Pilbara Minerals Ltd (ASX: PLS) shares are on the move on Wednesday morning.
At the time of writing, the lithium miner's shares are up almost 4% to $1.74.
Why are Pilbara Minerals shares racing higher?
Investors have been buying the company's shares today following the release of its eagerly anticipated fourth quarter update.
For the three months ended 30 June, Pilbara Minerals reported a massive 77% quarter on quarter increase in spodumene production to 221,300 tonnes.
Management advised that this reflects the increased output from the optimised Pilgan Plant following completion of the P1000 expansion in the March quarter.
Also increasing strongly were its sales volumes, which grew 72% quarter on quarter to 216,000 tonnes.
Another positive was that its unit operating costs fell 10% from the third quarter to A$619 per tonne or US$397 per tonne. Management notes that this reflects higher production volume from the expanded Pilgan plant and the benefits of the P850 operating model.
However, one key metric that went in the wrong direction was its average realised price, which was down 17% to US$599 per tonne (CIF China) on a ~SC5.1 basis.
Nevertheless, the increased sales volumes partially offset this and underpinned a 28% increase in revenue to $193 million.
Pilbara Minerals achieved a cash margin from operations of $98 million, which led to its cash balance ending the period at $1 billion.
Guidance delivered
In light of the above, Pilbara Minerals either achieved or outperformed its guidance in FY 2025.
Production for the full year came in at 754,600 tonnes, which is ahead of its guidance range of 700,000 tonnes to 740,000 tonnes.
Unit operating costs (FOB) were A$627 per tonne for FY 2025, which was in line with its guidance range of A$620 to A$640 per tonne.
And finally, its capital expenditure came in at A$569 million. This was at the low end of its guidance range of A$565 million to A$610 million.
FY 2026 guidance
Looking ahead, management is guiding to production of 820,000 tonnes to 870,000 tonnes with a unit operating cost (FOB) of A$560 to A$600 per tonne.
Capital expenditure is expected to drop to between A$300 million and A$330 million for the 12 months.
Commenting on the year ahead, the company said:
Production volumes are expected to remain steady quarter-on-quarter, supported by four scheduled maintenance shutdowns. FY26 spodumene production is guided at 820kt to 870kt 18 , reflecting continued benefits from Pilgan plant expansions. The increased production rate is also expected to support lower unit operating cost (FOB) of $560–$600/t. The Company will also continue to progress its Cost Smart program which has been tasked with identifying and executing a pipeline of continuous improvement and cost reduction initiatives across the business.
