Pilbara Minerals Limited and Calix Limited further reported on initiatives to develop value-added lithium products at Pilbara Minerals' 100% owned Pilgangoora Project. Following execution of a Memorandum of Understanding (MOU) in May 2021 between Pilbara Minerals and Calix, a Scoping Study for a Mid-Stream Product Demonstration Plant ("Scoping Study") commenced, which is nearing completion. The Scoping Study aims to support the development of a Demonstration Plant at the Pilgangoora Project ("Pilgangoora") to produce lithium salts from fines-flotation spodumene concentrate, supporting a pathway towards potential future commercial production of value-added lithium products at Pilgangoora.

The Scoping Study (undertaken by Lycopodium Minerals in conjunction with the Pilbara Minerals and Calix teams) is assessing the potential development of a new refining process to produce high purity lithium phosphate precipitate from Calix-calcined fines spodumene concentrate supplied from the Pilgangoora Project. This concentrated lithium salt from the Pilgangoora Project ("Mid-Stream Product"), could support downstream lithium raw material and cathodes demand. Technical work contributing to the Scoping Study (including testwork, process design and engineering) is now complete.

Completion of the commercial and economic evaluation contributing to the Scoping Study is expected early in the New Year, following which a final review of the results will be undertaken by the boards of Pilbara Minerals and Calix with results released shortly thereafter. Subject to the results being commercially and technically satisfactory to both Pilbara Minerals and Calix, in accordance with the MOU the parties will then progress negotiations for the formation of a joint venture and agree a work program to develop a Demonstration Plant at the Pilgangoora Project and ultimately seek to commercialise the Mid-Stream Product's process technology in respect of lithium phosphate applications on a worldwide basis. The lithium-ion supply chain is rapidly evolving with large scale development occurring through all segments of the supply chain.

Several prominent forces are shaping the industry including product cost (per lithia unit), product quality (purity), carbon energy reduction and waste management (particularly for the European market). Pilbara Minerals Mid-Stream Project objective is to deliver a superior value-added lithia product that exceeds across these metrics of product cost, quality, carbon energy reduction and waste reduction/handling. The project work to date has comprised exploring alternate solutions to achieve these aims, including reviewing and testing alternate process paths, equipment selection and end- product types.

The project has now been narrowed down to a preferred process route and end-product. The process route under investigation is unique in the use of both the calcination processing technology and chemical concentration process. Although the project is in its early development phase, the test work and engineering to date which has contributed to the initial Scoping Study provides strong indications that the new mid-stream product (and process path) can be expected to deliver on the desired metrics of an improved value-added lithia product.

In particular through a reduction in carbon energy intensity, reduction in shipped volumes (through higher concentration product) and providing a more easily handled product. The metrics of product production cost and quality will however need to be further assessed as the project moves through the subsequent phases of study and further development. Australian spodumene is a raw material feed to a high-value chemical industry that is largely conducted outside of Australia.

Producing a high lithium-content intermediate salt product on site at Pilgangoora, will result in a portion of the value traditionally retained by downstream spodumene converters outside of Australia being retained in-country. The value-added Mid-Stream product is also expected to be able to access diverse markets worldwide. Pilbara Minerals together with Lycopodium Minerals embarked on a testwork programme to develop a flowsheet to produce a lithium phosphate salt.

The testwork programme was initiated by using a produced synthetic lithium sulphate leach solution to produce small quantities of lithium phosphate precipitate. Subsequent testwork phases further developed the flowsheet to produce high purity lithium phosphate precipitates from Calix-calcined Pilgangoora spodumene concentrate. Following laboratory scale testwork, lithium phosphate has been selected as the preferred product, having demonstrated superior performance to other alternatives evaluated to date.

Other forms of lithium salts will continue to be considered for potential process optimization in future study works. Flowsheet test work to-date has demonstrated >90% overall lithium recovery to final high purity lithium phosphate product. Pilbara Minerals' mid-stream project development is expected to be progressed utilizing unallocated spodumene concentrate production capacity available from the Pilgangoora Project over time, without disrupting existing customer offtake arrangements, including the POSCO and Pilbara Minerals downstream joint venture.