Sayona Mining’s December 2024 quarterly report reveals robust operational gains at North American Lithium, a successful $38 million capital raise, and a transformative merger agreement with Piedmont Lithium.
- 54% increase in ore mined at North American Lithium (NAL)
- 33% revenue growth to $70 million driven by higher spodumene sales
- Definitive merger agreement signed with Piedmont Lithium, creating a leading North American lithium producer
- Unit operating costs at NAL reduced by 6% to $1,258/dmt
- Safety incidents rose at Moblan drilling sites but improved at NAL
Operational Momentum at North American Lithium
Sayona Mining Limited’s December 2024 quarterly activities report highlights a period of strong operational performance, particularly at its flagship North American Lithium (NAL) operation in Québec, Canada. Ore mined surged 54% quarter-on-quarter to 370,409 wet metric tonnes, reflecting improved mining rates and operational discipline despite weather and maintenance challenges. The processing plant maintained a robust 90% utilisation rate, underscoring the resilience of Sayona’s operational practices.
Spodumene concentrate production remained steady at 50,922 dry metric tonnes with a consistent grade of 5.3% Li2O, aligning with full-year production targets. Lithium recovery improved slightly to 68%, demonstrating incremental gains in processing efficiency. These operational improvements translated into a 33% increase in revenue to $70 million, driven by a 35% rise in concentrate sales volumes, including record sales of 66,035 tonnes.
Cost Management and Financial Position
Unit operating costs at NAL decreased by 6% to $1,258 per tonne sold, benefiting from higher sales volumes and tighter cost controls. Cash expenditure remained stable, enabling the operation to approach cash break-even from operating activities, a significant milestone for the company. Capital expenditure of $7 million focused on tailings storage facility upgrades and site improvements, consistent with the planned front-loading of FY25 capital spend.
Sayona’s cash position strengthened to $110.4 million by quarter-end, boosted by a successful $38 million capital raise. The company also plans a conditional $69 million placement to Resource Capital Fund VIII L.P. upon completion of its merger with Piedmont Lithium, further reinforcing its financial flexibility.
Strategic Merger with Piedmont Lithium
A defining feature of the quarter was the announcement of a definitive merger agreement with Piedmont Lithium Inc. This transaction will create a leading North American lithium producer with an approximately 50/50 equity split between Sayona and Piedmont shareholders. The merger is expected to close in the first half of 2025, pending shareholder approvals, and positions the combined entity to capitalize on growing lithium demand driven by the electric vehicle and battery markets.
The merger complements Sayona’s existing assets, including the Moblan project and its Western Australian lithium and gold exploration portfolio. The combined scale and resource base are expected to enhance operational synergies and market presence.
Exploration and Safety Developments
Exploration activities continued apace with significant drilling completed at NAL and Moblan, fully utilising Flow Through Share funding. While no further exploration is planned in the immediate term, results are being compiled to inform future resource updates. In Western Australia, drilling at the Mt Edon project revealed promising pegmatite zones with rubidium and lithium mineralisation, and new targets were identified at West Wodgina and Tabba Tabba, setting the stage for 2025 exploration.
Safety performance showed a mixed picture: NAL improved its safety culture and reduced incidents, but Moblan experienced an uptick in safety incidents related to drilling activities. Sayona has implemented enhanced safety inspections and preventive measures to address these challenges.
Outlook and Guidance
Sayona reconfirmed its FY25 production guidance of 190,000 to 210,000 dry metric tonnes of spodumene concentrate, with unit operating costs expected between $1,150 and $1,300 per tonne sold. The company’s focus remains on operational efficiency, resource expansion, and successful merger execution to position itself for a lithium market rebound.
Bottom Line?
Sayona’s operational strides and strategic merger set the stage for a pivotal year in its evolution as a North American lithium powerhouse.
Questions in the middle?
- How will the merger with Piedmont Lithium impact Sayona’s production capacity and cost structure?
- What are the implications of increased safety incidents at Moblan for operational risk management?
- How will fluctuating lithium market prices affect Sayona’s revenue and contract pricing in the near term?