Pilbara Minerals (PLS) $3.46PLS +5.81%: Rallied today on a...

1		Pilbara Minerals (PLS) .46

1		PLS +5.81%: Rallied today on a quarterly production update that highlighted their strong financial position and ability to handle weak Lithium prices better than many others. The December quarter saw them produce 176k tonnes of Spodumene Concentrate, up 22% q/q at an average realised price of ,113 per ton vs ,240 in 1Q. The material decline in pricing clearly has an impact on their financial metrics, with 6m revenue for the qtr down 46%, however, they showed good cost control (unit operating cost (FOB)/t A9, -14% q/q), and are being prudent around their balance sheet, flagging no dividend at the half while they reduced FY24 capex guidance from 5m-5m to a new range of 0m-5m, a number of non-essential new projects and enhancements deferred. Their cash balance was inline with expectations at .14bn, showing their balance sheet strength. Operationally, PLS are doing very well and controlling what they can. The weak pricing environment (Spodumene down from ~00/mt to ~00/mt) will send many higher-cost producers or non-revenue generating explorers to the wall and in that environment, we’d expect consolidation to pick up with PLS well-positioned. We have recently bought PLS in theActive Growth Portfolio, on the expectation that Lithium prices will start to respond to the prospect of lower production.