Piedmont Lithium Reports Third Quarter 2023 Results

Inaugural Revenue and Profit Recorded on Commencement of Lithium Concentrate Shipments

• Revenue of $47.1 million on sales of 29,011 dry metric tons (dmt) of lithium concentrate.
• Gross profit of $23.8 million, reflecting a gross profit margin of 50.4%.
• Net income of $22.9 million and adjusted net income⁽¹⁾ of $16.9 million.
• Diluted earnings per share of $1.19 and adjusted diluted earnings per share⁽¹⁾ of $0.88.
• Adjusted EBITDA⁽¹⁾ of $16.2 million, reflecting an adjusted EBITDA margin⁽¹⁾ of 34.3%.
• Cash and cash equivalents of $94.5 million at September 30, 2023.
• On track to deliver full-year shipment guidance of approximately 56,500 dmt of lithium concentrate. 

Piedmont Lithium (“Piedmont” or the “Company”) (Nasdaq: PLL; ASX: PLL), a leading global supplier of lithium resources critical to the U.S. electric vehicle supply chain, today announced financial results for third quarter 2023.

“The third quarter was transformational for Piedmont as we made our first customer shipments under our offtake agreement with our joint-venture operation, North American Lithium⁽²⁾. As a result, Piedmont became a revenue-generating lithium company and recorded adjusted net income of $17 million and adjusted earnings per share of $0.88.

“NAL is the largest operating lithium mine in North America, and production is ramping up well.

“While we are pleased with Piedmont’s operational and financial performances, our results were materially impacted by the 45% decline in spot lithium prices during the quarter. Virtually all of our offtake tonnage will eventually be sold under long-term contracts announced earlier this year, but initial shipments are being made on the spot market. The benchmark spodumene concentrate price fell from more than $3,500/dmt at the start of the quarter to approximately $1,900/dmt today, directly impacting our quarterly results as our spot shipments are settled at the spot price around the time of customer receipt.

“Piedmont expects to have two shipments in the fourth quarter and confirms our previous full year outlook of shipping approximately 56,500 dmt of lithium concentrate.

“EV demand remains strong globally with unit sales growth of 35% year to date and global EV penetration a record high of 18% in 2023. We continue to expect the U.S. electric vehicle market to grow significantly, in part, due to the positive stimulus provided by the Inflation Reduction Act. Further, with battery pack capacity for all EV types increasing and energy storage systems becoming a more substantial factor in the market, the total GWh of new battery capacity deployed has grown by nearly 50% this year. We believe the combination of growth in EV sales and total GWh deployed will drive continued lithium demand growth.

“With NAL in production, we look forward to advancing the rest of our projects, with the assistance of federal government finance agencies and strategic partners where possible, and always with a view to minimizing dilution to existing shareholders.”

Keith Phillips, Piedmont Lithium President and Chief Executive Officer

Third Quarter 2023 Financial Highlights

All references to dry metric tons (“dmt”) in this release relate to lithium (spodumene) concentrate.

Third Quarter 2023 and Recent Business Highlights

Piedmont Lithium

• Purchased 29,011 dmt from NAL in Q3’23.
• Shipped 29,011 dmt (~5.3% Li₂O) in Q3’23 to two customers.
• Our first shipment included a $31.6 million provisional prepayment received in Q3’23 based on indicative market pricing of $3,350/dmt at the time of contract execution. With the recent decline in lithium prices, current market pricing is now approximately $1,900/dmt. We have accrued $7.8 million associated with the final settlement, which will occur in Q1’24.

North American Lithium (Quebec, Canada)

• In Q3’23, NAL produced 31,486 dmt and shipped 48,211 dmt, of which 29,011 dmt were sold to Piedmont.
• In October 2023, Sayona Mining provided a forecast for the one-year period July 1, 2023 through June 30, 2024 projecting production of 140,000 to 160,000 dmt and shipments of 160,000 to 180,000 dmt.
• NAL has substantially progressed ongoing capital improvement projects, including a capacity increase for its tailings storage facility and a new crushed-ore dome.
• Concentrate produced and shipped by NAL and concentrate shipped by Piedmont:

Ewoyaa Project (Ghana)

• Piedmont exercised its option to acquire an initial 22.5% equity interest, subject to Ghanaian governmental approval, in Atlantic Lithium’s Ghanaian lithium portfolio, which includes Ewoyaa.
• Piedmont expects to earn an additional 27.5% equity interest, subject to funding the first $70.0 million of capital expenditures for Ewoyaa, which would result in Piedmont and Atlantic Lithium each owning 50% of the Ewoyaa project.
• In Q3’23, the Minerals Income Investment Fund of Ghana (“MIIF”) entered into a non-binding agreement with Atlantic Lithium to invest $27.9 million to acquire a 6% equity interest in Ewoyaa, with the investment earmarked for Ewoyaa’s project development costs, and to fund 6% of all future exploration and development costs within Atlantic Lithium’s Ghanaian portfolio. These funds are expected to equally reduce Piedmont and Atlantic Lithium’s capital expenditure contribution to Ewoyaa.
• In Q4’23, Ghana’s Ministry of Lands and Natural Resources granted a mining lease for Ewoyaa, subject to ratification by the Ghanaian Parliament. The mining lease includes a 13% free-carried interest in Ewoyaa for the Government of Ghana and a 10% royalty. If both the mining lease is ratified and the agreement with MIIF is executed, Piedmont and Atlantic Lithium would each own 40.5% equity interest in Ewoyaa. Piedmont would continue to maintain a 50% life-of-mine offtake right to future lithium concentrate production from Atlantic Lithium Ghana under these agreements.
• Prior to starting construction, an approval by the Environmental Protection Agency of Ghana will be required. Atlantic Lithium expects the permitting process to be finalized in H2’24.

Tennessee Lithium (Tennessee)

• In Q3’23, Piedmont received the final material permits required to proceed with construction of the 30,000 metric ton per year lithium hydroxide conversion facility.
• Piedmont exercised its option to purchase land for the plant site and is working on closing with local economic development.
• In Q3’23, Piedmont engaged advisors to support its funding strategy for the construction of Tennessee Lithium. In consultation with the U.S. Department of Energy (“DOE”), Piedmont has decided to pursue an Advanced Technology Vehicle Manufacturing (“ATVM”) loan with the DOE’s Loan Programs Office, rather than complete the previously announced $141.7 million grant under the Bipartisan Infrastructure Law. The ATVM loan, if awarded, would be expected to cover a significantly larger share of the capital required for the project, strengthening the opportunity for strategic parties to partner with Piedmont on the project. Piedmont expects the DOE and strategic funding processes to take several months to complete.
• In Q4’23, Piedmont purchased a tailings storage facility adjacent to the Tennessee Lithium plant site for the placement of inert tailings to be produced as part of the alkaline pressure leach process. Also in Q4’23, Piedmont agreed to acquire a large industrial complex in close proximity to the Tennessee Lithium plant site. These two acquisitions should result in significant net economic benefits to the project.

Carolina Lithium (North Carolina)

• Piedmont continues to advance the state mining permit process. In Q3’23, Piedmont submitted a partial draft response to the North Carolina Department of Environment, Minerals and Land Resources’ most recent additional information request.
• Piedmont continues to engage with community stakeholders, including the Gaston County Board of Commissioners, in advance of anticipated rezoning efforts.

Exploration

• In Q4’23, Piedmont paid $1.5 million to acquire a 19.9% equity interest in Vinland Lithium, which owns the Killick Lithium Project in southern Newfoundland, Canada. Piedmont has the right to earn up to a 62.5% equity interest through staged investments in Killick Lithium. Piedmont will be entitled to 100% marketing rights and a right of first refusal on 100% offtake rights to any lithium concentrate produced on a life-of-mine basis from Killick Lithium at competitive commercial rates.
• The Vinland investment is consistent with Piedmont’s strategy to build a world-class spodumene resource base by investing in projects with large-scale potential, in attractive jurisdictions, and managed by strong exploration teams.

Fourth Quarter 2023 Outlook

Piedmont expects to ship approximately 27,500 dmt in Q4’23, confirming the full-year guidance of approximately 56,500 dmt for the start-up year, 2023. The vast majority of forecasted capital expenditures relate to Tennessee Lithium and Carolina Lithium. Investments in and advances to affiliates reflect cash contributions to our equity method investees (Atlantic Lithium, Sayona Quebec and Sayona Mining) and advances to Atlantic Lithium for the Ewoyaa Project.

Safety and Sustainability

Piedmont is strongly committed to building safety into the foundation of all aspects of our company, operations, and culture. During Q3’23, members of management participated in an intensive safety leadership training program to help ensure a collaborative and uniform commitment to safety across the organization, particularly as we advance toward operations. Also in Q3’23, Piedmont hired an additional safety professional in Tennessee to manage operations of our recently acquired landfill, support the corporate team, and prepare safety initiatives related to our Tennessee Lithium project.

Piedmont issued its inaugural sustainability report, Progressing with Purpose, in June 2023, which governs our ESG efforts as we develop our operations and advance our equity interests. The report affirms the Company’s commitment to being a responsible, respectful steward of the planet, people, and the communities where Piedmont plans to operate its wholly-owned projects, Tennessee Lithium and Carolina Lithium. The aspirations reflected in the report are intended to guide the Company’s ESG strategy and are centered on the four pillars of planet, people, communities, and governance.

Conference Call Information

Piedmont’s earnings presentation and supporting material are available at:

https://piedmontlithium.com/investors/.

About Piedmont

Piedmont Lithium Inc. (Nasdaq: PLL; ASX: PLL) is developing a world-class, multi-asset, integrated lithium business focused on enabling the transition to a net zero world and the creation of a clean energy economy in North America. Our goal is to become one of the largest lithium hydroxide producers in North America by processing lithium concentrate produced from assets where we hold an economic interest. Our projects include our Carolina Lithium and Tennessee Lithium projects in the United States and partnerships in Quebec with Sayona Mining (ASX: SYA) and in Ghana with Atlantic Lithium (AIM: ALL; ASX: A11). These geographically diversified operations will enable us to play a pivotal role in supporting America’s move toward energy independence and the electrification of transportation and energy storage.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of or as described in securities legislation in the United States and Australia, including statements regarding exploration, development, construction and production activities of Sayona Mining, Atlantic Lithium, and Piedmont; current plans for Piedmont’s mineral and chemical processing projects; Piedmont’s potential acquisition of an ownership interest in Ewoyaa; and strategy. Such forward-looking statements involve substantial and known and unknown risks, uncertainties, and other risk factors, many of which are beyond our control, and which may cause actual timing of events, results, performance or achievements and other factors to be materially different from the future timing of events, results, performance, or achievements expressed or implied by the forward-looking statements. Such risk factors include, among others: (i) that Piedmont, Sayona Mining, or Atlantic Lithium may be unable to commercially extract mineral deposits, (ii) that Piedmont’s, Sayona Mining’s or Atlantic Lithium’s properties may not contain expected reserves, (iii) risks and hazards inherent in the mining business (including risks inherent in exploring, developing, constructing and operating mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), (iv) uncertainty about Piedmont’s ability to obtain required capital to execute its business plan, (v) Piedmont’s ability to hire and retain required personnel, (vi) changes in the market prices of lithium and lithium products, (vii) changes in technology or the development of substitute products, (viii) the uncertainties inherent in exploratory, developmental and production activities, including risks relating to permitting, zoning and regulatory delays related to our projects as well as the projects of our partners in Quebec and Ghana, (ix) uncertainties inherent in the estimation of lithium resources, (x) risks related to competition, (xi) risks related to the information, data and projections related to Sayona Mining or Atlantic Lithium, (xii) occurrences and outcomes of claims, litigation and regulatory actions, investigations and proceedings, (xiii) risks regarding our ability to achieve profitability, enter into and deliver product under supply agreements on favorable terms, our ability to obtain sufficient financing to develop and construct our projects, our ability to comply with governmental regulations and our ability to obtain necessary permits, and (xiv) other uncertainties and risk factors set out in filings made from time to time with the U.S. Securities and Exchange Commission (“SEC”) and the Australian Securities Exchange, including Piedmont’s most recent filings with the SEC. The forward-looking statements, projections and estimates are given only as of the date of this press release and actual events, results, performance and achievements could vary significantly from the forward-looking statements, projections and estimates presented in this press release. Readers are cautioned not to put undue reliance on forward-looking statements. Piedmont disclaims any intent or obligation to update publicly such forward-looking statements, projections, and estimates, whether as a result of new information, future events or otherwise. Additionally, Piedmont, except as required by applicable law, undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Piedmont, its financial or operating results or its securities.

Non-GAAP Financial Measures

The following information provides definitions and reconciliations of certain non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. The non-GAAP financial measures presented do not have any standard meaning prescribed by GAAP and may differ from similarly-titled measures used by other companies. However, we present these measures in this press release because we believe these non-GAAP financial measures provide useful means of evaluating and understanding how our management evaluates our financial condition and results of operations.

The following are non-GAAP financial measures for Piedmont Lithium:

Adjusted net income (loss) is defined as net income (loss) plus or minus the gain or loss from gain on dilution of equity method investments, gain or loss from foreign currency exchange and certain other adjustments we believe are not reflective of our ongoing operations and performance.

Adjusted diluted earnings per share (or adjusted diluted EPS) is defined as diluted EPS before gain on dilution of equity method investments, gain or loss from foreign currency exchange and certain other costs we believe are not reflective of our ongoing operations and performance. Any references to adjusted EPS are to adjusted diluted EPS.

EBITDA is defined as net income before interest expenses, income tax expense, and depreciation.

Adjusted EBITDA is defined as EBITDA plus or minus the gain or loss from gain on dilution of equity method investments, gain or loss from foreign currency exchange and certain other adjustments we believe are not reflective of our ongoing operations and performance.

Adjusted EBITDA margin is adjusted EBITDA as a percentage of revenue.

Below are reconciliations of non-GAAP financial measures on a consolidated basis for adjusted net income (loss), adjusted diluted EPS, EBITDA, and adjusted EBITDA.

Adjusted Net Income and Adjusted Diluted EPS

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin

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