PLS reported record spodumene concentrate production of approximately 267,000 tonnes at Pilgangoora in its third-quarter 2026 earnings call, up 25% quarter over quarter. FOB unit operating costs fell 12% to A$539 per tonne. With Ngungaju completing its ramp-up following the resumption of operations, production has increased further, while the P2000 expansion has also been approved. Although lower lithium prices affected quarterly revenue, management said margins remained healthy at current prices and that it had no near-term plans to adjust production at Ngungaju.
The increase in production was primarily driven by improved performance at the Pilgan plant and the resumption of operations at Ngungaju. Pilgan benefited from better feed quality, improved ore sorting, and stable operations, with overall lithium recovery at Pilgangoora reaching approximately 75%. Ngungaju resumed production in July and completed its ramp-up in October. Its output is expected to increase over the next three quarters. PLS maintained its FY2027 production guidance, with quarterly volumes expected to vary depending on ore characteristics, scheduled maintenance, and weather conditions.
Spodumene concentrate sales totaled approximately 223,000 tonnes, down 11% quarter over quarter, which the company attributed primarily to shipment timing. During the Q&A session, management described concentrate demand as healthy and said sales remained steady. Policy changes in Zimbabwe, uncertainty surrounding supply from Mali, and continued shutdowns at some Chinese mines have prompted certain lithium converters to place greater emphasis on reliable feedstock supply.
Another focus was whether falling lithium prices would lead PLS to curtail production at Ngungaju. Responding to an analyst's question referencing a market price of approximately US$1,300 per tonne, management said the overall operation continued to generate strong margins and that it had no near-term plans to adjust production. Several recently signed offtake agreements also include a price floor of US$1,000 per tonne, helping support continued production during periods of weaker prices.
Ngungaju's completed ramp-up gives PLS room to increase output in the near term. So far, lower lithium prices have not prompted the company to cut production. Its low production costs and price protection under some offtake agreements remain important factors supporting continued operations.
The quarterly FOB cost of A$539 per tonne benefited from operating improvements, higher production, and favorable weather. Increased capitalization of stripping costs also reduced reported operating costs for the period. PLS expects wet-season conditions and changes in diesel prices to put upward pressure on costs and therefore maintained its full-year cost guidance. Capitalized stripping is expected to remain above the previous fiscal year’s level over the next three quarters, although its contribution to lower unit costs is likely to be smaller than in the first quarter. The company plans to provide further details in its December quarterly update on how revised reserves and stripping ratios affect the allocation of spending between operating costs and capital expenditure.
The average estimated realized price was US$1,809 per tonne on a 5.2% Li₂O basis, down 14% quarter over quarter. Revenue was A$563 million, down 24% quarter over quarter.
The P2000 expansion involves planned investment of approximately A$1.9 billion. First production from the new Jimmagunya processing plant is targeted for the third quarter of 2029, followed by an approximately six-month ramp-up. During the first 10 years of steady-state operations, total spodumene concentrate production at Pilgangoora is expected to average approximately 2 million tonnes annually, at an average FOB cost of around A$600 per tonne in real terms. Contained lithium in the updated ore reserve increased by 31%, supporting the larger production scale while retaining approximately 20 years of open-pit mine life.
PLS is also advancing power and supporting infrastructure projects. Its 20-year power purchase agreement with Fortescue is expected to reduce FOB costs by A$15–20 per tonne from 2029 relative to the original P2000 cost assumptions. These savings are already included in the projected cost of approximately A$600 per tonne. Road upgrades, a new accommodation village, and mine services facilities are expected to improve transport efficiency, mine sequencing, and equipment maintenance.
PLS ended the quarter with A$2.2 billion in cash. Following a US$700 million bond issuance after quarter-end, cash and available credit facilities totaled approximately A$3.7 billion, providing funding support for project development over the next two to three years.
Ngungaju's return to production is the main source of PLS’s near-term output growth, while P2000 is expected to expand supply further from 2029 onward. Low costs, price protection under some contracts, and substantial financial resources allow the company to maintain production and continue expanding as lithium prices fluctuate lower. Near-term attention will center on Ngungaju's output, wet-season operating conditions, and shipment volumes, while the longer-term focus will be on P2000's construction progress and production start-up.
Source: PLS Group Limited (PILBF) Q1 2027 Earnings Call
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