Today, the Pilbara Minerals Ltd (ASX: PLS) share price passed by the moon on its way 15% higher as the broader market or S&P/ASX 200 (INDEXASX: XJO) trended higher.
Pilbara Share Price (1m)
Pilbara Minerals is an Australian lithium producer with its 100%-owned Pilgangoora Lithium-Tantalum Project.
The Pilgangoora project is located in West Australia and is one of the largest lithium ore deposits in the world. With this asset, Pilbara Minerals plans to become one of the world’s largest producers by 2020.
What’s Going On?
Here at Rask Media, we’ve covered Pilbara’s development and progress in detail. Last year, Pilbara Minerals announced its first shipment from the project before announcing Stage 2 development of its project had received board approval.
Today, Pilbara pleased investors with a promising announcement via the ASX which confirmed the sustained output of commercial production grades at Pilgangoora.
“The declaration of commercial production after six months of material production and sales marks another important step in the development of the world-class lithium raw materials production centre at Pilgangoora and for the Pilbara Minerals team,” CEO Ken Brinsden said.
“The rapid delivery from first drill hole, through construction and now commercial production of the first large scale hard-rock lithium mine to be developed in WA after Greenbushes, with both coarse and fines production, is testament to the hard work and dedication of the team involved. “
High production, plant feed-rates, quality and stable recovery levels helped the company declare commercial feasibility.
“…we are continuing to work on fine-tuning and balancing a number of aspects of this large and complex plant to achieve design recovery levels of 75%, and we remain confident of achieving 100% of production design capacity during 2019,” Brinsden added.
Buy, Hold or Sell
As a $1.3 billion company with just $14 million of revenue earned last half, this update is overwhelmingly reassuring for current shareholders because it’s another step towards greener pastures.
For investors looking to buy Pilbara shares, or other lithium-exposed companies such as Independence Group (ASX: IGO) or Orocobre Ltd (ASX: ORE), it’s important to understand how much of the expected sales growth is already baked in to the current valuation.
It may be more prudent to adopt a wait-and-see approach or, if you do buy now, start small and maintain a healthy level of diversification to other asset classes and individual shares.
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At the time of publishing, Owen does not a financial interest in the companies mentioned.
