PLS Group Delivers Record Production and Stronger Cash Generation as Pricing Recovery and Operational Discipline Strengthen the Outlook

About PLS Group Ltd

PLS Group Ltd (ASX: PLS) is a major Australian lithium producer with a diversified portfolio across upstream lithium production, growth development projects and downstream strategic partnerships. The group owns 100 per cent of the Pilgangoora Operation in Western Australia, described as the world’s largest independent hard-rock lithium operation, as well as the Colina Lithium Project in Brazil. It is also integrated further into the battery materials chain through its joint venture with POSCO in South Korea, which produces battery-grade lithium hydroxide.

Pilgangoora delivered a standout operating quarter

The March quarter was driven by strong execution at Pilgangoora, where record production of 232.4kt was achieved, up 12 per cent on the December quarter. PLS Group attributed this to improved plant reliability, increased run time and consistently high lithium recovery. Ore processed rose to 1.096Mt in the quarter, while lithia recovery remained strong at 75.4 per cent, helping support the production result.

Mining activity also increased significantly, with total material mined rising to 9.9Mt from 8.1Mt in the prior quarter. That lift was partly driven by increased waste stripping, consistent with the mine plan and the group’s preparation for the planned Ngungaju Plant recommencement. While ore mined declined from 1.5Mt to 1.3Mt, this reflected planned sequencing rather than operational weakness. In effect, PLS Group is using the current period not only to maximise existing plant performance, but also to position the operation for future throughput.

This matters because record production in a rising price environment has a powerful effect on margin expansion. PLS Group is showing that Pilgangoora remains highly operationally leveraged to improving spodumene pricing while also benefiting from tight cost control.

Pricing recovery sharply boosted earnings quality

The other major driver of the quarter was price. PLS Group reported an average estimated realised sales price of US$1,867/t on a CIF China basis for approximately SC5.2 product, up 61 per cent on the prior quarter. On an SC6 equivalent basis, that price was US$2,155/t. Although sales volumes fell 16 per cent quarter on quarter to 195.7kt, volumes were on budget and the stronger price outcome more than offset the shipment decline.

That translated into a major uplift in financial performance. March quarter revenue rose 52 per cent to A$567 million, while cash margin from operations surged 178 per cent to A$461 million. These are important moves because they demonstrate the sensitivity of the business to higher lithium pricing once production is stable and costs are well managed.

PLS Group also strengthened market downside protection during the quarter through a multi-year offtake agreement with Canmax Technologies for 150kt per annum of spodumene concentrate from calendar 2026. The agreement includes a US$100 million unsecured prepayment and a floor price of US$1,000/t on an SC6 basis, while preserving full exposure to higher prices. That structure is strategically significant because it improves funding flexibility while reducing downside exposure in a volatile market.

Cost performance remained a clear strength

In addition to stronger prices, PLS Group also benefited from lower unit operating costs. FOB unit operating cost fell 11 per cent quarter on quarter to A$520/t, or US$362/t, driven by higher production volumes and the benefit of higher capitalised waste stripping. On a year-to-date basis, FOB unit cost of A$550/t remains on track with full-year guidance.

CIF unit operating cost rose 2 per cent to A$733/t, reflecting higher royalties tied to stronger realised pricing rather than operational inefficiency. That distinction matters. The underlying site cost base remains well controlled, and the higher all-in CIF figure largely reflects success in the sales environment rather than cost pressure at the mine itself.

PLS Group has indicated that costs are expected to increase in the June quarter as the restart costs for Ngungaju are expensed before additional output from that plant is realised. That implies some short-term cost pressure ahead, but it appears linked to planned growth preparation rather than deterioration in underlying operating performance.

Growth options are being advanced carefully

A major theme in the update is that PLS Group is preserving and progressing its growth portfolio, but doing so selectively. The Ngungaju Plant restart remains scheduled for early July 2026, with ramp-up to steady-state production planned through the September quarter. Recruitment is progressing, operational teams are returning to site and major maintenance overhauls are scheduled for the June quarter to prepare the plant for commissioning.

Further out, the P2000 Feasibility Study is continuing, representing a potential expansion of Pilgangoora’s concentrate production capacity to around 2.0Mtpa. Study outcomes are expected in the December quarter of 2026. PLS Group is also assessing whether project timelines can be accelerated through pre-final investment decision spending in FY27, including detailed engineering and procurement of long-lead items. Even so, management has made clear that any final investment decision will depend on successful study outcomes, capital allocation discipline, funding capacity and confidence in a sustainably stronger lithium price environment.

In Brazil, the Colina feasibility study is also progressing, with drilling, metallurgy, flowsheet refinement and infrastructure studies continuing during the quarter. Completion remains on track for the December quarter of 2027.

Chemicals strategy remains a source of long-term optionality

PLS Group is also continuing to build strategic optionality beyond spodumene. In Australia, the mid-stream demonstration plant reached an important milestone after quarter end. The restructuring of the joint venture with Calix was completed, up to A$38.1 million in ARENA grant funding was secured, an offtake agreement was signed with Ronbay, and commissioning began, with first product expected in the September quarter of 2026.

In South Korea, the POSCO Pilbara Lithium Solution lithium hydroxide facility restarted during the quarter after being idled in the prior period. Train 1 restarted in February and Train 2 in March. Production reached 2,094t and 636t respectively, with almost all output meeting battery-grade specification. PLS Group also extended the period during which it can increase its ownership in the joint venture from 18 per cent to 30 per cent at cost until 31 July 2027, giving it more time to assess market conditions and ex-China lithium chemicals demand before deciding on its long-term participation level.

This is strategically important because it keeps the group exposed to future downstream upside without forcing premature capital decisions in a market that is still normalising.

Balance sheet strength gives the group more flexibility

PLS Group ended the quarter with A$1.455 billion in cash, up 52 per cent from A$954 million at the end of December. This increase was supported by strong operating cash margin and the US$100 million Canmax prepayment. After quarter end, the balance sheet was further strengthened through the completion of a US$600 million senior unsecured notes offering. Part of the proceeds was used to refinance the drawn portion of the revolving credit facility, while the rest will be used for general corporate purposes. At the same time, the revolving credit facility was reduced from A$1 billion to A$500 million.

That financing structure gives PLS Group greater depth and flexibility as it considers future mine development, infrastructure upgrades and potential growth spending across Pilgangoora and its broader portfolio.

Outlook

PLS Group appears to be emerging from the lithium downturn in a position of strength. Record production, sharply improved pricing, lower FOB unit costs and a much stronger cash balance all point to a business with solid operational footing and increasing financial flexibility. At the same time, the group is advancing multiple growth and strategic optionality projects without compromising capital discipline. With FY26 guidance reaffirmed, Ngungaju set to restart in July, and further study and chemicals milestones ahead, PLS Group is increasingly well placed to respond if lithium market conditions continue to improve.