Pilbara Minerals has signed a long-term offtake and financing support deal with China's Jiangxi Ganfeng Lithium for the first stage production of its Pilgangoora lithium/tantalum project in Western Australia.
The stage 1 offtake agreement consists of160 000 t/y of chemical-grade spodumene concentrate, over an initial ten-year term, with two five-year options to extend for an additional ten years.
Both the companies will sign a new offtake deal for a further 25% of the expanded production of chemical grade spodumene concentrate in Stage 2, with a limit of up to 75,000tpa.
The second deal will depend on a definitive feasibility study for phase two of the project which is expected to double the annual capacity to four-million tonnes according to Pilbara.
Pilbara 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 focussed 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.”
Ganfeng Lithium will also provide a cash prepayment or debt facility to Pilbara for the development of the Stage 2 expansion. In return, the Chinese company will get an additional 25%, and up to a total of 50% of the Stage 2 production, with a maximum of 150,000tpa.
The additional 25% of the Stage 2 production is subject to the companies entering into a facility agreement on terms acceptable to the Australian miner.
As per a separate agreement, Ganfeng Lithium’s subsidiary will buy shares in Pilbara for not less than $20m in any equity placement to be carried out by the Australian firm for the funding of the first stage of the Pilgangoora Project.
In late March, Pilbara agreed to acquire 51% stake in the lithium, tantalum and tin mineral rights for the Western Australia located Mt Francisco Lithium-Tantalum Project.