Australian (ASX) Stock Market Forum

PLS - Pilbara Minerals

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lower for longer?

Screenshot_20240621-103614_CommSec.jpg

.
PFS key outcomes
New plant nominal 5 Mtpa ore processing throughput.
• Production capacity increase to >2 Mtpa across Pilgangoora at SC5.
• First 10 years average concentrate production profile increases to ~1.9Mtpa at SC5.
• Life of mine reduction to 23 years – potential future exploration upside / resource conversion.
• P2000 Project incremental NPV of ~A$2.6 billion and IRR of 55%, assuming:
• Long-term SC6 pricing of US$1500/t real (US$1,300/t SC5 basis) and a long term exchange rate of (AUD:USD) of 0.70.
• 8% real discount rate.
• Includes capital construction expenditure of ~A$1.2 billion (-20/+30% accuracy).
• 10 year unit operating costs (FOB) - A$550-650/t.

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One of my picks for the yearly share tipping comp. Down over 20% for six months, so not a great pick. Hopefully we see a change in lithium price which would be a boost to the share price. Looking at how PLS is going and is being treated as a trading share by many holders so can expect some volatility.

Iggy
 
Iggy_Pop said:
One of my picks for the yearly share tipping comp. Down over 20% for six months, so not a great pick. Hopefully we see a change in lithium price which would be a boost to the share price. Looking at how PLS is going and is being treated as a trading share by many holders so can expect some volatility.

Iggy
Click to expand...
PLS is the most shorted ASX stock so at some stage there will be the mother of all short squeezes , generally this will come from a fundamental event . I picked up a few PLS this week along with LTR . Both these stocks are one ann from an eye melting rally particularly LTR as that is a Takeover target at the right price
 
-22% YTD. $3 looks an important tech level. Going to take patience and belief for holders, but the company is toiling away on their projects, as Dona F. covered above
 
Logique2 said:
-22% YTD. $3 looks an important tech level. Going to take patience and belief for holders, but the company is toiling away on their projects, as Dona F. covered above
Click to expand...
Hi Logique2
Was having a look at AFR electronic ... an article popped up, written by Joshua Peach, in short:

Among the beaten-up lithium miners is Pilbara Minerals, which tumbled nearly 40 per cent in the 12 months to trade around $3.05 apiece, which Mr Coppleson (Bell Potter director of institutional sales and trading) said he was watching closely in July.

“I own this and like it a lot,” he said. “I think it’s a super buy at these levels – when lithium does recover, this is back to $5 – only question is when will that be?”

That recovery in lithium may be protracted, however, according to commodity strategists, including Commonwealth Bank’s Vivek Dhar. “A meaningful recovery in lithium demand that would see lithium prices rebound is unlikely this year,” Mr Dhar said today (01/07/24).

rcw1 has traded PLS previously.
No holding.


Kind regards
rcw1
 
One of my picks for the yearly comp, and the worst performer, with another drop this month. Still believe the share will bottom soon before heading up again. It is a good company but lithium price has impacted.

Iggy
 
PLS is still profitable at these low lithium prices and mgt working on reducing costs while sitting on a billion cash. PLS can survive comfortably while many lithium resource companies are unable to raise capital to progress their projects. More lithium companies are going to care and maintenance and reducing exploration activities to preserve capital. This will delay future Li supply but it'll take time (6mths - yr) before Li prices will react to this future supply delay.

PLS is well worth watching for a reversal setup as the short interest is so high. It may not happen for another six months or more though. Unfortunately for current holders, PLS can go lower, much lower.
 
2.90 ; -27.2% YTD
Two year low.

www.marketindex.com.au

The ASX stocks the big brokers upgraded to buy this week, plus those they think have the most upside

Gold miners Northern Star (NST) and Regis Resources (RRL) received generally negative reviews of their respective updates, but Sandfire Resources‘ (SFR) news appeared to be better received. Lithium stocks found themselves the victim of “market to market” price target reductions, some of them...
www.marketindex.com.au www.marketindex.com.au
By Carl Capolingua ; Wed 31 Jul 24, 2:18pm (AEST)
(Extract):
"...It was another tough week for ASX-listed lithium stocks. Whilst there two rating upgrades, (Mineral Resources (ASX: MIN) to outperform by CSLA and Pilbara Minerals (ASX: PLS) to neutral by Citi), price targets generally fell to reflect significantly poorer lithium minerals pricing. This is often referred to as “marking to market”..."
 
Catching up with weekend stock market news...PLS a toddler slowly growing to become a 'Big Bro'..

The acquisition of Latin Resources is well timed as it is rare in our view for companies to execute material M&A at the bottom of a pricing cycle. A development of the Salinas project in Brazil would be material for PLS, adding ~30% to group production and providing a real alternative to the larger capital investment outlined for the P2000 expansion,” the Perth broker said.

“The potential to expand the Salinas development base case also exists. The Scheme Implementation Agreement is expected to become effective in late November 2024 and be implemented in early December 2024.”

Jarden analysts led by Ben Lyons cut their PT from $3.80 to $3.70 on the news, but still hold a buy rating at current levels.

“With SC6 spot prices of ~US$800/t trading well into the cost curve, we view an acquisition of LRS as judiciously counter-cyclical, whilst the use of PLS scrip preserves the strong PLS balance sheet and cash balance of A$1.6bn,” Jarden says.

“The addition of a second 100%-owned project, for modest consideration relative to PLS’s size, would add further optionality to the PLS portfolio and introduce competition for capital with the organic P2,000 project at Pilgangoora.”

Jarden is far more bullish on spodumene longer term than the current market.

“Further, it would increase the leverage to an eventual recovery in lithium prices, which remains our base case view (LT price US$1,400/t),” Lyons et. al. wrote.

Jarden estimates PLS is embedding a long-term price over 11 years of US$1290/t in the acquisition cost or US$1000/t if the mine life can be extended to 20 years with additional drilling and studies following a PEA released last year.

It says a key test of the quality of the deal will be in whether the NPV of the Salinas asset, which includes the more than 70Mt Colina deposit in Brazil’s Minas Gerais State, exceeds the roughly $590m price Jarden has ascribed to the deak, with corporate costs also forecast to increase by $15m.

“From our initial modeling, we derive an illustrative value for an 11-year mine life at Salinas of ~A$580-815m, assuming LT SC6 US$1,400/t, inflating the LRS PEA estimates for Capex and Opex by 35-50%, and applying a 12.5% discount rate,” Lyons and Co. said.

“Increasing the mine life to ~20 years, to account for the large resource increase post the PEA, increases our illustrative valuation to >A$1bn.”

Bell Potter meanwhile maintained a hold rating and cut its price target from $3.30 to $3.15 due to weak near term lithium fundamentals.

RBC’s Kaan Peker is also bullish on PLS, with a $3.80 PT, but sees limited operational synergies in the deal, suggesting it could be near-term earnings dilutive.

The deal seems to have other lithium stocks running hot today, with Pilbara rebounding from a more than 5% fall yesterday by lifting almost 3% and juniors like Sayona Mining (ASX:SYA), Wildcat Resources (ASX:WC8) and Patriot Battery Metals (ASX:pMT) rising today.
 
Dona Ferentes said:
lower for longer?
Click to expand...
numbers out, nobody even bothers to comment... trading sub $3

this from a broker:
Rocky profits for Pilbara as lithium prices dive. Pilbara Miners (PLS) - one of the world’s largest hard-rock lithium miners – posted a 69% drop in revenue and an 89% decline in net profit in FY2024 as lithium prices continued to suffer.
Click to expand...
Pilbara did not declare a final dividend in order to focus on project investments and preserve balance sheet strength.
Click to expand...
.. I wouldn't choose to go with 'strength', maybe survival would be appropriate?
 
Dona Ferentes said:
numbers out, nobody even bothers to comment... trading sub $3

this from a broker:


.. I wouldn't choose to go with 'strength', maybe survival would be appropriate?
Click to expand...
China will be hovering and waiting to pick up some of these critical mineral miners, then they will be able build us some processing plant and get this made in Australia by Australians happening. Lol
 
My pick for the November stock tipping comp as well as one of my picks for the CY 24 tipping comp. PLS has been hammered this year but hoping to see some turn around soon. PLS seems to being bought by a few big players including Australian Super fund, while the share price is low. Hoping for a turn around soon.

Iggy
 

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