Pilbara Minerals has carried out its production moderation strategy amid the coronavirus pandemic, finishing the March quarter with $108.2 million in cash.
The company’s quarterly cash position was up $2.7 million from the end of the December quarter in 2019.
With a focus on plant recovery improvements, levelling production with customer demand and minimising investment in working capital, Pilbara Minerals’ quarter is “solid”, according to managing director and chief executive Ken Brinsden.
“The solid operational and financial performance of the Pilgangoora project during the March quarter shows that our moderated production strategy continues to defend the business despite the relatively weak backdrop of demand both before and during the COVID-19 (coronavirus disease of 2019) impact in China,” he said.
“A combination of improved product recoveries from the plant, lower unit operating costs and the ability to continue to ship product to our customers despite the current disruptions being experienced globally as a result of COVID-19, has enabled us to strengthen our balance sheet during the quarter.”
Pilbara Minerals shipped 33,893 dry metric tonnes of spodumene concentrate product in the March quarter, which the company stating that it was “consistent with the lower end of the previously announced sales guidance of 35 metric kilotons to 50 metric kilotons”.
The recovery of spodumene to product has allowed the company to achieve unit cost reductions during plant operation.
“The company continues to closely monitor the situation both within China and elsewhere to determine the potential impact of COVID-19 on the lithium market and will continue to engage with existing customers and potential customers on future spodumene concentrate sales and shipments,” Brinsden said.
“As the market situation remains uncertain, further commentary in respect of sales conditions and the market outlook will be provided as conditions change and/or within the March quarterly report, which will be released later this month.”
Pilbara Minerals is confident that its financial position will allow it to continue reaching all debt service requirements, including the US$100 million ($164.2 million) senior secured bond that was used to fund stage one of the Pilgangoora project in Western Australia back in June 2017.