Piedmont Lithium (ASX:NASDAQ:PLL, OTC:PLLTL) Inc expects to receive the first shipment of spodumene (lithium) concentrate next month from the North American Lithium (NAL) operation in Québec, Canada, as part of an agreement with offtake partner Sayona Mining Ltd (ASX:SYA).
NAL’s current port inventory is approximately 30,000 wet metric tonnes (wmt) of spodumene concentrate, which is sufficient to supply Piedmont with its maiden cargo of circa 15,000 wmt due to be loaded in September.
Cash payment will be received by NAL from Piedmont for its cargo under the offtake agreement within standard commercial terms following completion of loading at the port.
Joint ownership
NAL is jointly owned by Sayona, which holds 75%, and Piedmont Lithium with 25%.
Current port inventory plus the additional product volume from mine production will be sufficient for an upcoming cargo for the NAL joint venture in late September/October 2023.
As well as NAL Sayona’s assets comprise the Authier Lithium Project and its emerging Tansim Lithium Project, supported by a strategic partnership with American lithium developer Piedmont Lithium.
First NAL cash proceeds
Sayona has today received the first cash proceeds for its NAL operation following the inaugural shipment of spodumene (lithium) concentrate to the international lithium market.
The initial cash payment (90% of cargo value) has been received by NAL for its first shipment of around 20,500 wmt (19,200 dry metric tonnes or dmt) of spodumene concentrate, which was sold via a major trading company (wmt is quoted for inventory handling purposes whilst dmt is the resultant tonnage measurement for concentrate sales).
The balance of the payment (10% of cargo value) will be received by NAL once final disport assays and weights are made available, after the arrival of the vessel AAL Moon at its port of destination, expected in late September.
Grade of 5.35%
The shipped grade of the lithium oxide (spodumene) was 5.35% Li2O and was adjusted on a linear basis from the standard 6.0% Li2O quoted by the indices.
The initial cash payment was derived from publicly available spodumene price indices as agreed with the customer and reflects the US dollar equivalent on the bill of loading date, August 1, 2023.
Average realised selling prices will be disclosed as part of Sayona’s regular quarterly reporting, commencing with the September 2023 quarterly report.
Ramp-up continues
These shipments come as the NAL mine and process plant ramp-up continues to progress well with the focus on optimising and debottlenecking the production process.
A recent failure of the rod mill resulted in four days of lost production, however, the plant came back online smoothly and has performed well since.
The NAL joint venture is reviewing its forecast production and sales in light of the ramp-up performance as well as the impact of continuous improvement initiatives.
NAL’s spodumene concentrate grade is averaging 5.5% Li2O for year-to-date production, with other key concentrate parameters adhering to offtake specifications.
Improvement projects
Alongside the ramp-up, NAL has also substantially progressed capital improvement projects, including a tailings storage facility (TSF) capacity increase and a new crushed ore dome which will improve winter operating efficiencies.
The TSF is undergoing a wall lift to safely increase its storage capacity, with completion expected in November 2023. The new crushed ore dome is scheduled for completion in the March quarter of 2024.
Sayona’s interim CEO James Brown said: “We are delighted to secure the cash proceeds from NAL’s first sales of spodumene concentrate, marking another major milestone for North America’s leading source of hard rock lithium production.
"We are focused on continuing to safely ramp up production at NAL and consistently delivering high-quality spodumene concentrate to port ahead of multiple shipments planned for the remainder of the year, delivering increasing cash proceeds to NAL for the benefit of the joint venture.
"It is also pleasing to see our partner at NAL in readiness to take their first shipment under our offtake agreement.
"Sayona has an exciting outlook as we work to maximise value and cashflows from the NAL operation while seeking to expand our lithium resource base."