The Pilbara Minerals Ltd (ASX: PLS) share price is up around 3.5% after making an announcement regarding its Ngungaju Plant.
Pilbara Minerals’ Ngungaju Plant
The lithium miner said that the commissioning of the coarse production circuit at the Ngungaja Plant is now underway as Pilbara Minerals commences a staged ramp-up of this facility from care and maintenance.
This follows the successful construction and maintenance acceleration program to bring forward additional production and realise more sales opportunities.
This is the first step of a staged recommissioning for the Ngungaju operation, with the first spodumene (lithium) processing circuit expected to commence production within the March 2022 quarter.
What is the annual production going to be?
Annual production capacity from the Ngungaju plant is expected to be approximately 180,000 dry metric tonnes (dmt) to 200,000 dmt after completing the ramp-up from the middle of 2022 onwards.
Management said this will complement the existing production capacity from the Pilgan Plant (330,000 tonnes per year (tpa), increasing to a range of 360,000 tpa to 380,000 tpa after completion of improvement works.
Additional production Ngungaju will allow more sales into the emerging spot market for spodumene concentrate/lithium, including the recently launched BMX digital sales platform where Pilbara Minerals achieved a very strong price for its lithium.
FY22 production guidance across the entire Pilgangoora Project has been affirmed at 460,000 dmt to 510,000 dmt.
Management comments
Pilbara Minerals Managing Director and CEO Ken Brinsden said this was another significant and exciting milestone in the rapid growth of the Pilgangoora Project:
“This is a great result, which marks the culmination of the incredible hard work which our entire team has put in to transform the amazing resource at Pilgangoora into a globally significant lithium raw materials production centre.
“This first step of the Ngungaju restart has been delivered in less than four months since the Board approved a staged restart of Ngungaju, ahead of the guidance we gave to the market.”
Summary thoughts on the Pilbara Minerals share price
I’m not an expert on lithium, but it seems like Pilbara Minerals is really in a sweet spot at the moment, with strong lithium prices from a short supply of the commodity.
The company is seemingly on track to generate some good revenue, and hopefully cashflow and profit.
However, with so much expectation built into the Pilbara Minerals share price (as well as others like Orocobre Limited (ASX: ORE) ), there are other ASX growth shares that I’d rather look at.
