The Pilbara Minerals Ltd (ASX: PLS) share price has rocketed higher over the last three trading days of this week, up 12% since the closing bell on Tuesday.
Despite falling 60% from 5 February through to 23 March, largely driven by the wider COVID-19 market rout, the Pilbara Minerals share price is up an impressive 25% year to date. And it’s up a really impressive 175% from its 23 March low.
For comparison, the S&P/ASX 300 Index (ASX: XKO) is down 12% in 2020 and up 30% from 23 March.
At the current Pilbara Minerals share price of 38 cents, the company has a market capitalisation of $812 million.
What does Pilbara Minerals do?
Pilbara Minerals is an Australian lithium-tantalum producer. The company owns 100% of the Pilgangoora Lithium-Tantalum Project. Located in the Pilbara region of Western Australia, the Pilgangoora project is considered one of the largest hard-rock lithium-tantalum deposits globally. The project’s significant scale and high quality has seen the company progress it from first drill hole to production in less than 4 years.
The company is embarking on a massive expansion of the Pilgangoora project, while developing strategic links into Chinese and South Korean markets. Pilbara Minerals shares began trading on the ASX in 2010.
Why is the Pilbara Minerals share price soaring this week?
On the bigger front, Pilbara Minerals is well situated in the rapidly growing global lithium industry, with demand for lithium raw materials forecast to grow by 28% annually through to 2028. That’s helped drive the Pilbara Minerals share price throughout the year.
But this week, shareholders received a nice boost when the company announced on Tuesday that it had replaced its existing Nordic Bond with a new, low cost US$110 million (AU$150 million) debt facility. Formal agreements for the new debt facility were executed with BNP Paribas and Australia’s specialist clean energy investor, the Clean Energy Finance Corporation.
Pilbara Minerals stated it expects to use the new funds to repay the Nordic Bonds by 30 September. The company forecasts “substantial cost savings” from the lower interest rates it secured. Furthermore, it announced the agreements include the renewal of the US$15 million Working Capital Facility with BNP Paribas.
Commenting on the new finance facilities, Pilbara Minerals’ Managing Director, Ken Brinsden, said:
The fantastic long-term financing outcome achieved by the Pilbara Minerals team shows just how far the company has come since 2017. As one of the major new key lithium raw materials suppliers globally, we have been able to attract very competitive financing terms from leading financial institutions in a challenging market.
This speaks volumes to the Tier-1 status of our deposit, the quality of our products, the strong recent performance of our plant, our cost competitive supply base and the quality of the key strategic partners and off-takers participating in our business.
With the Pilbara Minerals share price up 5.5% in trading today alone, investors appear to agree with Brinsden’s enthusiastic outlook.
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Motley Fool contributor Bernd Struben 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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