NAL Operations Ramping, Growth Projects Progressing, and Balance Sheet Reinforced
BELMONT, N.C.–(BUSINESS WIRE)–$PLL #EV–Piedmont Lithium Inc. (“Piedmont” or the “Company”) (Nasdaq:PLL; ASX:PLL), a leading global supplier of lithium resources critical to the U.S. electric vehicle supply chain, today announced fourth quarter and full year financial results for 2023.
“2023 was a pivotal year for Piedmont as our Quebec joint-venture, North American Lithium (“NAL”), successfully commenced operations last March, leading to the first revenue in Q3 via shipments made under our NAL offtake agreement. As the largest lithium operation in North America, NAL has been successfully ramping up production over the past 10 months, with production hitting record levels in December. We are completing a few remaining capital projects in the first half of 2024 that we expect will result in further improvements in production and operating costs as NAL looks to achieve full run-rate production levels later this year.
“We are pleased with the production ramp-up and prospects for long-term operations at NAL; however, our 2023 financial results were adversely impacted by the sharp downturn in lithium prices that occurred during the year and into 2024. We plan to shift our offtake volumes towards our multi-year customer contracts and reduce shipment volumes under spot sales agreements. We expect this strategy to result in less volatility and higher average realized prices.
“While NAL is a current focus given its status as a producing asset, we believe Piedmont is well-positioned for the long-term with growth opportunities across our project portfolio. In Ghana, we are encouraged by the support of the Ghanaian government evidenced by the sovereign wealth fund’s investment into the Ewoyaa Lithium Project (“Ewoyaa”) announced last year. Ewoyaa continues to advance through the permitting and approvals processes, and the project is poised to be a near-term spodumene producer with exceptional logistics and relatively modest capital and operating costs.
“We continue to make advances towards our mining permit in North Carolina for our Carolina Lithium Project, with the most recent set of questions from the state indicating that the review process for this important milestone could be approaching its conclusion. Our Carolina and Tennessee projects are strategically located in the growing Battery Belt and critical to the goal of achieving some level of lithium self-sufficiency in America. These projects will be advanced on timelines that take into account lithium market conditions, strategic partnering efforts, and government debt financing opportunities.
“Lithium has been a cyclical business for the past decade with trough markets in pricing generally followed by new record highs. As we navigate the current market, which seems to be in the throes of ‘peak pessimism,’ we’re bolstering our balance sheet by monetizing non-core assets, deferring capital spending, and employing cost savings plans designed to reduce our corporate overhead. Our goal is to protect shareholder value in this downturn, while remaining strategically positioned for the lithium market recovery that we believe is a matter of time.”
Keith Phillips, Piedmont Lithium President and Chief Executive Officer
Fourth Quarter and Full Year 2023 Financial Highlights
All references to dry metric tons (“dmt”) in this release relate to spodumene concentrate.
|
| Units |
| 2023 |
| Q4’23 |
| Q3’23 | |||
Sales |
|
|
|
|
|
|
|
| |||
| Concentrate shipped | dmt thousands |
| 43.2 |
|
| 14.2 |
|
| 29.0 |
|
| Revenue | $ millions |
| 39.8 |
|
| (7.3 | ) |
| 47.1 |
|
| Realized price (~5.5% Li2O)(1) | $/dmt |
| 920 |
|
| (513 | ) |
| 1,624 |
|
| Realized cost of sales(2) | $/dmt |
| 789 |
|
| 756 |
|
| 805 |
|
|
|
|
|
|
|
|
|
|
| ||
Profitability |
|
|
|
|
|
|
|
| |||
| Gross profit | $ millions |
| 5.7 |
|
| (18.1 | ) |
| 23.8 |
|
| Gross profit margin | % |
| 14.3 |
|
| NM |
|
| 50.4 |
|
| Net income (loss)(3) | $ millions |
| (21.8 | ) |
| (25.4 | ) |
| 22.9 |
|
| Adjusted net income (loss)(4) | $ millions |
| (31.3 | ) |
| (23.7 | ) |
| 16.9 |
|
| Adjusted diluted EPS(4) | $ |
| (1.64 | ) |
| (1.23 | ) |
| 0.88 |
|
| Adjusted EBITDA(4) | $ millions |
| (35.1 | ) |
| (24.4 | ) |
| 16.2 |
|
| Adjusted EBITDA margin(4) | % |
| (88.1 | ) |
| NM |
|
| 34.3 |
|
|
|
|
|
|
|
|
|
|
| ||
Cash |
|
|
|
|
|
|
|
| |||
| Cash and cash equivalents(5) | $ millions |
| 71.7 |
|
| 71.7 |
|
| 94.5 |
|
____________________________________ | ||
(1) | Realized price is the average estimated price, net of certain distribution and other fees, for ~5.5% Li2O grade, which includes referenced pricing data up to December 31, 2023 and is subject to final adjustment. The final adjusted price may be higher or lower than the estimated average realized price based on future price movements. | |
(2) | Realized cost of sales is the average cost of sales including Piedmont’s offtake pricing agreement with Sayona Quebec for the purchase of spodumene concentrate at a market price subject to a floor of $500 per metric ton and a ceiling of $900 per metric ton, adjustments for product grade, freight, and insurance. | |
(3) | Net income (loss) includes gain (loss) on dilution from equity method investments, which is reported on a one-quarter lag, of $8.0 million, $1.8 million and $17.0 million, for the three months ended September 30, 2023, three months ended December 31, 2023, and twelve months ended December 31, 2023, respectively. | |
(4) | See end of this release for reconciliation of non-GAAP measures. | |
(5) | Cash and cash equivalents are reported as of the end of the period. | |
NM – Not meaningful |
Fourth Quarter and Recent Business Highlights
Piedmont Lithium
North American Lithium (Quebec, Canada)
|
| Share |
| Units |
| FY23 |
| Q4’23 |
| Q3’23 | ||||
North American Lithium |
|
|
|
|
|
|
|
|
| |||||
| Concentrate produced | 100%(1) |
| dmt thousands |
| 98.8 |
| 34.2 |
| 31.5 | ||||
| Concentrate shipped | 100%(2) |
| dmt thousands |
| 72.1 |
| 23.9 |
| 48.2 | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
Piedmont Lithium |
|
|
|
|
|
|
|
|
| |||||
| Concentrate shipped | 100% |
| dmt thousands |
| 43.2 |
| 14.2 |
| 29.0 |
______________________________ | ||
(1) | Concentrate produced represents 100% of NAL’s production. | |
(2) | Concentrate shipped represents 100% of NAL’s shipments, inclusive of shipments to Piedmont totaling 29.0 thousand dmt and 14.2 thousand dmt in Q3’23 and Q4’23, respectively. |
Note: The table above reports quarterly and year-to-date information in accordance with Piedmont’s fiscal year reporting, which is on a calendar-year basis. Concentrate produced and concentrate shipped (above) are reported in the periods in which activities actually occurred. For financial statement purposes, Piedmont reports income (loss) from its 25% ownership in Sayona Quebec, which includes NAL, on a one-quarter lag. |
Ewoyaa Project (Ghana)
Carolina Lithium (North Carolina)
Tennessee Lithium (Tennessee)
Exploration and Development
2024 Outlook
|
|
| 2024 |
Capital expenditures |
|
| $10 million — $14 million |
Investments in and advances to affiliates |
|
| $32 million — $38 million |
The majority of forecasted capital expenditures relate to Carolina Lithium and Tennessee Lithium. Investments in and advances to affiliates reflect cash contributions to Sayona Quebec and advances to Atlantic Lithium for the Ewoyaa project. Our outlook for forecasted capital expenditures and investments in and advances to affiliates is subject to market conditions.
Piedmont expects funding for Ewoyaa to be minimal in 2024 and is evaluating a range of options that would be non-dilutive to Piedmont Lithium shareholders to fund its share of project capital. We expect a final investment decision for Ewoyaa to be made by 2025.
Under our offtake agreement with Sayona Quebec, Piedmont has the right to purchase the greater of 50% of production or 113,000 dmt/year, in addition to the 13.1 thousand dmt shipment that sailed in mid-January. However, actual purchases in 2024 may differ from the allotment based on how deliveries under contract are scheduled. As we begin deliveries under our customer contracts, we expect to provide more stable price realizations and reduce our reliance on unpredictable spot market sales.
Safety and Sustainability
Piedmont continues to build safety as a foundational pillar of its business and to further development of policies and procedures to enhance the Company’s safety and environmental management systems. Engagement in identifying hazards also improved with increased reporting that enabled proactive strategies for addressing unsafe conditions.
Additionally, Piedmont performed a materiality assessment in Q4’23 with key shareholders to identify, categorize, and prioritize material environmental, social, and governance matters. The Company expects to use the results of the assessment to further develop and guide the organization’s sustainability strategy as we advance toward operations at Carolina Lithium and Tennessee Lithium.
Conference Call Information
Date: |
| Thursday, February 22, 2024 |
Time: |
| 4:30 pm Eastern Standard Time |
Dial-in (Toll Free): |
| 1 (800) 715-9871 |
Dial-in (Toll): |
| 1 (646) 307-1963 |
Conference ID: |
| 6860456 |
Participant URL: |
|
Piedmont’s earnings presentation and supporting material are available at:
https://piedmontlithium.com/investors-overview/.
About Piedmont
Piedmont Lithium Inc. (Nasdaq: PLL; ASX: PLL) is developing a world-class, multi-asset, integrated lithium business focused on enabling the transition to a net zero world and the creation of a clean energy economy in North America. Our goal is to become one of the largest lithium hydroxide producers in North America by processing lithium (spodumene) concentrate produced from assets where we hold an economic interest. Our projects include our Carolina Lithium and Tennessee Lithium projects in the United States and partnerships in Quebec with Sayona Mining (ASX: SYA) and in Ghana with Atlantic Lithium (AIM: ALL; ASX: A11). These geographically diversified operations will enable us to play a pivotal role in supporting America’s move toward energy independence and the electrification of transportation and energy storage.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of or as described in securities legislation in the United States and Australia, including statements regarding exploration, development, construction and production activities of Sayona Mining, Atlantic Lithium, and Piedmont; current plans for Piedmont’s mineral and chemical processing projects; Piedmont’s potential acquisition of an ownership interest in Ewoyaa; and strategy. Such forward-looking statements involve substantial and known and unknown risks, uncertainties, and other risk factors, many of which are beyond our control, and which may cause actual timing of events, results, performance or achievements and other factors to be materially different from the future timing of events, results, performance, or achievements expressed or implied by the forward-looking statements. Such risk factors include, among others: (i) that Piedmont, Sayona Mining, or Atlantic Lithium may be unable to commercially extract mineral deposits, (ii) that Piedmont’s, Sayona Mining’s or Atlantic Lithium’s properties may not contain expected reserves, (iii) risks and hazards inherent in the mining business (including risks inherent in exploring, developing, constructing and operating mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), (iv) uncertainty about Piedmont’s ability to obtain required capital to execute its business plan, (v) Piedmont’s ability to hire and retain required personnel, (vi) changes in the market prices of lithium and lithium products, (vii) changes in technology or the development of substitute products, (viii) the uncertainties inherent in exploratory, developmental and production activities, including risks relating to permitting, zoning and regulatory delays related to our projects as well as the projects of our partners in Quebec and Ghana, (ix) uncertainties inherent in the estimation of lithium resources, (x) risks related to competition, (xi) risks related to the information, data and projections related to Sayona Mining or Atlantic Lithium, (xii) occurrences and outcomes of claims, litigation and regulatory actions, investigations and proceedings, (xiii) risks regarding our ability to achieve profitability, enter into and deliver product under supply agreements on favorable terms, our ability to obtain sufficient financing to develop and construct our projects, our ability to comply with governmental regulations and our ability to obtain necessary permits, and (xiv) other uncertainties and risk factors set out in filings made from time to time with the U.S. Securities and Exchange Commission (“SEC”) and the Australian Securities Exchange, including Piedmont’s most recent filings with the SEC. The forward-looking statements, projections and estimates are given only as of the date of this press release and actual events, results, performance and achievements could vary significantly from the forward-looking statements, projections and estimates presented in this press release. Readers are cautioned not to put undue reliance on forward-looking statements. Piedmont disclaims any intent or obligation to update publicly such forward-looking statements, projections, and estimates, whether as a result of new information, future events or otherwise. Additionally, Piedmont, except as required by applicable law, undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Piedmont, its financial or operating results or its securities.
PIEDMONT LITHIUM INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) | ||||||||||||||||
|
|
Three Months Ended |
|
Years Ended | ||||||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||||||
Revenue |
| $ | (7,310 | ) |
| $ | — |
|
| $ | 39,817 |
|
| $ | — |
|
Costs of sales |
|
| 10,775 |
|
|
| — |
|
|
| 34,138 |
|
|
| — |
|
Gross profit |
|
| (18,085 | ) |
|
| — |
|
|
| 5,679 |
|
|
| — |
|
Exploration costs |
|
| 261 |
|
|
| 454 |
|
|
| 1,929 |
|
|
| 1,939 |
|
Selling, general and administrative expenses |
|
| 11,526 |
|
|
| 9,250 |
|
|
| 43,319 |
|
|
| 29,449 |
|
Total operating expenses |
|
| 11,787 |
|
|
| 9,704 |
|
|
| 45,248 |
|
|
| 31,388 |
|
Income (loss) from equity method investments |
|
| 1,759 |
|
|
| (1,804 | ) |
|
| 194 |
|
|
| (8,352 | ) |
Loss from operations |
|
| (28,113 | ) |
|
| (11,508 | ) |
|
| (39,375 | ) |
|
| (39,740 | ) |
Interest income |
|
| 900 |
|
|
| 780 |
|
|
| 3,859 |
|
|
| 1,153 |
|
Interest expense |
|
| (5 | ) |
|
| (18 | ) |
|
| (39 | ) |
|
| (116 | ) |
Loss from foreign currency exchange |
|
| (3 | ) |
|
| (28 | ) |
|
| (91 | ) |
|
| (88 | ) |
Gain (loss) on dilution of equity method investments |
|
| 1,767 |
|
|
| (412 | ) |
|
| 16,975 |
|
|
| 28,955 |
|
Total other income |
|
| 2,659 |
|
|
| 322 |
|
|
| 20,704 |
|
|
| 29,904 |
|
Loss before income taxes |
|
| (25,454 | ) |
|
| (11,186 | ) |
|
| (18,671 | ) |
|
| (9,836 | ) |
Income tax expense (benefit) |
|
| (64 | ) |
|
| (282 | ) |
|
| 3,106 |
|
|
| 3,139 |
|
Net loss |
| $ | (25,390 | ) |
| $ | (10,904 | ) |
| $ | (21,777 | ) |
| $ | (12,975 | ) |
|
|
|
|
|
|
|
|
| ||||||||
Basic and diluted: |
|
|
|
|
|
|
|
| ||||||||
Loss per share |
| $ | (1.32 | ) |
| $ | (0.61 | ) |
| $ | (1.14 | ) |
| $ | (0.74 | ) |
Weighted-average shares outstanding |
|
| 19,209 |
|
|
| 17,966 |
|
|
| 19,033 |
|
|
| 17,518 |
|
PIEDMONT LITHIUM INC. CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) | |||||||
|
December 31, |
|
December 31, | ||||
Assets |
|
|
| ||||
Cash and cash equivalents | $ | 71,730 |
|
| $ | 99,247 |
|
Accounts receivable |
| 595 |
|
|
| — |
|
Other current assets |
| 3,829 |
|
|
| 2,612 |
|
Total current assets |
| 76,154 |
|
|
| 101,859 |
|
Property, plant and mine development, net |
| 127,086 |
|
|
| 71,541 |
|
Other non-current assets |
| 30,353 |
|
|
| 18,873 |
|
Equity method investments |
| 147,662 |
|
|
| 95,648 |
|
Total assets |
| 381,255 |
|
|
| 287,921 |
|
|
|
|
| ||||
Liabilities and Stockholders’ Equity |
|
|
| ||||
Accounts payable and accrued expenses |
| 11,754 |
|
|
| 12,862 |
|
Current portion of long-term debt |
| 149 |
|
|
| 425 |
|
Other current liabilities |
| 29,463 |
|
|
| 124 |
|
Total current liabilities |
| 41,366 |
|
|
| 13,411 |
|
Long-term debt, net of current portion |
| 14 |
|
|
| 163 |
|
Operating lease liabilities, net of current portion |
| 1,091 |
|
|
| 1,177 |
|
Other non-current liabilities |
| 431 |
|
|
| — |
|
Deferred tax liabilities |
| 6,023 |
|
|
| 2,881 |
|
Total liabilities |
| 48,925 |
|
|
| 17,632 |
|
Commitments and contingencies (Note 15) |
|
|
| ||||
Stockholders’ equity: |
|
|
| ||||
Common stock; $0.0001 par value, 100,000 shares authorized; 19,272 and 18,073 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively |
| 2 |
|
|
| 2 |
|
Additional paid-in capital |
| 462,899 |
|
|
| 381,242 |
|
Accumulated deficit |
| (126,844 | ) |
|
| (105,658 | ) |
Accumulated other comprehensive loss |
| (3,727 | ) |
|
| (5,297 | ) |
Total stockholders’ equity |
| 332,330 |
|
|
| 270,289 |
|
Total liabilities and stockholders’ equity | $ | 381,255 |
|
| $ | 287,921 |
|
PIEDMONT LITHIUM INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||
| Years Ended December 31, | ||||||
| 2023 |
| 2022 | ||||
Cash flows from operating activities: |
|
|
| ||||
Net loss | $ | (21,777 | ) |
| $ | (12,975 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
| ||||
Stock-based compensation expense |
| 9,516 |
|
|
| 3,490 |
|
Loss from equity method investments |
| (194 | ) |
|
| 8,352 |
|
Gain on dilution of equity method investments |
| (16,975 | ) |
|
| (28,955 | ) |
Deferred taxes |
| 3,106 |
|
|
| 3,139 |
|
Depreciation and amortization |
| 272 |
|
|
| 74 |
|
Noncash lease expense |
| 245 |
|
|
| 106 |
|
Loss on sale of property, plant and mine development |
| — |
|
|
| 12 |
|
Unrealized loss on investment |
| — |
|
|
| 30 |
|
Changes in operating assets and liabilities: |
|
|
| ||||
Accounts receivable |
| (595 | ) |
|
| — |
|
Other assets |
| (1,021 | ) |
|
| (201 | ) |
Operating lease liabilities |
| (220 | ) |
|
| (97 | ) |
Accounts payable |
| (1,281 | ) |
|
| 1,413 |
|
Accrued expenses and other current liabilities |
| 30,494 |
|
|
| (837 | ) |
Net cash provided by (used in) operating activities |
| 1,570 |
|
|
| (26,449 | ) |
Cash flows from investing activities: |
|
|
| ||||
Capital expenditures |
| (56,723 | ) |
|
| (25,732 | ) |
Advances to affiliates |
| (9,361 | ) |
|
| (13,006 | ) |
Investments in equity method investments |
| (33,239 | ) |
|
| (21,062 | ) |
Net cash used in investing activities |
| (99,323 | ) |
|
| (59,800 | ) |
Cash flows from financing activities: |
|
|
| ||||
Proceeds from issuances of common stock, net of issuance costs |
| 71,084 |
|
|
| 122,059 |
|
Proceeds from exercise of stock options |
| — |
|
|
| 279 |
|
Principal payments on long-term debt |
| (426 | ) |
|
| (1,087 | ) |
Payments to tax authorities for employee stock-based compensation |
| (422 | ) |
|
| — |
|
Net cash provided by financing activities |
| 70,236 |
|
|
| 121,251 |
|
Net (decrease) increase in cash |
| (27,517 | ) |
|
| 35,002 |
|
Cash and cash equivalents at beginning of period |
| 99,247 |
|
|
| 64,245 |
|
Cash and cash equivalents at end of period | $ | 71,730 |
|
| $ | 99,247 |
|
Contacts
Erin Sanders
SVP, Corporate Communications &
Investor Relations
T: +1 704 575 2549
E: esanders@piedmontlithium.com
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