was lower than we expected and lagged the ~30% move in Chinese domestic lithium carbonate and hydroxide prices over the same period. That said the realised price is over 100% higher than our forecast spodumene prices for PLS over the FY22-FY24 period, suggesting to us there remains considerable upside risk to our forecasts for PLS.

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Take home comment for me was: "• Catalyst: PLS is set to release its 1QFY22 production result on 28 October with guidance on forward realised pricing a key potential catalyst for the stock.".

PLS Price at posting: $2.21 Sentiment: Buy Disclosure: Held
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Last $3.05		Change -0.100(3.17%)		Mkt cap ! $9.185B

Open	High	Low	Value	Volume
$3.13	$3.15	$3.02	$74.55M	24.33M

Buyers (Bids)

No.	Vol.	Price($)
4	89482	$3.04

Sellers (Offers)

Price($)	Vol.	No.
$3.05	37502	3

View Market Depth

No.	Vol.	Price($)
6	31294	3.030
12	119629	3.020
6	50011	3.010
54	211167	3.000
11	153088	2.990

Price($)	Vol.	No.
3.050	11000	1
3.060	10330	1
3.070	36169	4
3.080	41571	4
3.090	30000	2

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Ann: Results of Third BMX Auction, page-89

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Ann: Results of Third BMX Auction, page-89

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