Why the Pilbara Minerals Ltd share price is falling

A corporate presentation out of emerging lithium and tantalum producer Pilbara Minerals Ltd (ASX: PLS) has seen its share price drop 2% to 88c per share today, despite the company revealing a 36% increase in lithium resources at its Pilgangoora Project in Western Australia.

Updates on the resource estimate underpins the company’s Stage 2 development of the project with Pilbara CEO Ken Brinsden saying the company is poised to “take full advantage of burgeoning demand for lithium raw materials – which keeps surprising to the upside”.

Pilbara recently reached a landmark agreement with South Korea’s POSCO for spodumene concentrate from Pilgangoora, with a presentation earlier this month naming the project as “the world’s leading lithium development”.

With a $1.57 billion market cap, Pilbara has plenty of room for expansion and its shares have sunk lower alongside lithium peers this week.

Elsewhere in the sector Orocobre Limited (ASX: ORE) shares were down 4.5% to $5.65 at the time of writing while Galaxy Resources Limited (ASX: GXY) was down 2.1% to $3.34.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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