Gains for the Pilbara Minerals Ltd (ASX: PLS) share price were quick to fade this morning, opening 5.33% higher to an intraday high of $1.975 before sliding to breakeven territory.
This is despite an upbeat announcement this morning regarding an upgrade in ore reserves and a September quarterly update later in the afternoon.
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Short-lived rally for the Pilbara Minerals share price
The Pilbara Minerals share price quickly ran out of steam this morning, hitting an intraday high of $1.975 right after the morning bell before fading to lows of $1.86 by 11 am.
Despite investors selling on the news, the announcement itself highlighted a positive 54% increase in total proved and probable ore reserve tonnes following the discovery of new pegmatite domains together with the integration of the Ngungaju resource.
Pilbara Minerals announced its plans to restart Ngungaju operations back in June this year.
The project was previously owned by Altura Mining Limited (ASX: AJM), which Pilbara Minerals acquired in October last year for $175 million.
The company estimates that restart costs will be around $39 million and the project should ramp up to 1800,000 to 200,000 dry metric tonnes (dmt) by mid 2022.
Pilbara Minerals announced another price-sensitive piece of news in the afternoon, that being a September quarter production and sales update.
The announcement failed to drive any further upside to the Pilbara Minerals share price.
Within the announcement, the company reported September quarter production of 85,759 dmt of spodumene concentrate compared to 77,162 dmt in the June quarter.
Spodumene concentrate shipment figures stood at 91,549 dmt, a slight decrease compared to June quarter shipments of 95,972. But exceeded its prior guidance of 77,000 to 90,000 dmt.
Pilbara Minerals reported a quarter-end cash balance of $137.3 million, which included $36.2 million in irrevocable bank letters of credit for shipments completed up to 30 September.
In addition to production and shipment figures, the company advised that its joint venture with South Korean steel-making company POSCO was "well advanced".
Pilbara Minerals said that a final investment decision is expected towards the end of October.
The joint venture features the development and operation of a 40,000 tonnes per annum (tpa) downstream lithium chemical conversion facility in South Korea.
