Slide 1: Positioning for the future
Positioning for the future Equity raising and acquisition of Altura Project 14 December 2020 ASX: PLS
Slide 2: Important notices
Important notices You must read the following notices before reading or making any use of this document or any information contained in this document. By continuing to read, use or otherwise act on this document, you agree to be bound by the following terms and conditions, including any modification
Slide 3: Important notices
Important notices Forward Looking Statements Statements contained in this document, including but not limited to those regarding the possible or assumed future costs, projected timeframes, performance, dividends, returns, revenue, exchange rates, potential growth of Pilbara Minerals, statements abou
Slide 4: Important notices
Important notices Mineral Resources and Ore Reserves Recipients of this presentation outside Australia should note that it is a requirement of the Australian Securities Exchange listing rules that the reporting of ore reserves and mineral resources in Australia comply with the Australasian Joint Ore
Slide 5: Important notices
Important notices Disclaimer None of Macquarie Capital (Australia) Limited, AustralianSuper Pty Ltd in its capacity as trustee for AustralianSuper and Resource Capital Fund VII L.P, (together the “Underwriters”), nor their or the Company’s respective advisers or any of their respective affiliates, r
Slide 6: Table of contents
Table of contents 1. Overview of the acquisition and equity raising 7 2. Introduction to the combined operation 11 3. Equity raising 20 Appendices A. Summary of key agreements 26 B. Investment risks 33 C. Foreign selling restrictions 44 6
Slide 7: Overview of the acquisition and equity raise
Overview of the acquisition and equity raise Introduction to the combined operation Equity raising Appendices 7
Slide 8: Overview of the proposed transaction
Overview of the proposed transaction Logical consolidation of neighbouring operations Pilbara Minerals to acquire Altura Lithium Operations Pty Ltd (“ALO”) for US$175 million1,2 A cost effective acquisition for which Pilbara Minerals is Pilgangoora Project4 uniquely placed to add value Unique opport
Slide 9: Strategic rationale
Strategic rationale Proposed transaction expected to deliver significant benefits to Pilbara Minerals’ shareholders1 Enhances scale of Consolidation of Acquisition following Ability to rapidly Secures position as the operations with increased neighbouring Deed of Company increase production in leadi
Slide 10: Key transaction terms
Key transaction terms Synergistic acquisition of Pilbara Minerals’ neighbouring project ⚫ As announced to the ASX on 1 December 2020, Pilbara Minerals entered into a Share Sale Agreement (“SSA”) with Altura Mining Limited (Receivers and Managers Appointed) (Administrators Appointed) (“Altura”) and R
Slide 11: Introduction to the combined operation
Overview of the acquisition and equity raise Introduction to the combined operation Equity raising Appendices 11
Slide 12: Overview of the Altura Project
Overview of the Altura Project The Altura Project is Pilbara Minerals’ neighbouring operation Project overview1 Altura historical quarterly metrics4,5 ⚫ The Altura Project is a hard-rock lithium operation which shares common tenement boundaries (to the 60 100% south and west) with Pilbara Minerals’
Slide 13: Overview of Pilbara Minerals' Pilgangoora Project
Overview of Pilbara Minerals’ Pilgangoora Project Moving from moderated production towards full production Project overview Historical quarterly production and sales 80,000 ⚫ 100% owned Pilgangoora Lithium-Tantalum Project with multi-stage mine expansion: Spodumene concentrate produced — Stage 1, in
Slide 14: Overview of the combined operation
Overview of the combined operation The Altura Project is expected to significantly contribute to the combined operations Relative contribution • 100% owned Australian hard rock • Consolidated greater Enterprise value 1 1,972 89% 11% 236 lithium operation Pilgangoora orebody (A$ million) • Processing
Slide 15: Unlocking the common tenement boundary
Unlocking the common tenement boundary Removal of the common tenement boundary to potentially unlock additional inventory Reserve liberation ⚫ The common tenement boundary between Pilbara Minerals’ and Altura’s projects previously prevented Altura from mining close to the tenement boundary, sterilis
Slide 16: Operating plan for Altura Lithium Operations
Operating plan for Altura Lithium Operations Initial evaluation underway to integrate projects with findings to inform the implementation strategy, subject to prevailing market conditions Initial evaluation Completed ✓ Receiver placed the Altura Project into care and maintenance on 26 October 20201
Slide 17: Potential synergies
Potential synergies Pilbara Minerals is the logical owner of the Altura Project and is well placed to extract quantifiable and unquantifiable operational synergies Estimated savings for each existing operation Operational flexibility Speed to market under consolidated operations group at full ⚫ Pote
Slide 18: Proforma metrics
Proforma metrics The combination of operations consolidates Pilgangoora as one of the leading Australian lithium assets – Pilbara Minerals is one of the only Australian lithium producers to retain 100% ownership of its assets FY20 production (dry kt concentrate1) Mineral Resource & Resource grade2,3
Slide 19: A pathway for growth
A pathway for growth Expanded production capacity, strategic offtaker partners and robust balance sheet to support ability to capitalise on the forecast demand increase for lithium products ✓ Strong balance sheet and funding flexibility for future growth ― A$96 million cash (pro-forma as at 30 June
Slide 20: Equity raising
Overview of the acquisition and equity raise Introduction to the combined operation Equity raising Appendices 20
Slide 21: Equity raising overview
Equity raising overview Placement and Entitlement Offer to raise ~A$240 million at A$0.36 per share Committed equity ⚫ AustralianSuper and RCF VII have entered into binding Share Subscription and Sub-underwriting Agreements that represent the full equity raising amount of funding A$240 million with
Slide 22: Sources and uses
Sources and uses Acquisition to be funded via the Equity Raising Sources of Funds A$ million Uses of Funds A$ million Placement 119 Purchase consideration1 208 Entitlement Offer 121 Transaction costs2 28 Cash 4 Total Sources 240 Total Uses 240 1. Upfront Cash Consideration only (i.e. excludes Deferr
Slide 23: Pro-forma capital structure
Pro-forma capital structure Pilbara Minerals to retain robust balance sheet position post acquisition Pilbara Minerals Pro-forma Pilbara Pro-forma metrics Units Acquisition adjustment3 standalone Minerals Cash A$ million 921 4 96 Borrowings2 A$ million 149 - 149 Net debt (Cash) A$ million 56 (4) 52
Slide 24: Equity Raising timetable
Equity Raising timetable Event Date1,2 Equity raise launch and Placement opens 11 December 2020 Allotment of shares issued under the Placement 14 December 2020 Trading Halt (pre-market open) 14 December 2020 Institutional Entitlement Offer opens 14 December 2020 Announcement of the results of the In
Slide 25: Summary and next steps
Summary and next steps ✓ Highly strategic acquisition of neighbouring project to unlock tangible synergies ✓ The combined operations will be one of the select few operating spodumene projects globally which are 100% owned by a single owner ✓ Production scale and existing capacity means Pilbara Miner
Slide 26: Appendices
Overview of the acquisition and equity raise Introduction to the combined operation Equity raising Appendices A. Summary of key agreements B. Investment risks C. Foreign selling restrictions 26
Slide 27: Summary of Subscription Agreements
Summary of Subscription Agreements RCF Subscription Agreement AustralianSuper Subscription Agreement Approximately A$61.4 million Approximately A$57.5 million Subscription Shares 170.5 million shares 159.7 million shares Subscription Price A$0.36 per Share A$0.36 per Share Conditions Precedent • FIR
Slide 28: Summary of the Share Sale Agreement
Summary of the Share Sale Agreement Share Sale Agreement Overview Pilbara Minerals entered into a Share Sale Agreement (“SSA”) with Altura Mining Limited (Receivers and Managers Appointed) (Administrators Appointed) for the acquisition of all of the shares in Altura Lithium Operation Pty Ltd (ALO) o
Slide 29: Summary of the DOCA
Summary of the DOCA Deed of Company Arrangement Overview Pilbara Minerals has entered into the DOCA with ALO and the Administrators which provides a compromise in respect of the claims of ALO’s creditors and allows Pilbara to acquire ALO by way of an administration process. Key features of the DOCA
Slide 30: Summary of the Creditors' Trust Deed
Summary of the Creditors’ Trust Deed Creditors’ Trust Deed Overview The DOCA requires that a creditors’ trust be formed as a mechanism to accelerate ALO’s exit from the Administration process and result in the control of ALO returning to the newly appointed directors immediately upon effectuation of
Slide 31: Summary of the Underwriting Agreement
Summary of the Underwriting Agreement Underwriting Agreement Overview Pilbara Minerals entered into an underwriting agreement with Macquarie Capital (Australia) Limited (“Underwriter”) in respect of the Entitlement Offer on 14 December 2020 (“Underwriting Agreement”) pursuant to which the Underwrite
Slide 32: Summary of the Underwriting Agreement
Summary of the Underwriting Agreement Underwriting Agreement Termination Events The events which may trigger termination of the Underwriting Agreement include the following: • breach of sub-underwriting agreement – any Sub-Underwriting Agreement becomes void or voidable, or has been amended or breac
Slide 33: Appendices
Overview of the acquisition and equity raise Introduction to the combined operation Equity raising Appendices A. Summary of key agreements B. Investment risks C. Foreign selling restrictions 33
Slide 34: Investment risks
Investment risks Nameplate Capacity of Pilgangoora 2Mtpa, Stage 1 Project • The development of Stage 1 of the Pilgangoora Project has progressed well with commercial production declared on 1 April 2019. The Company is now completing the final stages of the optimisation of the processing plant to ena
Slide 35: Investment risks
Investment risks Future capital needs and additional funding • The Company plans to meet its funding requirements for the incremental Stage 2 expansion and the Company’s funding obligations under the proposed POSCO downstream joint venture in South Korea by a combination of sources including existin
Slide 36: Investment risks
Investment risks • Furthermore, the Company’s customer offtake agreements require a minimum product specification for product grade and maximum impurity levels. If the Company is not able to achieve the required product specification to satisfy the customer offtake agreements, there is no guarantee
Slide 37: Investment risks
Investment risks Changes to Western Australian State Royalties • As announced to the ASX on 1 December 2020, the Western Australian Government has granted Pilbara Minerals a 50% royalty rebate on spodumene concentrate produced and sold from the Pilgangoora Project for up to 12 months from 1 December
Slide 38: Investment risks
Investment risks Exploration and development risks generally • The Company has identified certain exploration targets. The exploration for, and development of, mineral deposits involves a high degree of risk. Few properties which are explored are ultimately developed into producing mines. Resource e
Slide 39: Investment risks
Investment risks Environmental and Safety Regulations • Exploration for minerals, development of mines and production of metals can impact the environment and environmental damage may occur that is costly to remedy. If Pilbara Minerals is responsible for any environmental damage, Pilbara Minerals ma
Slide 40: Investment risks
Investment risks Transport and infrastructure • Pilbara Minerals’ operations depend on an uninterrupted flow of materials, supplies, equipment, services and finished products. Pilbara Minerals is dependent on third parties for the provision of trucking, port, shipping and other transportation servic
Slide 41: Investment risks
Investment risks ACQUISITION RISKS Completion risk • Pilbara Minerals has entered into a conditional Share Sale Agreement with Altura Mining Limited (Receiver and Managers Appointed) and the Receivers and Managers for the purchase of 100% of the shares in Altura Lithium Operations Pty Ltd (ALO), a w
Slide 42: Investment risks
Investment risks Funding and underwriting risk • Pilbara Minerals’ obligation to complete the Transaction under the Share Sale Agreement is conditional on raising A$240m of funding under the Offers and Altura Lithium Operations Pty Ltd effectuating and completing a Deed of Company Arrangement. • Pil
Slide 43: Investment risks
Investment risks Acquisition accounting • Following completion of the Transaction, Pilbara Minerals will complete a formal fair value assessment of the assets, liabilities and contingent liabilities that represent a present obligation of Altura Lithium Operations Pty Ltd. The assessment is required
Slide 44: Appendices
Overview of the acquisition and equity raise Introduction to the combined operation Equity raising Appendices A. Summary of key agreements B. Investment risks C. Foreign selling restrictions 44
Slide 45: Foreign selling restrictions
Foreign selling restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any cou
Slide 46: Foreign selling restrictions
Foreign selling restrictions Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pur
Slide 47: Foreign selling restrictions
Foreign selling restrictions Norway This document has not been, and will not be, registered with or approved by Finanstilsynet (the Financial Supervisory Authority of Norway) and it does not constitute a prospectus under the Prospectus Regulation (Regulation (EU) 2017/1129) or the Norwegian Securiti
Slide 48: Foreign selling restrictions
Foreign selling restrictions UAE United Arab Emirates (excluding the Dubai International Financial Centre and the Abu Dhabi Global Market) This document is strictly private and confidential and is being distributed to a limited number of investors and must not be provided to any person other than th
Slide 49: ASX: PLS pilbaraminerals.com.au
ASX: PLS pilbaraminerals.com.au Follow us on 0120206-0000018 SYO1: 2000828657: 1