Pilbara Minerals Ltd (ASX: PLS) shares are on the move on Friday.
In morning trade, the lithium miner's shares are up 6% to $3.15.
This follows the release of the company's first quarter update before the market open.
Pilbara Minerals shares jump on strong update
For the three months ended 30 September, Pilbara Minerals reported spodumene production of 224,800 tonnes. This was an increase of 2% on the previous quarter.
Management notes that its production growth reflects stable output from the Pilgan Plant at the Pilgangoora Operation following completion of the P1000 expansion in FY 2025.
Sales volumes for the quarter came in at 214,000 tonnes, which is a 1% decline from the June quarter and in line with consensus estimates.
This was achieved with an average estimated realised price of US$742 per tonne (CIF China) on a ~SC5.3 basis. This represents a 20% increase relative to the June quarter on a SC6.0 basis and is ahead of consensus estimates.
In light of this improved pricing, Pilbara Minerals was able to generate a 30% increase in revenue to $251 million.
Costs fall
Another positive from the release, which is likely to be going to down well with investors, is the company's costs, which declined over the quarter.
Management advised that its unit operating cost (FOB) decreased 13% to $540 per tonne (US$353 per tonne) compared to the prior quarter. This reflects the continued realisation of operational efficiencies and cost reductions implemented across all areas of the business.
This ultimately led to the company reporting a cash margin from operations (receipts from customers less operating costs) of $8 million. However, it is worth highlighting that there are $50 million in customer receipts not included due to timing.
Combined with its capital expenditure, this saw Pilbara Minerals' cash balance fall from $974 million to $852 million during the quarter.
Looking ahead, Pilbara Minerals' costs are expected to increase as the financial year progresses. Management explains:
While the September Quarter delivered strong cost performance, unit costs are expected to face upward pressure over the remainder of the financial year due to seasonal operational challenges typically associated with the wet season, and the continued implementation of end-to-end optimisation initiatives, including increased processing of contact ore.
Nevertheless, FY 2026's unit operating costs (FOB) are expected to remain within the full year guidance range. In addition, management advised that its production remains on track to achieve its guidance for the year.
