NAL Mine Faces Challenges Despite Increased Production
Six months after Sayona Mining and Piedmont Lithium announced a cost-cutting review at their jointly owned North American Lithium (NAL) mine in Quebec, the operation is still struggling to stabilize. In the second quarter, NAL produced 49,660 dry metric tonnes of 5.3% concentrate, a 23% increase from the previous quarter, attributed to improved mill utilization, which rose to a new high of 83% from 73%.
However, the mine shipped only 27,700 tonnes of concentrate, less than half of the 58,100 tonnes shipped in the first quarter. Weather delays caused a third shipment to be postponed to the next quarter. Despite a 2% decrease in unit operating costs to $995 per tonne, these costs remain significantly higher than the realized selling price of $604 per tonne, which was down 11% from the previous quarter.
Overall, revenues fell 58% to AUD 25 million ($22.6 million) due to the delayed shipment and declining prices. The introduction of a new crushed ore dome with a 6,000-tonne capacity is expected to further enhance production levels and utilization rates, particularly during winter.
The NAL operation began shipping spodumene concentrate in August 2023 but has faced challenges, including an 80% drop in lithium prices last year. Sayona also holds the advanced Moblan project nearby.
Piedmont Lithium aims to become a leading low-cost producer of lithium hydroxide, leveraging the growing North American electric vehicle supply chain. Piedmont has a development project in the United States and owns a 22.5% stake in Atlantic Lithium's Ewoyaa project, with an option to earn 50%.
Keith Phillips, president and CEO of Piedmont Lithium, stated, "As one of only a handful of active spodumene mines globally, NAL is a highly strategic asset with excellent operational performance as the ramp-up to steady-state production continues. With ongoing quarterly production records and recent high-grade drill results, NAL has demonstrated significant progress and future potential. We look forward to increasing our shipments to contract customers in the second half of the year."
Piedmont plans to ship about 96,500 tonnes of spodumene concentrate in the second half of 2024, targeting a total of 126,000 tonnes for the year.
At the time of reporting, Piedmont Lithium traded at 16¢ per share, with a market cap of AUD 315.5 million ($285.6 million). Sayona Mining traded at A3.1¢ per share, with a market cap of AUD 329.7 million ($298.5 million), in a 52-week range of A3-17¢.
