Pls Group Limited · ASX:PLS
Pls — Investor Presentation (May 2021)
55 slides from Pls's investor presentation, May 11, 2021
Slide 1: Pilbara Minerals and the Pilgangoora Project – Ready for the global energy transformation
Pilbara Minerals and the Pilgangoora Project – Ready for the global energy transformation INVESTOR STRATEGY AND OUTLOOK FORUM Tuesday 11 May 2021 ASX: PLS
Slide 2: Introduction – Ken Brinsden
Ken Brinsden Managing Director and CEO INTRODUCTION 2
Slide 3: Important Notices
Important Notices Not an Offer of Securities This document has been independently prepared by Pilbara Minerals Limited (“Pilbara” or “Pilbara Minerals” or the “Company”) and is dated 11 May 2021. This document is provided for informational purposes and does not constitute or contain an offer, invita
Slide 4: Important Notices
Important Notices U.S. Securities Laws Any securities issued by Pilbara Minerals have not been and will not be registered by Pilbara Minerals under the United States Securities Act of 1933 (“U.S. Securities Act”). Accordingly, such securities may not be offered or sold in the United States except in
Slide 5: Important Notices
Important Notices No new information – Pilgangoora Operation (Pilgan Plant operations) Information relating to the current mineral resource and ore reserve estimates, production targets and forecast information derived from the production targets (including information relating to the proposed expan
Slide 6: Company Overview
Company Overview The leading, ASX-listed pure-play lithium company, owning 100% of the largest, independent hard-rock lithium operation in the world • $112.1M1 cash balance • 100% owned Pilgangoora Project and Operations • Products: ‐ ~6% Li2O spodumene concentrate ‐ +5% primary tantalite concentrat
Slide 7: Corporate Snapshot
Corporate Snapshot Ticker ASX:PLS Share Register Strategic Shareholders Issued Shares 2,896,895,632 Share Price (at 10 May 2021) $ 1.305 3.20% Market Capitalisation $ 3,780,448,800 7.20% 36.2% Cash Balance1 $ 112,100,000 Debt2 (AUD) $ 142,173,969 41.5% Enterprise Value $ 3,810,522,769 Index Inclusio
Slide 8: Board and Executives
Board and Executives Anthony Kiernan Sally-Anne Layman Steve Scudamore Nick Cernotta NON-EXECUTIVE CHAIRMAN NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR Ken Brinsden Alex Eastwood Brian Lynn Dale Henderson MANAGING DIRECTOR COMPANY SECRETARY & CHIEF FINANCIAL OFFICER CHIEF OP
Slide 9: Our Purpose
Our Purpose Making the world a better place by enabling the global energy transformation Our culture is built upon ‘What We Stand For’, six commitments that motivate our behaviours and guide us in our work to achieve our Purpose GREAT We are a proud team of talented and grounded people who value div
Slide 10: Pilgangoora Project – Naming our Facilities
Pilgangoora Project –Naming our Facilities We acknowledge and respect Aboriginal people, their culture, language, traditions and connection to country From early on, we have worked closely with the Traditional Owners of the land, the Nyamal People on the Pilgangoora Project’s development, operationa
Slide 11: From First Drillhole to Production in Under Four Years
From First Drillhole to Production in Under Four Years News flow and share price performance News 20 ASX Release Per PLS Website # 1a 17-Jun-14 Maiden Tantalum - Lithium Resource at Pilgangoora (historical drilling) 21 1b 06-11-2014 Major Drilling Program Commences at Pilgangoora 12 2 24-Sep-15 Majo
Slide 12: Strategic Acquisition
Pilgangoora Operation Strategic Acquisition Well-timed and cost effective strategic acquisition of neighbouring lithium operation Enhances scale of operations1,2 – increased processing capacity, significant mineral endowment and further exploration potential Operational synergies – integrated mine o
Slide 13: Production, Projects and Downstream Initiatives
Dale Henderson Chief Operating Officer PRODUCTION, PROJECTS AND DOWNSTREAM INITIATIVES 13
Slide 14: Video: Pilgangoora Project and Operation Fly Through
Pilgangoora Project and Operation Fly Through - click to view Video 14
Slide 15: Mineral Resource and Reserve
Mineral Resource and Reserve The Resource and Reserve makes Pilgangoora one of the leading Australian lithium assets, wholly owned Mineral Resource & Resource grade1,2 To be updated in Sept Quarter 2021 Source: Public company announcements. Refer to slide 55. Grade 1.Altura Project’s JORC Mineral Re
Slide 16: Resource Potential and Targeting Pit Inventory Extension
Resource Potential and Targeting Pit Inventory Extension1 Recent drilling of near surface ore at Ngungaju operation tenement boundary • Extensional drilling adjacent to the historical Altura tenement boundary further defines zones of high-grade pegmatite mineralisation • 7,009 drill metres completed
Slide 17: Strategy to Expand Operations and Diversification Pathway
Strategy to Expand Operations and Diversification Pathway UPSTREAM MIDSTREAM DOWNSTREAM (spodumene concentrate) (lithium salts) (lithium chemicals) Cumulative nameplate capacity ~3301 ~360-3801 ~5801 ~6801 >1,0001 TBD 43k LCE (ktpa)3: Participation subject to Status: C&M / Under Feasibility Feasibil
Slide 18: Pilgan Processing Plant Layout
PILGAN PROCESSING PLANT LAYOUT East 18
Slide 19: Safety performance
Safety performance • Steady track record for safety performance • 12-month total recordable injury frequency rate (TRIFR) of 4.40 • 653 days lost time injury free 6.0 60 Total Recordable Injury Frequency Rate (TRIFR) Rolling First Aid Injury Frequency Rate 50 5.0 40 4.0 30 20 3.0 10 2.0 0 Apr-20 May
Slide 20: Pilgan Plant Production
Pilgan Plant Production Production increasing to support growth in customer sales as lithium raw material pricing improves and record production is achieved in Q3 2021 Commissioning / Ramp Up Moderated Production Moving to 80,000 steady-state 70,000 60,000 Quarterly spodumene concentrate (dmt) 50,00
Slide 21: Pilgan Plant – Processing Performance
Pilgan Plant –Processing Performance Steady improvement in lithia recovery since project commencement attributable to: ore mineralogy 80% understanding 70% 60% mining practices 50% Lithia Recovery (%) 40% 30% process plant improvements 20% Moving to steady- 10% Plant defect rectification / state (im
Slide 22: Upstream Expansion Strategy – Flexible Growth Pathway
Upstream Expansion Strategy –Flexible Growth Pathway Pilgangoora resource and asset supports: Spodumene Concentrate, SC6 (ktpa) • Phased expansion up to and beyond ~1Mtpa • Potential for other lithia based product streams Expansion timing to be guided by: • Market conditions (including overall deman
Slide 23: Ngungaju Processing Plant Layout
NGUNGAJU PROCESSING PLANT LAYOUT North TAILINGS STORAGE SOUTH MINE PIT ROM PAD POWER STATION CRUSHING CIRCUIT HMS CIRCUIT CONCENTRATE STORAGE MILLING CIRCUIT TAILINGS THICKNER FLOTATION CIRCUIT COARSE PRODUCT STORAGE 23
Slide 24: Upstream Expansion – Ngungaju Operation to Lift Total Pilgangoora Production
Upstream Expansion –Ngungaju Operation to Lift Total Pilgangoora Production Pilgan Plant Early works commenced with restart under evaluation Progress of review • Project transferred successfully on 20 January 2021, currently on care and maintenance • Successful trial processing of Ngungaju South Pit
Slide 25: Upstream Expansion – Ngungaju Operation Moving Towards Restart
Upstream Expansion –Ngungaju Operation Moving Towards Restart Next steps (pre-FID): • Commitment to long-lead equipment and other enabling works (subject to board approvals) • Completion of evaluation works Final investment decision (FID): • Expected June Quarter 2021 • Subject to market conditions
Slide 26: Emissions Reduction and Displacement Initiatives
Emissions Reduction and Displacement Initiatives Several initiatives being progressed to transition to renewable energy and reduce operational carbon footprint Initiatives include: • 6MW solar PV power solution. Award anticipated in the second half of calendar year 2021 • Integrated Pilgangoora Oper
Slide 27: Midstream – Exploring Value-Added Products
Midstream –Exploring Value-Added Products (lithium salts) Hardrock lithium industry is evolving: Research and development exploring: • Need to transition to low-carbon processing methods • Alternate processing pathways to deliver lower carbon and higher concentration lithia products • Deployment of
Slide 28: Midstream – Exploring Value-Added Products
Midstream –Exploring Value-Added Products (lithium salts) Conventional spodumene supply chain: Chemical Plant Battery / Cathode Mine site (converter) maker • Carbon intensive (hard rock concentrator) • Aluminosilicates shipped to customer (>90% of export mass) • Spodumene concentrate SC6.0 - 6.0% Li
Slide 29: Midstream – R&D Chemical salts development with Calix
Midstream –R&D Chemical salts development with Calix Research development objective: • Production of a superior lithium carrier product from a fine spodumene concentrate feedstock • Sub-objectives: reduction of carbon, improvement in quality and reduced lithia production cost Areas of testwork under
Slide 30: Downstream Initiatives
Downstream Initiatives Pursuing increased lithium margins and diversification POSCO JV • Technical and commercial due diligence progressing • Participation subject to completion of due diligence, formal agreements and Pilbara Minerals’ Board financial investment decision Other opportunities • Uncomm
Slide 31: Financial Discipline, Balance Sheet and Funding
Brian Lynn Chief Financial Officer FINANCIAL DISCIPLINE, BALANCE SHEET AND FUNDING 31
Slide 32: Financial Performance - FY20
Financial Performance - FY20 Financial performance impacted by soft lithium market conditions Prior year operational activities Highlights: Operational cashflow * • Market deterioration dominated FY20 (both volume and selling price) Rapid response by Company including: Net equity raising • Capital e
Slide 33: Financial Performance - Months to March 2021
Financial Performance - 9 Months to March 2021 Financial consolidation for growth Highlights: • Moderated production achieves positive operational cashflow in soft market conditions (incl. weak pricing) $5-7M provisional pricing adjustment related FX loss • to March 2021 Quarter cargoes expected to
Slide 34: Pilgan Operation – Quarterly Margin Analysis
Pilgan Operation** – Quarterly Margin Analysis Actuals Independent Market Outlook *** Moderated Production Steady State March 2021 Quarter Highlights • improved market conditions, with A$/dmt (CIF China) higher demand and pricing • production of 77,820 dmt • shipments of 71,229 dmt • unit cash opera
Slide 35: Refinance of US$100M Nordic Bond
Refinance of US$100M Nordic Bond New debt facility underpins financial strength and provides significant improvement in short term cash flows by deferring debt repayments until September 2022 (from June 2020) and reducing funding costs from 12% to ~5%. Key terms Lenders BNP Paribas and Clean Energy
Slide 36: Strong Balance Sheet to Support Growth Opportunities
Strong Balance Sheet to Support Growth Opportunities Available funding options to underwrite growth, subject to positive market conditions Pilgan Plant Improvements US $15M Yibin Tianyi Prepayment (in place) Existing Cash Potential to increase existing Finance Facility utilising Ngungaju Plant Resta
Slide 37: Sustainability, Markets / Drivers, Sales Trading Platform, Offtake and Strategic Plan-on-a-page
Ken Brinsden Managing Director & CEO SUSTAINABILITY, MARKETS / DRIVERS, SALES TRADING PLATFORM, OFFTAKE AND STRATEGIC PLAN-ON-A-PAGE 37
Slide 38: Sustainability
Sustainability To contribute to a sustainable future through responsible operations and ethical business practices that deliver economic returns to our shareholders and create shared value in our communities A responsible and Great people that go Make a positive ethical operation home safe and well
Slide 39: FY21 sustainability initiatives
FY21 sustainability initiatives • Alignment to Sustainability Accounting Standards Board • Mental health awareness campaign Modern Slavery Statement published and Policy Books in Homes program – Yandeyarra across business and within adopted Community community • Books in Homes program support for Ya
Slide 40: Climate Change strategy
Climate Change strategy Series of actions underway to support the objectives under the Paris Agreement and our commitment to making the world a better place • Development of decarbonisation pathway commenced targeting net zero emissions (Scope 1 and 2) during the decade commencing 2040 • Assessment
Slide 41: Big on the Agenda
Big on the Agenda 2020 was a big year for major global economies as they tackled climate change and stimulated domestic recoveries from COVID-19 China Aiming to be carbon neutral by 2060 Europe European Green Deal – making Europe climate neutral by 2050 USA Election of Joe Biden and commitment to re
Slide 42: CATL investing US$3B into three new battery facilities
CATL investing US$3B into three new battery facilities • Expected to add 120–150 GWh of battery production capacity in the next 2–4 years • Spent 73 billion yuan on capacity expansion in 2020 • Largest EV battery manufacturer in the world with 24.2% of market share, looking to grow to 40% 42
Slide 43: Chinese Spodumene Convertors - 2012
Chinese Spodumene Convertors -2012 Xinjiang • Eight facilities in operation • Limited export capacity Aba Guangsheng General Lithium Nantong Galaxy Zhangjiagang Nike Guorun Sichuan Shehong Jiangxi Ganfeng Jiangxi Jiangli 43 Source: Pilbara Minerals’ estimates
Slide 44: Chinese Spodumene Convertors - 2020
EX-CHINA New Conversion facilities (under construction / proposed) AUSTRALIA – x 3 (2022-2025) SOUTH KOREA – x 1 (2023) Chinese Spodumene Hunan & Hubei Convertors -2020 Sichuan Construction: 2 - 3 Liaoning & Hebei New operation/ New operation/ construction: 3 - 4 construction: 4 - 6 • Approximately
Slide 45: Market Growth
Plug-In Electric Vehicle Sales in Europe Market Growth UK and Europe • World’s largest EV market in 2020 • A market that will be dominated Chart source: Inside Evs ‘EV sales blog data by high-nickel cathode batteries driving lithium hydroxide demand Electric Vehicle China • EV sales strong Car Sales
Slide 46: Market Growth
Rising demand for materials needed High-nickel cathode materials monthly production (tonne) for renewable energy and e-mobility Future demand (2020 and 2050) as a multiple of current demand* Market Growth Industry Trends • Spodumene chemical conversion direct to lithium hydroxide Chart source: UBS •
Slide 47: Improvement in Pricing
Improvement in Pricing As global economies adopt clean energy COVID-19 recovery stimulus packages – bringing forward a recovery in lithium market Lithium chemical pricing Tantalite concentrate pricing 120.0 Asian Metals Argus 110.0 100.0 90.0 US$/lb CIF 80.0 70.0 60.0 50.0 40.0 Sep/2018 Nov/2018 Aug
Slide 48: Strategic Offtake Partners
STRATEGIC OFFTAKE PARTNER PLS OFFTAKE / EQUITY PARTNERSHIPS CAPACITY (CURRENT AND FUTURE) • Strategic partnership with major • 22kt LCE - Jiangxi and Jiangsu China’s third largest 6 year offtake Chinese battery industry • Future: 82kt LCE on construction of Hubei plant lithium producer (Pilgan Opera
Slide 49: Uncommitted Production and Offtake
Uncommitted Production and Offtake Combined Pilgangoora Project plant capacity will provide additional, uncommitted tonnes to market 2022-2024 200-230,000 tpa (dry) - Derived principally from Ngungaju Plant capacity addition End of 2024 400,000 tpa + (dry) (pending Stage 2 offtake uptake) - Derived
Slide 50: Battery Material Exchange
Battery Material Exchange Partnership with GLX Digital creates a digital trading platform for battery raw materials Sophisticated, digital battery materials trading platform Trade unallocated Pilgangoora spodumene Flexible trading – auctions, tenders, bilateral sales across multiple products 50
Slide 51: Battery Grade Chemicals Price
Battery Grade Chemicals Price (Ex-Works China + Contributing Cost) 30000 GLX platform designed to efficiently support 25000 the ‘spot sales’ market opportunity Ex Works China Chemicals Price (Battery Grade per tonne LCE) 20000 15000 Where excess demand/tight supply 10000 exists, there is an opportun
Slide 52: Pilgangoora Production – Strategic Plan-on-a-page
PILGANGOORA PRODUCTION Summary UPSTREAM MIDSTREAM DOWNSTREAM PARTICIPATION Strategic Plan- on-a-page Pilgangoora spodumene Key international markets concentrate production • Calcination ‘Calix’ • Digestion • Precipitation SC5X Fine chemicals partners Spodumene concentrate (SC) SC5X SC6.0 Mid-Stream
Slide 53: pilbaraminerals.com.au
ASX: PLS pilbaraminerals.com.au Follow us on
Slide 54: Pilgan Operations - Mineral Resource and Ore Reserve
Pilgan Operations -Mineral Resource and Ore Reserve Mineral Resource Statement (30 June 2020) including stockpiled material CATEGORY TONNES Li2O (%) Ta2O5 Fe2O3 (%) M.dmt (ppm) Measured 18.3 1.38 151 0.45 Indicated 113.8 1.29 119 0.58 Inferred 90.4 1.21 105 0.67 Total 222.5 1.26 116 0.61 Note: Total
Slide 55: Mineral Resource and Reserve – Company References
Mineral Resource and Reserve –Company References COMPANY COMPANY PROJECT NAME ANNOUCEMENT TITLE ANNOUNCEMENT CODE DATE Mineral Resources MRL Wodgina Wodgina Mineral Resource and Ore Reserve 23 October 2018 Update Pilbara Minerals PLS Pilgangoora 2020 Annual Report 16 October 2020 Lithium-Tantalum IG