Pilbara Minerals share price slides despite lithium production increasing 54%

The Pilbara Minerals Ltd (ASX: PLS) share price is in the red today despite a positive production update.

The lithium producer’s shares are currently trading at $2.37, a 0.84% fall. However, in earlier trade the company’s share price leaped 4% higher.

For perspective, multiple ASX lithium shares are in the red today. Core Lithium Ltd (ASX: CXO) is falling 5.77%, Lake Resources NL (ASX: LKE) is descending 2.41%, and Allkem Ltd (ASX: AKE) is down 1.21%. The S&P/ASX 200 Materials Index (ASX: XMJ) is sliding 1.49%.

So what did Pilbara Minerals reveal to the market today?

‘Significant’ production increase

Pilbara provided a lithium production update from the company’s Pilgangoora Project in Western Australia.

Pilbara Minerals is estimating production of 123,000 to 127,000 dry metric tonnes (dmt) of spodumene concentrate in the June quarter. This is a 54% boost on the March quarter, when 81,431 dmt was produced.

The company estimates it will achieve June quarter shipments of 127,000 to 132,000 dmt, up 118% from the previous quarter.

Pilbara forecasts a substantial increase in its cash position to $850-$855 million at 30 June. This is a $565 million boost on the quarter ending 31 March. Pilbara attributed this increase to “strong market pricing conditions” and “increased shipment volumes”.

Pilbara Minerals CEO Dale Henderson said in a company statement:

Despite various operational challenges during the year, including impacts from COVID-19 and labour shortages, the company is pleased to have finished FY22 strongly to achieve the higher end of production guidance.

After overcoming production challenges early in the June quarter, Pilbara Minerals is closing the June quarter with a strong operational performance that demonstrates the Company’s ability to achieve annualised production targets previously announced.

Looking ahead, Pilbara Minerals is planning further Battery Metals Exchange (BMX) auctions, including in the second week of July. In a recent BMX auction in June, the company accepted a bid of US$7,017 per dmt for lithium.

The company’s quarterly report for June is due on 28 July.

Pilbara Minerals share price snapshot

Pilbara Minerals shares have exploded 66% in the past 12 months. But they have descended nearly 26% year to date.

For perspective, the S&P/ASX 200 Materials index has lost more than 5% in the past year and 3.5% year to date.

Pilbara Minerals has a market capitalisation of $7 billion based on today’s share price.

The post Pilbara Minerals share price slides despite lithium production increasing 54% appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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