PLS Group (PLS) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition diversifies Pilbara Minerals' revenue beyond Pilgangoora, adding a second Tier 1, low-cost, hard rock lithium asset in Brazil and providing exposure to new growth markets in North America and Europe.

• Provides access to the Salinas project, a large, advanced-stage lithium development in a pro-mining jurisdiction with strong infrastructure and uncommitted offtake.

• Enables Latin Resources shareholders to participate in Pilbara Minerals' future growth, benefiting from Pilbara's technical and financial strength.

• The deal aligns with Pilbara Minerals' strategy to be a leader in sustainable battery materials and diversify its asset base.

• Transaction is counter-cyclical, leveraging a low point in the lithium price cycle to secure a high-quality asset.

Financial terms and conditions

• Pilbara Minerals will acquire 100% of Latin Resources via a scheme of arrangement; each Latin shareholder receives 0.07 new Pilbara shares per Latin share, representing ~6.4% of Pilbara post-transaction.

• Implied value of ~A$0.20 per Latin share, a 57% premium to 10-day VWAP and 32% to 30-day VWAP.

• All-share transaction preserves Pilbara's net cash position of A$1.6bn as of 30 June 2024.

• Pro-forma market cap of A$9.2bn and combined Mineral Resources of 14.1Mt LCE.

• Pilbara Minerals will provide a A$10 million loan facility to Latin Resources for working capital and early works, repayable based on scheme outcome.

Synergies and expected cost savings

• Pilbara Minerals' technical expertise and balance sheet expected to de-risk and optimize Salinas' development, leveraging proven project delivery capabilities.

• Access to Pilbara's intellectual property and funding mitigates development risk for Salinas.

• Potential to optimize Salinas' flowsheet, throughput, and recoveries as part of the ongoing DFS.

• Salinas is expected to add ~20% to Pilbara Minerals' Mineral Resources and contribute up to ~30% of pro-forma steady state production at competitive costs.

• Potential to leverage Calix Electric Calcination Technology for downstream value.