PLS Group (PLS) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition diversifies Pilbara Minerals' revenue beyond Pilgangoora, adding a second 100% owned, low-cost, Tier 1 hard rock lithium asset in Brazil and providing exposure to new growth markets in Europe and North America.

• Salinas project offers access to emerging North American and European battery markets, leveraging its strategic location and uncommitted offtake.

• Enables Latin Resources shareholders to participate in Pilbara Minerals' future growth, with ongoing exposure to lithium market upside and a more liquid ASX 50 company.

• The project aligns with Pilbara Minerals' strategy for operational growth, chemical value extraction, and geographic diversification.

• Salinas is a large, advanced-stage lithium development in a pro-mining jurisdiction with strong infrastructure.

Financial terms and conditions

• Pilbara Minerals to acquire 100% of Latin Resources via a court-approved scheme; each Latin shareholder receives 0.07 new Pilbara shares per Latin share, representing ~6.4% of the combined group.

• 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 are expected to de-risk and optimize Salinas' development, leveraging proven project delivery capabilities.

• Integration of Pilbara's mining and processing IP, including advanced calcination technology, to enhance project value.

• 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.

• Access to Pilbara's balance sheet enables more efficient project funding and development.