The Pilbara Minerals Ltd (ASX: PLS) share price is under the microscope today after announcing its production and sales for the September quarter.
Pilbara Minerals is a large lithium miner on the ASX.
September numbers
The ASX lithium share said that it produced 147,105 dry metric tonnes (dmt) of spodumene concentrate (lithium) – this was a 16% increase from the June 2022 quarter.
Pilbara Minerals’ Ngungaju Plant achieved its capacity of between 180,000 dmt to 200,000 dmt per year.
It sold 45,041 dmt of ‘middlings’ product, which was produced during comissioning of the Ngungaju Plant.
The business reported an average realised sales price of US$4,266 per dmt for its shipped spodumene concentrate. This equates to a reference price of US$4,813 per dmt when adjusted for lithia content (that compares to $4,267 per dmt in the June 2022 quarter).
Management noted that it has achieved strong pricing from recent Battery Material Exchange sale auctions. I reported on the latest auction.
It finished the quarter with $1.375 billion of cash. Including irrevocable letters of credit for shipments completed up to 30 September 2022, the cash balance is $1.5 billion.
Project development
The company noted two different things in its update.
The P680 project has commenced, with bulk earthworks underway and long-lead item contracts awarded.
Construction of the 43,000 tonnes per annum LHM primary lithium hydroxide chemical processing facility in South Korea in joint venture with POSCO was progressed, with certain key contracts awarded and preliminary site activities underway.
My thoughts on the Pilbara Minerals share price
The huge cash balance makes this business even more interesting. I think the progress it’s making on getting more involved with the lithium supply chain is very promising, as it will allow Pilbara Minerals to have more control and also enable to capture some of that margin.
With the Pilbara Minerals share price up more than 50% this year, I’m not sure it’s great value right now. It depends what the lithium price does in the coming months and years, which is largely unknowable. I think lithium has a promising future, but I’m not sure how sustainable the current price is, so I’d be happy to wait for a pullback.
For now, there are other ASX growth shares that I want to focus on.
