The production capacity expansion at Pilgangoora is well underway and PLS remains on track to deliver the P1000 project in 2025. A future expansion that would double capacity (P2000) was outlined in a pre-feasibility study in June 2024. The acquisition of Latin Resources will provide PLS with a second, lower cost, smaller scale, growth option in Brazil. Importantly, we estimate PLS’s ~A$1.0b net cash balance would have declined to ~A$400m on completion of P1000 at spot prices and A$600m using Argonaut forecasts. As a result, we expect PLS will pivot towards development the Salinas project in Brazil, due to its lower capex, ahead of P2000, which we push back to beyond 2030. We are reiterating our BUY rating on PLS, lifting our price target 3% to A$3.80 after incorporating the Latin Resources acquisition and changes to our spodumene price forecasts.
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