Jefferies-Pilbara Minerals 1Q26–Sorting The Wheat From The Chaff-20251026

Operationally, the quarter was strong, with early benefits from the P1000 program evident through enhanced mining practices and improved plant recoveries. Our FY26 forecasts remain aligned with company guidance,positioning PLS to return to a cash-generative profile. On our numbers, PLS is pricing in an SC6 price of US$1,015/t, below our US$1,250/t LT price and a marginal premium to spot. HOLD. PT AUD3.00 (from $2.30).

Pilgangoora. Completion of the P1000 expansion, and operation under the P850 model has started to yield results, with production/sales a solid beat to our and consensus expectations.Notably, the Pilgan plant optimisations have seen recoveries increase to 78.2%, ~9% higher than our expectation. Unit costs of A$645/t (US$422/t) CIF was ~12% higher than our expectations. PLS is targeting increased contact ore feed to maximise unit cost efficiencies to offset increasing stripping ratios. ASP of US$841/dmt (JEFe: $810/t | Cons: $790/t) was higher than expectations following the retirement of underperforming off-take agreements.