PLS upside 2020 and beyond, page-7

https://www.kalkine.com.au/stockresearch/3-resource-sector-stocks--gxy-syr-pls.aspx

Pilbara Minerals Limited

Pilbara Minerals Limited (ASX: PLS) is engaged in the exploration, development and operation of the Pilgangoora Lithium-Tantalum Project.

Quarterly Highlights:During the quarter ended 30 September 2019, the company produced 21,322 dry metric tonnes of spodumene concentrate at 6.06% Li₂O, as compared to 63,782 dmt in the June quarter. Subsequent to the quarter end, the company also signed its first sales contract for secondary tantalite concentrate for 36,500 lbs with expected delivery in October 2019.


Production & Shipment (Source: Company Reports)

Outlook: Two small mining campaigns to support the required plant production are expected during the December quarter. Subject to market conditions and demand assessment, mining activity on a continuous shift roster is likely to restart in Q3FY20.Based on indicative customer demand, inventory levels and current capacity to take further product, spodumene concentrate sales guidance for the December quarter has been provided in the range of 35,000 – 70,000 dmt.

Stock Recommendation: The stock of the company generated a negative YTD return of 57.25% and is currently trading close to the lower band of its 52-weeks trading range of $0.270-$0.885. In FY19, the company had a current ratio of 2.13x, which is higher than the industry median of 1.75x, implying that the company has enough cash position to address its short-term obligations. The company is targeting development of Pilgangoora Stage 2 for expansion of up to 5 Mtpa to produce 6.0% spodumene concentrate of approximately 800,000 to 850,000dmt. Commissioning of the Stage 2 Pilgangoora Project is being targeted during December 2020 half-year or at a date ensuring alignment of additional production with customer requirements.Considering the above factors, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.310 per share, up 10.714% on 28 October 2019, owing to the release of quarterly activities report for September 2019.