Pilbara Minerals’ $60m raising put in doubt

Pilbara Minerals’ plans to raise equity appear to be under a cloud as the company entered a trading halt yesterday.

Only days after telling the market that its attempts to sell down part of its Pilgangoora project has been shelved, the group has been making efforts through Macquarie Capital to tap the market with a $60 million placement, where shares are being sold at 30c each.

However, the company yesterday entered a trading halt, with some questioning whether the deal would be recut where shares are sold at a lower price.

It is understood that meetings it had with fund managers yesterday would continue today.

Sources close to Pilbara Minerals said the raising was going smoothly even as the company had slowed down production and stage two of its Pilgangoora project to accommodate the weaker lithium demand.

But the timing of the raising has been unfortunate as yesterday it was announced that lithium producer Alita Resources had collapsed into administration and that KordaMentha had been appointed as administrators.

Macquarie Capital was working with Pilbara Minerals to find a buyer of between 20 and 50 per cent of its Pilgangoora lithium project, but the company indicated this week that it did not believe the offers received for the project were high enough in a relatively weak short-term market for lithium raw materials.

Canaccord Genuity said in a note that it believed the pricing of lithium in China had still not bottomed, but anecdotal industry feedback suggested a rebound in demand into the fourth quarter.

Pilbara Minerals counts China’s Guanfeng as its 8.24 per cent shareholder; it also partners with Korea’s Posco.

Macquarie earlier secured top dollar for Mineral Resources when it offloaded a 50 per cent stake in its Wodgina lithium project to Albermale for $1.6bn.