PLS Group Ltd (ASX: PLS) shares are jumping higher into the green in Wednesday lunchtime trade.
At the time of writing, the lithium shares are up around 7% to $3.07 each.
Today's share price hike follows two consecutive days of gains this week. The shares have now rebounded 17% since hitting a 52-week low of $2.62 on Friday last week, and they're almost flat on trading levels 12 months ago.
However, after a strong rally earlier this year, the ASX mining shares are still down around 29%.
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What is going on with the lithium miner's shares this week?
The rebound is two-fold.
As a pure-play lithium producer, PLS Group is heavily tied to lithium prices. After crashing over 21% over the past month, lithium prices have jumped higher this week, up around 2.5% over the past two days to around CNY 99,350 per tonne at the time of writing, according to Trading Economics data.
The lithium price bump is most likely related to tighter supply. Delays are ongoing at CATL's Jianxiawo mine in China, and there have also been reports this week that upstream miners and sellers have begun holding back material and refusing to sell at low bids to defend their margins.
There has been some company specific news out of PLS Group this morning too, which has likely contributed to the company's share price spike.
PLS wrote a note to the ASX to confirm it has signed a long-term agreement with Fortescue Ltd (ASX: FMG) to cut operating costs and move closer to net zero emissions.
Looking ahead, Pilbara Minerals and Fortescue will work through approvals and design to commence power supply by 2029. The improved infrastructure will future-proof Pilgangoora's expansion plans, with the aim of achieving net zero Scope 1 and 2 emissions by the 2040s.
Also this morning, PLS Group posted its September quarter activities report. Highlights include record production of 267.6kt and sales of 223.6kt (reflecting shipment timings) resulting in revenue of $563M, and a reduction in its unit operating costs, to US$539 per tonne, underpinned by operational efficiencies and a greater volume of capitalised waste.
The miner saw a 24% quarter-on-quarter decrease in sales revenue, but still managed to end the quarter with an operating cash margin of $392 million, demonstrating strong underlying cash generation.
Can PLS Group's rebound keep going?
According to expert forecasts, yes.
TradingView data shows that the majority (13 out of 19) have a buy/strong buy rating on PLS Group shares. The average $4.58 target price implies an upside of around 50% at the time of writing. The maximum $5.80 target price suggests the shares have the potential to jump even higher, by another 89%, over the next 12 months.
