Lots of people posting on here seem to be surprised that it was a crap quarterly.
What was anybody expecting in the quarter where lithium prices hit extremely low levels, and have only just started to increase again, albeit slowly?
And unfortunately this was a quarter where SYA,s sales volumes increased significantly from the previous quarter, hence increased volume sold into the worst prices, which is reflected in the abysmal realised price.
The poor prices received during this quarter were then compounded by the fact mining is occurring in the canadian winter, still in ramp up phase, plus still implementing capital expenditure items such as the jaw crusher and crushed ore dome leading to high cash burn, together with utilising high cost inventory ore(whatever that means).
So, yes it was a bad quarterly, but personally I was expecting a bad quarterly, although probably not quite as bad as it was, as average realised price and production costs were both worse than I was expecting.
However, I ask myself should the following factors have a bearing on future production costs, cash burn and realised prices:
1.Spot market prices improving- recent auctions by other companies have realised prices of approx U$1100-U$1300,(approx A$ 1683 to A$1989)so will surplus SYA production not going to the PLL offtake start realising better prices in the next quarter than the A$999 average realised price?
2.If the PLL offtake is say U$800 for the 5.4% spod that equates to A$1224, so it looks like SYA,s sales into the spot market this quarter must have been at an extremely low price to average A$999 bearing in mind 2 shipments went to the PLL offtake..I wonder if PLL at the last minute advised they could not take product so SYA were forced to sell into the spot market in a hurry and realised abysmal prices as spod prices were at a low?
3.Capital expenditure projects being completed early in the next quarter, commissioned and put into use, such as the jaw crusher and crushed ore dome, thus increasing productivity further, plus ending some of the high cash burn associated with plant improvements.
4.Canadian spring and summer approaching, which should result in improved mining productivity.
My expectation is that factors 1 to 4 above will have a bearing on the next quarters results, although how much I have no idea.Whereas this last quarterly was disapponting and after first reading the quarterly and some of the comments on HC I was feeling despondant about SYA,s future, having now considered the situation in more detail I think there may still be some light at the end of the tunnel so I have not completely given up hope.
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