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Piedmont Lithium Reports Q1 2024 Results

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Piedmont Lithium Inc. reported record quarterly production at North American Lithium (NAL), achieving 40,439 dry metric tons of spodumene concentrate in Q1’24 with strong lithium recoveries. The Carolina Lithium mining permit was received in May 2024, accelerating funding discussions. Revenue reached $13.4 million, cash stood at $71.4 million, and the outlook for 2024 includes doubling shipments and reducing investments by over 50% in H2’24 vs. H1’24.

Positive
  • Record quarterly production at NAL with strong lithium recoveries, exceeding plan and setting new records in safety performance.

  • Carolina Lithium mining permit received, facilitating funding discussions and positioning the project as a low-cost producer of lithium products.

  • Revenue of $13.4 million and cash and cash equivalents of $71.4 million as of March 31, 2024, with a positive outlook for doubling shipments in 2024 and reducing investments in H2’24.

Negative
  • Net loss of $23.6 million in Q1’24, with diluted EPS of -$1.22 and adjusted net loss of $11.9 million.

  • Realized cost of sales at $799 per dmt and adjusted EBITDA at -$12.4 million in Q1’24.

  • Sale of shares in Sayona Mining and Atlantic Lithium resulted in a taxable gain and notable reportable losses.

Piedmont Lithium's Q1 2024 results exhibit an operational uptick with a record production of spodumene concentrate at North American Lithium (NAL) and a notable rise in safety performance metrics. The Carolina Lithium project's mining permit could pivot the company towards increased funding opportunities and strategic partnerships, potentially impacting the company's future financial stability and project scalability. Moreover, the financial activities, including the monetization of non-core investments, hint at strategic capital management aimed at strengthening the company's balance sheet. These moves reflect a proactive approach in positioning for potential market volatility and the need for liquidity. Noteworthy is the gross profit margin's positive turn, although slim at 5.2% and the company's agile response to operational costs through a cost-savings plan that could positively affect future profitability. The substantial cash reserves of $71.4 million and nearly doubled working capital signal a robust financial position for Piedmont Lithium, which may bode well for upcoming strategic initiatives and investments.

The significance of the received mining permit for Carolina Lithium, alongside Piedmont's role in the U.S. electric vehicle supply chain, reflects positively on the company's strategic positioning within a rapidly expanding industry. The projected doubling of shipments and reduced capital expenditures indicate a promising scale-up in operations, which may be catalyzed by legislation such as the Inflation Reduction Act of 2022. Such regulatory tailwinds, combined with favorable tax regimes and minimal royalties, could enhance the company's competitive edge. Additionally, the anticipated reduction of operating expenses and deferring capital spending illustrates a clear strategy to optimize financial performance in anticipation of increased production capacity. From a market perspective, these developments could be viewed favorably, as they suggest a forward-thinking management team effectively maneuvering through the challenges and opportunities of the lithium market.

Piedmont Lithium's positioning in the 'Battery Belt' and its proximity to auxiliary markets is of strategic importance, considering energy security concerns and the growing demand for electric vehicles. The Carolina Lithium project's low-cost production forecast echoes the broader industry trend of cost competitiveness being a significant differentiator in the electric vehicle supply chain. The company's current alignment with government policies and infrastructural advantages may enhance its long-term sustainability and market relevance. The financial highlights denote an imperative to balance immediate growth with long-term project development, as evidenced by the deferral of capital expenditures and the emphasis on long-term customer shipments. Investors should note the potential benefits stemming from Piedmont Lithium's advantageous location, government support and operational efficiencies, which could have a lasting impact on its market prospects.

NAL Achieves Record Quarterly Production, Carolina Lithium Mining Permit Received

  • Record quarterly production at NAL with recoveries exceeding target; full run-rate production on track for H2’24
  • Piedmont plans full-year customer shipments of approximately 126,000 dry metric tons (“dmt”), weighted to H2’24
  • Carolina Lithium mining permit issued in May 2024, accelerating funding discussions
  • Revenue of $13.4 million on sales of approximately 15,500 dmt of spodumene concentrate
  • $71.4 million in cash as of March 31, 2024; working capital nearly doubled from 2023 year end
  • 2024 outlook for shipments to more than double and investments to decrease more than 50% in H2’24 vs. H1’24

BELMONT, N.C.--(BUSINESS WIRE)--

Piedmont Lithium Inc. (“Piedmont,” the “Company,” "we," "our," or "us") (Nasdaq: PLL; ASX: PLL), a leading North American supplier of lithium products critical to the U.S. electric vehicle supply chain, today reported its first quarter 2024 financial results.

North American Lithium (“NAL”), the largest producing spodumene operation in North America, achieved record quarterly production of 40,439 dry metric tons (“dmt”) of spodumene concentrate in Q1’24. NAL lithium recoveries of 69% in March 2024 exceeded plan and set a new monthly record. Overall safety performance improved as NAL recorded its lowest quarterly incident rate since the restart of operations in March 2023. Construction of the crushed ore storage dome at NAL was materially completed during Q1’24 with commissioning advancing in Q2’24. This capital project, along with other improvements, is expected to result in increased NAL production and a reduction in NAL’s unit operating costs. NAL management estimates operations will achieve full run-rate production in H2’24. NAL is jointly owned by Piedmont (25%) and Sayona Mining Limited ("Sayona Mining") (75%).

In North Carolina, Piedmont achieved a significant milestone in May 2024 with the receipt of the mining permit for Carolina Lithium, a strategic project situated in the U.S. Battery Belt. The mining permit is a catalyst for accelerating discussions with potential funding parties, including government loan agencies and strategic partners who could provide capital, offtake, and technical support. The Company expects, based on its published technical studies, Carolina Lithium to be a low-cost producer of spodumene concentrate and lithium hydroxide and a key contributor to U.S. energy security. The project should benefit from exceptional infrastructure, minimal transport distances, low energy costs, a deep local talent pool, and proximity to cathode and battery customers as well as by-product markets. The competitive corporate tax regime offered in the U.S., the absence of significant royalties, and the benefits inherent in the Inflation Reduction Act of 2022 should also provide advantages to the project.

“We are very pleased with developments during the first quarter, including the milestones attained in Quebec and North Carolina. NAL achieved records in both safety performance and production in Q1’24, and the outlook is promising with the commissioning of the crushed ore dome currently underway. 2024 will be a year of two halves, with Piedmont shipments expected to more than double from H1’24 to H2’24 as we begin to emphasize shipments to core customers under long-term agreements, and Piedmont capital expenditures and investment in affiliates to fall by over 50% in H2’24 vs H1’24,” said Keith Phillips, President and Chief Executive Officer of Piedmont. “Carolina Lithium is one of only two significant spodumene projects in the United States, and receipt of our mining permit is a critical step in its development. We will now focus our efforts on aggressively pursuing strategic partnering and other funding conversations for our foundational asset. We also fortified our balance sheet by monetizing certain non-core investments during the quarter, and we are well-positioned to advance our projects with a continued focus on minimizing dilution to Piedmont shareholders.”

First Quarter 2024 Financial Highlights

All references to dry metric tons (“dmt”) in this release relate to spodumene concentrate.

 

 

 

Units

 

Q1’24

 

Q4’23

 

Q1’23

Sales

 

 

 

 

 

 

 

 

 

Concentrate shipped

 

dmt thousands

 

15.5

 

 

14.2

 

 

 

 

Revenue

 

$ millions

 

13.4

 

 

(7.3

)

 

 

 

Realized price(1)

 

$/dmt

 

865

 

 

(513

)

 

 

 

Li2O content(2)

 

%

 

5.5

 

 

5.7

 

 

 

 

Realized cost of sales(3)

 

$/dmt

 

799

 

 

756

 

 

 

 

 

 

 

 

 

 

 

 

 

Profitability

 

 

 

 

 

 

 

 

 

Gross profit

 

$ millions

 

0.7

 

 

(18.1

)

 

 

 

Gross profit margin

 

%

 

5.2

 

 

NM

 

 

 

 

Net loss

 

$ millions

 

(23.6

)

 

(25.4

)

 

(8.6

)

 

Diluted EPS

 

$

 

(1.22

)

 

(1.32

)

 

(0.47

)

 

Adjusted net loss(4)

 

$ millions

 

(11.9

)

 

(23.7

)

 

(10.2

)

 

Adjusted diluted EPS(4)

 

$

 

(0.61

)

 

(1.23

)

 

(0.55

)

 

Adjusted EBITDA(4)

 

$ millions

 

(12.4

)

 

(24.4

)

 

(12.0

)

 

Adjusted EBITDA margin(4)

 

%

 

NM

 

 

NM

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

 

 

 

 

 

 

 

Cash and cash equivalents(5)

 

$ millions

 

71.4

 

 

71.7

 

 

129.2

__________________________________

(1)

Realized price is the average estimated price, net of certain distribution and other fees, which includes reference pricing data up to the respective period end and is subject to final adjustment. The final adjusted price may be higher or lower than the estimated average realized price based on future price movements.

(2)

Weighted average Li2O content for shipments made during the respective period.

(3)

Realized cost of sales is the average cost of sales including Piedmont’s offtake pricing agreement with Sayona Quebec Inc. ("Sayona Quebec") for the purchase of spodumene concentrate at a market price subject to a floor of $500 per dmt and a ceiling of $900 per dmt, adjustments for product grade, freight, and insurance.

(4)

See non-GAAP Financial Measures at the end of this release for a reconciliation of non-GAAP measures.

(5)

Cash and cash equivalents are reported as of the end of the period.

NM - Not meaningful

First Quarter and Recent Business Highlights

Piedmont Lithium

  • Shipped approximately 15,500 dmt (~5.5% Li2O) of spodumene concentrate from NAL to customers in Q1’24.
  • In Q1’24, we sold our entire holdings in Sayona Mining and a portion of our holdings in Atlantic Lithium Limited ("Atlantic Lithium") for net proceeds of $49.1 million. The sale of our shares in Sayona Mining resulted in net proceeds of $41.4 million, a taxable gain of $22 million based on net proceeds less acquisition costs, and a reportable loss of $17.2 million driven by historical non-cash gains on dilution in Sayona Mining. The sale of our shares in Atlantic Lithium resulted in net proceeds of $7.7 million, a taxable gain of $1.1 million, and a reportable gain of $3.1 million. The sale of these shares had no impact on our joint ventures or offtake arrangements with either Sayona Quebec or Atlantic Lithium.
  • In February 2024, we initiated a cost-savings plan designed to reduce operating expenses by $10 million annually and defer 2024 capital spending to 2025. As part of this plan, we reduced our workforce by 28% and recorded $1.8 million in severance and severance-related costs, which includes $0.6 million of non-cash charges associated with accelerated stock compensation expense, in the first quarter of 2024. We expect to recognize the majority of our cost savings in 2024.
  • In March 2024, Ms. Dawne Hickton, an accomplished leader in the aerospace, energy, and metals industries, was appointed to Piedmont’s Board of Directors, further diversifying the Board’s executive, operational, and strategic guidance to the Company.
  • In Q1’24, the U.S. District Court for the Eastern District of New York granted Piedmont’s motion to dismiss a securities class action lawsuit, originally filed in July 2021, against Piedmont and two of its executives, which also resulted in the related derivative actions being dismissed.

North American Lithium (Quebec, Canada)

  • In Q1’24, NAL achieved record quarterly production of approximately 40,400 dmt and shipped approximately 58,000 dmt, of which approximately 15,500 dmt were sold to Piedmont. Quarterly production increased by 18% compared to the prior quarter. Safety performance also improved as NAL achieved its lowest quarterly recordable incident rate since restarting operations in March 2023.
  • In March 2024, operations at NAL achieved a record production month with 15,699 dmt of spodumene concentrate produced and three daily production records set between 710 dmt and 750 dmt. Lithium recoveries reached a record 69%, exceeding the ramp-up target of 67%.
  • In April 2024, following a detailed operational review, the joint venture partners of NAL agreed to complete several ongoing capital project initiatives and continue operations with the goal of completing ramp-up activities to achieve steady-state production in 2024.
  • In Q1’24, progress continued on two important capital improvement projects – a new crushed ore storage dome and a crushed ore re-feed system. These projects are expected to result in production increases and unit cost improvements. Commissioning is expected to conclude for both projects in May 2024.
  • Concentrate produced and shipped by NAL and concentrate shipped by Piedmont:

 

 

 

Share

 

Units

 

Q1’24

 

Q4’23

 

Q3’23

Piedmont Lithium

 

 

 

 

 

 

 

 

 

 

 

Concentrate shipped

 

100%

 

dmt thousands

 

15.5

 

14.2

 

29.0

 

 

 

 

 

 

 

 

 

 

 

 

North American Lithium

 

 

 

 

 

 

 

 

 

 

 

Concentrate produced

 

100%(1)

 

dmt thousands

 

40.4

 

34.2

 

31.5

 

Concentrate shipped

 

100%(2)

 

dmt thousands

 

58.0

 

23.9

 

48.2

__________________________________

(1)

Concentrate produced represents 100% of NAL’s production.

(2)

Concentrate shipped represents 100% of NAL’s shipments, inclusive of shipments to Piedmont.

Note: The table above reports quarterly and year-to-date information in accordance with Piedmont’s fiscal year reporting, which is on a calendar-year basis. Concentrate produced and concentrate shipped (above) are reported in the periods in which activities actually occurred. For financial statement purposes, Piedmont reports income (loss) from its 25% ownership in Sayona Quebec, which includes NAL, on a one-quarter lag.

Carolina Lithium (North Carolina)

  • In May 2024, Piedmont received the finalized mining permit for the construction, operation, and reclamation of Carolina Lithium following the posting of a $1 million reclamation bond to the state of North Carolina. The North Carolina Department of Environmental Quality’s Division of Energy, Mineral, and Land Resources approved the mining permit application on April 12, 2024.
  • Receipt of the state mining permit allows the Company to accelerate discussions with funding parties, including government loan agencies and strategic partners who could provide capital, offtake, and technical support. The Company’s goal is to put in place a strong funding plan that will maximize value for Piedmont shareholders.
  • Piedmont continues to engage with community stakeholders, including the Gaston County Board of Commissioners.

Ewoyaa Project (Ghana)

  • In January 2024, the Minerals Income Investment Fund, Ghana’s sovereign wealth fund, commenced its investment in Atlantic Lithium through its purchase of Atlantic Lithium’s common stock totaling $5 million.
  • In February 2024, Mr. Patrick Brindle, Piedmont’s Executive Vice President and Chief Operating Officer, stepped down as a member of Atlantic Lithium’s board of directors due to our reduction in ownership of Atlantic Lithium.

Tennessee Lithium (Tennessee)

  • Tennessee Lithium remains a key part of our development pipeline as a permitted project. Piedmont is evaluating the timeline of project development given the recent receipt of the state mining permit for Carolina Lithium.
  • In April 2024, the Company exited the purchase agreement for a nearby industrial complex and continues to negotiate a renewal of our option agreement for the planned project site.

2024 Outlook

 

 

Units

 

H1’24

 

H2’24

 

Full Year 2024

Shipments

 

dmt thousands

 

37 — 39

 

84 — 88

 

126

Capital expenditures

 

$ millions

 

7 — 9

 

3 — 5

 

10 — 14

Investments in and advances to affiliates

 

$ millions

 

25 — 26

 

7 — 12

 

32— 38

NAL is forecasted to achieve full run-rate production in H2’24. 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 and per the Company’s offtake agreement, Piedmont expects to ship approximately 126,000 dmt of spodumene concentrate in 2024, with quarterly variations due to shipping logistics and customer requirements. A shipment of approximately 13,200 dmt of spodumene concentrate held over from 2023, combined with our planned 113,000 dmt annual offtake from NAL, provides the basis for full-year shipment outlook. We are prioritizing contract customer shipments, weighted to H2’24, which we expect will provide more stable price realizations and reduce reliance on volatile spot market sales.

The majority of forecasted capital expenditures relate to Carolina Lithium and Tennessee Lithium. Investments in and advances to affiliates reflect cash contributions to Sayona Quebec and advances to Atlantic Lithium for the Ewoyaa project. Our outlook for forecasted capital expenditures and investments in and advances to affiliates is subject to market conditions.

Piedmont is in the process of retaining a financial advisor to assist in developing funding options for Ewoyaa that would minimize dilution to Piedmont shareholders.

Safety and Sustainability

In Q1’24, Piedmont continued to focus on building a culture of safety and awareness among employees. The Company began 2024 with a heightened focus on ramping up training requirements as part of the long-term objective to establish a robust safety and health management system. Increased identification and reporting of hazards improved along with strategies for addressing unsafe conditions.

Additionally, Piedmont prioritized its social commitments to key stakeholders, continuing engagement with community members about project development plans for our planned Carolina Lithium project. A town hall, one-on-one meetings with neighbors, tours of the field office, civic sponsorships, and a range of other community activities were conducted to inform community members and ensure their needs, values, and perspectives are taken into consideration as we advance the project.

Piedmont is targeting Q2’24 for the release of its annual Sustainability Report.

Q1 2024 Earnings Call

Date:

 

 

 

Thursday, May 9, 2024

Time:

 

 

 

8:30 a.m. Eastern Standard Time

Dial-in (Toll Free):

 

 

 

1 (800) 715-9871

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FAQ

What was Piedmont Lithium's revenue in Q1’24?

Piedmont Lithium reported revenue of $13.4 million in Q1’24.

What was the record quarterly production achieved at NAL in Q1’24?

NAL achieved record quarterly production of 40,439 dry metric tons of spodumene concentrate in Q1’24.

How much cash did Piedmont have as of March 31, 2024?

Piedmont had $71.4 million in cash and cash equivalents as of March 31, 2024.

What is the outlook for Piedmont's shipments in 2024?

Piedmont expects shipments to more than double in 2024 and investments to decrease by over 50% in H2’24 vs. H1’24.

When did Piedmont receive the mining permit for Carolina Lithium?

Piedmont received the mining permit for Carolina Lithium in May 2024.

Piedmont Lithium Inc.

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