Pilbara Minerals Share Price Rises on Funding Package and New Facility

For those who watch lithium stocks, the latest news out of Pilbara Minerals Ltd [ASX:PLS] has coincided with a healthy jump for the share price.

It is up 12%, trading at 70 cents per share.

The share price of Pilbara Minerals has been largely moving sideways since February, but after coming out of a trading halt, it has recently experienced an uptick:

Pilbara Minerals Share Price

Source: marketindex.com.au

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Funding package buoys Pilbara Minerals’ share price

Below is a summary of the funding package that the company has secured:

Pilbara Minerals Share Price

Source: Pilbara Minerals

The CEO and Managing Director of Pilbara Minerals, Ken Brinsden hailed the funding package saying:

This should send a clear message about the robust outlook for the lithium market as far as our Tier-1 customer base is concerned and demonstrates the secure position the world-class Pilgangoora project commands as part of a global lithium-ion supply chain that is growing rapidly.

In effect, this injection of funds will allow the company to expand its output at a time when lithium prices have been softening due to greater supply.

It also demonstrates the sound working relationship the company has with Chinese companies.

China has come to dominate the electric vehicle market with 50% of global production in 2017:

PLS Share Price

Source: International Council on Clean Transportation

Larger downstream chemical facility to be evaluated

In addition to the funding package, Pilbara Minerals also announced that in conjunction with POSCO, it would consider a larger South Korean JV chemical conversion facility.

Pilbara Minerals would retain a right to participate with a 30% stake in the new facility.

Commenting on the non-binding memorandum of understanding (MoU), Brinsden said:

POSCO has invested extensively in battery raw materials research and development for approximately 10 years — especially in the lithium sphere — and as a result they have significant experience and expertise at their disposal. We are pleased to be working with POSCO to develop and expand a new lithium raw material supply chain for the South Korean market that is principally focused on high-quality hydroxide production.

The price of lithium hydroxide has been more resistant to the recent downturn in lithium prices:

Lithium Price

Source: Benchmark Mineral Intelligence

Over the coming weeks, investors will be looking closely for further positive news out of the company.

Further discussion of the state of play for lithium can be found here.

Regards,

Lachlann Tierney,
For Money Morning

PS: Get the inside scoop on Australia’s Top 10 Mining stocks for 2019. The report can be downloaded for free here.


Lachlann Tierney is a writer for Money Morning and has been investing for nearly a decade. With an MSc from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently, he has been working with Phil Anderson and Terence Duffy. They have three publications:

Phil Anderson’s Time Trader
Cycles, Trends & Forecasts
Money Morning Trader


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