PLS Group Commits A$1.9B to Lift Pilgangoora to 2.0Mtpa Capacity
Key Takeaways
- PLS has approved the A$1.9B P2000 project, which lifts Pilgangoora to about 2.0Mtpa of spodumene concentrate with first production in the September Quarter CY29.
- The project delivers a A$2.7B incremental post-tax NPV (8% real) and a 29.5% IRR at a US$1,620/t SC6 price, and each US$250/t price lift adds about A$900M.
- Strip ratio drops from 7.7x to 5.6x as 67Mt of former waste becomes ore, holding unit operating costs near A$620/t FOB.
- The Ore Reserve rises to 249.2Mt at 1.24% Li2O, up 23% in tonnes and 31% in contained lithia, including a maiden 46.5Mt underground reserve.
- Funding comes from A$2.3B in cash with no equity raise, though only about 50% of FY30 P2000 volume has contracted placement capacity so far.
PLS approves P2000 FID to lift Pilgangoora to ~2Mtpa
PLS Group has taken a positive final investment decision (FID) for the P2000 Project at its 100%-owned Pilgangoora Operation in Western Australia. The project will build the new Jimmagunya processing plant, with first production expected in the September Quarter CY29.
An FID is the formal green light to commit capital and start construction. Here are the headline numbers from the 16 October 2026 announcement:
- Production capacity of approximately 2.0Mtpa of spodumene concentrate
- Project capital of approximately A$1.9B
- Incremental post-tax NPV of A$2.7B (8% real)
- Post-tax IRR of 29.5%
- First production expected in the September Quarter CY29
The NPV and IRR are incremental to the existing Pilgangoora operating profile. They are based on a long-term SC6 price assumption of US$1,620/t.
Dale Henderson, Managing Director and CEO
“In a cyclical market, scale matters, but cost position matters more…”
When big ASX news breaks, our subscribers know first
Feasibility Study outcomes: bigger, lower-cost, less waste
The completed P2000 Feasibility Study (FS) builds on the June 2024 Pre-Feasibility Study (PFS). PLS says improved metallurgical understanding from the P680 and P1000 expansions allows more mineralised material to be recovered as ore, cutting waste movement and strip ratio.
PFS to FS comparison
| Metric | Units | P2000 PFS | P2000 FS | Change |
|---|---|---|---|---|
| Open pit ore mined (ROM reference point, before ore sorting) | Mt | **211** | **236** | **25** |
| LOM strip ratio | W:o | **7.7x** | **5.6x** | **(2.1x)** |
| Jimmagunya wet plant capacity | Mtpa | **5.0** | **6.3** | **1.3** |
| 10-year average production (SC5.2) | ktpa | **1,895** | **1,970** | **75** |
| Unit operating costs (FOB, real) | A$/t | **~600-700** | **620** | **-** |
| P2000 project capital | A$B | **1.3** | **1.9** | **0.6** |
Read the cost and capital rows with care. PFS unit operating costs and project capital have been adjusted for inflation (Perth All Groups CPI) by a cumulative 9.0%. The original PFS figures were A$550-650/t and A$1.2B.
Unlocking more of the orebody
About 67Mt of mineralised contact material previously classified as waste is now included as ore in the updated Ore Reserve. The updated Pilgangoora Ore Reserve is 249.2Mt at 1.24% Li2O, including the maiden Underground Ore Reserve of 46.5Mt at 1.50% Li2O.
That is a 23% increase in reported Ore Reserve tonnes and a 31% increase in contained lithia, relative to the Ore Reserve in PLS’ FY26 Annual Report. For you as an investor, lower average unit operating costs of approximately A$620/t (FOB, real) are the number to watch, because the company says they strengthen Pilgangoora’s position on the global cost curve.
How do ore sorting and contact ore work?
Contact ore is a blend of ore and host rock from the ore contact boundary. Strip ratio is the waste-to-ore ratio of the life-of-mine open pit.
A lower strip ratio means less waste rock moved for every tonne of ore mined, which is why it feeds directly into lower unit costs. The P2000 open-pit plan has a life-of-mine strip ratio of approximately 5.6x, down from 7.7x in the PFS.
Ore sorting separates ore from waste in the feed before it reaches the wet plant. PLS says testwork showed higher ore sorting efficiency and an ability to accommodate more waste in the feed.
Average lithia recovery through the Jimmagunya wet plant is expected to be approximately 70%. By processing more contact material, the revised configuration is expected to increase overall orebody extraction by approximately 17%.
Funding, timeline and sales strategy
Funded from existing cash
P2000 funding is underpinned by the existing cash balance (A$2.3B as at 30 June 2026) and operational cashflows from existing production. PLS will periodically assess debt funding opportunities as needed to support future growth optionality.
| Capex (A$M) | FY27 | FY28 | FY29 |
|---|---|---|---|
| P2000 | **500** | **900** | **500** |
This table covers P2000 only. Separately, PLS announced expected expenditure of A$600-650M on enhancing infrastructure, including a road upgrade, new mine services facility and new permanent accommodation village.
Execution and offtake
Jimmagunya will use a highly modularised construction strategy, and its construction is not expected to impact Pilgangoora production. Full production is targeted following an approximate six-month ramp-up.
The project is expected to create more than 1,000 construction jobs and around 500 ongoing operational roles (FTE).
On sales, contracted placement capacity covers approximately 50% of forecast P2000 volume in FY30. PLS also says it continues to receive significant unsolicited inbound interest from existing and potential new customers for long-term offtake.
The next major ASX story will hit our subscribers first
Price sensitivity and long-term upside
Valuation outcomes are sensitive to the SC6 price. A US$250/t increase in the pricing outlook is equivalent to a ~A$900M increase in NPV.
Benchmark Mineral Intelligence has increased its long-term spodumene price forecast to approximately US$2,580/t (SC6 FOB Australia). The study uses US$1,620/t (SC6 CIF China), so the two figures are on different bases and should not be equated.
The separate Underground PFS indicates combined open-pit and underground mining has the potential to lift average production to approximately 2.2Mtpa over the first 10 years at steady state. It would also extend the operating horizon from approximately 20 years (open pit only) to more than 25 years.
None of that is in the P2000 FID, capital estimate or financial outcomes. PLS has commenced a separate Underground FS, and any future underground development will be subject to its completion, a separate future investment decision and market conditions.
Key takeaways for investors:
- Scale: approximately 2.0Mtpa of spodumene concentrate capacity at Pilgangoora.
- Cost: average unit operating costs of approximately A$620/t (FOB, real) over the first 10 years at steady state.
- Orebody extraction: approximately 67Mt of contact material now included as ore, with overall extraction expected to rise by approximately 17%.
- Funding: underpinned by a A$2.3B cash balance and operational cashflows.
PLS held an investor webcast on 16 October at 7.30am AWST to discuss the P2000 outcomes and FID.
Don’t Miss the Next Lithium Breakout
Get FREE breaking ASX lithium news delivered to your inbox within minutes of release, complete with in-depth analysis. Join 30,000+ investors already staying ahead of the market. Click the “Free Alerts” button at Big News Blast to receive market-moving mining and energy announcements the moment they break.