PLS signs multi-year Canmax offtake deal featuring price floor, US$100M prepayment, boosting liquidity and lithium market flexibility.
PLS Group Limited has confirmed the execution of a binding, multi-year offtake agreement with Canmax Technologies Co. Ltd for the supply of spodumene concentrate, marking another significant step in strengthening its commercial position within the global lithium supply chain. The agreement is scheduled to commence in calendar year 2026 (CY26), subject to PLS receiving a US$100 million prepayment from Canmax. Deliveries under the contract will continue through mid-CY28, with PLS retaining the option to extend the arrangement for an additional 12 months at its discretion.
The structure of the agreement has been designed to provide both stability and strategic upside for PLS. A key feature is the inclusion of a floor price mechanism, which offers protection against potential market downturns by establishing a minimum price level. At the same time, the arrangement preserves full exposure to any improvement in lithium prices, allowing PLS to benefit from favorable market conditions. This balanced pricing structure reflects confidence in the quality and consistency of spodumene concentrate produced at the company’s Pilgangoora Operation and underscores its competitive positioning in the market.
An important financial component of the deal is the US$100 million unsecured prepayment. The prepayment will be provided without interest charges and without restrictive covenants, thereby strengthening PLS’s short-term liquidity without adding financing costs or operational constraints. The structure of this advance payment signals Canmax’s strong belief in the long-term fundamentals of the lithium market as well as its confidence in PLS as a strategic partner. The additional liquidity enhances PLS’s financial flexibility as it continues to optimize production and sales strategies in a recovering lithium environment.
The agreement also incorporates volume optionality at PLS’s election, granting the company the flexibility to adjust supply volumes in response to evolving market dynamics and customer portfolio requirements. This optionality supports disciplined decision-making and enables PLS to manage its contracted and uncontracted capacity efficiently.
PLS retains full operational flexibility regarding the source of supply. Offtake commitments can be fulfilled from its Pilgangoora Operation, including production from the Pilgan Plant, the Ngungaju Plant, or a combination of both facilities. Based on current production plans and existing customer contracts, PLS has sufficient uncontracted capacity at the Pilgan Plant to meet up to 100% of its contracted offtake obligations, including the volumes allocated to Canmax.
Canmax Technologies Co. Ltd, listed on the Shenzhen Stock Exchange, is a diversified industrial group and among the world’s leading producers of lithium-ion battery materials. Commenting on the agreement, PLS Managing Director and CEO Dale Henderson highlighted that the deal builds upon an established relationship between the two companies. He emphasized that the interest-free prepayment and the floor price mechanism demonstrate commercial confidence in PLS’s product quality, operational reliability, and large-scale production capabilities.
Henderson further noted that the agreement enhances PLS’s liquidity position, maintains operational flexibility through optional volumes, and supports prudent production and marketing decisions as lithium market fundamentals continue to strengthen. Expanding collaboration with Canmax also broadens PLS’s customer base and reinforces its status as a dependable, large-scale supplier to the global lithium materials industry.
