Pilbara Minerals : March 2022 Quarterly Activities Report

ASX / MEDIA ANNOUNCEMENT

Thursday, 28 April 2022

MARCH 2022 QUARTERLY ACTIVITIES REPORT

Production guidance achieved despite impact of COVID, with lithium prices continuing to hit new highs and key mid and downstream projects progressed

Access the quarterly investor, analyst and media webcast at 8.00am (WST) / 10.00am (AEST) on Thursday, 28 April 2022:https://webcast1.boardroom.media/watch_broadcast.php?id=6243aa2834c68

KEY POINTS

Production and sales

• • Production of 81,431 dry metric tonnes (dmt) of spodumene concentrate (December Quarter: 83,476 dmt). Production volumes impacted by resourcing shortfalls in staff and contractors as a function of COVID-19 impacts and the tight labour market.

• • Spodumene concentrate shipments of 58,383 dmt (December Quarter: 78,679 dmt), impacted by a port delay in loading a ~20,000 dmt cargo, which was scheduled for late March (departed Port Hedland on 7 April).

• • Average spodumene price reference for sales in the March Quarter of US$2,650/dmt (SC 6.01, CIF China basis), in line with prior guidance (being US$2,600-3,000/dmt CIF China SC6.0 basis).

• • Tantalite concentrate sales totalled 12,880 lbs (December Quarter: 29,038lbs).

Lithium market

• • Price of US$5,650/dmt (SC 5.5, FOB Port Hedland basis) achieved under Battery Material Exchange ("BMX") auction conducted on 27 April 2022. Equates to an estimated price of US$6,250/dmt (SC6.0, CIF China basis).

• • Strong sales price dynamic during the March Quarter, with battery grade chemical pricing suggesting another significant step-up in the offtake concentrate sales price during the June Quarter.

Project development

• • Pilgan Plant Improvements Project successfully commissioned, with installed production capacity now re-rated from 330ktpa to 360-380ktpa of spodumene concentrate.

• • Staged restart of production from the Ngungaju Plant continued. Load commissioning of fines flotation circuit commenced on 9 April 2022.

• • Scoping Study completed for Mid-Stream Project, providing preliminary support for the development and construction of a demonstration plant chemicals facility at Pilgangoora, producing value-added lithium phosphate salts via an innovative calcination and refining process.

• • A Life Cycle Assessment was completed for the Pilgangoora Project identifying opportunities for decarbonisation at both Pilgangoora and within the supply chain downstream.

Corporate

• • Operating cashflow of $113.9M delivers Quarter-end cash balance of $284.9M, inclusive of $75.2M of irrevocable bank letters of credit for shipments completed up to 31 March 2022

1 The actual concentrate grade delivered to customers may be less than 6% lithia content, in which case the actual price received is typically pro rata to the 6% reference price. Please refer to section 1.3 for further pricing commentary.

p. 1

(December Quarter: $245M).

• • Key conditions precedent and other closing criteria were progressed during the Quarter for the formation of a downstream processing JV with POSCO, with completion occurring on 13 April 2022 including the Company subscription for its 18% interest in the JV.

• • Managing Director and CEO, Ken Brinsden, advised his intention to step down from the role by the end of 2022. Pilbara Minerals has commenced an executive search process for the Company's next CEO.

1. Operations Overview

During the March Quarter 2022 (the Quarter), Pilbara Minerals Limited (Pilbara Minerals or the Company | ASX: PLS) continued to progress work programs to increase spodumene concentrate production at the Pilgangoora Project, responding to surging global demand for lithium raw materials.

Production for the Quarter of 81,431 dry metric tonnes (dmt) of spodumene concentrate was achieved, within previous guidance provided of 75,000 - 90,000dmt.

Production was, in part, impacted by the rising instance of community transmission of COVID-19 in Western Australia during the Quarter, which reduced the availability of staff and contractors.

With COVID-19 expected to continue to impact the Company's operations through the June Quarter, there remains some uncertainty regarding production levels through to 30 June 2022. COVID-19 has (and may continue in the near term) to cause operational delays, including staffing shortages for both shut-down and operating staff (mining and processing).

Despite these impacts, FY22 annualised production guidance has been maintained in the range of 340-380,000dmt, albeit noting that any continuing COVID-19 impacts may result in production being in the lower half of the guidance range.

1.1

Sustainability

1.1.1

Health and safety

The Company has continued to closely monitor the COVID-19 situation (including virus transmission among employees and contractors) and responded accordingly to any changes in directives by the State and Federal governments. Pilbara Minerals remains focused on taking all necessary steps to ensure the health and safety of its people and other key stakeholders, while responsibly maintaining site operations.

One recordable safety incident (cut hand) occurred in the March Quarter. At the end of the March Quarter, the Total Recordable Incident Rate was 3.5, down from the December quarter of 4.42.

1.1.2

Solar farm

During the March Quarter, the Company's main power contractor - Contract Power Australia mobilised for the construction of the 6MW solar photovoltaic farm, which is the first major step in the Company's pathway to decarbonising the Pilgangoora Operation. Site detailed civil works will be the predominate task for the coming Quarter, with final equipment installation and commissioning of the array targeting completion in the September 2022 Quarter.

1.1.3

People and culture

Strong progress continued to be made by the Company in its ongoing recruitment campaign to support its operational expansions. Despite the current extremely competitive labour market in the resources sector, 90 positions were recruited to join Pilbara Minerals' workforce during the

March Quarter. The main focus of recruitment for Pilbara Minerals has been personnel to support the Company's owner-mining fleet (which was increased by an additional 81 positions in the

March Quarter) and the additional operating and maintenance labour for the Ngungaju Plant.

As a result of this recruitment campaign, the Company's employee numbers increased by 15% in the March Quarter and 121% over the last twelve months with a total of 339 employees as at 31 March 2022.

While Pilbara Minerals has been largely successful with the recruitment of full-time personnel in support of expanded operations, peak labour availability across contractor workgroups including our mining contractor (MACA), construction, shutdown and breakdown maintenance groups continues to be challenging in light of further intensifying skills shortages in the mining industry and the impact of COVID-19. The Company continues to work with its key contractors to find innovative solutions to try to maintain appropriate manning levels that support ongoing operations.

1.2

Mining and processing commentary

Production volumes for the period were in line with guidance, with total production of 81,431 dry metric tonnes (dmt) of spodumene concentrate.

Previous guidance had assumed a level of operational impact from the effects of community transmission of COVID-19. During the Quarter these anticipated impacts were realised, principally in the form of shortfalls in operational personnel that was felt in all areas of the operation and were further challenged by the tight labour market for the WA mining industry.

These shortfall impacts translated to reduced mined volumes (compared to plan), reduced processing plant run-time for the Pilgan processing plant (due to extended process plant maintenance shut-downs) and slower commissioning and ramp-up of the Ngungaju processing plant.

1.2.1

Mining

Total material mined across the combined Pilgangoora Operation was 6,076,398 wet metric tonnes (wmt) (December Quarter: 4,672,233 wmt). Total ore mined for the Quarter was 815,387 (December Quarter 779,368 wmt) at an average grade of 1.39% Li2O.

Total material movement increased during the period in support of the planned additional waste movements. However, total material movements were still below planned quantities due to COVID-19 impacts affecting personnel numbers for the both mining contractor (MACA) and Pilbara Minerals' owner-mining fleet.

1.2.2 Processing

Total processing plant feed of 613,202 dmt (December Quarter: 566,027 dmt) resulted in the production of 81,431dmt of spodumene concentrate (December Quarter: 83,476 dmt) across the two processing plants (refer Table 2).

Lithia recoveries for the Pilgan processing plant were 61% and largely in line with the targeted recovery (64%), which anticipated there would be several changes in ore feed during the Quarter as ore was sourced from both Central and South pits, including new pit stages.

A long-run expected lithium recovery rate in the range of 70-75% remains in place for the Pilgan operation, during periods where consistent and optimal ore feed should allow stable processing plant operations.

During the period, planned maintenance shutdowns for the Pilgan processing plant over-ran as a function (principally) of personnel shortages.

Processing performance had continued to improve post the month of February, and there is an expectation that operational performance for the Pilgan operation will continue to improve through the June Quarter. This is mainly due to the combination of an expanded operations workforce being able to cover for any shortfalls which has supported the transition to more consistent ore sources from Central pit.

The quarterly activities for the Ngungaju processing plant comprised operation of the coarse circuit only, which has now moved into a more stable and consistent operating rhythm. In parallel, construction upgrade works were completed for the flotation circuit during the Quarter, and commissioning of this circuit commenced. Lithia recoveries for the coarse circuit were in line with expectations given the lower production outputs whilst commissioning works commenced for the flotation circuit.

Tantalite production for the Quarter was lower than planned principally due to changing ore feed source to South pit, that has minimal tantalite concentration. Tantalite production volumes are expected to return to normal levels as ore feed changes.

Quantities for mining, ore processed, shipments and concentrate stocks for the Quarter are detailed below (Refer Tables 1, 2 and 3 respectively).

Table 1: Total ore mined and processed

Ore mined

Waste mined

Total material mined Ore processed

Units	Q4 FY21	Q1 FY22	Q2 FY22	Q3 FY22
wmt	672,020	639,188	779,368	815,387
wmt	1,976,039	2,929,647	3,892,865	5,261,012
wmt	2,648,059	3,568,836	4,672,233	6,076,398
dmt	422,111	443,691	566,027	613,202

1.3

Shipments and sales

During the Quarter a total of 58,383 dmt of spodumene concentrate was shipped (both SC5.5 and SC6.0) under existing offtakes and to customers on a spot sale basis. Total tonnes shipped were impacted in late March by the delay of a cargo-ready 20,000 dmt shipment due to berth access constraints at Port Hedland. This vessel subsequently sailed post Quarter-end on the 7th of April, 2022 with final pricing consistent with previous March Quarter price guidance.

The average sales price for the March Quarter of ~US$2,650/dmt (SC6.0, CIF China basis) was within previous guidance of US$2,600-3000/dmt, inclusive of a cargo priced for shipment in the December Quarter that was eventually shipped in the March Quarter.

Offtake customer cargoes to date have typically been priced against a 6% lithia content reference price, however actual deliveries may contain a lower lithia content. In this instance, the actual price received is adjusted pro rata to the 6% lithia reference price.

Discussions continue with customers about delivered grades, with a view to maximising mine site recovery to product and therefore delivered lithia units to customers.

Battery grade chemical pricing continued to strengthen in the March Quarter, with current pricing dynamics suggesting further increases in spodumene concentrate pricing to be received for offtake contract sales during the June Quarter.

100,000

90,000

Quarterlyspodumeneproduction/shipments(dmt)

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

Q4 FY21

Q1 FY22

Q2 FY22

Q3 FY22

Spodumene concentrate produced (dmt)

Spodumene concentrate shipped (dmt)

Figure 1: Quarterly spodumene concentrate production and shipments (dmt)

Tantalite concentrate sales for the Quarter were 12,880 lbs (including provisional sales, pending final reconciliation and assay results).

Table 2: Production and shipments

Spodumene concentrate produced

Spodumene concentrate shipped Tantalite concentrate produced Tantalite concentrate shipped

Units	Q4 FY21	Q1 FY22	Q2 FY22	Q3 FY22
dmt	77,162	85,759	83,476	81,431
dmt	95,972	91,549	78,679	58,383
lbs	34,048	33,557	24,629	2,654
lbs	39,234	36,876	29,038	12,880

Table 3: Stocks position

Spodumene concentrate stocks Tantalite concentrate stocks

Units	Q4 FY21	Q1 FY22	Q2 FY22	Q3 FY22
dmt	18,845	12,557	16,496	37,5081
lbs	19,588	16,269	11,860	1,633

1 Closing balance includes reconciliation adjustments of (2,036) dmt during the Quarter for final survey adjustments, storage handling at the mine site, moisture reconciliation and draft survey at port.

1.4

Production Guidance

With COVID-19 expected to continue to partly impact the Company's operations through the June Quarter, there remains some uncertainty regarding production forecasts through to 30 June 2022.

COVID-19 has and may continue in the near term to interrupt and cause operational delays,