Search

Pilbara Minerals Primed to Boom

Despite quite a bearish month for all lithium stocks, one stock has been backed to set itself apart from the Aussie crowd.


The S&P/ASX 200 Materials Index (ASX: XMJ) is down over 18% for the month/

However, Pilbara Mineral’s share price dropped over 22% during the same timeframe.


Pilbara is a lithium producer focused on the Pilgangoora Project near Port Headland in Western Australia.


Top Australian broker Ord Minnett has predicted that this is the bottom for the lithium miner. They have placed a $4.25 price target on the lithium producer’s shares with a buy rating. The broker is optimistic on future lithium prices after Pilbara’s latest offer at a Battery Material Exchange (BMX) auction. On 23 June, Pilbara advised it accepted a bid worth US$7,000 per dmt (dry metric tonne) in advance of an auction on the BMX.


Macquarie’s price target is also in line with this consensus. Their analysts have placed a $3.90 price target on the shares and kept an outperform rating. The broker was also impressed with Pilbara’s auction result and sees lithium prices remaining strong.


Pilbara also recently announced its quarterly production jumped by an estimated 54% compared to the March quarter to 123-127,000 dmt.


Finally, the company reached a final investment decision (FID) on their P680 project which will increase their production capacity to 680,000dmt per year, which will lift them up to become one of the biggest hard rock lithium producers in the world.


Pilbara Minerals incoming Managing Director and CEO, Dale Henderson, said:


“This increase in production capacity will enable the Company to continue to capitalise on the opportunities in the lithium chemicals market, being driven by rapid transition to decarbonisation through technologies such as electric vehicles and battery storage. “The increase in production from the Pilgangoora Project will coincide with the expected commissioning and ramp-up in production from the downstream chemical conversion plant being constructed under our Joint Venture with POSCO, which will see Pilbara Minerals become a fully integrated lithium raw materials company.”