The Piedmont Lithium Inc (ASX: PLL) share price is up 4.55% to 69 cents amid news the company has received a US$31.6 million payment for its inaugural lithium shipment.
The partial prepayment has materially boosted the lithium company's balance sheet. Its cash position is now approximately US$100 million.
Let's look into the details.
Piedmont Lithium share price spikes on revenue news
Piedmont owns a 25% stake in the North American Lithium (NAL) Project.
NAL is a joint venture with Sayona Mining Ltd (ASX: SYA), which owns 75%.
NAL began production in March.
Earlier this month, Sayona Mining announced the JV's first revenue and shipment to an international buyer.
That shipment totalled approximately 20,500 dry metric tonnes (dmt) of lithium spodumene concentrate.
Piedmont itself has an offtake agreement to buy lithium concentrate from NAL.
The company says NAL's production ramp-up is going well. It therefore expects to receive its full 2023 allocation of 56,500 dmt of lithium concentrate, as planned.
Piedmont's own first shipment will total 15,000 dmt. It will leave port in September and go to an unnamed international buyer.
President and CEO Keith Phillips said:
This is a significant day for Piedmont Lithium as we announce the first shipment of lithium concentrate under our offtake agreement with NAL and the receipt of a prepayment, which significantly increases our cash position.
… we expect sales from Piedmont Shipments to help fund out strategic initiatives while reducing our need to raise equity in the market.
What is Piedmont Lithium?
Piedmont is an Australian company.
Its long-term goal is to become one of the largest lithium hydroxide producers in North America.
It wants to become a key supplier in the burgeoning electric vehicle manufacturing industry.
Electric vehicle manufacturers prefer lithium hydroxide to lithium carbonate because it delivers better battery capacity.
Piedmont Lithium owns some lithium projects itself and has partnered with other companies to source spodumene concentrate.
Along with its JV in NAL, which is located in Quebec, Piedmont has also partnered with Atlantic Lithium (ASX: A11) to get spodumene from its Ghana mine.
Last month, Piedmont announced it had received all the necessary permits to start construction of its Tennessee Lithium hydroxide manufacturing plant next year. It is targeting first production in 2026.
The company hopes to produce 30,000 metric tonnes of lithium hydroxide per year.
Piedmont Lithium share price snapshot
The Piedmont Lithium share price is down 22.5% over the past 12 months.
