The Pilbara Minerals Ltd (ASX: PLS) share price is in the spotlight after reporting its quarterly update for June 2024.
Pilbara Minerals is one of the world’s largest lithium minerals. Its Pilgangoora operation is located in Australia.
Start of a recovery?
The ASX mining share reported that in the three months to June 2024, its production increased 26% quarter on quarter to 226.2kt of spodumene concentrate (raw lithium) and it sold 235.8kt, up 43%.
Pilbara Minerals achieved an average realised price for its sales of US$840 per tonne, up 4% from the US$804 per tonne in the March 2024 quarter. At the end of the quarter, the miner completed price reviews with two major customers and it resulted in “improved” pricing outcomes. This is expected to be realised in the September quarter.
This combination of selling more resources at a higher price led to quarterly revenue jumped 58% to A$305 million. Pleasingly, the unit operating costs (FOB – free on board) decreased 12% to A$591 per tonne, suggesting that the company’s mining profitability increased in the June 2024 quarter.
The ASX lithium share reported its cash balance declined by 9% to A$1.6 billion over the quarter.
Annual figures
With June being finished, the company was able to tell investors about its FY24 figures.
It produced 725.3kt of production (up 17%) and it sold 707.1kt of resource (up 16%). The realised price in FY24 was US$1,176 per tonne, a massive 74% lower than what it achieved in FY23.
FY24 revenue was A$1.25 billion, down 69% year on year. Pilbara Minerals’ unit operating costs (FOB) were A$654 per tonne, up 7%.
The lithium company finished FY24 with a cash balance of A$1.6 billion, down 51%.
Pilbara Minerals said its FY24 results met or exceeded guidance for production, unit operating costs and capital expenditure.
Other developments
Recently, the company has commenced construction of the mid-stream plant at its Pilgangoora operation – it wants to take a bigger role in the process of turning raw lithium in battery-ready lithium.
The company also released its P2000 pre-feasibility study, which showed that production capacity at the Pilgangoora operation could be expanded to 2 million tonnes per annum with construction of an extra plant.
Final thoughts on the Pilbara Minerals share price
The company’s FY25 guidance is for production of between 800kt to 840k, unit operating costs (FOB) of between US$650 to US$700 per kt and capital expenditure will be between A$615 million to A$685 million.
It’s possible that the company’s realised price for the lithium could keep rising from here, which would be great news for its profitability. However, the lithium price is still a long way below where it was two years ago.
I’m not calling it a buy, but it could be a turnaround opportunity if lithium prices were to climb and mining costs stopped inflating. For me, there are other ASX growth shares I’d rather buy.
