Pilbara Minerals receives US$15M after upsizing off-take deal with Chinese firm

Pilbara Minerals Ltd. received US$15 million from Yibin Tianyi Lithium Industry Co. Ltd. as a prepayment for the increase in Yibin's off-take of spodumene concentrate from Pilbara Minerals' Pilgangoora lithium project in Western Australia.

The agreement will increase Yibin's off-take to up to 115,000 tonnes per year over the five-year deal from the initial 75,000 t/y announced in March 2020.

Pilbara Minerals said March 15 that it will use the funds to support A$22 million of stage-one improvement works at the existing Pilgangoora processing plant. The project would boost the plant's production capacity by 30,000 t/y to 50,000 t/y. Work will begin in March and commissioning is scheduled for the September quarter.

The prepayment will be available for drawdown by March 31 and will be repaid over three years from Jan. 1, 2022, through an offset against the product delivered under the off-take agreement.

Pilbara Minerals recently awarded a A$15 million contract for the project to a joint venture between SIMPEC Pty. Ltd. and IronMerge, a business owned by the Njamal People, Pilbara Minerals' native title partner.

Following project completion, Pilbara Minerals expects to start shipments of the additional product under the off-take agreement in late 2021 or early 2022.

In the first half of its fiscal 2021, Pilbara Minerals narrowed its net loss to A$21.2 million from a year-ago net loss of A$63.4 million after sealing its US$175 million acquisition of the Altura lithium project in Western Australia from Altura Mining Ltd.