PLS’s FY24 earnings result was solid with most key metrics in line with our estimates. Net cash at the end of June of A$1.1b was also in line with our estimates. PLS has secured a new A$1.0b revolving corporate facility that will be used to refinance the existing project debt and help fund the remainder of the P1000 expansion project. Spot spodumene prices remain under pressure and will consume the bulk of PLS’s funding capacity through to the completion of the P1000 expansion if current prices persist into mid-2025. We expect recent supply cuts will be sufficient to drive a recovery in spodumene prices over the next six months and reiterate our BUY rating on PLS and A$3.70 price target. We make some minor adjustments to earnings after splitting the P1000 and P2000 projects into separate financial models in our base case.
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