The detailed review of the North American Lithium (NAL) operation has concluded that joint venture (JV) partners Sayona Mining and Piedmont Lithium must continue ramping up the operation, in Quebec, Canada, to steady state production.

The news, announced on Thursday, pushed up NAL majority shareholder Sayona’s share price 12% on the ASX.

“The NAL operational review was a critical exercise to ensure we are optimising our resources and positioning Sayona for long-term success,” said interim CEO James Brown.

Sayona initiated a review of NAL in early 2024, after the global lithium market declined rapidly as a result of lower-than-expected electric vehicle demand growth and increased availability of battery material inventory across the supply chain. The accelerated downward pricing pressure has forced many global lithium producers and developers of lithium mines to revise production strategies and in some cases halt or moderate production.

The review considered several continued operations scenarios at NAL and also evaluated care-and-maintenance scenarios covering options to either slow down or cease mining, process existing stocks only and suspend operations for up to 12 months.

The review concluded that more time was needed for several capital improvement projects, such as the crushed ore dome and crushed ore re-feed system, to deliver their intended production increases and unit operating cost improvements.

The JV partners have committed to continuing to assess capital improvement projects to enhance ramp-up of production.

Brown said that there was a clear line of sight towards achieving steady state production in 2024.

He also pointed out that process plant recoveries had exceeded expectations, a significant milestone in any ramp-up, with multiple new daily production records achieved in March.

"Looking forward, we will regularly evaluate NAL operations in the ordinary course of business based on prevailing market conditions and the ability to achieve our operating cost targets. We are confident that this approach to considering alternatives and maintaining optionality will enable Sayona to maximise value for shareholders ahead of an anticipated recovery in the lithium market,” said Brown.