PLS 3.47% $2.84 pilbara minerals limited

G'day all, After getting the chance to look at Monday's...

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    G'day all,

    After getting the chance to look at Monday's announcement, I thought I would start the discussion as I there were a couple of points that I really liked.


    1) Great Wall's off-take comprises 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.

    2) Great Wall has the opportunity 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$50M of debt financing for its Stage 2 expansion, either via a debt or an off-take pre-payment facility.

    As we already know, if Great Wall take up the option to extend on stage one, there will be 75,000tpa at SC6.0 for 15 years at a minimum. However can someone confirm if the additional 75,000 tpa from Stage 2 is subject to the same conditions ? (i.e. ability for the contract to be extended for a further 10 years through two five year options).

    It would seem logical for it to be under the same conditions. The announcement refers to the Stage 2 $50m debt financing and $28m in equity, but not indication on whether or not Great Wall has the option to extend the terms of the additional offtake.

    Any thoughts ?

    Cheers, TCS
 
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