Pilbara Minerals (ASX:PLS) share price on watch following record Q4 update

This lithium miner was on form in the fourth quarter…

| More on:
Mining worker making frame with his hands and peering through it

Image source: Getty Images

There are now two reasons for investors to keep an eye on the Pilbara Minerals Ltd (ASX: PLS) share price when it returns from its trading halt.

This follows the release of the lithium producer’s fourth quarter update this afternoon.

Why is the Pilbara Minerals share price in a trading halt?

On Tuesday the Pilbara Minerals share price was placed into a trading halt pending an application to the Supreme Court of Western Australia. The application is seeking orders in relation to its inadvertent failure to lodge a cleansing notice within the prescribed five-day period after the issue of shares on 25 June.

While this is very sloppy by Pilbara Minerals, it isn’t likely to have a material impact on its share price when it returns to trade.

One things that could, though, is the release of its fourth quarter update this afternoon.

How is Pilbara Minerals performing?

According to the release, the company was on form again during the fourth quarter, which could bode well for the Pilbara Minerals share price when it returns to trade.

The release explains that the company delivered production of 77,162 dry metric tonnes (dmt) of spodumene concentrate during the three months ended 30 June. This was achieved with a unit cash operating cost of US$441 per dmt, which was up 15% quarter on quarter. The increase in its cash cost was due largely to higher sea freight costs, additional investment in mining equipment, and higher royalty costs.

And while production was down slightly on the third quarter, it didn’t stop the company from reporting record spodumene concentrate shipments of 95,972 dmt. This is up from 71,229 dmt in the third quarter and exceeds its guidance of 75,000-90,000 dmt.

Also breaking records was its spodumene concentrate sales, which came in at 109,190 dmt. This is inclusive of tonnes loaded onto a vessel late in the March quarter which departed in early April.

Lithium pricing continues to improve

Also potentially giving the Pilbara Minerals share price a boost upon its return is management’s commentary regarding the lithium market.

It advised that there has been continued strengthening in global lithium materials demand. This led to China domestic lithium carbonate prices remaining stable and China domestic lithium hydroxide prices increasing by 16% since March. This means the latter has now regained its premium over the former.

In addition to this, it revealed that the spodumene concentrate spot market continued to tighten during the quarter.

Given the positive industry trends the company is experiencing, things are looking positive for its potential POSCO Downstream Joint Venture (DSJV). Management advised that things are progressing and both parties are targeting a Final Investment Decision in late August 2021.

The Pilbara Minerals share price has doubled in value in 2021.

Should you invest $1,000 in Pilbara Minerals right now?

Before you consider Pilbara Minerals, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Pilbara Minerals wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares