Proven and probable reserves now stand at 69.8 million tonnes at 1.26% lithium oxide, 132 parts per million tantalum and 1.04% iron oxide, up 136% over the maiden estimate released in March.

The reserve beat Pilbara’s internal target of 50-60Mt.

The updated reserve contains 883,000 tonnes of lithium oxide and 20.3 million pounds of tantalum pentoxide, which would underpin a 35-year mine life for a 2Mt per annum operation to produce 330,000tpa of spodumene concentrate.

The DFS, which will be released early next month, looked at a 2Mtpa operation, but given the large resource and reserve base, studies are already underway into a future expansion to 4Mtpa.

The March prefeasibility study returned capital costs of $A184 million, a net present value of $407 million, internal rate of return of 44% and payback period of just two years.

Pilbara managing director Ken Brinsden said the upgraded reserve cemented Pilgangoora’s position as a globally significant hard rock lithium-tantalum deposit.

“Of particular note is the fact that the upgraded ore reserves have been calculated using a conservative assumed price for 6% battery grade spodumene concentrate of $US460 a tonne, which is well below the current market price and considerably below the medium term prices being forecast by most major investment banks and commodity analysts,” he said.
 
“One of the key attributes of Pilgangoora is that, because of its exceptional grade, scale, low stripping ratio and great location it will be one of the lowest cost hard rock lithium operations in the world.

“That sets us apart from many of our peers and puts us in a position where we expect to have an extremely robust operation capable of generating strong margins at all stages of the lithium price cycle.”

Pilgangoora has a measured, indicated and inferred resource of 128.6Mt at 1.22% lithium oxide, 138ppm tantalum pentoxide and 0.63% iron oxide for 1.57Mt of lithium oxide (or 3.98Mt of lithium carbonate) and 39Mlb of tantalum pentoxide.

The resource remains open in many areas and Pilbara believes it will continue to grow.

“While we have made it clear that our strategy is to enter the market in a sensible, staged manner based initially on a 2Mtpa production rate, there is clear potential to grow the operation rapidly and we have already commenced studies to examine this potential,” Brinsden said.

Pilbara shares were up A1c to 54.5c.