- North American Lithium ramp up continues with record quarterly
production in Q4’23
- Operating cost improvements expected upon completion of key
capital projects
- Piedmont offtake agreement provides strong leverage to
anticipated recovery in lithium prices
- Ewoyaa advancing through approvals process with Final
Investment Decision anticipated in 2025
- Piedmont and Atlantic currently co-funding modest project
development costs in advance of FID
- Pursuing financing options non-dilutive to Piedmont’s
shareholders to fund capex in 2025+
- Permitting, partnering, and debt funding discussions
progressing for domestic projects
- Large, strategic projects positioned for development in
stronger markets
- Initiated cost savings plan in Q1’24 targeting ~$10 million in
annual run rate savings
- Piedmont ended 2023 with $72 million in cash and currently
holds marketable securities of ~$38 million
Piedmont Lithium (“Piedmont” or the “Company”) (Nasdaq: PLL;
ASX: PLL), a leading global supplier of lithium resources
critical to the U.S. electric vehicle (“EV”) supply chain, today
provided an update on key business and portfolio activities.
Quebec – North American
Lithium
Ramp up continues on target at North American Lithium (“NAL”),
Piedmont’s joint-venture mining operation in Quebec. NAL produced
34,237 dry metric tons (“dmt”) of spodumene concentrate in Q4’23,
at an average grade of 5.5% Li2O, representing a 9% increase in
production from the prior quarter. Operations achieved records in
concentrate production (13,954 dmt), mill availability (80%), and
global lithium recovery (66%) in December 2023.
Cash operating costs at NAL are expected to improve upon
completion of important capital projects in mid-2024. In
particular, completion of the crushed ore storage dome is expected
to enable the operation to achieve full production rates and result
in meaningfully lower unit production costs. Furthermore, mining
costs are currently elevated with activity focused in the area of
pre-existing underground mine works dating from the 1950s. Unit
mining costs are expected to improve once operations have moved
past the old mining works.
Inclement weather and port congestion resulted in the delay of
one of Piedmont’s planned Q4’23 shipments, with 14,248 dmt of
spodumene concentrate shipped during Q4’23 and 13,104 dmt being
shipped in mid-January 2024. Piedmont expects to begin deliveries
under its long-term contracts in 2024 and reduce reliance on
volatile spot market sales.
Piedmont is working with its NAL joint-venture partner, Sayona
Mining (ASX: SYA), to conduct a strategic review of NAL operations.
The objective of the review is to continue improving NAL’s
productivity and operating costs, with a view toward positioning
NAL to continue to operate throughout the market cycle.
“We are very pleased with the progress at NAL and anticipate
continued operating improvements through 2024," said Keith
Phillips, President and Chief Executive Officer of Piedmont
Lithium. “NAL is North America’s only operating spodumene mine, and
as such, is quite strategic to the long-term customers we serve. As
we complete our operational review with our partners at Sayona, our
goal is to optimize production rates and operating costs and
maintain leverage for the recovery in lithium prices that we
anticipate based upon market dynamics and historical pricing
trends.”
Ghana – Ewoyaa Lithium Project
(“Ewoyaa”)
Piedmont and its partner, Atlantic Lithium (AIM: ALL; ASX: A11)
(“Atlantic”), continue to advance development of the Ewoyaa project
in Ghana. Atlantic announced recently that the Minerals Income
Investment Fund of Ghana (“MIIF”) completed a $5 million investment
in Atlantic and discussions continue regarding MIIF’s potential
investment of $27.9 million directly into Ewoyaa for a 6% project
stake, which would reduce funding requirements for Piedmont and the
project’s other partners.
Construction at Ewoyaa is targeted to commence in 2025 following
receipt of required permits and approvals, which are expected later
in 2024. Piedmont expects Ewoyaa funding will be minimal in 2024
and is evaluating a range of options that would be non-dilutive to
Piedmont shareholders to fund its share of project capital in 2025
and beyond. Piedmont expects to submit a formal application for the
Ewoyaa project debt financing later this quarter to the U.S.
International Development Finance Corporation. The size and terms
of any such arrangement will be the subject of due diligence and
negotiation, but customary project financing could account for a
majority of project capital. Separately, Piedmont is exploring
possible funding related to its 50% offtake interest in the
project. Of note, Atlantic recently announced completion of Stage 1
of a competitive offtake partnering process for the 50% of the
Ewoyaa material controlled by the joint venture.
“We are excited about the potential of the Ewoyaa project,”
commented Mr. Phillips. “Based on technical studies, Ewoyaa is
expected to be a large operation offering the potential of a high
return on invested capital given its relatively low capex and opex
profile. We expect 2024 project spending to be minimal with a focus
on advancing the project through the environmental permitting and
approvals processes to prepare for an ultimate investment decision
in 2025.”
United States Projects
Piedmont’s projects in North Carolina and Tennessee are central
to its long-term strategy of developing an integrated lithium
hydroxide business in the United States. In the current lithium
price environment, the Company is managing the pace of development
and capital spending at both Carolina Lithium and Tennessee
Lithium, including deferrals of property purchases, engineering
expenses, and other development costs.
On January 18, the Company delivered its formal response to a
third request for additional information (ADI #3) to the North
Carolina Division of Energy, Minerals, and Land Resources
(“DEMLR”). DEMLR is currently reviewing the response and a decision
is possible in the coming weeks. In the event Piedmont receives a
positive decision on the Carolina state mining permit, the Company
would prepare for local project rezoning and permits while
continuing to work with state agencies in North Carolina to obtain
final air and industrial discharge permits.
Corporate
Piedmont finished 2023 with $72 million in cash and currently
holds approximately $38 million in marketable securities. The
Company intends to reduce its capital spending in 2024 and control
operating expenses through expense management that the Company
views as prudent, including a recently completed 27% reduction in
force. The Company expects to complete the majority of its cost
savings initiatives by the end of Q1’24 and is targeting
approximately $10 million in annual run rate savings.
“These cost reduction actions, while difficult, are necessary to
position the Company for the long-term. Lithium prices have fallen
sharply, and the market consensus is currently negative. However,
lithium has been a cyclical business over the past decade with
trough markets in pricing generally followed by new record highs,”
commented Mr. Phillips. “As they say in the mining business, ‘the
solution to low prices is low prices,’ and announcements of
capacity curtailments and new project deferrals have recently
become commonplace with more likely to come. At today’s lithium
prices and equity valuations, new project development is expected
to be challenging for all, and if EV markets continue to grow, then
another period of lithium shortages appears likely to follow.”
“We believe we are extremely well-positioned as a partner in
North America’s only producing spodumene mine and in an exceptional
low-capex development project in Africa, with tactical optionality
to build downstream businesses in two locations in the United
States. We have taken a series of measures we believe are judicious
to protect shareholder value in this downturn, while remaining
strategically positioned for the lithium market recovery that we
foresee,” said Mr. Phillips.
Legal
On January 18, 2024, 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.
About Piedmont Lithium
Piedmont Lithium Inc. (Nasdaq: PLL; ASX: PLL) is developing a
world-class, multi-asset, integrated lithium business focused on
enabling the transition to a net zero world and the creation of a
clean energy economy in North America. Our goal is to become one of
the largest lithium hydroxide producers in North America by
processing spodumene concentrate produced from assets where we hold
an economic interest. Our projects include our Carolina Lithium and
Tennessee Lithium projects in the United States and partnerships in
Quebec with Sayona Mining (ASX: SYA) and in Ghana with Atlantic
Lithium (AIM: ALL; ASX: A11). We believe these geographically
diversified operations helps us to play a pivotal role in
supporting America’s move toward energy independence and the
electrification of transportation and energy storage. For more
information, follow us on Twitter @PiedmontLithium and visit
www.piedmontlithium.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of or as described in securities legislation in the
United States and Australia, including statements regarding
exploration, development construction, production, and ramp up
activities or the timing of these activities, of Sayona Mining,
Atlantic Lithium and Piedmont, including regarding operating cost
improvements, regulatory approvals or permits or the timing
thereof, project spend, timing of completion of capital projects
and the effects of such projects, timing of planned deliveries and
ability to improve productivity; current plans for Piedmont’s
mineral and chemical processing projects; Piedmont’s potential
acquisition of an ownership interest in Ewoyaa, including financing
options, the timing of final investment decisions and project
spend; strategy; market cycles; lithium prices; equity values;
costs of new project developments; lithium shortages; lithium
market recovery; certain Company approvals, permitting, partnering
and debt funding discussions; a recently completed workforce
reduction; expense management and possible or assumed future
financial results or financial condition. Such forward-looking
statements involve substantial and known and unknown risks,
uncertainties, and other risk factors, many of which are beyond our
control, and which may cause actual timing of events, results,
performance or achievements and other factors to be materially
different from the future timing of events, results, performance,
or achievements expressed or implied by the forward-looking
statements. Such risk factors include, among others: (i) that
Piedmont, Sayona Mining or Atlantic Lithium may be unable to
commercially extract mineral deposits, (ii) that Piedmont’s, Sayona
Mining’s or Atlantic Lithium’s properties may not contain expected
reserves, (iii) risks and hazards inherent in the mining business
(including risks inherent in exploring, developing, constructing
and operating mining projects, environmental hazards, industrial
accidents, weather or geologically related conditions), (iv)
uncertainty about Piedmont’s ability to obtain required capital to
execute its business plan, (v) Piedmont’s ability to hire and
retain required personnel, (vi) changes in the market prices of
lithium and lithium products, (vii) changes in technology or the
development of substitute products, (viii) the uncertainties
inherent in exploratory, developmental and production activities,
including risks relating to permitting, zoning and regulatory
delays related to our projects as well as the projects of our
partners in Quebec and Ghana, (ix) uncertainties inherent in the
estimation of lithium resources, (x) risks related to competition,
(xi) risks related to the information, data and projections related
to Sayona Mining or Atlantic Lithium, (xii) occurrences and
outcomes of claims, litigation and regulatory actions,
investigations and proceedings, (xiii) risks regarding our ability
to achieve profitability, enter into and deliver product under
supply agreements on favorable terms, our ability to obtain
sufficient financing to develop and construct our projects, our
ability to comply with governmental regulations and our ability to
obtain necessary permits, (xiv) our ability to deliver on our
expense management efforts and other cost improvements expected
upon completion of key capital projects as well as our future cash
payments associated with these initiatives and potential future
impairment charges and (xv) other uncertainties and risk factors
set out in filings made from time to time with the U.S. Securities
and Exchange Commission (“SEC”) and the Australian Securities
Exchange, including Piedmont’s most recent filings with the SEC.
The forward-looking statements, projections and estimates are given
only as of the date of this press release and actual events,
results, performance, and achievements could vary significantly
from the forward-looking statements, projections and estimates
presented in this press release. Readers are cautioned not to put
undue reliance on forward-looking statements. Piedmont disclaims
any intent or obligation to update publicly such forward-looking
statements, projections, and estimates, whether as a result of new
information, future events or otherwise. Additionally, Piedmont,
except as required by applicable law, undertakes no obligation to
comment on analyses, expectations or statements made by third
parties in respect of Piedmont, its financial or operating results
or its securities.
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version on businesswire.com: https://www.businesswire.com/news/home/20240206121354/en/
For further information:
Erin Sanders SVP, Corporate Communications & Investor
Relations T: +1 704 575 2549 E: esanders@piedmontlithium.com
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