Piedmont Lithium (PLL) Q1 2025 Earnings Call May 07, 2025 04:30 PM ET Speaker0 Thank you for standing by. My name is Carrie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 twenty twenty five Piedmont Lithium Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to Mr. John Coslow, Investor R ...

PART I - Financial Information [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Piedmont Lithium reported increased Q1 2025 revenue to $20.0 million, but gross profit declined to $0.1 million, leading to a $15.6 million net loss [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 revenue increased to $20.0 million, but gross profit declined to $0.13 million, while net loss narrowed to $15.6 million due to lower operating expenses Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Revenue** | $19,996 | $13,401 | | Costs of sales | $19,862 | $12,710 | | **Gross profit** | $134 | $691 | | Selling, general and administrative expenses | $6,771 | $8,094 | | Loss from equity method investments | ($4,935) | ($5,440) | | **Loss from operations** | ($11,855) | ($14,676) | | **Net loss** | ($15,631) | ($23,611) | | **Net loss per share (Basic and diluted)** | ($0.71) | ($1.22) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $327.0 million, primarily due to lower cash, while total liabilities and stockholders' equity also declined Consolidated Balance Sheet Highlights | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $65,390 | $87,840 | | Total current assets | $82,480 | $102,639 | | **Total assets** | **$326,989** | **$349,885** | | Total current liabilities | $38,427 | $46,106 | | **Total liabilities** | **$43,698** | **$51,638** | | **Total stockholders' equity** | **$283,291** | **$298,247** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $19.2 million, while investing activities shifted to a $2.3 million use, resulting in a $22.5 million decrease in cash Consolidated Statements of Cash Flows (Q1 2025 vs Q1 2024) | Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($19,155) | ($28,322) | | Net cash (used in) provided by investing activities | ($2,311) | $28,695 | | Net cash used in financing activities | ($984) | ($659) | | **Net decrease in cash** | **($22,450)** | **($286)** | | Cash and cash equivalents at end of period | $65,390 | $71,444 | [Notes to the Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail accounting policies and key disclosures, including the Sayona Mining merger, cost savings plan, revenue recognition, equity investment changes, and debt obligations - The company is a development-stage, multi-asset, integrated lithium business planning to supply lithium hydroxide to the North American electric vehicle and battery manufacturing supply chains[32](index=32&type=chunk) - On November 18, 2024, the company entered into a Merger Agreement with Sayona Mining, expected to close in mid-2025, subject to shareholder approvals[43](index=43&type=chunk)[44](index=44&type=chunk) - As of March 31, 2025, approximately **15,700 dmt** of spodumene concentrate sales with an average provisional price of **$644 per dmt** were subject to final pricing adjustments[52](index=52&type=chunk) - In Q1 2024, the company initiated a Cost Savings Plan, reducing its workforce by **28%** and incurring **$1.8 million** in severance and benefits costs[65](index=65&type=chunk) - During Q1 2024, the company sold its entire holding in Sayona Mining for net proceeds of **$41.4 million** and sold a portion of its Atlantic Lithium shares for **$7.7 million**. As a result, neither are accounted for as equity method investments as of March 31, 2024[80](index=80&type=chunk)[81](index=81&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategy to become a key U.S. lithium hydroxide supplier, the Sayona Mining merger, Q1 2025 financial results, and liquidity management [Executive Overview & Strategy](index=28&type=section&id=Executive%20Overview%20%26%20Strategy) Piedmont's strategy focuses on becoming a key U.S. lithium hydroxide supplier through its multi-asset portfolio, including Carolina Lithium, NAL, and Ewoyaa projects - The company's strategy is to become an integrated lithium business to support the clean energy economy and U.S. energy security[133](index=133&type=chunk) - Piedmont's portfolio includes Carolina Lithium (North Carolina), an interest in Sayona Quebec's NAL (Canada), and Atlantic Lithium's Ewoyaa project (Ghana)[135](index=135&type=chunk) - The company plans to produce an estimated **60,000 metric tons per year** of domestic lithium hydroxide, supported by offtake rights to approximately **525,000 metric tons** of spodumene concentrate annually[136](index=136&type=chunk) [Proposed Merger with Sayona Mining](index=28&type=section&id=Proposed%20Merger%20with%20Sayona%20Mining) Piedmont entered a stock-for-stock merger agreement with Sayona Mining, expected to close mid-2025, which will rename the combined entity Elevra Lithium Limited - A merger agreement was signed with Sayona Mining for a stock-for-stock combination, expected to close in mid-2025[139](index=139&type=chunk)[142](index=142&type=chunk) - The exchange ratio will be **3.5133 Sayona shares per Piedmont share** if Sayona completes a **1-for-150 reverse stock split**, or **527 Sayona shares** otherwise[141](index=141&type=chunk) - The combined company is proposed to be renamed Elevra Lithium Limited, with a board composed of four nominees from each of the existing boards[146](index=146&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Q1 2025 revenue increased by 49.2% to $20.0 million due to higher sales volume, but gross profit fell 80.6% to $0.1 million, while net loss improved to $15.6 million Q1 2025 vs Q1 2024 Performance | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $19,996 | $13,401 | 49.2% | | Gross Profit | $134 | $691 | (80.6)% | | SG&A Expenses | $6,771 | $8,094 | (16.3)% | | Loss from Operations | ($11,855) | ($14,676) | (19.2)% | | Net Loss | ($15,631) | ($23,611) | (33.8)% | - Revenue growth was driven by a **74.2% increase** in spodumene concentrate sales volume to **~27,000 dmt** in Q1 2025 from **~15,500 dmt** in Q1 2024[168](index=168&type=chunk) - The average realized price per dmt of spodumene concentrate fell **14.3%** from **$865** in Q1 2024 to **$741** in Q1 2025, negatively impacting gross profit[170](index=170&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Piedmont had $65.4 million in cash and a $25.0 million credit facility as of March 31, 2025, deemed sufficient for the next twelve months, with long-term project financing pursued - Principal sources of liquidity as of March 31, 2025, were **$65.4 million** in cash and a fully-utilized **$25.0 million** Credit Facility[181](index=181&type=chunk) - The company believes its cash on hand and credit facility are sufficient to fund operations for the next twelve months[188](index=188&type=chunk) - Full-year 2025 outlook includes spodumene concentrate shipments of **113,000-130,000 dmt**, capital expenditures of **$4.0-$6.0 million**, and investments in affiliates of **$7.0-$13.0 million**[186](index=186&type=chunk) - Long-term funding strategies for Carolina Lithium include a potential ATVM loan from the DOE and strategic partnerships. Ewoyaa funding may involve offering a long-term offtake agreement[189](index=189&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk factors were reported from the Annual Report for the year ended December 31, 2024 - There have been no material changes in risk factors from those disclosed in the Annual Report for the year ended December 31, 2024[200](index=200&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting identified - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[201](index=201&type=chunk) - No changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls were identified during the quarter ended March 31, 2025[202](index=202&type=chunk) PART II - Other Information [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) Several past legal proceedings, including a securities class action, two shareholder derivative lawsuits, and an SEC investigation, have been dismissed or concluded without enforcement action - A securities class action lawsuit filed in July 2021 was dismissed by the Court on January 18, 2024, and the deadline to appeal has expired[125](index=125&type=chunk) - Two shareholder derivative lawsuits (Thomascik and Varbaro) were dismissed with prejudice in March 2024[128](index=128&type=chunk) - An SEC investigation related to mining investments outside the U.S. was concluded on November 20, 2024, with the SEC not intending to recommend enforcement action[129](index=129&type=chunk) [Risk Factors](index=42&type=page&id=Item%201A.%20Risk%20Factors) A new risk factor identifies potential adverse impacts from U.S. tariffs on Canadian critical minerals, including a 10% tariff on lithium, affecting NAL spodumene concentrate imports - A new risk factor has been identified regarding tariffs and changes in international trade policy[205](index=205&type=chunk) - Effective March 4, 2025, the U.S. imposed tariffs on Canadian goods, including a **10% tariff** on critical minerals such as lithium, which could impact spodumene concentrate imported from NAL[205](index=205&type=chunk) - No other material changes to risk factors were reported from the company's 2024 Annual Report[206](index=206&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities were reported during the period - None[207](index=207&type=chunk) [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the quarter ended March 31, 2025[210](index=210&type=chunk)

Merger Announcement - Piedmont Lithium Inc. announced an update regarding the proposed merger with Sayona Mining Ltd, aiming to create a leading lithium business[5] - The merger was initially announced on November 19, 2024, indicating a strategic move to enhance market position in the lithium sector[5] - The press release detailing the merger update was issued on April 10, 2025, reflecting ongoing developments in the company's strategic initiatives[5]

Group 1: Company Performance - Piedmont Lithium Inc. (PLL) shares increased by 24.6% to close at $8.91, with notable trading volume compared to typical sessions, and a 5.5% gain over the past four weeks [1] - The consensus EPS estimate for Piedmont Lithium has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [6] Group 2: Merger and Corporate Developments - Piedmont Lithium and Sayona Mining Limited have made significant progress since their merger announcement on November 19, 2024, with approvals obtained for the Investment Canada Act and Hart-Scott-Rodino Act, and CFIUS confirming no further action on the transaction [2] - Amendments to the merger agreement include Sayona seeking shareholder approval for a one-for-150 share consolidation, leading to an updated exchange ratio of 3.5133 Sayona shares for each Piedmont share [3] - The combined entity is expected to be named Elevra Lithium Limited, with projected quarterly losses of $0.50 per share and revenues of $33.07 million, reflecting a year-over-year increase of 146.8% [4] Group 3: Industry Context - Piedmont Lithium is part of the Zacks Mining - Miscellaneous industry, where HudBay Minerals (HBM) also operates, finishing the last trading session up 4.3% at $7.56, but with a -9.9% return over the past month [6] - HudBay Minerals has seen a -1.1% change in its consensus EPS estimate over the past month, now at $0.12, which is a -25% change from the previous year [7]

Core Points - Sayona Mining Limited is progressing with a proposed transaction to merge with Piedmont Lithium Inc to create a leading lithium business [1] - Upon completion of the transaction, the company will be renamed Elevra Lithium Limited, with shareholders of Sayona and Piedmont Lithium holding approximately 50% equity each in the new entity [2] Regulatory Approvals - Significant progress has been made in obtaining necessary regulatory approvals, including Investment Canada Act approval, Hart-Scott-Rodino Act approval, and a review by the Committee on Foreign Investment in the United States, all of which have concluded without objections [3] Shareholder Approval and Meeting - The completion of the transaction is subject to shareholder approval from both companies and is targeted to close in mid-CY2025, with an Extraordinary General Meeting of Sayona shareholders expected in the first half of CY2025 [4] Share Consolidation and Pricing - Sayona plans to consolidate its shares at a ratio of 150:1 and will issue American Depositary Shares at a ratio of 10:1 post-consolidation, which is expected to attract a broader set of investors [4][5] - Based on the current share price of A$0.017 and the AUD:USD exchange rate of 0.64, the post-consolidation share price is projected to be approximately A$2.55, with an indicative ADS price of about US$16.32 [5] Fundraising and Future Outlook - The transaction includes a conditional placement of Sayona shares to raise approximately A$69 million (~US$45 million) at A$0.032 per share, subject to completion of the transaction [7] - The merger is viewed as a significant opportunity for both companies to emerge as leaders in the lithium sector and contribute to the global energy transition [9]

Production and Sales - Piedmont Lithium plans to produce an estimated 60,000 metric tons of lithium hydroxide annually, significantly increasing U.S. annual production capacity from approximately 20,000 metric tons [340]. - In 2024, Piedmont sold approximately 116,700 dmt of spodumene concentrate, generating $99.9 million in revenue with a realized sales price of $856 per dmt [346]. - NAL achieved record production of 193,162 dmt of spodumene concentrate in 2024, with a 96% increase compared to 2023 [347]. - The company holds a life-of-mine offtake agreement with Sayona Quebec for the greater of 113,000 dmt or 50% of spodumene concentrate production per year, with prices ranging from $500 to $900 per dmt [345]. - Sales volume of spodumene concentrate rose approximately 73,400 dmt, or 169.5%, to approximately 116,700 dmt in 2024 from approximately 43,300 dmt in 2023 [369]. - The company plans to deliver customer shipments of spodumene concentrate totaling between 113,000 dmt and 130,000 dmt in 2025, with capital expenditures expected to be between $6.0 million and $9.0 million [385]. - During the year ended December 31, 2024, the company received provisional payments on sales of 39,255 dmt of spodumene concentrate [419]. - There are 24,350 dmt of spodumene concentrate remaining subject to final pricing determinations at year-end [419]. Financial Performance - Revenue increased by $60.1 million, or 150.8%, to $99.9 million for the year ended December 31, 2024, compared to $39.8 million in 2023 [368]. - Gross profit increased by $5.1 million, or 90.1%, to $10.8 million in 2024, while gross profit margin declined to 10.8% from 14.3% in 2023 [371]. - The company reported a net cash used in operating activities of $42.9 million for the year ended December 31, 2024, compared to a net cash provided of $1.6 million in 2023, reflecting a $44.5 million increase in cash used [394]. - The company achieved a $10 million annual run-rate target in its 2024 Cost Savings Plan, which included a 28% workforce reduction and further reductions leading to a total workforce decrease of 62% [381]. - The company recorded $5.8 million in severance and restructuring costs related to its 2024 Cost Savings Plan [381]. - Loss from equity method investments increased by $18.0 million to a loss of $17.8 million in 2024, compared to income of $0.2 million in 2023 [374]. - Restructuring and impairment charges amounted to $9.9 million in 2024, with no such charges recorded in 2023 [375]. - Other expense increased by $32.9 million, or 159.0%, to $12.2 million in 2024, driven by a loss on sale of equity method investments [376]. - Income tax benefit was $3.1 million in 2024, compared to an income tax expense of $3.1 million in 2023 [377]. Cost Management - The company achieved $14 million in annual cost savings in 2024 by reducing workforce by 62% and lowering third-party spending [346]. - Selling, general and administrative expenses decreased by $4.6 million, or 10.7%, to $38.7 million in 2024, attributed to cost savings from the 2024 Cost Savings Plan [373]. - Exploration costs decreased by $1.8 million, or 95.0%, to $0.1 million in 2024, primarily due to reduced exploration activities [372]. Investments and Financing - The company has invested $2.6 million in Killick Lithium, which is a Canadian-based entity with exploration properties prospective for lithium [357]. - The company entered into a Credit Facility allowing it to borrow up to $25.0 million, which expires on September 11, 2027, with interest payable quarterly at SOFR plus 2.4% [380]. - The company sold common stock holdings in Sayona Mining and Atlantic Lithium for net proceeds totaling $49.1 million during the first quarter of 2024 [382]. - The company plans to fund capital expenditures and investments in affiliates totaling between $7.0 million and $13.0 million in 2025, reflecting a substantial decrease compared to 2024 [385]. - The company has contractual obligations totaling $31.4 million, including $26.5 million in debt obligations due within one year [398]. - The total variable rate debt as of December 31, 2024, was $25.0 million with a variable interest rate of SOFR + 2.4% [413]. Market Outlook - The demand for electric vehicles is projected to grow significantly, with sales expected to reach 57 million units by 2034, indicating a strong market for lithium products [360]. - The projected penetration rate of new electric vehicles sold is expected to reach 58% by 2034, highlighting the increasing reliance on lithium-based batteries [360]. - The economic feasibility of mining on the company's properties is influenced by market prices of lithium products [421]. - A 10% change in the applicable market price index could yield a potential impact of approximately $1.8 million to net income (loss) [420]. Strategic Initiatives - Piedmont's strategic shift to consolidate U.S. lithium hydroxide production at Carolina Lithium is aimed at deploying capital and technical resources more efficiently [339]. - The company strategically invests in unconsolidated entities to access hard rock lithium assets and projects with sustainable production practices [411]. - The company is evaluating funding options for its projects, focusing on non-dilutive strategies to protect shareholder value [388]. Risk Management - The company does not currently engage in any hedging or derivative transactions to manage interest rate risk [413]. - The company evaluates its risk exposure to foreign currency fluctuations and may enter into hedging transactions in the future [416]. - The fair value of share options is determined using the Black-Scholes option pricing model, while the fair value of TSR PRAs is determined using a Monte Carlo simulation [404].

Financial Data and Key Metrics Changes - In Q4 2024, Piedmont Lithium shipped approximately 55,700 dry metric tons, a quarterly record, and recognized $45.6 million in revenue compared to $27.7 million in the previous quarter, driven by increased volume [18][20] - The realized price per metric ton was $818 for the quarter, equating to $909 on an SC6 equivalent basis, indicating strong price realizations despite market conditions [19][30] - The company ended the year with $87.8 million in cash, up from $64.4 million at the end of September 2024 [20] Business Line Data and Key Metrics Changes - North American Lithium (NAL) produced nearly 51,000 tons in Q4 2024 and over 190,000 tons for the full year, with cash operating costs at NAL reaching a new low of $709 per ton in Q4 2024 [9][11] - The company successfully reduced corporate expenses as part of its 2024 cost savings plan, achieving a $14 million reduction in annual run rate spending [22][25] Market Data and Key Metrics Changes - The lithium market saw a record year for EV sales in 2024, with approximately 17 million EVs sold globally, particularly driven by growth in the Chinese market [32] - Demand for lithium is expected to grow significantly, with energy storage systems projected to represent 34% of total lithium demand by 2030 [33] Company Strategy and Development Direction - The company is focused on advancing its projects, particularly in North Carolina and Ghana, while maintaining a measured pace due to current market conditions [15][17] - The planned merger with Sayona Mining aims to create the largest lithium producer in North America, enhancing operational efficiency and growth potential [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed a medium- to long-term bullish outlook for the lithium industry, despite short-term uncertainties and volatility [48][52] - The company is preparing for a challenging 2025, focusing on cost containment and cash management [22][26] Other Important Information - The company received its state mining permit in 2024, and a petition to challenge that permit was voluntarily withdrawn [15] - The merger with Sayona is expected to close around mid-2025, pending SEC review and shareholder votes [55][59] Q&A Session Summary Question: Impact of tariffs on shipments - Management noted that a potential 10% tariff on critical minerals would be paid by American customers, which may not significantly impact their decision-making [42][44] Question: Supply-demand expectations - Management indicated uncertainty in the near term but remains medium- to long-term bullish, citing potential demand growth from energy storage [48][52] Question: Merger completion timing - The merger is expected to close around mid-2025, with SEC review being the primary hurdle [55][59] Question: Update on Ghana project - Management expressed optimism about the new leadership in Ghana being more favorable towards critical minerals development [62] Question: Industry projects in Quebec - Management highlighted the importance of local processing capacity and potential partnerships to improve margins and reduce transportation costs [70][76] Question: Ewoyaa project development timeline - Management indicated that project advancement would depend on market conditions, with a preference to wait for stronger spodumene prices before proceeding [84]

分组1 - Piedmont Lithium Inc. reported a quarterly loss of $0.55 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.43, and an improvement from a loss of $1.23 per share a year ago, indicating an earnings surprise of -27.91% [1] - The company posted revenues of $45.59 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 28.32%, compared to revenues of -$7.31 million in the same quarter last year [2] - Piedmont Lithium shares have declined approximately 6.2% since the beginning of the year, contrasting with the S&P 500's gain of 4.5% [3] 分组2 - The earnings outlook for Piedmont Lithium is currently unfavorable, with a Zacks Rank of 4 (Sell), suggesting that the shares are expected to underperform the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.11 on revenues of $49.82 million, and for the current fiscal year, it is -$0.91 on revenues of $130.49 million [7] - The Mining - Miscellaneous industry, to which Piedmont Lithium belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating a challenging environment for stock performance [8]

Production and Shipment - Piedmont Lithium shipped approximately 55,700 dry metric tons (dmt) of spodumene concentrate in Q4'24, a 77% increase from Q3'24[2] - The company achieved a total of 116.7 kt dmt of concentrate shipped for FY 2024, representing a 170% increase compared to FY 2023[2] - NAL produced 50.9 kt dmt of concentrate in Q4'24, with a slight decline of 2% from the previous quarter, but still maintaining production above 50,000 dmt for two consecutive quarters[3] - NAL's ore mined increased by 54% quarter-over-quarter to 370.4 kt wmt in Q4'24, and total ore mined for FY 2024 reached 1,195.5 kt wmt, a 35% increase year-over-year[2] Financial Performance - Piedmont recorded $87.8 million in cash and cash equivalents as of December 31, 2024[4] Mergers and Agreements - Piedmont and Sayona Mining signed a definitive agreement to merge in an all-stock transaction, aimed at creating a leading North American hard rock lithium producer[3] Production Guidance and Utilization - The company is on track to meet Sayona Mining's fiscal year 2025 production guidance of 190,000 – 210,000 dmt[3] - Mill utilization at NAL was 90% in Q4'24, slightly down from 91% in Q3'24, impacted by a planned shutdown and weather-related issues[3] Lithium Recovery and Quality - The average lithium grade remained stable at approximately 5.4% Li O2 in Q4'24, consistent with previous quarters[2] - Lithium recovery improved to 68% in Q4'24, aligning with the life-of-mine target set in the 2023 Definitive Feasibility Study[3]

Group 1: Merger Overview - Piedmont Lithium (PLL) and Sayona Mining Limited have entered into an all-stock merger agreement to form a unified company, MergeCo, focused on hard rock lithium production [1] - The merger has been unanimously approved by the boards of both companies, pending shareholder and regulatory approvals, expected to close in the first half of 2025 [2] - MergeCo will have a 50%-50% equity holding for shareholders of both companies and will be domiciled in Australia while maintaining a Nasdaq listing [2] Group 2: Strategic Positioning - MergeCo will combine complementary businesses and is expected to become a leader in North American lithium production, with three high-quality development projects and potential for brownfield expansion at North American Lithium (NAL) [1][3] - NAL is the largest lithium operation in North America, targeting 226,000 metric tons per year of spodumene concentrate production [3] Group 3: Operational Synergies - The merger aims to create a simpler and stronger lithium business with low capital intensity and a lower cost base [4] - Shared benefits from synergies, including optimized logistics and procurement, are expected to lower operating costs, while marketing synergies will enhance customer relationships [4] - A strengthened balance sheet will enable MergeCo to fund and accelerate growth plans [4] Group 4: Market Context - There has been a downtrend in lithium prices due to slowing demand growth for electric vehicles (EVs), inventory glut, and increased supply, but long-term prospects for lithium remain robust [5] - Demand for lithium is expected to accelerate due to significant global EV adoption and increasing use in energy storage systems [5] Group 5: Company Performance - Piedmont's shares have underperformed, losing 58.2% in the past year compared to the industry's 9.7% decline [6]