Slide 1: Equity raising presentation
Equity raising presentation Not for release to US wire services 4 September 2019 or distribution in the United States ASX: PLS
Slide 2: Important Notices
Important Notices Nature of information This document has been prepared by Pilbara Minerals Limited ACN 112 425 788 (“Pilbara Minerals” or, the “Company”) and is dated 4 September 2019. This document is not a prospectus, product disclosure statement or other offering document under Australian law or
Slide 3: Important Notices
Important Notices Past performance Statements about past performance are not necessarily indicative of future performance. Investors should note that historical trading prices for the Company's shares cannot be relied upon as an indicator of (and provides no guidance as to) the future trading pride
Slide 4: Table of contents
Table of contents 1 Offer overview 5 2 Pilbara Minerals overview 21 Appendices A Supporting information on Pilbara Minerals 30 B Lithium market overview 36 C Investment risks 41 D Foreign selling restrictions 49
Slide 5: 1. Offer overview
1. Offer overview
Slide 6: Introduction
Introduction Pilbara Minerals is raising A$91.5 million via an institutional and strategic placement Equity raising Use of proceeds Investment highlights ● Institutional and strategic placement ● Strengthen Pilbara Minerals’ balance sheet ● Pilgangoora is one of the premier hard-rock together expect
Slide 7: Strategic relationship with CATL
Strategic relationship with CATL New strategic relationship with China’s largest battery manufacturer for EVs who is supportive of Pilgangoora’s phased Stage 2 expansion strategy and has indicated a willingness to support Pilbara Minerals with future offtake CATL strategic relationship overview Key
Slide 8: Equity raising overview
Equity raising overview Institutional and strategic placement to raise ~A$91.5 million at A$0.30 per share and a Share Purchase Plan to raise up to a maximum of A$20.0 million Institutional and CATL Placements to raise approximately A$91.5 million Equity raising Approximately 305.1 million share
Slide 9: Equity raising overview (cont.)
Equity raising overview (cont.) Institutional and strategic placement to raise ~A$91.5 million at A$0.30 per share and a Share Purchase Plan to raise up to a maximum of A$20.0 million Offer proceeds will supplement Pilbara Minerals’ existing cash resources and will be applied to: — General working
Slide 10: Equity Raising timetable
Equity Raising timetable Placement timetable Event Date1,2 Announcement of Placement 4 September 2019 Institutional Placement Announcement of completion of Institutional Placement and suspension lifted By 5 September 2019 Settlement of New Shares issued under the Institutional Placement 9 September
Slide 11: Sources & uses of funds
Sources & uses of funds Equity Raising to provide additional working capital during the remaining Stage 1 ramp-up, complete Stage 1 plant rectification and improvement works, and fund initial participation in the POSCO JV Sources of funds A$m Uses of funds A$m Unconditional on Pilbara Minerals’ shar
Slide 12: Robust balance sheet post Placement
Robust balance sheet post Placement The Placement will strengthen Pilbara Minerals’ balance sheet, providing more working capital and increased financial flexibility at a time of soft market conditions, to support Pilgangoora Stage 1 target nameplate capacity being achieved Proforma liquidity positi
Slide 13: Pilgangoora Stage 1 update
Pilgangoora Stage 1 update Ramp-up of Stage 1 Pilgangoora continues with A$8.0m of Placement funds allocated to previously announced plant rectification and improvement works and A$25.0m to provide a prudent working capital buffer Stage 1 Pilgangoora update1 Spodumene concentrate production (dmt)3 E
Slide 14: Pilgangoora Stage 1 update (cont.)
Pilgangoora Stage 1 update (cont.) On 27 August, Pilbara provided a sales and production update which flagged December Quarter sales in line with guidance following a moderated September Quarter 2019 Stage 1 production moderation1 ● Following a softening of lithium market conditions, Pilbara Mineral
Slide 15: Revised Stage 2 development
Revised Stage 2 development Optimised Stage 2 pathway reduces upfront capital and aligns production with customer demand – A$5.0m of Placement proceeds to be used for studies, engineering and committed long lead items Revised Stage 2 expansion studies and approach – announced 27 August 20191 ● Pilba
Slide 16: Revised Stage 2 development (cont.)
Revised Stage 2 development (cont.) Optimised Stage 2 pathway reduces upfront capital and aligns production with customer demand – A$5.0m of Placement proceeds used for studies, engineering and committed long lead items ● Optimised delivery strategy utilises: Stage 2 (Phase 1), 3D model overlay —Lat
Slide 17: POSCO lithium chemicals JV
POSCO lithium chemicals JV Placement assists Pilbara Minerals with funding its 21% share of the POSCO downstream JV POSCO lithium chemicals JV ● Pilbara Minerals has executed a detailed binding terms sheet with POSCO JV contribution A$m POSCO for a 40ktpa lithium chemicals downstream joint venture i
Slide 18: Well positioned post Placement
Well positioned post Placement Pilbara Minerals is focused on reaching Stage 1 nameplate capacity at Pilgangoora and developing the 40ktpa lithium hydroxide conversion facility with POSCO Enhanced financial flexibility with gross proceeds to bolster Pilbara Minerals’ balance sheet following the deci
Slide 19: Share Subscription Agreement - CATL
Share Subscription Agreement - CATL In recognition of the strategic relationship, CATL has been granted certain rights and obligations under the Share Subscription Agreement Share Subscription Agreement: Key CATL rights and obligations CATL right / obligation Description CATL has indicated a willing
Slide 20: Investment risks
Investment risks There are various risks associated with an investment in Pilbara Minerals and many of these are outside the control of the Company. Please refer to Appendix C – Investment Risks, for further details Pilbara Minerals specific risks General risks Ramp-up of Pilgangoora 2Mtpa, Stage 1
Slide 21: 2. Pilbara Minerals overview
2. Pilbara Minerals overview
Slide 22: Corporate overview
Corporate overview Corporate overview Top shareholders1 ● Pilbara Minerals is an Australian lithium-tantalum producer listed Investor Shares held (m) % shares on issue on the Australian Securities Exchange (ASX:PLS) Ganfeng Lithium 152.6 8.2 ● Through the development of its 100%-owned Pilgangoora Pr
Slide 23: Investment highlights
Investment highlights 1 World class lithium resource The Pilgangoora Project is one of the premier hard-rock lithium-tantalum resources globally (by size and grade) with material Tantalite by-product credits. 2 Low cost operation Forecast LOM cash cost of US$312/t1 (net of tantalum by-products) for
Slide 24: Pilgangoora Lithium-Tantalum Project
Pilgangoora Lithium-Tantalum Project One of the largest spodumene-tantalite resources in the world ● Pilgangoora is a lithium-tantalum project located 120km from Port Hedland in Western Australia’s resource rich Pilbara region ● First concentrate was produced in the 2Q 2018 ● Expansion of the Projec
Slide 25: Exceptional growth opportunity
Exceptional growth opportunity A clear expansion pathway to meet customer growth requirements over time UPSTREAM DOWNSTREAM STAGE 1: 2MTPA STAGE 2: 5MTPA STAGE 3: UP TO 7.5MTPA POSCO JV STAGE: STAGE: STAGE: STAGE: STAGE: Operations DFS and conditional FID complete Proposed subject to market demand B
Slide 26: Pilgangoora and POSCO
Pilgangoora and POSCO Interconnected hard rock supply and hydroxide to feed the growing South Korean market KOREAN COMPANIES BATTERY PLANT EXPANSIONS (INCLUDING PLANTS PLANNED FOR EUROPE & CHINA) 300 250 7 X GROWTH 200 Capacity GWh 315ktpa 600ktpa 150 285 100 185 50 40 0 2017 2023 2028 Source: Bench
Slide 27: High quality customers & product offtake
High quality customers & product offtake Pilbara Minerals has sold Stage 1 and Stage 2 spodumene production to world-class customers ● Pilbara Minerals has secured long-term offtake to underpin Stage 1 and Stage 2 production with China’s largest fully integrated lithium company high quality customer
Slide 28: Pilgangoora – a globally significant hard rock lithium resource
Pilgangoora – a globally significant hard rock lithium resource 1 Sourced from respective company announcements. 1. Pilbara Minerals Resource endowment with Ta2O5 converted to Li2O assuming a revenue factor of 13.8% for Ta2O5 based on Stage 2 DFS. 28
Slide 29: A low-cost hard rock lithium operation
A low-cost hard rock lithium operation Based upon Roskill's most recent lithium cost model, Pilgangoora is expected to be positioned favourably on the global spodumene cost curve 2018 spodumene concentrate cost curve 2023 spodumene concentrate cost curve US$/t spodumene 6%, CIF real 2019 US$/t spodu
Slide 30: Appendix A Supporting information on Pilbara Minerals
Appendix A Supporting information on Pilbara Minerals
Slide 31: Experienced board of directors
Experienced board of directors Tony Kiernan AM Ken Brinsden Nick Cernotta Sally-Anne Layman Steve Scudamore Non-Executive Chairman Managing Director & CEO Non-Executive Director Non-Executive Director Non-Executive Director Highly experienced company Mining engineer with over 25 Highly experienced m
Slide 32: Pilbara Minerals – connected to the entire supply chain
Pilbara Minerals – connected to the entire supply chain Chemical Pre-Cursor Converters Cells & Cathode Li Resource Battery EVs Battery Grade Cathode Material Packs LiOH / LC Material 32
Slide 33: Stage 1 – production summary
Stage 1 – production summary Mine production and product shipped during FY19 Production Units Q4 FY18 Q1 FY19 Q2 FY19 Q3 Q4 FY19 FY19 FY19 Total Direct shipping ore (DSO) sold wmt 145,974 205,766 01 01 01 205,766 Spodumene concentrate produced dmt - 11,015 47,859 52,196 63,782 174,852 Spodumene conc
Slide 34: Resources and reserves
Resources and reserves JORC Mineral Resource Estimate - September 2018 (using 0.2% Li2O cut off grade)1 TONNAGE LI2O TA2O5 LI2O TA2O5 FACTORED CATEGORY (MT) (%) (PPM) (T) (MLBS) FE2O3 (%) Measured 22.8 1.38 145 314,000 7.3 0.44 Indicated 112.8 1.29 119 1,456,000 29.5 0.57 Sub-total M&I 135.6 1.31 12
Slide 35: Stage 1 Pilgangoora processing
Stage 1 Pilgangoora processing Spodumene and tantalite concentrate recovery ● Spodumene concentrate contains lithium in the form of lithia (Li2O), recovered at the mine via the concentrator: — 2-stage heavy media separation for coarse spodumene concentrate — oxide flotation for fine spodumene concen
Slide 36: Appendix B Lithium market overview
Appendix B Lithium market overview
Slide 37: Future lithium raw material supply
37 Future lithium raw material supply Lithium hydroxide is expected to become the sought-after product for battery manufacturers presenting a significant opportunity for hard rock lithium projects Forecast for lithium demand by lithium chemical production across all sectors A stable supply of hard r
Slide 38: Global battery plant pipeline by plant location
Global battery plant pipeline by plant location Korean based companies market share of plant capacity by country (total 140 285GWh) 800 120 19% 700 (127) 100 686 600 Capacity GWh 80 46% Forecast capacity GWh 500 60 (80) 40 100% 400 (53) 20 17% 300 (25) 0 China Europe Korea USA 200 173 100 150 61 53
Slide 39: Global lithium chemicals pricing
Global lithium chemicals pricing Source: FastMarkets, August 2019 Lithium carbonate ex-works domestic China Lithium hydroxide ex-works domestic China Lithium carbonate min 99.5% Li2CO3 battery grade, ex-works domestic China, yuan/t (midpoint) Lithium hydroxide monohydrate min 56.5% LiOH.H2O battery
Slide 40: Global tantalite pricing
Global tantalite pricing Source: Argus Media, August 2019 Tantalite pricing (25% Ta2O5 CIF main port) 40 40
Slide 41: Appendix C Investment risks
Appendix C Investment risks
Slide 42: Investment risks
Investment risks Ramp-up of Pilgangoora 2Mtpa, Stage 1 Project • The development of Stage 1 of the Pilgangoora Project is progressing with commercial production declared on 1 April 2019. The Company is now focusing on ramp-up and optimisation of the processing plant to achieve nameplate capacity, in
Slide 43: Investment risks
Investment risks Lithium and tantalum market • The Pilgangoora Project currently produces and sells spodumene concentrate and tantalite concentrate. Demand for, and pricing of, spodumene concentrate is sensitive to a variety of external factors, most of which are beyond Pilbara Minerals’ control. In
Slide 44: Investment risks
Investment risks Senior Secured Bond • The Company has entered into a senior secured bond for the issuance of US$100 million in Nordic bonds (refer to ASX release dated 13 June 2017). Pilgangoora Operations Pty Ltd, a wholly-owned subsidiary of the Company, as owner of the Pilgangoora Project and is
Slide 45: Investment risks
Investment risks POSCO Joint Venture • The proposed joint venture with POSCO is subject to a number of conditions precedent, which are detailed in the Company’s ASX announcement dated 27 August 2019, “Pilbara Minerals Executes Binding Terms Sheet for Lithium Chemicals Downstream Joint Venture with P
Slide 46: 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 47: 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 48: Investment risks
Investment risks Disputes and litigation • Common with all enterprises in the minerals and mining sector, the Company is from time to time exposed to potential or threatened litigation, claims and disputes which are with or without merit. Defence and settlement costs can in some cases be substantial
Slide 49: Appendix D Foreign selling restrictions
Appendix D Foreign selling restrictions
Slide 50: 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 51: Foreign selling restrictions
Foreign selling restrictions European Union This document has not been, and will not be, registered with or approved by any national securities regulator in the European Union. Accordingly, this document may not be made available, nor may the New Shares be offered for sale, in the European Union exc
Slide 52: Foreign selling restrictions
Foreign selling restrictions Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange or any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the New Shar
Slide 53: ASX: PLS pilbaraminerals.com.au
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