Pilbara Minerals buy
29th June 2019
Resources Rising Stars
Foster Stockbroking has reissued a buy recommendation on beaten-down lithium producer Pilbara Minerals, given its share price performance in recent weeks (reports The West Australian).
The Ken Brinsden-led company announced last week it was slowing production this month and next because of delays in the construction and commissioning of chemical conversion capacity by two of its Chinese customers. The news sent Pilbara’s share price plunging from 70¢ to as low as 53.5¢.
“Despite the disappointing sales update, the company is still working through both its partnering process for Pilgangoora and the POSCO JV,” Foster said in a note to clients.
Pilbara is looking to sell up to 49 per cent of its Pilgangoora project as part of plans to fund a $226 million stage-three expansion of the mine.
Foster estimates Pilgangoora could be worth $2.47 billion, based on recent market transactions.
The broker lowered its price target from $1.04 to 81¢ but said the project sell-down should provide a major catalyst for a share price rerate.
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