John Koslow; Investor Relations; Piedmont Lithium Inc
Keith Phillips; President, Chief Executive Officer, Director; Piedmont Lithium Inc
Michael White; Chief Financial Officer, Executive Vice President; Piedmont Lithium Inc
Noel Parks; Analyst; Tuohy Brothers
Operator
Thank you for standing by. My name is Carrie and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2025 Piedmont Lithium earnings conference call.
(Operator instructions)
Thank you. I now like to turn the call over to Mr. John Koslow, Investor Relations at Piedmont Lithium. Please go ahead.
John Koslow
Thank you and good afternoon. Welcome to Piedmont Lithium's first quarter 2025 earnings call. Joining us today from Piedmont Lithium are Keith Phillips, President and Chief Executive Officer; and Michael White, Chief Financial Officer. Keith will provide an introduction and review key updates from the quarter; and Michael will then review our financial results. We will provide closing commentary before we transition to a Q&A session.
As a reminder, today's discussion will contain forward-looking statements related to future events and expectations that are subject to various assumptions and caveats. Factors that may cause the company's actual results to differ materially from these statements are included in today's presentation, earnings release, and in our SEC filing. In addition, we have included non-GAAP financial metrics in this presentation, and reconciliations to the most directly comparable GAAP financial measure can be found in today's earnings release and the appendix to today's slide presentation.
Any references to EBITDA mean adjusted EBITDA. References to shipments are shipments of spodumene concentrate, and tons are dry metric tons. Copies of our earnings release and presentation In addition to a replay of this call, will be available on our website at PiedmontLithium.com. With that, I'll turn the call over to Keith Phillips. Keith?
Keith Phillips
Thanks, John, and thank you all for joining us today. 2025 has opened with considerable volatility in lithium markets. Prices have fluctuated as the industry continues to navigate shifts in global supply and demand, macroeconomic uncertainty, and evolving policy landscapes. Despite this backdrop, our team remains focused on what we can control, delivering operational and commercial excellence, maintaining capital discipline, and positioning our business for long-term success.
We shipped 27,000 tons to customers to start the year. North American lithium produced a little over 43,000 tons, a decline from the record production level seen in the second half of 2024. Variable weather conditions impacted mill utilization, but the team reacted quickly to mitigate the effects on a go-forward basis.
On the corporate side of the business, we continued to advance toward the merger with Sayona Mining that we announced in November. We achieved several notable milestones recently, and I will spend time at the end of the call providing more detail on the merger process and why we are so excited about the transaction.
First, let's move on to slide four to discuss the quarter at NAL in more detail. NAL saw a 15 % quarter over quarter decline in production through March and produced approximately 43,000 tons to start the year. Importantly, the operation remains on track to meet the guidance provided by Sayona Mining, called for production of 190 to 210,000 tons, where their year ended June 30, 2025.
The challenges encountered in Q1 were largely driven by volatile weather patterns to begin the year. with a stretch of warm and wet days followed by a cold snap, resulting in freezing conditions and hurting performance principally in the crushing circuit. While this type of weather pattern is atypical, it's exactly what we and our partners at Sayona plan for when installing the crushed ore dome to allow bypassing of the crushing circuit.
The crushed ore dome's capacity is roughly one-and-a-half days of mill feed, so additional mobile crushing capacity was deployed to support the primary crushing activities as needed. There were several positive developments at NAL during the quarter, including the operation setting a record 72 % recovery in March, thanks to process optimization.
In April, Sayona announced the final drill results from the 2024 exploration program, and the focus now turns to producing an updated mineral resource estimate for the asset. The program confirmed mineralization outside of the existing MRE and supports our belief that NAL is in the early stages of its life. with significant potential to expand its resource base, extend mine life, and scale production over time.
Now let's turn to slide five for an update on the state of the lithium market. While recent price volatility has captured headlines, it's important to recognize that these fluctuations are not new or unique to the industry. The market is always encyclical, and periods of pricing pressure have historically preceded sharp rebounds driven by structural demand growth.
Demand fundamentals remain strong. EV adoption continues to accelerate and grid storage applications are growing across the globe. A long-term trajectory for lifting demand remains intact. While there are plenty of lifting projects in the pipeline to meet this growing demand, the low pricing we've experienced in the past two years is beginning to have an impact.
Greenfield developments are generally moving more slowly, including our own, due to the financing challenges associated with current pricing. In due course, we expect this growing demand and slowdown in project development to ultimately lead to tighter lithium market conditions and stronger pricing. I'd like to take a moment to focus on developing a secure supply chain for critical minerals in North America, and I'll talk more about that on slide six.
As technology and the global demand for energy evolve, it is clear that national energy dominance cannot be achieved without critical minerals. And the global supply demand imbalance becomes even more apparent when looking at North America. Lithium demand will continue to accelerate across the region, driven by the growth in EV and ESS demand and massive investments in battery manufacturing.
The reality is that today North America is heavily reliant on imported lithium and current production levels are nowhere near what's needed to meet future demand. At the same time, OEMs and battery manufacturers are seeking reliable IRA compliant sources of supply, creating a clear opportunity for projects like ours. Trade policy is also emerging as a key factor shaping the market outlook.
Recent and proposed tariffs could significantly alter supply chains and increase the strategic value of local supply. As policy continues to evolve in support of energy security and on-shoring, we believe assets in the US and Canada will be increasingly favored by customers and capital markets.
Now, we'll turn the call over to Michael White to discuss our financial results.
Michael White
Thanks, Keith, and good afternoon. We shipped approximately 27,000 dry metric tons for the quarter and recognized $20 million in revenue. This is down from the previous quarter where we shipped approximately 55,700 dry metric tons and recorded $45.6 million in revenue. While our shipments and revenue declined sequentially, this was expected due to variations in customer requirements and in line with our guidance.
Our fourth quarter GAAP net loss was $15.6 million for a loss of $0.71 per share, and adjusted net loss was $10.1 million for a loss of $0.46 on an adjusted per share basis. Included in our GAAP results were $3.6 million in unrealized loss on equity securities related to Atlantic Lithium, $1.4 million of transaction costs related to our proposed merger with Sayona Mining, $300,000 related to restructuring charges associated with our 2024 cost savings plan, and approximately $200,000 in other items. We ended the year with $65.4 million in cash compared to $87.8 million in cash at the start of 2025.
Now moving to slide nine to discuss our realized pricing in more detail. Our realized price per metric ton was $741 for the quarter. On an FC6 equivalent basis, our realized price per metric ton equated to $823. While lithium prices improved from the lows seen in the second half of 2024, the backwards looking nature of our customer contracts and the decline in pricing since the end of March have had a negative impact on our realized pricing to begin the year.
Despite the decline, we are pleased to report a relatively strong price for the quarter in the context of the soft market and pricing reported by other producers.
Now moving to slide 10 to discuss our sources and uses of cash. Operating cash flows for the quarter were negative $19 million driven by timing of working capital associated with sales of spodumene concentrate and our net loss. Operating cash flows improved $9 million from the first quarter of 2024 as we made large cash payments in Q1 2024 to settle 2023 spot sales where the final price settlement was less than the provisional payment we received.
Additionally, our net loss narrowed versus the comparable period as we are recognizing the benefits of our 2024 cost savings plan, which we completed at the end of last year. Cash outflows for our joint ventures, as well as capital expenditures, were approximately $2 million in aggregate for the first quarter and met the low end of our Q1 guidance range.
We anticipate an increase in cash contributions to our joint ventures and funding additional capital expenditures this quarter. However, the levels will remain modest as we look to preserve balance sheet strength. While our cash balance decreased from 88 million at the end of Q4 to 65 million at the end of Q1, we do not expect to see this type of degradation in the second quarter of 2025 as the timing of working capital associated with sales of spodumene concentrate is driving short-term cash movements.
Further to this point, we expect our cash balance at the end of the second quarter to be similar to our cash balance of $65 million at the end of Q1 of this year.
Let's move to slide 11, where we provide our updated 2025 outlook for shipments, capital expenditures, and investments in joint ventures. We expect to ship 8,000 to 20,000 dry metric tons in the second quarter of 2025 with the variance related to a planned shipment, which is estimated to depart at the end of the quarter. We expect any shipments that leave after the end of Q2 to be accretive to Q3 shipment totals and will not impact our full year shipment outlook of 113,000 to 130,000 dry metric tons.
Our 2024 shipping schedule is back and loaded and at times lumpy, but this is not dissimilar to 2024. As always, certain factors, including shipping constraints and customer requirements, may impact the timing of future shipments.
For our CapEx outlook, we have reduced our full year range from $6million to $9 million down to $4 million to $6 million. This is the result of direct actions taken in relation to our land position for our Carolina lithium project, whereby we have either deferred or opted out of certain land purchases that no longer makes sense, especially during the continued lithium downturn.
Joint venture investments and advances are expected to be in the range of $2 million to $4 million in the second quarter and approximately $7 million to $13 million for full year 2025. This compares to $26 million in 2024. Our outlook is subject to changes in market conditions and may vary materially. With that, I'll turn the presentation back over to Keith.
Keith Phillips
Thank you, Michael. Turning to slide 13, I'd like to provide a status update on our merger with Sayona Mining. After announcing the deal in mid-November, we've been hard at work progressing the deal towards completion. This is a complex transaction, but we've been very pleased with the progress made to date, and we continue to work diligently with our counterparts at Sayona Maning.
We recently made several announcements related to progress, including the new name for the combined company, Elevra Lithium, and the names of the nominees to the Elevra Board of Directors. The deal has received regulatory clearance from Investment Canada and Hart-Scott-Rodino in the United States. CFIUS also completed the review and indicated it will take no further action with respect to the transaction.
Members of the Piedmont and Sayona teams have been engaged in detailed integration planning, making sure that the company is ready to execute as Elevra on day one. There are roughly a dozen different work streams focused on everything from corporate branding to project prioritization to measuring corporate synergies.
We are in the SEC review process now and continue to expect that shareholder votes for both companies will occur in the coming weeks and the deal will close in mid-2025. When we announced the transaction, we announced that Piedmont shareholders would receive 527 ordinary shares of Sayona Mining for each share of Piedmont Lithium common stock held, or 5.27 Sayona shares for each Piedmont CDI.
This ratio was devised to result in an approximate 50-50 split between shareholders of Piedmont and Sayona Mining on fully diluted basis. After a review, the parties agreed that a reverse box split or share consolidation in Australian parlance makes sense as part of the transaction in order to improve a lever's appeal to institutional investors.
The reverse split will occur at the Sayona level and be subject to their shareholders' approval. Sayona shareholders will receive one new lever share per 150 Sayona shares owned, and this will obviously impact the number of lever shares that Piedmont shareholders will receive in the merger. Additionally, Sayona is proposing a one for 10 ADR ratio for the American depository shares that will be listed on NASDAQ.
A summary is laid out here on page 14, and there will be more detail included in the merger circular we send to shareholders in coming weeks. Importantly, while these proposals will impact a number of shares outstanding, they are not expected to have any valuation impact.
I'd like to conclude this afternoon's call with some brief comments on the benefits to Piedmont Lithium shareholders from our planned merger with Sayona Mining. On slide 15, we've outlined some of the key benefits of bringing together our two complementary businesses. We believe the merger will create a larger, simpler, and stronger company.
With all of the tons produced at NAL coming under control of one company, lever will have increased relevance within the market to be a more attractive supplier to the industry. The combination also unlocks value for Piedmont shareholders by enabling the possible expansion of the NAL complex. Strong drill results we've seen at NAL indicate the possibility for meaningful resource and reserve expansion, hopefully leading to the possibility of an attractive brownfield expansion, spreading fixed costs over a larger operating base, and further enhancing the economics of the operation.
The transaction also brings Moblan into our portfolio. Based on recent drill results reported by Sayona, Moblan is a transformative growth project, large, high-grade, scalable. It's exactly the kind of asset customers are looking for, secure, reliable, sustainable with heat supply in North America.
On the corporate side, we expect to realize synergies of approximately $50 million to $20 million annually. And the merger secured committed funding of approximately $43 million from resource capital funds. RCF has a significant history of delivering substantial returns and contributing to the advancement of critical mineral project development.
Lastly, a unified corporate structure will consolidate strong operational credentials, streamline decision making, reduce duplication, and better align operational and strategic priorities across all assets.
In summary, we believe the long-term fundamentals for lithium remain strong and the combination of Piedmont and Cyanide to form the lever lithium will create a business that can operate through the cycles and generate sustained value for our shareholders. With that, we can turn the call over to Q &A.
Operator
(Operator instructions)
Noel Parks, Tuohy Brothers.
Noel Parks
Hi, good afternoon. You know, of course, uncertainty is the word of the day or the month. But you just mentioned tariffs and the effect they could have on supply chains. And do you anticipate a direct effect that could impact North America? Or are you more sort of the ripple effects? other supplies, their economics change, you know, depending on how the tariffs are applied.
Keith Phillips
Yes, no, good question. Think from a long-term perspective, would be, and we're early innings here in terms of what may happen in terms of tariffs, whether they become a factor in global economics in a way that haven't been for several decades or not. In the long term, who knows? But I think having North American projects is critical and positive from that perspective.
Certainly, to the extent there are tariff borders up around the US, that's a positive in the Carolina Lithium, for the Carolina Lithium project. In the near term with production in Quebec, I mean between ourselves and Sayano, we ship most of the material to Asia. It's not impacted by tariffs. Shipments into the US will be impacted by tariffs.
As I think I might've said last quarter, at prices as low as they are, the tariff burden isn't that significant, and we don't think it will affect customers' decisions on where the material goes, but it's certainly a factor everybody's watching. And as a reminder, obviously the tariff falls on the customer, the buyer of the material not on us directly.
Noel Parks
Right, right. Thanks. And I just wonder, you know, the president's executive order that sort of put the spotlight on critical minerals. I just wonder if at this point, have you detected any impression it's made, any shifts in terms of just reception to the Carolina Lithium project on the ground and locally? From what I understand, there's also a good bit going on with interest rates, USAID, and sort of everything in that area of the country. So just wondering if you had detected anything in the last couple of months.
Keith Phillips
No, I would say neutral on that. I think the tone in the government of DC of the importance of critical minerals, that's very positive for us at many levels. And we think that would be positively seen locally as well. Just given the market we're in, our focus in Carolina, our primary focus right now remains completing the permitting process. So we've got our mine permit. We're feeling good about the air permit for this year, some positive signals recently on that. So that's good.
So really buttoning up the permitting before we would approach the rezoning process anyway. And then we're just faced with the reality, which I think everybody in the industry is that with spodumene prices at these levels, it's really not a great time to push the button on a project, on projects anyway. It's kind of ironic. On the one hand, it's probably never been a better time to go to Washington to get support for a project. On the other hand, the lithium market conditions today, which I can't imagine can persist indefinitely, are challenging. So it's just not a great time to be funding a project.
Operator
(Operator instructions)
There are no further questions at this time. I'll turn it back over to management for any closing remarks.
Keith Phillips
Thanks very much, moderator, and thanks everybody for listening. Thank you for your participation. This does conclude today's conference call. You may now disconnect.
