Sayona Mining share price crashes 12% as weak lithium prices start to bite

It now costs more for Sayona Mining to mine lithium than it receives for selling it.

| More on:
A woman screams and holds her hands up in frustration.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Sayona Mining Ltd (ASX: SYA) share price pain continues on Wednesday.

At the time of writing, the lithium miner's shares are down 12% to a new 52-week low of 3.7 cents.

This means that Sayona Mining's shares are now down 86% over the last 12 months.

Why is the Sayona Mining share price crashing today?

Investors have been rushing to the exits today after the company revealed just how bad things are getting due to weak lithium prices.

According to its quarterly update, Sayona Mining reported a 76% decline in revenue quarter on quarter to $23 million.

But it gets much worse. To generate this revenue, Sayona spent approximately $77.6 million on production, staff costs, and administration.

This ultimately led to its cash balance falling from $233 million to $158 million during the three months.

Lithium price weakness starts to bite

During the three months, the company experienced a sizeable 52% quarter on quarter decline in its average realised selling price to A$946 per dry metric tonne (dmt).

At the same time, the company's unit operating cost increased 14% to A$1,397 per dmt.

This means that it is operating with a negative margin of A$451 per dmt and losing considerable money every time it pulls lithium out of the ground and sells it.

Clearly this isn't sustainable. And judging by the Sayona Mining share price performance today, the market appears to believe that something will have to give. This could mean following in the footsteps of Core Lithium Ltd (ASX: CXO) by suspending operations to conserve cash.

It is worth noting that Sayona Mining recently announced an operational review to optimise its cost structure. And while it hinted that it hoped to continue mining activities through the cycle, it is going to be very difficult with a realised selling price of just A$946 per dmt.

The results of the review are expected during the current quarter.

Should you invest $1,000 in Betashares Australia 200 Etf right now?

Before you buy Betashares Australia 200 Etf shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Betashares Australia 200 Etf wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

Why are Fortescue shares charging higher today?

What is getting investors excited today? Let's find out.

Read more »

Business people discussing project on digital tablet.
Materials Shares

What does Macquarie think Liontown Resources shares are worth?

Let's see if analysts think that this lithium miner is in the buy zone or best avoided.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Materials Shares

Lynas shares charge higher on big news

What is getting investors excited today? Let's find out.

Read more »

Lion holding and screaming into a yellow loudspeaker on a blue background, symbolising an announcement from Liontown.
Materials Shares

Liontown Resources shares roar higher on big news

This lithium miner is catching the eye with some big news. Here's what is happening.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

What does Macquarie think BHP shares are worth?

Is now a good time to buy the miner's shares? Let's find out.

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Materials Shares

What does Macquarie think Pilbara Minerals shares are worth?

Is this lithium miner dirt cheap? Let's find out.

Read more »

Two miners standing together.
Materials Shares

Is it time to buy this beaten down lithium share?

This diversified miner’s share price has been hit on multiple fronts. What does it mean for investors?

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Pilbara Minerals share price falls on 30% quarterly revenue slump

ASX investors are bidding down Pilbara Minerals shares on Thursday. Here’s why.

Read more »