Pilbara sitting in the proverbial catbird seat.....
Of my many individual Lithium related miner holdings Pilbara has the most upside here are the reasons.
1) High quality spodumene resource with a minimum 26 year mine life at 580,000 tpa offtake per year. Assumes mine resources aren't increased as mine site exploration continues. Undoubtedly more resource will be found.
2) Annual production of 600,000+ tpa sold at price per dmt that exceeds 2022 price.
3) Starting 2024 the JV with POSCO ramps up. Under the agreement Pilbara supplies up to 358,000 tpa spodumene at prevailing price for 20 years. Additionally they own 18% of the JV with option to increase that to 30% (which no doubt they will exercise). So basically, they're guaranteed that 1/2 their production is sold at prevailing market price starting next year, and they will benefit (profit) futher from the JV sales
4) Possible expansion to 1M tpa (which I believe they will do), expanding their sales to $5.0 billion AUD on Spodumene plus sales from POSCO JV. If the profit margins can be maintained the gross profit on spodumene sales would be $4,233,944,000.00 AUD.
5) Sovereign risk is negligible due to their domicile in Australia a mining nation with a long history of supporting miners and free markets. Unlike their competitors that have operations in Africa, Mexico, and Latin America that are subject to less stable political situations and exposed to more state control and excessive taxation. Competitive advantage Pilbara.
It is difficult to see how Pilbara wouldn't be one of the more profitable and stable Lithium miners in the world if demand continues as expected.
Bullish
If you work hard and have a skill set to match success and wealth is yours for the taking
