The Pilbara Minerals Ltd (ASX: PLS) share price is up by 8.7% to 38 cents per share at the time of writing, after the company announced it has secured a new US$110 million (A$153 million) low-cost debt facility.
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What's moving Pilbrara Minerals share price today?
According to today's announcement, international bank BNP Paribas and Australian clean energy investors Clean Energy Finance Corporation (CEFC) are providing the new financing. Both are long term Pilbara supporters.
The new debt facility will largely go towards the early redemption of Pilbara's existing US$100 million Nordic Bond, which was used to support the financing of Stage 1 of the Pilgangoora Lithium-Tantalum Project in 2017.
According to the announcement, the average all-in interest rate for the new facility currently comes in at approximately 5%, which represents a substantial cost saving when compared to the Nordic Bond.
The company expects the new financing to increase cash flows and decrease its funding costs.
What does Pilbara Minerals do?
Pilbara is an Australian lithium-tantalum producer. It owns 100% of the Pilgangoora Project in Western Australia. The region is believed to contain some of the largest deposits of hard-rock lithium-tantalum deposits in the world.
With lithium helping power electric vehicles and the wider transition away from carbon-based fuels, Pilbara Minerals aims to become one of the biggest producers in the world.
A word from Pilbara's CEO
In announcing the refinancing of its existing debt facilities to support its long-term growth plans for its Pilgangoora Project, managing director and CEO, Ken Brinsden noted:
This landmark refinancing of our long-term debt facilities … reflects the quality and scale of the Pilgangoora Project, as well as our success in building, commissioning and ramping-up the Pilgangoora Project to secure our position as a sustainable and reliable long-term supplier of lithium raw materials to some of the key players in the global lithium battery supply chain. Both BNP Paribas and the CEFC have been key contributors and partners in the development journey of the Pilgangoora Project.
Investors appear pleased with the news, with the Pilbara share price up 8.7% in late-afternoon trading.
Pilbara is an S&P/ASX 300 (INDEXASX: XKO) listed company, with a market capitalisation of $834.28 million at current prices.
