Sayona’s Q3 Lithium Production Drops 15% Amid Weather; Prices Rise 8%

Operational Challenges Amid Unseasonal Weather

Sayona Mining Limited’s March 2025 quarterly activities report highlights a challenging period for its North American Lithium (NAL) operation in Québec. Ore mined fell 13% quarter-on-quarter to 322,407 wet metric tonnes, primarily due to a strategic decision to leave ore uncovered in the pit to avoid costly rehandling. The operation faced unseasonal thaw and refreeze cycles that impaired crusher performance, resulting in a 15% decline in spodumene concentrate production to 43,261 dry metric tonnes and a mill utilisation rate of 80%.

Despite these headwinds, lithium recovery improved slightly to 69%, reflecting operational discipline and process optimisation, including enhanced flotation reagent performance. The scheduled five-day maintenance shutdown in March further constrained output but was necessary to sustain longer-term plant reliability.

Sales Strategy and Pricing Dynamics

Sales volumes for the quarter dropped sharply by 59% to 27,030 dry metric tonnes, aligning with Sayona’s deliberate strategy to skew sales towards the June 2025 quarter. This approach aims to capitalise on higher forward lithium prices compared to spot market rates. The average realised free-on-board (FOB) selling price rose 8% to A$1,142 per dry metric tonne (US$710/dmt), supported entirely by shipments under the Piedmont Lithium offtake agreement.

Stockpiles increased to 34,881 tonnes by quarter-end, positioning the company to leverage improved pricing in the coming months. This tactical sales timing underscores Sayona’s focus on maximising revenue despite short-term production disruptions.

Cost Pressures and Financial Position

Unit operating costs rose 7% quarter-on-quarter to A$1,374 per tonne sold, driven by increased mining activity related to pre-stripping and higher processing expenditures linked to maintenance. However, in US dollar terms, costs edged down 1% to US$830 per tonne, benefiting from a weaker Australian dollar.

The company reported a net cash outflow from NAL operations of approximately A$7 million and ended the quarter with a cash balance of A$88.9 million, down A$21.5 million from December 2024. This decline reflects operational losses, capital expenditure of A$3 million, exploration payments, and merger-related costs.

Exploration and Permitting Progress

Exploration activity shifted from drilling to evaluation and planning, with over 129,000 metres drilled in 2024 across NAL and Moblan projects. Updated Mineral Resource Estimates are expected by mid-2025. In Western Australia, Sayona advanced drilling and mapping at its Pilbara projects, including promising rubidium and lithium mineralisation at the Mt Edon prospect.

Permit applications for potential expansions at NAL and Moblan commenced, with key biological studies scheduled for the northern hemisphere summer. The company also secured permits for mobile crushing equipment to mitigate weather-related operational impacts.

Merger with Piedmont Lithium Advances

Sayona is progressing a transformational merger with Piedmont Lithium, subject to shareholder approval. The merger, which will create Elevra Lithium Limited, has cleared major regulatory hurdles including approvals from Investment Canada, the U.S. Department of Justice, and CFIUS. The combined entity will have a balanced board with equal representation from both companies.

A conditional placement of A$69 million to Resource Capital Fund VIII L.P. is planned post-merger to strengthen the merged company’s capital base. An Extraordinary General Meeting is expected in mid-2025 to seek shareholder approval for the transaction, share consolidation, and company rebranding.

Managing Director Lucas Dow emphasised the company’s disciplined capital management and strategic positioning to deliver long-term value in the evolving lithium market.