Pilbara Minerals share price climbs as lithium prices surge

How did Pilbara Minerals perform in the March quarter?

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Female miner smiling in front of a mining vehicle as the Pilbara Minerals share price rises

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Key points

  • The Pilbara Minerals share price is 3.65% in the green after the company released its quarterly results
  • The lithium price continued to skyrocket over the March quarter 
  • Pilbara Minerals' cash balance surged by 16% despite lower production 

The Pilbara Minerals Ltd (ASX: PLS) share price is in the green today on the back of the company’s quarterly results.

The ASX lithium producer’s share price is currently $2.70, a 3.65% gain. In contrast, the S&P/ASX 200 Index (ASX: XJO) is up 1% today.

Let’s take a look at what Pilbara Minerals has told the market.

Pilbara Minerals share price jumps on quarterly results

Highlights included:

  • Cash balance of $284.9 million, a 16% increase on the previous quarter
  • Production of 81,431 dry metric tonnes of spodumene concentrate (dmt), down 2%
  • Spodumene concentrate shipments of 58,383 dmt, down 25.8%
  • Average spodumene price of US$2,650/dmt.

What else happened during the quarter?

The Pilgan operations contributed to an operating cash flow of $113.9 million due to “positive pricing dynamics”. The company received $169.2 million in customer sales from production at the Pilgan plant with $37.9 million spent on capital activities and $25.1 million repaying a syndicated finance facility.

Pilbara reported lithium prices surged in the March quarter, reaching new record highs. Battery grade lithium carbonate averaged US$76,700 a tonne in March, a 95% increase year to date. In fact, in March 2021, lithium carbonate was trading at just US$13,400 a tonne.

Production volumes were slightly down on the previous quarter due to COVID-19 impacting staff, as well as the tight labour market in general.

A port delay loading a 20,000 dmt cargo had a negative impact on shipments.

The cash balance was also impacted by a debt repayment of $25.1 million and the shipment delay.

The spodumene price is in line with the company’s prior guidance of US$2,600–$3,000 per dmt.

Pilbara also advised it completed its fourth Battery Material Exchange (BMX) auction after the market close yesterday. The company said it will accept the highest bid of US$5,650 per dmt for a 5,000 dmt cargo.

What’s next?

Company managing director and CEO Ken Brinsden will step down by the end of the year. Recruitment agency Derwent is conducting an extensive search for a new CEO. An announcement might be made in the third quarter.

Pilbara has maintained an FY22 production guidance of 340,000–380,000 dmt. However, the company warns that production could be in the lower half of the guidance due to potentially ongoing COVID-19 impacts.

Pilbara Minerals share price snapshot

The Pilbara Minerals share price has surged 134% in the past 12 months. It has lost 23% year to date. Over the past five trading days, the company’s shares have fallen 6%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned around 4% over the past year.

Pilbara Minerals has a market capitalisation of about $8 billion based on the current share price.

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.

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