Pilbara Minerals Ltd [ASX:PLS] traded up 28.6% to a high of 44 cents this morning.
What happened to Pilbara Minerals?
It probably won’t come as a surprise that PLS is a small lithium miner. Blue-chip stocks rarely run up 28% in a day, even on extremely positive news.
This morning, PLS announced steps towards becoming a low-cost lithium producer. While the company doesn’t produce lithium yet, they’ve received commitments to funding and other forms of help from Chinese lithium company Jiangxi Ganfeng Lithium Co Ltd.
Jiangxi has agreed to provide funds of no less than $20 million for Stage 1 of PLS’s road to commercial production. They will also buy 25% of expanded production and fund up to 50% of Stage 2 in the Pilgangoora Project.
PLS’ managing director Ken Brinsden said:
‘With the chemical grade spodumene off-take now completed, the Pilbara team together with our financial advisors, BurnVoir Corporate Finance, are fully focused on arranging the balance of the Pilgangoora Project’s development funding.
‘In that regard, we are well advanced and with the support of our major customers we look forward to announcing a successful funding solution in the near term.’
What now for PLS shares?
While it all sounds rosy for PLS, the company is still in pre-commercial stages. Unless you know a lot about the industry, a speculative mining stocks isn’t something I’d run into. Even with a bit of common sense, mining reports and industry nuances are hard to grasp.
But if you are looking to make big money from cheap miners, let resource analyst Jason Stevenson help.
Jason has a great track record within the resource sector. In his advisory service, Resource Speculator, Jason has tipped stocks that have run up 52.4%, 57.6% and 100%.
Jason also has a report, ‘The Top 10 Australian Mining Stocks’, which could help you profit from miners in 2017.
To get a free copy of Jason’s report, click here.
Junior Analyst, Money Morning