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Piedmont Lithium reports Q3 2024 financial results

Piedmont Lithium Inc., a leading North American supplier of lithium products critical to the U.S. electric vehicle supply chain, today reported its third quarter 2024 financial results.

Piedmont shipped approximately 31,500 dry metric tons of spodumene concentrate (~5.4% Li2O) associated with spot shipments in Q3’24 and recognized US$27.7 million in revenue. The Company’s realized price per ton was US$878 in Q3’24, which outperformed industry peers during the quarter. Piedmont expects to ship approximately 41,000 to 55,000 dmt of spodumene concentrate in Q4’24, resulting in total shipments of approximately 102,000 to 116,000 dmt in 2024. Our Q4’24 shipments are expected to be long-term customer shipments or spot shipments structured to minimize downside risk. Production at North American Lithium supports the Company’s Q4’24 shipment guidance.

NAL, North America’s largest operating spodumene mine, continued to achieve quarterly production records in Q3’24 following the achievement of steady-state production in June 2024. NAL produced approximately 52,100 dmt of spodumene concentrate during the quarter, up 5% from Q2’24, with recoveries remaining relatively steady at 67% in the quarter. Mill utilization achieved a new record high of 91%, benefiting from the recently completed crushed ore dome. The increased utilization rate also drove an improvement in unit operating costs, which declined by 15% quarter-over-quarter to US$729 when excluding the impact of inventory movements. Further, Sayona Mining Limited reported an increase to NAL’s mineral resource estimate in Q3’24, including a significant increase in resources in the measured and indicated categories. NAL is jointly owned by Piedmont (25%) and Sayona Mining (75%).

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Carolina Lithium remains the focus of the Company’s U.S. project development strategy following the receipt of the state mining permit in Q2’24 and the subsequent decision to shift the proposed Tennessee Lithium conversion capacity to the North Carolina project. Piedmont continues to pursue an air permit application currently under review by North Carolina’s Division of Air Quality, which would allow for up to 60,000 tons per year of lithium hydroxide production at Carolina Lithium. In addition, the U.S. Department of the Treasury recently issued final rules for the Inflation Reduction Act’s manufacturing credit (45X), which included modifications that could materially improve the after-tax economics of U.S. projects like Carolina Lithium.

In Q3’24, our joint venture Ewoyaa Lithium Project in Ghana received an environmental permit from Ghana’s Environmental Protection Agency and in October, received a Mine Operating Permit from the Ghanaian Minerals Commission. Development of the project remains subject to the outcome of the mining lease ratification by the Ghanaian Parliament, ongoing design work, additional regulatory approvals, prevailing market conditions, and project financing.

“We are very pleased with the continued quarterly progress at NAL, with new records set in Q3 for production and mill utilization rates. Production in Q3 benefited from the investments made at NAL during prior quarters, particularly the recently completed crushed ore dome, the availability of which also drove an improvement in unit operating costs,” said Keith Phillips, President and CEO of Piedmont Lithium. “In addition to the progress in operations, Sayona Mining announced a significant increase to the mineral resource estimate for NAL this quarter, indicating the potential for a brownfield expansion of annual production at some future point.”

“The third quarter was a successful one for Piedmont with a quarterly record of spodumene concentrate shipped via well-placed spot shipments that took advantage of the futures market. We expect to exceed Q3’s shipment record in Q4’24 to round out an excellent second half of the year,” said Phillips. “On the development side, Ewoyaa made key strides on the regulatory front, and we were heartened by the recent positive news from the U.S. Treasury that should provide material improvement to the economics of Carolina Lithium.”

“While lithium markets remain challenging, we have been successful in strengthening our financial position through reductions in operating costs, minimized spending on discretionary capital items, and the arrangement of low-cost working capital financing through a trading company partner,” added Phillips.

3Q 2024 Financial Highlights

All references to dry metric tons in this release relate to spodumene concentrate.

Units

Q3’24

Q2’24

Q3’23

Sales

Concentrate shipped

dmt thousands

31.5

14.0

29.0

Revenue

$ millions

27.7

13.2

47.1

Realized price(1)

$/dmt

878

945

1,624

Li2O content(2)

%

5.4

5.5

5.3

Realized cost of sales(3)

$/dmt

794

900

805

Profitability

Gross profit

$ millions

2.7

0.6

23.8

Gross profit margin

%

9.6

4.7

50.4

Net (loss) income

$ millions

(16.7)

(13.3)

22.9

Diluted EPS

$

(0.86)

(0.69)

1.19

Adjusted net (loss) income(4)

$ millions

(8.1)

(12.7)

16.9

Adjusted diluted EPS(4)

$

(0.42)

(0.65)

0.88

Adjusted EBITDA(4)

$ millions

(8.7)

(13.2)

16.2

Cash

Cash and cash equivalents(5)

$ millions

64.4

59.0

94.5

3Q and Recent Business Highlights

Piedmont Lithium

  • Shipped approximately 31,500 dmt (~5.4% Li2O) of spodumene concentrate from NAL to customers in Q3’24 and recognized US$27.7 million in revenue with a realized sales price of US$878 per dmt. On an SC6 equivalent basis, our realized price per metric ton was US$976.
  • In July 2024, Piedmont streamlined its U.S. lithium hydroxide production plans in favor of deploying capital and technical resources more efficiently by shifting our proposed Tennessee Lithium conversion capacity to Carolina Lithium. We plan to leverage the North Carolina project by adding a second lithium hydroxide production train as part of a phased development approach on a measured timeline subject to market conditions.
  • In September 2024, we entered into a working capital facility with a trading company partner, whereby we may borrow up to US$25.0 million based on the value of committed volumes of spodumene concentrate shipped within the following twelve months. Borrowings are credited against the outstanding balance at the time vessels complete loading, which provides additional borrowing availability. Interest is payable quarterly at the rate of SOFR plus 2.4%.
  • During the second half of 2024, we expanded our 2024 Cost Savings Plan and further reduced our workforce by 32% in October 2024. We expect to record restructuring charges in Q4’24 of approximately US$0.6 million, which consists of US$0.5 million in cash severance and employee benefits and US$0.1 million in non-cash stock compensation expense. As part of our 2024 Cost Savings Plan, we reduced our total workforce by 48% between February 2024 and October 2024. We expect to recognize US$14 million in annual cost savings in 2024.

North American Lithium (Quebec, Canada)

  • In Q3’24, NAL achieved record quarterly production of approximately 52,100 dmt and shipped approximately 49,000 dmt, of which approximately 31,500 dmt were sold to Piedmont.
  • In Q3’24, production at NAL increased nearly 5% compared to the prior quarter, recovery rates held consistent at 67%, and mill utilization increased to 91%, up 10% from the previous quarter.
  • During the third quarter of 2024, NAL operations benefited from the availability of the crushed ore dome, which was commissioned in Q2’24. Operations are expected to produce at steady-state for the remainder of 2024.
  • In Q3’24, Sayona announced an increase to the mineral resources estimate at NAL including a significant increase to the mineral resources in the measured and indicated categories in accordance with JORC Code requirements.
  • In September 2024, NAL reported an incident-free safety performance record with no lost time injuries, no modified duty injuries, and no medical aid injuries.
  • Concentrate produced and shipped by NAL and concentrate shipped by Piedmont:

Share

Units

Q3’24

Q2’24

Q3’23

Piedmont Lithium

Concentrate shipped

100%

dmt thousands

31.5

14.0

29.0

North American Lithium

Concentrate produced

100%(1)

dmt thousands

52.1

49.7

31.5

Concentrate shipped

100%(2)

dmt thousands

49.0

27.7

48.2

Ewoyaa Lithium Project (Ghana)

  • In July 2024, the application to grant the Ewoyaa mining lease was submitted to the Ghanaian parliament to undergo the ratification process. The mining lease remains subject to parliamentary ratification as of the date of this Quarterly Report. We expect advances to Atlantic Lithium for Ewoyaa to decrease in the coming months depending on the timing of mining lease ratification, permitting, and prevailing market conditions.
  • In July 2024, Piedmont mandated a financial advisor to develop a funding strategy that includes an offtake-partner process to support our share of Ewoyaa construction capital and minimize dilution to Piedmont shareholders.
  • In September 2024, Ghana’s Environmental Protections Agency granted an environmental permit to the Ewoyaa project.
  • In October 2024, the Minerals Commission of Ghana issued a Mine Operating Permit in respect of the Ewoyaa project. The receipt of the permit marked an important milestone in achieving the regulatory approvals required to commence Project construction. The project, however, remains subject to ratification of the mining lease by the Ghanaian Parliament.

Carolina Lithium (North Carolina)

  • Piedmont continues to pursue an air permit application currently under review by North Carolina’s Division of Air Quality, which would allow for up to 60,000 tons per year of lithium hydroxide production at Carolina Lithium.
  • October 2024, the U.S. Department of the Treasury issued final guidance for the Inflation Reduction Act’s rules regarding the manufacturing credit (45X) with the modifications intended to drive critical mineral processing in the U.S. The new guidance supports the application of the 10% manufacturing credit to direct and indirect material costs, which could materially improve the after-tax economics of U.S. projects like Carolina Lithium.

Tennessee Lithium

  • In July 2024, Piedmont converted the proposed Tennessee Lithium project plans to a second lithium hydroxide train as part of a phased development for Carolina Lithium. The combined conversion facilities should allow Piedmont to significantly increase U.S. lithium hydroxide production capacity while deploying capital and technical resources more efficiently.

2024 Outlook

Units

YTD’24

Q4’24

Full Year

2024

Shipments

dmt thousands

61

41 — 55

102 — 116

Capital expenditures

$ millions

11

0 — 1

11 — 12

Investments in and advances to affiliates

$ millions

25

2 — 4

27 — 29

Under our offtake agreement with Sayona Quebec, Piedmont has the right to purchase the greater of 50% of production or 113,000 dmt/year. Based on the production projection, customer requirements, and per the Company’s offtake agreement, Piedmont currently expects to ship 41,000 to 55,000 dmt in Q4’24, totaling approximately 102,000 to 116,000 dmt in 2024. In response to a customer request, the Company expects to shift a previously planned cargo from Q4’24 to early Q1’25 and is contemplating shifting a second shipment from December 2024 to January 2025 to realize material transport cost savings by combining this shipment with one from Sayona Quebec. As a result of these expected amendments to the shipment schedule, the Company has made an adjustment from our prior guidance of 126,000 dmt for 2024. We expect these shifts to be accretive to our 2025 shipments totals and not impact Piedmont’s total offtake quantities at NAL. We are prioritizing contract customer shipments and structuring spot shipments to limit downside exposure.

We expect less than US$1 million in capital expenditures mainly related to Carolina Lithium in Q4’24. Investments in and advances to affiliates reflect cash contributions to Sayona Quebec and advances to Atlantic Lithium for the Ewoyaa project. With the restart capital program at NAL completed, and approvals at Ewoyaa ongoing, we expect payments to affiliates to substantially reduce in H2’24. Our outlook for forecasted capital expenditures and investments in and advances to affiliates is subject to market conditions.

Safety and Sustainability

Following the release in Q2’24 of Piedmont’s 2023 Sustainability Report, the Company continued policy development and training to support the long-term objective of establishing a robust safety and health management system. Employee engagement in safety events remained strong and identification and reporting of hazards, unsafe acts, conditions, and safety observations, and near misses continued to improve.

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