Sayona Mining Ltd (ASX: SYA) is experiencing notable pressure on its share price, which has fallen 6% to a multi-year low of 3 cents on Thursday morning. This downturn follows the release of the company’s latest quarterly update, revealing ongoing financial difficulties despite record production figures.
Record Production Achievements
In its quarterly update, Sayona Mining, an ASX mining stock, reported impressive production figures. The company achieved a record output of 49,660 tonnes of spodumene concentrate with an average grade of 5.3% for the quarter, reflecting a 23% increase from the previous period. Notable highlights include reaching a new daily production high of 919 tonnes in June and a monthly production peak of 19,314 tonnes in May.
Financial Struggles Continue
Despite the strong operational performance, Sayona Mining continues to face financial challenges. The unit operating costs at its North American Lithium (NAL) project were reported at A$1,506 (US$995) per dry metric tonne (dmt), down 2% from the previous quarter. However, the average realized selling price of its lithium concentrate fell by 11% to A$885 (US$604) per dmt. This substantial drop means the company is selling its lithium concentrate at A$621 (US$391) per dmt below production costs.
Revenue and Cash Flow Impact
These financial issues resulted in a significant 58% decline in NAL’s revenue, which totaled A$25 million for the quarter. It is important to note that a delayed shipment due to weather conditions will be recognized in the current quarter’s figures. Shipments for the September quarter are projected to be between 50,000 dmt and 65,000 dmt, depending on the timing of a late September shipment.
The company’s cash balance at the end of the period was A$91 million, reflecting an 8% decrease from the previous quarter. This balance includes A$14.7 million from the sale of equity investments and other one-off sources.
Management’s Outlook
Interim CEO James Brown highlighted the quarter’s operational successes, noting the record production levels and improved mill utilization. Brown expressed confidence in the company’s potential for future growth once market conditions improve. Despite the current financial pressures, there has been no indication from management of plans to suspend operations to conserve cash.
Sayona Mining’s share price has declined over 80% in the past year, mirroring ongoing investor concerns amid a challenging market environment.