Earnings call transcript: Pilbara Minerals Q1 2025 sees revenue surge, stock rises

Pilbara Minerals Ltd (PLS) reported a strong start to fiscal year 2026, with Q1 revenue reaching $251 million—a 30% increase quarter-over-quarter. The company’s stock responded positively, climbing 5.07% to $3.11. According to InvestingPro data, the stock is trading near its 52-week high of $3.27, with impressive returns of over 84% in the past six months. The earnings call highlighted significant advances in operational efficiency and market positioning, setting a promising tone for the year ahead.

Key Takeaways

• Pilbara Minerals reported a 30% increase in quarterly revenue, reaching $251 million.
• The company’s stock surged 5.07% following the earnings announcement.
• Operational costs were reduced by 13%, contributing to improved margins.
• Lithium demand continues to grow, with global EV sales up 9% quarter-over-quarter.
• The company maintains a robust cash balance of $852 million.

Company Performance

Pilbara Minerals demonstrated robust performance in Q1 FY26, driven by increased revenue and operational efficiency. The company capitalized on the growing demand for lithium, as evidenced by a 24% increase in realized prices per tonne. Operational advancements, including the implementation of ore sorting technology, have positioned Pilbara as a leader in cost-effective lithium production.

Financial Highlights

• Revenue: $251 million, up 30% quarter-over-quarter.
• Realized price per tonne: $742, a 24% increase.
• FOB unit operating cost: $540/tonne, reduced by 13%.
• Cash balance: $852 million.
• Total liquidity: $1.5 billion.

Market Reaction

Following the earnings announcement, Pilbara Minerals’ stock rose 5.07% to $3.11. This positive movement reflects investor confidence in the company’s strategic direction and financial health. The stock’s performance is notable as it approaches its 52-week high of $3.27, indicating strong market sentiment.

Outlook & Guidance

Looking forward, Pilbara Minerals is focused on further reducing costs and enhancing operational efficiency. With a market capitalization of $6.49 billion and a beta of 1.27, the company shows moderate market sensitivity. The ongoing P2000 feasibility study and exploration of downstream integration opportunities signal the company’s commitment to growth. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value. The Nokiju plant remains in care and maintenance, with future plans under consideration.

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Executive Commentary

CEO Daryl Howe emphasized the company’s strong start to the fiscal year, stating, "The September quarter marked a strong and disciplined start to FY26." He also highlighted the resilience of Pilbara Minerals, noting, "We are set up to last a longer storm if that is to eventuate." Howe’s comments underscore the company’s strategic preparedness and growth potential.

Risks and Challenges

• Market volatility: Fluctuations in lithium prices could impact revenue.
• Supply chain disruptions: Potential delays in raw material supply could affect production.
• Regulatory changes: New policies in key markets could influence operational costs.
• Competition: Increasing competition in the lithium market may pressure pricing.
• Economic conditions: Global economic downturns could dampen demand for lithium products.

Pilbara Minerals’ Q1 performance sets a strong foundation for FY26, with strategic initiatives and market trends supporting its growth trajectory. The company’s focus on cost efficiency and innovation positions it well to capitalize on the rising demand for lithium as the global shift toward electric vehicles and energy storage continues.

Full transcript - Pilbara Minerals Ltd (PLS) Q1 2026:

Daryl Howe, CEO, Pilbara Minerals: Thank you, Maggie. Good morning and good evening. Thank you for joining us today. I’d like to begin by acknowledging the traditional owners on the lands on which PLS operates. Here in Perth, we acknowledge the Whadjuk people of the Noongar Nation, and we also recognize the Ngäme and Gariyara peoples on whose land our Australian operation is located in the Pilbara region. We pay our respects to their elders past and present. Joining me today is Flavio Garofalo, our Interim CFO, and Brett McFadgen, our Chief Operating Officer. We’re also joined by other members of our senior team. This call will run for approximately an hour. We’ll begin with a presentation on our September quarter performance, then move through market commentary before finishing with Q&A. We’ll address questions submitted via the webcast at the end of the session.

Starting with some open commentary, the September quarter delivered a strong start to FY26, demonstrating the benefits of our expanded operating platform and our contact ore-focused operating strategy. We’ve continued to build on the momentum from a transformational FY25, demonstrating resilience and operating discipline through stable production of just under 225,000 tonnes of spodumene concentrate, an improvement in lithium recovery to deliver a record quarterly average of 78% lithium, and a 13% reduction in unit cost to $540 per tonne (FOB). These results highlight the continued optimization of the P850 operating model and the benefits of our deliberate strategy to increase contact ore feed to maximize unit cost reductions. They also affirm that the Pilgan plant is now operating in steady state, delivering the scale, efficiency, and cost performance we envisaged when we embarked on our expansion journey.

Pricing conditions improved materially, with a 20% uplift on the prior quarter, contributing to a 30% increase in revenue to $251 million. As the largest 100% owned and operated hard rock lithium producer, every price improvement flows directly to PLS’s bottom line, providing strong leverage to any recovery in lithium pricing and reinforcing our position as the sector’s pure play leader. Underlying operating cash flow remained positive after adjusting for customer receipt timing, and we closed the quarter with $852 million in cash, maintaining a strong balance sheet and significant flexibility to invest through the cycle. Now, let’s please turn to slide two. Beginning with a reminder of our strategy, our strategy is underpinned by a clear vision to create sustainable value for our shareholders while strengthening Pilbara Minerals’ position as a leading long-life and low-cost producer in the global lithium supply chain.

Turning to slide three, Pilbara Minerals is the world’s largest independent hard rock lithium producer. That independence remains one of our greatest strengths, giving us agility and responsiveness needed in a fast-changing global market. Our foundation asset is the high-quality, long-life Pilbara operation in Western Australia. Through our P680 and P1000 expansions, we’ve established a leading low-cost processing platform that delivers greater scale, efficiency, and operational flexibility, firmly positioning Pilbara Minerals at the lower end of the global cost curve. Beyond Pilbara Minerals, we are continuing to build a truly diversified growth platform with downstream exposure through our POSCO joint venture in South Korea and early-stage international optionality through the Cleanup project in Brazil. Importantly, our balance sheet remains exceptionally strong, with $852 million in cash and $625 million in undrawn cash facilities, providing the flexibility and confidence to invest, grow, and lead through all stages of the lithium cycle.

Turning to slide four, some of the key highlights for the quarter include production of 224.8 thousand tonnes, up to 2% quarter on quarter, reflecting strong operational recovery and consistent plant performance as we operate the expanded Pilgan plant at steady state. Unit operating costs, as mentioned, a 13% reduction to $540 per tonne (FOB), delivering clear cost leadership and highlighting the operational leverage of our optimized production platform. As it relates to pricing, a 20% uplift in realised pricing and a 30% increase in revenue resulting in positive cash margin, even as we continue to make modest investment in our growth and improvement programs. Importantly, this performance marks a disciplined and confident start to FY2026, validating our strategy of building scale, efficiency, and flexibility to capture margin through the cycle. Now, with that, I’ll now hand over to Brett to take a deeper look at the operation.

Brett McFadgen, Chief Operating Officer, Pilbara Minerals: Thank you, Daryl. If we move to slide five, starting with safety, our 12-month rolling TRIFA was 3.08 at the end of the September quarter. We also achieved 2.95 quality safety interactions completed per 1,000 hours worked, well above our target of 1.6, demonstrating strong leadership engagement in promoting a positive safety culture. This outcome reflects the ongoing work we’re doing to build and strengthen our safety culture across the site. While this improvement is encouraging, we recognize there’s always more work to do to ensure every team member goes home safe and well after every swing. Moving to slide six, the September quarter delivered strong, disciplined operational outcomes across mining, processing, cost, and sales performance. Total material moved increased due to improved operational efficiencies. The transition to our mining fleet to the owner-operator model is ongoing, supporting greater cost control and flexibility.

Processing lithium recovery of approximately 78% demonstrates the sustained benefits of the P1000 expansion and the reliability of our processing platform. Our operating strategy of maximizing contact ore fed through effective utilization of the ore sorting capability is delivering expected unit cost benefits. The proportion of contact ore processed will be progressively increased over the remainder of FY2026 to leverage our ore sorting capability and maximize unit cost reductions. Together, these initiatives across mining and processing continue to unlock more capital efficiencies and lower unit operating costs. Our unit FOB cost of $540 a tonne, or US$353 a tonne, delivered a 13% reduction on the June quarter, a significant improvement driven by scale, efficiency, and our optimized operating model. For the Pilgan plant now operating in steady state, we’ve delivered on our vision of a larger, more efficient, and lower-cost operation.

The expanded platform provides us with greater operational flexibility, improved resource utilization, and the ability to adapt to changing market conditions. Most importantly, this transformation positions us to capture margin through the cycle, enabled by industry-leading ore sorting technology, improved efficiency, and strong cost discipline. Thank you, and I’ll now hand back to Daryl.

Daryl Howe, CEO, Pilbara Minerals: Thanks, Brett. Moving now to slide seven, PLS has built a portfolio of strategic growth options designed to drive long-term shareholder value through flexibility, diversification, and market responsiveness. The Nokiju processing plant remains in care and maintenance for FY2026, providing immediate low-capital restart capability when market conditions improve. This is a unique source of latent capacity and optionality within our portfolio. A P2000 feasibility study is progressing well, assessing the potential to expand Pilbara Minerals’ production capacity to more than 2 million tonnes per annum. Study outcomes are expected in FY2027, with the development timing dependent on successful technical results, funding readiness, and, of course, a sustained improvement in lithium pricing. In Brazil, drilling continues and study optimization work is advancing, with outcomes targeted for the June quarter of 2026.

This program will help define the development pathway for the Cleanup project and strengthen our presence in one of the world’s most prospective emerging lithium provinces. Together, these initiatives demonstrate a balanced, portfolio-based approach to growth, leveraging Tier 1 assets, global reach, and disciplined capital allocation to create value and optionality through the cycle. Moving now to slide eight, our chemical strategy continues to advance, providing exposure to valuated lithium chemical products and enhanced supply chain diversification. As it relates to PLS, our joint venture continues to make steady progress with customer certifications. Production has temporarily moderated to batch processing, reflecting near-term softness in the South Korean battery sector following reduced U.S. EV incentives and higher tariffs during the quarter.

Encouragingly, PLS, our joint venture, is receiving interest from a number of new customers across existing and additional geographic regions, particularly those seeking to diversify lithium chemical and battery supply chains outside of China for EV mobility and energy storage applications over the medium term. Moving to midstream, construction of our midstream demonstration plant remains on schedule, with completion target for the December quarter this year. This project will provide valuable technical data and commercial insight to inform future midstream participation opportunities. Lastly, relating to our Ganfeng partnership, work on the joint downstream partnering study with Ganfeng has progressed during the quarter. More than 1,000 industrial sites have now been assessed, with detailed evaluation continuing on a select few. We are in discussion with Ganfeng to extend the agreement’s sunset date to December 2027, providing additional time to assess market conditions, shortlist sites, and the overall investment case.

Together, these initiatives demonstrate a measured capital discipline approach to downstream integration, building capability and partnerships today that will position PLS for greater diversification and value capture across the lithium supply chain in the future. Now, with that, I’ll hand over to Flavio for an overview of our financial performance.

Brett McFadgen, Chief Operating Officer, Pilbara Minerals: Thank you, Daryl. Good morning and good evening to everyone joining us today. Please turn to slide 10 for a summary of the group’s key financial metrics for the quarter ended 30 September 2025. The September quarter delivered strong financial results, demonstrating the operational leverage of our optimized Pilgan plant across all key metrics. Group revenue of $251 million was 30% higher quarter on quarter, driven by a 24% increase in average realized price to US $742 per tonne for SC 5.3 and stable sales volumes. This demonstrates our ability to capture improved market pricing while maintaining operational consistency. On the cost side, FOB unit operating cost decreased 13% to $540 per tonne, with CIF unit cost also down 11% to $645 per tonne. This improvement reflects the benefits of high production volume and scale efficiencies delivered through our expanded platform, along with ongoing optimization initiatives.

Our cost reduction focus is now embedded in the culture at Pilbara Minerals and is driving strong performance across all areas. We closed the quarter with a cash balance of $852 million, providing financial flexibility for strategic opportunities and maintaining our balance sheet resilience. Turning to slide 11, slide 11 shows a cash flow bridge for the September quarter. During the September quarter, our cash balance declined by $122 million from $974 million to $852 million. This reduction was primarily driven by capital expenditure of $78 million and working capital timing effects. Working capital movements included approximately $50 million in customer receipts due in the early December quarter and $32 million in final pricing adjustments on the June quarter shipments. Cash margin from operations of $8 million was supported by improved pricing but impacted by these timing effects.

Cash margin from operations, less mine development costs and sustaining CapEx, was negative $19 million. The capital expenditure was $78 million on a cash basis and $55 million on an accrual basis, comprising infrastructure and projects of approximately $28 million, mine development of $20 million, and sustaining capital of $7 million. Despite these working capital impacts, our balance sheet remains robust with total liquidity of $1.5 billion, positioning us well to navigate the current market conditions and invest strategically through the cycle. I’ll now hand back to Daryl.

Daryl Howe, CEO, Pilbara Minerals: Thanks, Flavio. Turning to slide 13, global geopolitical dynamics continue to highlight the strategic importance of secure and resilient critical mineral supply chains. PLS is actively contributing to these policy discussions from recent participation in the Austrade Critical Minerals delegation trip to the U.S. to consultations on the proposed strategic reserve and through direct engagement with policymakers in Canberra. Next week, I’ll represent PLS at the APEC CEO Summit in South Korea. This is another opportunity to help position Australia as a reliable, low-cost supplier of critical minerals to global markets. We welcome the Commonwealth Government’s continued commitment to developing Australia’s critical mineral sector, and we will continue to contribute to the policy discussions shaping its long-term success. Australia has an incredible opportunity to expand its role in the global lithium and energy transition supply chain, but the race for market share is well underway.

Other jurisdictions are moving fast with coordinated policy and public investment to attract capital and downstream manufacturing. To remain competitive, Australia must match that ambition through targeted investment and shared infrastructure that lowers the cost for all across the industry and helps secure our position in this global race. Turning to pricing, conditions remain volatile but improved from the prior quarter, with both spodumene and lithium carbonate spot prices recording double-digit gains. During my recent visit to China last month, every one of our customers reiterated confidence in the long-term outlook and expressed strong interest in securing additional supply from PLS. That continued demand and engagement underscore confidence in the sector’s fundamentals and the prospectivity of our product supply. Moving to slide 14, now turning to demand, lithium fundamentals remain robust.

Global EV sales continue to expand, up around 9% quarter on quarter and 26% year to date, with penetration now approaching 30% globally and more than half of all new vehicles in China being EVs. Battery energy storage installations are also accelerating, up nearly 40% year on year, strongly supported by China’s rapid renewable energy build-out. From a policy perspective, China’s supportive regulatory framework continues to underpin domestic storage growth. While recent U.S. tax credit changes may create short-term noise, this doesn’t alter the long-term global demand trajectory. In short, the demand story remains intact, and PLS, with its 100% ownership model and strong balance sheet, is positioned to capture full benefit as markets recover. Moving to slide 15, battery energy storage is now the fastest growing segment, and lithium demand rising just 3% of total consumption in 2020 and around 17% today, according to BMI.

BMI’s latest forecast projects about 323 gigawatts of new BESS installations in calendar year 2025, 50% growth year on year. If achieved, this is an extraordinary growth rate. China remains the main catalyst. In September, the National Development and Reform Commission released a major action plan targeting 180 gigawatts of a new type of energy storage by 2027. This represents more than $30 billion in new investment and a 140% increase from China’s installed base at the end of calendar year 2024. At the same time, a second demand driver is emerging: the rapid build-out of AI and data center infrastructure. These facilities require large-scale, instantaneous power support, making grid-connected BESS a critical enabler of reliable infrastructure. Recent announcements from Google, Nvidia, and Meta illustrate this trend, with each committing tens to hundreds of billions of dollars to new AI-driven data center capacity.

McKinsey and Company recently projected their global data center investment will reach nearly $7 trillion by 2030, with more than $4 trillion allocated to computing hardware. That level of capital intensity underscores how central data center resilience and therefore dependable power and storage is becoming to the global economy. Together, policy-driven renewable storage expansion and the digital infrastructure boom are expected to contribute significantly to continued growth in lithium demand, a dynamic that reinforces PLS’s long-term opportunity to supply and partner across the global energy storage value chain. In summary, BESS or BESS demand is being driven by two significant emerging drivers: one, aggressive renewable energy storage policy, particularly in China, and two, the rapid expansion of digital infrastructure. Together, these forces are reshaping the energy and technology landscape, underpinned by strong long-term fundamentals for sustained lithium demand.

The broader lithium market continues to demonstrate resilience and depth, with total demand growing at around 30% CAGR since 2020. This, of course, is driven by accelerating electrification across mobility, energy storage, and emerging technology sectors. While regional policy changes may create short-term noise, the global trajectory remains firmly positive. For PLS, this environment reinforces the strength of our strategic positioning and customer relationships across key markets, giving us the agility and confidence to navigate near-term volatility while capturing long-term value as the industry expands. Lastly, for my closing comments, I’d like to leave you with a few key reflections. The September quarter marked a strong and disciplined start to FY26, confirming that the expanded Pilgan plant is operating in steady state with improved efficiency, lower costs, and consistent performance. Financially, the business remains robust.

Underlying operating cash flow was positive after adjusting for sales timings’ impacts, demonstrating our ability to generate cash even in a volatile pricing environment. We remain on track to deliver our FY26 guidance, reflecting the strength and resilience of the platform we’ve built. Near-term pricing remains volatile, but the long-term fundamentals are unchanged. Structural growth drivers from electric vehicles to stationary energy storage continue to strengthen, and current lithium prices, I should say, are not incentivizing new supply, which suggests tighter markets ahead. With a scalable, technology-enabled operating base, a strong balance sheet, and a globally diversified growth portfolio, PLS is well positioned to lead through the cycle and capture value as market conditions improve. As the largest 100% owned and operated hard rock lithium producer, every price improvement flows directly to our bottom line, providing strong leverage to any recovering lithium pricing.

Our confidence is anchored in what we can control: disciplined execution, operational excellence, and strategic agility, the hallmarks that define PLS and make us a partner of choice in global supply chains. Now, with that, I’ll hand back to Maggie to open the floor for questions. Thank you, Maggie.

Maggie, Moderator/Operator: Thank you, Daryl. As a reminder, to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by as we compile the Q&A roster. Our first question comes from a line of Jonathon Sharp from CLSA Limited. Please go ahead.

Yeah, good morning, Dale and team. First question is just on the uplift in recoveries. You averaged in FY2025, you averaged 72%. This quarter, we saw quite an uplift to 78%. You’ve recently commissioned the ore sorters. Can you just quantify how much of that improvement was directly attributed to the ore sorters versus anything else? Do you expect recoveries to continue to rise potentially into the 80% as you sort of iron out any issues with those ore sorters? Thanks.

Brett McFadgen, Chief Operating Officer, Pilbara Minerals: Yeah, thanks, John. It’s Brett here to answer that question. The recoveries have been attributed to the work that we did with the P1000 and the P680. Ore sorting plays a tremendous part in that, but it’s not limited just to the ore sorting. That’s been the big lever, but the site team and corporate technical team have been working on a range of initiatives through the rest of the circuit there that are working in combination with the ore sorting. What we will be doing in the next quarter and then in the next half is increasing our contact ore ratio and really leveraging the ore sorting circuit just to try to flex that cost in the mine right through to the mill and get those cost efficiencies.

Recoveries are always a big focus of us, but I wouldn’t be expecting them to get into the 80%, but we are getting closer and certainly with our geometric work, we’re well on track to make the most out of our recovery circuit.

Okay, thanks for that. Just a second question. I know you’ve answered this before just on Nokiju, and I know you’ve said that you’re expected to remain in care and maintenance in FY2026. Can you just remind us of what price signal or duration of price strength would trigger a restart there?

Daryl Howe, CEO, Pilbara Minerals: Yeah, John, thanks for revisiting that one. We haven’t given a price guidance around that, but really the way what we need to see is obviously a consumer will lift from current pricing, probably something north of $1,200 U.S. per ton. More importantly, we want to make sure that that’s sustained. As I say, we haven’t picked a threshold value on that.

Okay, thank you for that. I’ll pass it on.

Maggie, Moderator/Operator: Thank you. Next question comes from Hayden Bestor from Argonaut. Please go ahead.

Yeah, morning Daryl. A great operating result. I just wanted to touch on the ore sorter a bit more. Can you just give us some rough metrics? When you run a million tonnes through that, you know you’re getting a modest grade uplift as well into the process plant. What does a million tonnes through the ore sorter provide you with feed for the actual mill?

Brett McFadgen, Chief Operating Officer, Pilbara Minerals: Yeah, thanks Hayden. That’s quite a complex question that I could sort of say depending on what we’re feeding it. That is a large part of the work that we’re doing with the geometric to make sure that we’re getting that blend right. We’re maximizing those ore sorters and we’re getting the cleanest feed that we can through to the plant. It’s not always a strict %, but what we’re doing is really looking at what’s coming out in the mine plan, how do we optimize that through the ore sorter to make the best feed for the plant?

Okay, brilliant. Just on the product grade’s moving around a bit. Just keen to sort of understand who’s taking all the product at the moment. I presume there’s a little bit of spot sales going on, but is the movements in the grade reflecting who you’re selling it to each quarter, or is it just more what’s coming out of the back end of the plant?

Daryl Howe, CEO, Pilbara Minerals: Yeah, I think it’s more the latter. It’s not related to customer requirements. As it relates to, you know, where is the flow of sales going to? At this moment in time, it’s largely offtake. We had had a little bit of spot, but not a lot. The grade fluctuations are not driven by customer requirements.

Okay, brilliant. Great quarter. Cheers, guys.

Thanks, Hayden.

Maggie, Moderator/Operator: Thank you. Just a moment for our next question, please. Next, we have Rahul Anand from Morgan Stanley. Please go ahead.

Yeah, hi, good morning, Dale and team. Thanks for the call. I’ve got two questions. The first one is on POSCO and your POSCO JV. Obviously, you’ve pared back some of the volumes going into that contract, $150 this year, just given the ramp-up and demand for hydroxide, as you’ve mentioned in the release. That contract sits at over $300 going into future periods, $315 to be precise. I just wanted to understand the makeup of that contract. Is that take or pay? Is there flexibility within that? How are you thinking about that option that you have coming up to buy into that plant? That’s the first one. I’ll come back with the second. Thanks.

Daryl Howe, CEO, Pilbara Minerals: Yeah, thanks, Rahul. As it relates to the offtake requirements, we, and across all of our offtakes, finalize sort of the year ahead in advance of the year we’re heading into. We do that across the board, including with our joint venture partner, PPLS. As outlined in the release, we’ve adjusted those volumes for the year ahead. Of course, bearing in mind that there are two things at play. This is about bringing online and introducing a whole new chemical facility in a new market. As per our releases, there’s been a lot of development around qualifications, which is serving into new growth markets, in particular the U.S. That’s part of it. The other part, which is less of a bearing, is obviously ramp-up progress, which we’re quite comfortable with. It’s really those two things which are guiding volumes.

The team is in the thick of the planning process right now for the budgets and outlook for next year, so there could be some further adjustment to come. As it relates to the equity election option that we have coming up to go from 18% to 30%, the timing of that is not due until July next year, which in the lithium industry is a very long time away. Between now and then, we’ll continue to monitor the market and take a view of what we want to do closer to the time.

Got it. Okay, thanks for that. Look, just on the second one, I wanted to touch a bit more on the recoveries. I guess the missing piece of the puzzle here is obviously the head grade that went into the plant for ore processing, and I think that’s what Hayden was alluding to as well in terms of this question. Are you able to give a bit of a color perhaps on how that plant grade changed given the elevated recoveries? Because obviously, just trying to figure out sort of, you know, how the recovery performance goes for the rest of the year, you flagged that recoveries will reduce. Just wanted to kind of square that circle if that’s possible.

Brett McFadgen, Chief Operating Officer, Pilbara Minerals: Yeah, sure. The head grade, we weren’t high grading, just to make that clear. That was not an intentional high grading of the mill feed. Mill feed was no different to it has been, and also just part of the mine plan. The recoveries will take a slight impact, but mainly for more of the contact ore that we’re intending to feed over the next quarter. We really need to maximize those ore sorters to take as much of the contact ore around the main ore body as we go through our mine, rather than stockpiling it and re-handling it later. That’s the bigger impact to the recoveries.

Daryl Howe, CEO, Pilbara Minerals: I might just add to Brett’s commentary in this space. Obviously, an absolutely cracking lithium recovery result, and that, as mentioned, you know, a record for us. As to how that got achieved, there’s actually multiple processing levers which have been worked on simultaneously by Brett’s team. Across several, we’ve had fantastic progress. It’s a real credit to Brett, his team, the operating team, and the projects team. Just to rattle off a few, as it relates to the processing plant, the ore sorting, of course, gets a lot of focus, but it’s not just that. There’s a series of online analyzers at the front of the circuit, the back of the circuit. Separate to that, the team has been working on different reagent regimes. There’s also different monitoring systems in the float circuit, some optical type gear which has been deployed.

There’s been further work around tying mineral variation in particular, crystal size and grind size in the circuit, and a new level of sophistication has entered the operating strategy. The sum of all of these things is contributing to the improved results that you see. If I just circle back to the idea of, you know, to what extent did you scale up contact ore or not, that answer is complicated, and it depends where you’re at in the mine plan. It also depends what stockpiles are available or not available. In short, it’s a complex equation with a lot of subcomponents summing through to the result that you see. I appreciate that’s a longer explanation, but this is the art and the science that the team have been working on for years. Thanks, Rahul.

Maggie, Moderator/Operator: Thank you. Just a moment for our next question, please. Next, we have Austin Yun from Macquarie. Please go ahead.

Morning, Dale and team. Yeah, really good operational results against the backdrop of the tightening of the lithium market. Just a follow-up question on the Pilgan plant. In the update, you expect the plant to remain care and maintenance in financial year 2026. I’m just keen to understand the rationale and thinking behind it. Does that mean you don’t believe the price is going to go high up and fast enough in the next nine months? The base case is care and maintenance, or is it actually because you believe you can squeeze a bit more from the current Pilgan plant given the good performance and the ore sorting is working really well? I’ll circle back with the second one. Thank you.

Daryl Howe, CEO, Pilbara Minerals: Sure. Thanks, Austin. Thanks for your question. The short answer is no. I wouldn’t read through that that’s our view of the market outlook. Austin, as you know, the lithium market’s got an ability to surprise, is what we’ve seen historically. Given these incredible growth rates, we could well see a pull-through and a rapid turn. All of that’s possible. We’ve seen it before, in which case we will respond accordingly. If the market turns rapidly and we think it’s game on, of course, we will flick the switch. We’ll bring Nokiju back to life, and shareholders will enjoy the benefit of that. Yes, don’t take a read-through in terms of that type of guidance.

Thank you. The second one is just a quick one. It seems like, you know, lithium is a hot topic and part of the critical minerals discussion. Do you, as critical minerals, expect any support, you know, funding or other forms from the U.S.? Anything you could share from your recent trip to White House? Thank you.

As it relates to our engagement, and as I mentioned in our notes, we have been contributing input into a number of processes, and we’ll continue to do that to support the government’s thinking. It’s too early to take any view of where that all heads. A number of the avenues the federal government is exploring, I think they’re still really at the early stages of working through what type of support they would like to deploy. Certainly, Pilbara Minerals is at the table and contributing to that. As Perry notes, we’re at pains to reinforce the need for shared infrastructure. We think this is utterly critical for Australia to become more competitive. When I say shared infrastructure, it’s about shared facilities, shared by all to lower the cost for all. It’s about shared power, network power to lower the cost for all.

Putting in place these types of infrastructure, that’s the role of government. That’s what we need to do. That’s top of the list as we advocate to government about the right types of support.

Thank you, Daryl. I’ll pass it on.

Maggie, Moderator/Operator: Thank you. Next, we have Hugo Nicolaci from Goldman Sachs. Please go ahead.

Morning, Daryl and team. Thanks for the update. Obviously, great to see some of the early efficiencies of the mine coming through. I won’t belabor the point on the feed grade. I assume that’s just going to average down with the mine grade and contact ore strategy. If I can pick up the PPLS points, what are you now budgeting in terms of FY2026 hydroxide production relative to that offtake revision? Is it sort of 40 to 50% utilisation going forward?

Daryl Howe, CEO, Pilbara Minerals: We’ll be able to give you a clearer answer on that next quarterly update because the refinement of the calendar year plan for next year, the team’s in the thick of it. You can take an assumption based on what we’ve committed and the release of the 155,000 tonnes.

Got it. In terms of any further losses in the JV or further contributions into it to consider, that’s probably something for next quarter as well?

Yeah, correct. That’ll flow from the budget process. As it relates to the medium to long-term outlook, we are very happy about the strategic rationale and our sort of positioning with that hydroxide facility. You can appreciate, particularly given the rise of our almost desperation for critical mineral security, we think our joint venture with POSCO puts us in a very, very unique position. In terms of where we’re at today, we’re very comfortable about that strategic positioning. We’ve got some good runway just to see how the next six to nine months go. Very happy with our involvement there with PPLS.

Makes sense. Maybe just one on given the price volatility in the quarter, how should we think about any provisional pricing impacts that come through this quarter?

Do you want to take that?

Yeah, I’ll take that. In terms of we’ve obviously seen an uplift in pricing in that September quarter. We will expect to see some gains which will flow through to the December quarter, which obviously will benefit from. During the September quarter, as mentioned, we took a $32 million hit, which was provided for in the June accounts. We have that number there. Moving forward, I think we’ll see some benefits coming through. Got it. In terms of just the timing of when that price peak, you don’t have some unwind of that going forward? No, we’ll expect to see some of that come through in the December quarter. Essentially, most of that will crystalize in the early part. Great, thanks for that. I’ll pass it on.

Maggie, Moderator/Operator: Thank you. Just a moment for our next question, please. Next, we have Levi Spry from UBS. Please go ahead.

Yeah, good day, Dale and team. Thanks for your time. Can I just explore these many discussions you’re having with government bodies and things like that on strategic reserves and potential government support? What role, if any, do you think floor pricing could play in it? Obviously, the context is MP, and it obviously seems to be getting a bit more airtime. In your discussions, what role do you think it could play?

Daryl Howe, CEO, Pilbara Minerals: Yes, good day, Levi. At this stage, we’ve just been inputting our ideas to government, in particular, the group tasked with thinking through the strategic reserve. They’re very much in input mode. Of course, they’re taking views around floor pricing and what that could mean and the pros and cons. As to the idea around floor pricing, the devil’s in the detail. I think if deployed the right way, there could be positives, but equally, there could be bad, unintended consequences if not rolled out the right way. I appreciate there’s others on the market who have been vocal about that. That’s all going into the thinking as government considers what support they’d like to deploy. For us, we’ve been very much advocating for the shared infrastructure aspect. We think that’s a very clear-cut, sensible investment case and hard to dispute.

Okay, thank you. Maybe I should know this, but what’s the timing of all this coming to a head?

That’s in the government’s hands. They haven’t provided publicly an outline as to their timing, so we’ll wait and see. We’re not holding our breath.

Thank you. Just the last one, just to come all the way back to recoveries. Previously, you’ve said mid-70s, haven’t you? Isn’t this a material step up? How should we consider it? Think about the long-term number in our models. Should I be tweaking it up a couple of points?

Brett McFadgen, Chief Operating Officer, Pilbara Minerals: Yeah, the life of mine recoveries there, Levis, are in the mid-70%. You know, this quarter, corresponding quarter in FY2025, was also in the 75%. You know, we’re always going to be trying to push the recoveries. It’s the best lever that we have. At the moment, with all of the good work that we’ve done that Daryl touched on, and we’re continuing to lever the contact ore, that’s the main variable that is going to change for the next quarter and half year.

Daryl Howe, CEO, Pilbara Minerals: Think about just, yeah, maximizing lithium recovery versus this is what the team is here to do. I love the idea that if we could eke up that long-term average expectation, that would be obviously incredible in terms of value lift. We’d be able to reset the reserve, and a whole bunch of flow-ons would flow from that. That, of course, remains the central aim. What we need to do is we’re really into the process of really starting to sweat and leverage the full power of this new platform we’ve built. Yes, early signs are really positive, but we’re really going to get more runs on the board and get more data processed. Yes, it’ll be fantastic as we’ve got more runs on the board to look at resetting those long-run expectations. Too early to do that.

Okay, thank you. Thanks for your time.

Thanks, Levi.

Maggie, Moderator/Operator: Thank you. Next, we have Glyn Lawcock from Barrenjoey Markets Pty Limited. Please go ahead.

Good morning, Daryl. Two questions. Just maybe just on offtake and price floors. What about industry discussions? Is there any probability of price floors or, you know, with industry participants rather than government? We’ve seen that in the past in the lithium industry. Just where, you know, if they want new supply non-China, is that an alternative?

Daryl Howe, CEO, Pilbara Minerals: Yeah, good day, Glyn. Look, to date, I haven’t heard much about that in terms of coming together for a shared approach. Obviously, any of those discussions would have to be handled with great care, given various anti-competition laws depending where in the world those groups are domiciled. No, I’m not aware of any of those types of discussions. I’d also add that in terms of the structure of the market today, it is very much a global market. You’ve got supply from all continents in different forms. I think the probability of alignment across that supply is pretty unlikely, but you never know.

Do you think you could see a price floor to get Nokiju restarted with a car manufacturer or a battery manufacturer? That’s not something you contemplate?

Oh, no, the door is open for that. If a buyer would like to do that, and there have been overtures of that, I’ll believe it when I see it. The door is open.

Okay. Maybe just staying on the Kalina project, with all the benefits you’ve now seen through ore sorting, contact ore feed, everything for the Pilgan plant, how much of that can you translate through to the Kalina project? Would it be a bit of capital you need to spend, or can what you’ve got benefit the Kalina project when you do finally come to turn it on? Just trying to think about all your learnings that you’ve got now, how we could do a lot better with the Kalina plant, get the cost down, volume up. Thanks.

Yeah, great question. Let me start, and Brett might want to follow in on this one. Yeah, the short answer is yes, we’re considering what knowledge transfer we could go from the Pilgan to Nokiju plant. We had been sort of waiting to ramp up the Pilgan and start to sweat the asset, you know, for the purpose of really, yeah, being able to have confidence in what the benefit delta is. We’re increasingly moving to a position where we can start to do the evaluation on the investment case at Nokiju. Given those units and the material handling complexity, it’s not straightforward to augment that into an existing circuit. There’s a lot to work through. It’s complex, and there’s capital intensity involved. There’s a fair bit to work through to work out, is it worth the investment?

Yeah, timeline?

Brett McFadgen, Chief Operating Officer, Pilbara Minerals: No, it’s not a timeline at the moment. The other thing, Glyn, is a lot of the downstream benefits that we’re seeing with the ore mineralogy and the flotation chemistry is directly applicable to Ngungaju. We can transfer that knowledge straight in there and obtain the benefits. That’s the beauty about having the two plants side by side, as we can leverage what we learn in one and take directly into the other. There’ll be some significant benefits that we can directly transfer from the P1000 expansion.

Okay, thanks very much.

Daryl Howe, CEO, Pilbara Minerals: Thanks, Glen.

Maggie, Moderator/Operator: Thank you. Our next question comes from the line of Daniel Roden from Jefferies. Please go ahead.

Good day, Daryl and team. Thanks for taking my question. I just wanted to come back to the recoveries. I think everyone gets it, but I just wanted to heavily point and clarify that the recovery that you’re reporting doesn’t account for the ore sorting losses or rejects. How should we be thinking about accounting for this? If I look at your numbers, if I’m just taking your reported mines and your reported mills, if I forecast that out and take your numbers into the next, into perpetuity, would there be a disconnect there? I’d just see my ROM stockpiles build because it’s not accounting for the ore sorting losses. Where I’m trying to get at is the ore sorter, what’s the rejects recovery factor that we need to be, what are the guide rails that we need to be assuming there?

Brett McFadgen, Chief Operating Officer, Pilbara Minerals: Yeah, thanks, Daniel. Those guide rails are ever-changing at the moment as we’re leveraging up the contact ore. The level of rejection is highly dependent on what level of that contact ore that we put in the front end of the ore sorters. That material actually goes back into the mine. It’s prior to the crushed ore stockpile. The feed grade that we report there is from the crushed ore feed grade forward. It’s pretty hard to give a number at the moment, particularly since we’re ramping up the contact ore. It’s a bit of work in progress at the moment.

Daryl Howe, CEO, Pilbara Minerals: Yeah, just to clarify, from a financial modeling perspective, the lithium recovery is what we’ve been able to recover from the mine of what’s in situ. The fact that we’ve added ore sorting or various other process leaders does not change that methodology. The whole idea of ore sorting is it’s really for two aims: to enable more extraction and enable more concentration to maximize lithium recoveries. Is there some additional exit streams? Yes, but this is all for one aim, which is actually to improve that value. You don’t need to allow for any additional complexity in terms of how the mine was modeled pre-ore sorting. Hopefully, that clarifies, Daniel.

Yes, it definitely does. I think I’m just being conscious that we’re not, you know, on a forecasting perspective, over accounting for ROM stock builds is kind of where I’m coming from. Maybe just bringing it back to you, you kind of mentioned that I guess from next quarter you’re going to start increasing that contact ore feed. How should we think about that in terms of, I guess, fresh ore mining volumes? Are you going to be leveraging your stockpiles a bit more and decreasing, I guess, mining activity from next quarter? Is that more contact from the fresh ore feed that you’re going to leverage on?

Brett McFadgen, Chief Operating Officer, Pilbara Minerals: Yeah, it’s more of the contact ore from the fresh feed around the peripheries. As we get further down in the central pit and over in our east pit, we start to get more of that contact ore. Rather than stockpiling it, we’re intending to use it, which will allow us to get the economies through the mining fleet as well.

Okay, perfect. If I can just run one more from me, with regards to the PPLS, what’s the utilization been there? I guess if you ran it at full noise, how close to nameplate would you be running out?

Daryl Howe, CEO, Pilbara Minerals: From memory, Daniel, on that one, the first train that I brought upline has been brought up to close to full utilization, whereas the second train, they’ve been purposely moderating it as a function of the sales changes. I’d have to double-check on this, but I’m pretty sure both have, in terms of the sort of throughput rate, been run up to full throughput. As I say, the utilization levels are just different at the moment.

Okay, perfect. Thanks, guys. Appreciate it.

Thanks, Daniel.

Maggie, Moderator/Operator: Thank you. Last question from the audio before we move you on to the webcast. We have Matthew Frydman from MST Financial Services Pty Limited. Please go ahead.

Sure, thanks. Morning, Dale and team. Can I ask a question on the cash burn during the quarter? Obviously, you ran ahead of guidance in the quarter, but you’re highlighting that you’re expecting upward unit cost pressure from here. Obviously, the cash position went backwards. Just wondering if there’s any further step change necessary in your view to stem that cash burn outside of waiting for prices to improve, whether that maybe looks like a further change to the P850 operating model, whether there’s any sort of discretionary CapEx that you can take out across the various project streams, or are you happy to operate at kind of steady state as you’ve outlined and use your cash balance and your debt liquidity as required to continue funding operations? Thanks.

Flavio Garofalo, Interim CFO, Pilbara Minerals: Yeah, hi, Matthew. Thanks for your question. The cash burn for the period was really a function of cash flow timing. As I pointed out, we had some provisional pricing adjustments, which we actually booked $40 million for in the year-end accounts. We crystallized $32 million of that in the September quarter. We had high receivables at the end, which didn’t come through of $50 million. It was purely a timing impact for the period of the September quarter. Moving forward, we don’t expect any material changes. It’s just purely a function of timing between the quarters.

Yeah, okay, thanks, thanks, Flavio. I mean, your cash margin from operations was negative, understanding that there were some receivables, but you’re going to get receivable movements from quarter to quarter. Obviously, there was gross capital spend, interest in leases, and other spend, which obviously weighed on that cash balance to bring it down by $122 million quarter on quarter. It’s not necessarily a problem that isn’t going to repeat in future quarters outside of price. Just wondering if you guys are happy for that situation in terms of continuing to lean on your existing balance sheet and liquidity or whether there’s any other further step changes operationally to deliver. Thanks.

Yeah, I think just to add to that, obviously as part of our cost smart measures, we’ll have further cost discipline and cost reductions moving forward. We’ll be very disciplined in terms of managing our cash balance as part of maintaining our strong balance sheet moving forward. There are some other opportunities in terms of timing from a capital perspective that we’ll look at. We’ll obviously look at this through the lens of the lithium price as we move forward through to the December quarter as well.

Daryl Howe, CEO, Pilbara Minerals: Matthew, probably just to add, you can look at the points. A few points are good ones. Although there’s some enthusiasm returned to the sector of late, at the end of the day, the price appreciation we’ve seen is still well below the long-run requirements of the industry. You know, depending on which analyst you choose, that range is anywhere from $1,000 US per tonne to $1,600 US per tonne, with an average of about $3,300 or so US per tonne. Of course, the prevailing price is well below that at this time. For Pilbara Minerals, what we’ve done is we’ve set the business up for this low-cost environment. To your question, we’re comfortable with the way we’ve configured the business. We’ve optimized for lowest cash burn, we’re maximizing contact ore, we’ve got the very strong balance sheet, etc., etc.

We are set up to last a longer storm if that is to eventuate. However, of course, given the strong growth signals, etc., etc., we envisage tightness coming. That’s what really sets up what we think is the big opportunity for our shareholders.

Maggie, Moderator/Operator: Thank you. Now I’ll pass to James for webcast questions.

Okay, thank you, Maggie. Daryl, some questions online here. Does collaborating with Ganfeng Lithium for the study on downstream processing rule out the U.S. as a possible site for projects?

Daryl Howe, CEO, Pilbara Minerals: The short answer is no. As a large operator with an incredible unallocated profile head across our Australian asset and Brazil asset, we’re able to do multiple downstream collaborations if that’s what makes most sense to our shareholders. We’re not ruling out any jurisdiction or counterparty.

Okay, thank you. Daryl, what is your response to Trump’s critical minerals deal with Albanese? Could it help sustain Australia’s position long-term as the world’s largest lithium producer, or are there still challenges to that?

I think the announcements that we’ve seen between the President and our Prime Minister are incredibly encouraging. At the end of the day, the lithium industry is still young and needs to grow significantly to support the growth needs globally. Therefore, multiple supply chains need to be built out to serve the world. This type of government-to-government collaboration is fantastic to see, and we need more of it to not only usher for lithium, but other key critical minerals.

Okay, Daryl, what do you mean by targeted investment is needed by governments? How would you like that investment to be targeted? I think that’s referencing infrastructure.

That’s right. Targeted is a not polite way of saying don’t blow money on the wrong things. For us, it’s about investing in shared infrastructure to lower the cost for all, which makes Team Australia more competitive on the global stage.

Okay, in regards to the Ganfeng Lithium JV, what possible countries are we looking at, and any idea on ballpark capacities?

As it relates to what possible countries, of course, we’ve got a view around what’s nearer the top of the pile. Within that, there are some Asian countries, some Middle East. I would also say that other parts of the world may well come into the picture, depending on whether their government comes through with larger support or not. For this reason, we’ve been deliberately not guiding one area over another because, as you’ve seen in the media, it’s a bit of a moving feast. Different support regimes are coming in, and that could really tip the scales from one prospect to another.

Okay, great. With consistent requests from customers to secure additional supply and strong demand going forward, is Pilbara Minerals considering more sales on the spot market?

Yes, in terms of realised price, in terms of the market structure today, I think we’re achieving the best of both worlds. The offtakes, of course, provide long-term security, but the pricing that’s used to derive those sales actually comes essentially from the spot market. We also sell spot sales. The reason we do that is that supports price discovery. One supports the other effectively. We’ve taken a portfolio approach there where we’re largely weighted to offtake, which gives us security that’s the strongest in the supply chain, whilst also doing a little bit of spot for price discovery.

Okay. Is there any serious threat from African supply?

The jury’s not out on that. Look, there’s a big game being taught from certain areas. In terms of the work we’ve done understanding that area, the low-cost operations are few and far between, would be our view. Further, there is an overlay of risk depending on which country you’re speaking to. We’ve seen time and time again different impediments arise, which debilitate those operations and really jeopardize some of those investments and continuity of those operations. It’s for these reasons we’ve not sought to look in that direction in terms of our own growth profile. That’s bringing you back to home. At the end of the day, we view this market as a globally competitive market.

What we keep focused on is making sure we continue to improve such that we move to the left of the cost curve and position ourselves as one of the best in the business.

Okay, thank you, Daryl. That’s the last of the questions. Just a reminder that this presentation is available on our website, and the webcast recording will be available via our website within a few hours.

Great. Thank you everyone for dialing in today. The September quarter was an incredibly strong start to this financial year, building on the FY25 year, which was obviously a transformational year for the business. We look forward to updating again next quarter. Thank you for your time.

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