425: Sayona Mining Achieves Record Lithium Production Amidst Transformational Merger Progress

Sayona Mining Limited reported record quarterly spodumene production and sales, alongside significant progress towards its proposed merger with Piedmont Lithium Inc. to form Elevra Lithium.

Summary

• North American Lithium (NAL) delivered record quarterly spodumene production of 58,533 dry metric tonnes (dmt), a 35% increase quarter-on-quarter (QoQ).
• Process plant utilisation reached a new record of 93%, and lithium recovery was a record 73%, up 4% QoQ.
• Spodumene sales totaled 66,980 dmt for the June 2025 quarter, reflecting a 148% QoQ increase, aligning with a strategy to capture higher forward sales prices.
• NAL revenue for the quarter was $71 million (A$), the second highest quarterly revenue achieved since shipments began in 2023.
• The average realised selling price (FOB) decreased by 8% to $1,054/dmt (A$) or US$682/dmt, yet significantly outperformed lithium index prices which fell 15-20% QoQ.
• Unit operating costs (FOB, per tonne sold) for NAL decreased 10% QoQ to $1,232/dmt (A$) or US$791/dmt, with the unit cost of production falling to US$737/dmt.
• All FY25 guidance metrics were successfully achieved, with full-year concentrate sales up 32% and unit operating cost sold (FOB) down 9%.
• The proposed merger with Piedmont Lithium Inc. is targeted to complete on 12 August 2025, subject to shareholder approval, with regulatory approvals secured.
• The cash and cash equivalents balance at the end of June 2025 was $72.3 million, a $16.6 million decrease from the prior quarter.
• Cash decreased due to a $12 million loss from NAL operations, $5 million loss from Group operations, $4 million in NAL sustaining capital expenditure, and $4 million in merger transaction costs, partially offset by $8 million in JV partner contributions.
• A conditional placement of Sayona shares to Resource Capital Fund VIII, L.P. is planned to raise approximately $69 million (~US$45M), subject to merger completion.
• A share consolidation of 150 Sayona shares into 1 Sayona share is expected to commence on 1 September 2025, after the merger and capital raise.

Sentiment

Score: 8

Explanation: The filing indicates strong operational performance with record production, high efficiency, and significant cost reductions. The strategic merger with Piedmont Lithium is progressing well and is expected to create a globally scaled lithium producer. While cash balance decreased due to operational losses and merger costs, the planned capital raise and improving lithium market sentiment provide a positive outlook.

Positives

• Record quarterly spodumene production of 58,533 dmt, up 35% QoQ, demonstrating strong operational performance.
• New record process plant utilisation at 93% and record lithium recovery at 73%, indicating improved efficiency.
• Significant increase in spodumene sales volumes (66,980 dmt, up 148% QoQ) due to effective forward sales strategy.
• Average realised selling price of US$682/dmt significantly outperformed lithium spot price index benchmarks, which fell 15-20% QoQ.
• Unit operating costs decreased by 10% QoQ to $1,232/dmt (A$) and unit cost of production fell to US$737/dmt, highlighting cost efficiency.
• All FY25 guidance metrics were successfully achieved, including 32% growth in annual concentrate sales and a 9% reduction in unit operating costs.
• Improved safety performance with a decreased Total Recordable Injury Frequency Rate (TRIFR) and no lost time injuries in May or June 2025.
• All regulatory approvals for the proposed merger with Piedmont Lithium Inc. have been secured, paving the way for completion.
• Encouraging exploration progress at Mt Edon in Western Australia, identifying significant rubidium mineralisation with assays up to 0.59% Rb2O and 0.63% Li2O.

Negatives

• The average realised selling price (FOB) decreased by 8% QoQ to $1,054/dmt (A$) due to weak market price conditions.
• Cash and cash equivalents decreased by $16.6 million to $72.3 million at quarter-end.
• NAL operations incurred a $12 million loss, contributing to the overall cash decrease.
• The Group incurred a $5 million loss from operations and $4 million in merger transaction costs, further impacting cash balance.

Risks

• Forward-looking statements are predictions based on assumptions and involve known and unknown risks, uncertainties, and other factors, many of which are beyond the company's control, meaning actual events or results may differ materially.
• The success of the proposed merger and associated capital raise is subject to shareholder approval and other closing conditions.

Future Outlook

The company plans to provide FY26 guidance with the FY25 Full Year Results in late August 2025. Updated Mineral Resource Estimates for both the North American Lithium and Moblan projects are expected by the end of August 2025. The proposed merger with Piedmont Lithium is targeted to complete in early August 2025, forming Elevra Lithium. Lithium index pricing has improved by over US$150/t since the quarter-end, and the forward curve for lithium products has partially recovered.

Management Comments

• Improved safety performance, record production, lower costs, and a transformational merger set the stage for Sayona's next growth chapter.
• The June 2025 quarter marked a significant step forward for Sayona, with North American Lithium delivering record-breaking operational results that highlight the momentum and resilience of our team and operations.
• Spodumene concentrate production hit a new high of 58,533 dmt up 35% quarter-on-quarter while mill utilisation and lithium recovery both set new benchmarks at 93% and 73%, respectively.
• These impressive results reflect the cumulative benefits of ongoing process improvements and disciplined execution across the site.
• Sales totalled 66,980 dmt for the quarter, in line with our strategy to skew shipments to Q4FY25 to deliver against stronger forward pricing.
• Despite a softer spot pricing environment related to market conditions, our realised average selling price of $1,054/dmt (FOB) significantly outperformed lithium price index benchmarks, demonstrating the effectiveness of our forward sales strategy.
• Importantly, unit operating costs fell 10% to $1,232/dmt (US$791/dmt), while the unit cost of production decreased to US$737/dmt, highlighting the operating leverage from increased throughput and efficiency initiatives.
• The record performance at NAL capped off a year of 31% growth in annual production and a 9% reduction in unit costs compared to FY24.
• While realised prices declined due to weak market conditions, we are encouraged by the recent uptick in lithium index pricing, which has improved by over US$150/t since quarter-end.
• On the ESG front, we continued to progress studies supporting the permitting of NAL expansion.
• Our TRIFR improved further this quarter, bolstered by strong hazard reporting and consistent field leadership, with no lost time injuries recorded in either May or June 2025 the best safety performance since the September 2024 quarter.
• Exploration efforts transitioned from drilling to evaluation and planning, following the completion of more than 129,000 metres of drilling at NAL and Moblan during CY2024.
• In Western Australia, we made encouraging progress at Mt Edon and the Pilbara tenements, including a new research collaboration to investigate rubidium extraction and refinement.
• Finally, we are rapidly advancing our proposed merger with Piedmont Lithium to form Elevra Lithium. With all regulatory approvals now secured and shareholder meetings scheduled for 31 July, we continue to work towards the completion of the transaction in early August 2025.
• The merged business will emerge as a premier North American lithium producer with global scale, a balanced leadership team, and a strong foundation for long-term shareholder value creation.

Industry Context

The announcement highlights Sayona's strong operational performance in the North American lithium market, achieving record production and efficiency gains despite a softer global spot pricing environment for lithium. The company's forward sales strategy proved effective in mitigating the impact of declining spot prices. The proposed merger with Piedmont Lithium is positioned to create a premier North American lithium producer with global scale, aligning with broader industry trends towards consolidation and regional supply chain strengthening. The recent uptick in lithium index pricing post-quarter-end suggests a potential recovery in market conditions.

Comparison to Industry Standards

• Not explicitly detailed in the filing, but the company noted its average realised selling price of US$682/dmt significantly outperformed lithium price index benchmarks despite a softer spot market.

Corporate Governance

Related Party Transactions

• Sales of spodumene concentrate to Piedmont Lithium Inc. as part of an existing offtake agreement, with two marine cargoes departing port during the quarter for sale to both Piedmont Lithium and international markets.
• Proposed merger with Piedmont Lithium Inc., which will result in a 50%/50% equity holding of shareholders of Sayona and Piedmont Lithium in the merged business.

Stakeholder Impact

• Shareholders: Potential for long-term value creation through the merger, impact from share consolidation, and potential dilution from capital raise.
• Employees: Continued focus on safety performance and operational improvements.
• Customers: Continued supply of spodumene concentrate, with sales strategy optimizing pricing.
• Local Communities: Ongoing engagement through the NAL Monitoring Committee, addressing environmental and community results, and progressing studies for NAL expansion.

Next Steps

• Sayona Extraordinary General Meeting (EGM) and Piedmont Lithium stockholder meetings on 31 July 2025 for merger approval.
• Targeted completion of the merger transaction with Piedmont Lithium Inc. on 12 August 2025.
• Provision of FY26 guidance with the FY25 Full Year Results in late August 2025.
• Expected release of Updated Mineral Resource Estimates for NAL and Moblan by the end of August 2025.
• Consolidation of Sayona shares (150 into 1) expected to commence on 1 September 2025 and complete by 11 September 2025, following merger and capital raise.
• Continued studies to support permitting of NAL expansion.
• Further development drilling planned at Mt Edon for potential maiden mineral resource.
• Ground gravity geophysical survey scheduled to commence at Mallina in July 2025.
• Further mapping and geochemical sampling planned in other Pilbara tenement areas to assess targets for potential maiden drill testing.

Key Dates

Recommendation

The filing demonstrates strong operational performance with record production, improved efficiencies, and significant cost reductions at North American Lithium. The strategic merger with Piedmont Lithium is on track, promising to create a globally scaled lithium producer with a robust North American presence. Despite a temporary dip in realized prices, the company's forward sales strategy proved effective, and lithium index prices have shown a recent uptick. The planned capital raise will strengthen the balance sheet, supporting future growth and expansion initiatives. These factors collectively indicate a positive trajectory and strong potential for long-term shareholder value creation.

Keywords

Lithium, Spodumene, Mining, Quarterly Report, Merger, Piedmont Lithium, Sayona Mining, North American Lithium, NAL, Elevra Lithium, Exploration, Rubidium, Canada, Australia, Financial Results