‘We’re up for it’: Pilbara Minerals chief Dale Henderson could crack $1.8 billion war chest for right deal

Any drawdown on Pilbara Minerals’ tightly-held $1.8 billion bank balance would likely go back into bolstering the miner’s flagship operation, but its chief executive says M&A is still an option. Analysts were keen to hear how the pure-play lithium producer planned to spend the significant cash balance it has amassed since 2022, when a tonne of the battery-making commodity was fetching more than $US6000. “It’s most likely that the best investment’s back into the base asset, in terms of capital return, plus risk profile . . . that’s really the key prioritisation. So we’ll continue as we’re doing to invest in the base,” Dale Henderson said. “That being said, we are considering and looking at inorganic growth opportunities, but we’re in no rush, and we won’t grow for growth’s sake. But if there’s a great opportunity . . . where we can create some great value for our shareholders we’re up for it.” The last acquisition Pilbara closed was under the leadership of former CEO Ken Brinsden in 2021 when it bought the Altura lithium project in the Pilbara. There had been speculation Pilbara might be in the market for Mr Brinsden’s new Canadian lithium venture Patriot Battery Metals in mid-2023, but it did not eventuate. On Pilbara’s growth plan, Mr Henderson joked the company’s Pilgangoora lithium mining and processing operation could reach ‘P-Infinity’, riffing off the P-prefixed growth projects so far named P680 and P1000, to lift production. He said Pilbara was still completing studies to establish what the operation’s upper limit would be. “The study’s working through that problem of ‘what is the constraint? How large can we go?’. Probably the key constraint comes from the mine,” he said. “The upper limit we’ve got to explore is what is the highest volumetric rate that we can sustainably take from the mine at an even rate.” Holding onto cash proved a smart move last year when spodumene concentrate prices plunged about 80 per cent, which Mr Henderson told the Macquarie Australia Conference in Sydney on Wednesday he believed could also have been the price floor. The average realised price for Pilbara’s spodumene concentrate from Pilgangoora was $US804 per dry metric tonne for the March quarter. At the tail end of the period it sold a batch of the product for $US1106/dmt.