Lithium producer Sayona Mining (ASX:SYA) has received the first cash proceeds for its North American Lithium (NAL) operation in Quebec, Canada.
It follows the inaugural shipment of spodumene (lithium) concentrate to the global lithium market. NAL is jointly owned by Sayona (75%) and Piedmont Lithium (ASX:PLL) (25%).
Sayona says the initial cash payment (90% of cargo value) has now been received for its first shipment of about 20,500 wet metric tonnes (19,200 dry metric tonnes) of spodumene concentrate, which was sold via a major trading company.
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.
Sayona says for clarity, wet metric tonnes are quoted for inventory handling purposes while dry metric tonnes is the resultant tonnage measurement for concentrate sales. The initial cash payment was derived from publicly available spodumene price indices as agreed with the customer and reflects the USD equivalent on the bill of lading date (1 August 2023).
Average realised selling prices will be disclosed as part of Sayona’s regular quarterly reporting, commencing with the September 2023 quarterly report. The shipped grade of the lithium oxide (spodumene) was 5.35% Li2O and was adjusted on a linear basis from the standard 6% Li2O quoted by the indices. The balance of Sayona’s cash and cash equivalents as of 31 August 2023 totalled $257 million.
As no further cash receipts from NAL customers are anticipated in September 2023, it is expected that Sayona’s balance of cash and cash equivalents at the end of the September quarter will be lower than at 31 August 2023.
The company reports customer payments for additional sales of spodumene concentrate recognised in September will be received by NAL in the next fiscal quarter (Q2 FY24). NAL’s current port inventory is some 30,000 wmt of spodumene concentrate, sufficient to supply offtake partner Piedmont Lithium with its maiden cargo of circa 15,000 wmt due to be loaded in September (date to be confirmed).
NAL will receive cash payment from Piedmont for its cargo under the offtake agreement within standard commercial terms following completion of loading at the port. The current port inventory plus the positive additional product volume from mine production will be sufficient for an upcoming cargo for the NAL joint venture in late September / October 2023 (dates to be confirmed).
The ramp‐up of the NAL mine and process plant 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 Sayona says the plant came back on-line smoothly and has performed well since.
The NAL joint venture is currently reviewing its forecast production and sales in light of the ramp-up performance as well as the impact of continuous improvement initiatives
The NAL joint venture is currently 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 calendar year-to-date production, with other key concentrate parameters adhering to offtake specifications.
Alongside the production ramp-up, NAL has 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 Q3 FY24.
Sayona Mining is a North American lithium producer with projects in Quebec, Canada and Western Australia. In Quebec, Sayona’s assets comprise North American Lithium together with the Authier Lithium Project and its emerging Tansim Lithium Project, supported by a strategic partnership with American lithium developer Piedmont.
Sayona also holds a 60% stake in the Moblan Lithium Project in northern Quebec. In Western Australia, it holds a large tenement portfolio in the Pilbara region prospective for gold and lithium. Sayona is exploring for Hemi‐style gold targets in the Pilbara region, while its lithium projects include company-owned leases and those subject to a JV with Morella Corporation (ASX:1MC).
Write to Adam Orlando at Mining.com.au
Images: Sayona Mining