The Sayona Mining Ltd (ASX: SYA) share price pain continues on Wednesday.
At the time of writing, the lithium miner's shares are down 12% to a new 52-week low of 3.7 cents.
This means that Sayona Mining's shares are now down 86% over the last 12 months.
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Why is the Sayona Mining share price crashing today?
Investors have been rushing to the exits today after the company revealed just how bad things are getting due to weak lithium prices.
According to its quarterly update, Sayona Mining reported a 76% decline in revenue quarter on quarter to $23 million.
But it gets much worse. To generate this revenue, Sayona spent approximately $77.6 million on production, staff costs, and administration.
This ultimately led to its cash balance falling from $233 million to $158 million during the three months.
Lithium price weakness starts to bite
During the three months, the company experienced a sizeable 52% quarter on quarter decline in its average realised selling price to A$946 per dry metric tonne (dmt).
At the same time, the company's unit operating cost increased 14% to A$1,397 per dmt.
This means that it is operating with a negative margin of A$451 per dmt and losing considerable money every time it pulls lithium out of the ground and sells it.
Clearly this isn't sustainable. And judging by the Sayona Mining share price performance today, the market appears to believe that something will have to give. This could mean following in the footsteps of Core Lithium Ltd (ASX: CXO) by suspending operations to conserve cash.
It is worth noting that Sayona Mining recently announced an operational review to optimise its cost structure. And while it hinted that it hoped to continue mining activities through the cycle, it is going to be very difficult with a realised selling price of just A$946 per dmt.
The results of the review are expected during the current quarter.
