The Pilbara Minerals Ltd (ASX: PLS) share price is charging higher on Wednesday.
At the time of writing, the lithium miner's shares are up 5% to $3.03.
This follows the release of the miner's highly anticipated fourth quarter update this morning.
Pilbara Minerals share price charge higher on Q4 update
For the three months ended 30 June, Pilbara Minerals delivered record quarterly production of 226,200 dry metric tonnes (dmt) of spodumene concentrate.
This represents a 26% quarter on quarter increase and is significantly stronger than the market was expecting. For example, Goldman Sachs was forecasting production of 194,000 dmt and the consensus estimate was for a smaller increase in production to 184,000 dmt.
This production growth helped drive unit costs lower during the quarter. Pilbara Minerals' unit operating cost (FOB) was A$591 per dmt, which is down 12% on the prior quarter. Management notes that this reflects the continuous operation of the P680 primary rejection facility and improved recoveries resulting from successful plant optimisation.
Also coming in ahead of expectations was the company's sales volumes. Pilbara Minerals reported a 43% quarter on quarter increase in sales to 235,800 tonnes. Goldman was expecting spodumene sales of 209,000 tonnes.
One slight disappointment was its average realised selling price of US$840 per dmt. This fell short of Goldman's expectations of an increase to US$923 per dmt.
Nevertheless, this couldn't stop Pilbara Minerals from reporting a 58% quarter on quarter increase in quarterly revenue to A$305 million. This took its total revenue to A$1,254 million for FY 2024, which is down 69% year on year due to a collapse in lithium prices.
At the end of June, Pilbara Minerals had a cash balance of A$1.6 billion. This is down A$156 million since the end of March due to continued capital expenditure for P680 and P1000 expansion projects.
FY 2025 guidance
Management is guiding to another increase in production in FY 2025. However, it will be lower than the annualised run rate implied by its fourth quarter performance.
Pilbara Minerals expects production to be in the range of 800,000 dmt to 840,000 dmt, which is up from 725,300 dmt in FY 2024. It commented:
Production volume is expected to be 800-840kt which is higher than FY24 due to the benefits of P680 primary rejection but is lower than annualising June Quarter FY24. […] June Quarter results represent a full quarter for the Operation with P680 primary rejection optimised and without the impact of any new projects being commissioned or ramped up.
By comparison, during the course of FY25 two major brownfields expansions will be integrated into the operation.
This will also likely mean higher costs for the company in FY 2025. It is guiding to unit operating costs (FOB) of A$650 to A$700 per tonne. Management said:
FY25 expansion also requires increased operating costs to support the successful handover and ramp up of the P680 and P1000 projects before operating cost leverage from P1000 production volume rates begins to be achieved in FY26.
This investment is reflected in a higher unit operating cost FOB guidance range of A$650 – 700/t versus the June Quarter. The midpoint of this range at approximately A$675/t is broadly in line with March Quarter FY24 performance which was impacted by the optimisation of the P680 primary rejection facility.
The company will also be eating into its cash reserves with its capital expenditure plans of A$615 million to A$685 million.
The Pilbara Minerals share price remains down 35% since this time last year.
