Pilbara Minerals has reported improved financial performance towards the end of 2019, despite being impacted by difficult lithium market conditions.
The company today released its December 2019 half-year financial report, indicating an improvement in its cash gross margin to $11.5 million in the December 2019 quarter, compared to a $13.3 million loss in the September quarter.
Challenging lithium market conditions, resulted by weaker customer demands and lower spodumene concentrate prices, compelled Pilbara Minerals to launch moderating strategies at its Pilgangoora lithium-tantaulm project in Western Australia.
As part of its moderating measures, Pilbara Minerals slowed down its expansion program at Pilgangoora and preserved cash flow by drawing down on existing stockpiles to meet customer sales requirements.
The company also undertook significant plant improvement and optimisation works to improve its lithia recoveries, resulting in reduced unit operating costs.
Pilbara Minerals today announced that the changes formulated and implemented in the September quarter had resulted in financial benefits in the December quarter.
The effect of drawing down stockpiles and reducing cash costs during operations resulted in $500,000 net cash flow generation for operating activities conducted during the half-year.
Pilbara Minerals managing director Ken Brinsden, said he was happy with the company’s proactive response to the fluctuations in the lithium market.
“It has been a tough six months for all hard-rock lithium producers and lithium-ion supply chain participants in general, following the relatively weak demand conditions in the China domestic market,” Brinsden said.
According to Brinsden, Pilbara Minerals will continue to identify ways to manage cash flow as well as to diversify its customer base.
Pilbara Minerals is now looking to further improve its lithia recoveries to reduce operating costs.