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Pilbara Minerals powering on as battery metal prices continue to climb

September 29, 2021

Pilbara Minerals powering on as battery metal prices continue to climb

Earlier this year, Eiger Capital principal and portfolio manager Stephen Wood made the bold claim Pilbara Minerals (ASX: PLS), would double its share price in less than five years.

Earlier this year, Eiger Capital principal and portfolio manager Stephen Wood made the bold claim Pilbara Minerals (ASX: PLS), would double its share price in less than five years.

The company did it in less than five months.,

Pilbara Minerals was one of the three favourite stocks selected by Mr Wood for his presentation on Reach Markets’ The Insider: Meet the Fund Manager series.

The Western Australian-based lithium miner had already enjoyed a strong rally in the five months leading up to the presentation, and Mr Wood said he expected this momentum to continue, spurred on by rising demand for battery metals as global economies try to decarbonise.

The company started the year trading at $0.87, and by May 21 (when Mr Wood made his remarks) it had already climbed to $1.08 per share.

“You only have to open the newspaper or turn on Bloomberg TV every day to see the revolution on electric vehicles is just beginning and the targets are ambitious and getting more so,” he said at the time. 

“And the grid stabilisation demand for lithium is just getting going and the projects are getting bigger and bigger and bigger.”

Mr Wood added Pilbara Minerals itself had been substantially derisked in recent years, and noted the company would still be a buy at the valuations offered in May.

“If you’re going to take a half-decade view and you’re going to try and double your money, which is essentially what our process boils down to, we think there’s every chance you’ll double your money in this in the next half-decade,” he said.

Between May 21 and September 22 – only four months – Pilbara Minerals’ price had grown to $2.15, marking a 99.07% increase.

September alone has been a big month for the company, which reported a “significant” increase in its resource size (up 39% to 309 megatonnes) on the 6th, before auctioning off its second round of spodumene concentrate for US$2,240 per dry metric tonne less than 10 days later.

The price was almost double the US$1,250 per tonne paid at the company’s first spodumene concentrate auction in July, and represented a 550% year-on-year increase for spodumene prices.

Even experts were stunned at the significant price, which was paid for the company’s low-grade (5.5% lithium) spodumene material. 

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