Pilbara Minerals Limited (PILBF)

[n4807g]

Looking at Allkem's quarterly report we can make some educated assumptions. Allkem's average sale price during the quarter was:

based on an average sales price of US$5,702 /dmt CIF for SC 5.2%

Assuming Pilbara achieved the same average price and sold their entire nameplate quarterly production of approx. 140,000 /dmt CIF their gross revenue for the quarter would be 5,702 x 140,000 = US$798,280,000 converted to AUD @.67 exchange = AU$1,191,462,686. If the AU$ cost of production an freight charge was the same as their 6 month report (AU$1,136/dmt CIF) the cost of production plus freight is 1,136 x 140,000 = 159,040,000. Gross Margin would be 1,191,462,686 - 159,040,000 = AU$1,032,422,686. If their General, Administrative and Exploration cost remained about the same they would be approx. AU$17,500,000 leaving a gross profit of 1,032,422,686 - 17,500,000 = AU$1,014,922,686. It's not easy to factor in capex expenses which would reduce this gross profit number, so keep that in mind.

AU$1,014,922,686 would be a great outcome. It will be interesting to see their cash balance on hand, given the dividend payout and capex, it should still be impressive. The one downside of the Allkem report was their expectation that the average price of spodumene will drop to US$5,000/dmt CIF SC6.0 (SC 5.2 will be substantially less) in the 4th quarter. But even at lower sales price Pilbara would be profitable. All the Pilbara data was taken from the 6 month report page 13. One other interesting note.....also from page 13:

Average realised selling price of ~US$4,993/dmt (CIF China)...........should be an interesting report this week.