ASX-listed Elevra Lithium has revised its 2026 financial year production, sales and cost guidance after challenging operating conditions at its North American Lithium (NAL) operation in Canada weighed on recoveries and concentrate output during the December 2025 quarter.

The company reported on Wednesday that it had adopted a more conservative outlook for the next several quarters, lowering guidance until the benefits of increased grade control drilling and improved ore blending are realised.

Elevra noted that current operational conditions were not representative of the life-of-mine orebody and that the adjustment applied to short-term guidance only.

The miner has lowered its spodumene concentrate production guidance from between 195 000 and dry metric tonnes (dmt) to between 180 000 and 190 000 dmt, while its sales guidance has been cut to between 170 000 and 190 000 dmt.

Unit costs are forecast going up to between $860/dmt and $880/dmt, from a previous range of $765/dmt and $830/dmt.

The guidance revision came despite the company delivering record quarterly revenue and generating a gross profit at NAL, supported by improved lithium prices and strong sales volumes.

During the December quarter, ore mined increased 15% quarter-on-quarter to 389 801 wet metric tonnes, while plant utilisation improved to 89%. However, lithium recovery declined by 7% to 62%, reflecting pit development sequencing near historical underground workings, which resulted in lower feed grades and higher iron content.

Spodumene concentrate production fell 15% quarter-on-quarter to 44 154 dmt at an average grade of 4.9%, with the higher iron content requiring increased use of wet high-intensity magnetic separators.

Spodumene sales totalled 66 016 dmt, in line with prior guidance, with two larger cargoes shipped in line with the company’s freight optimisation strategy.

The average realised selling price increased 27% quarter-on-quarter to $998/dmt, benefiting from strengthening lithium market fundamentals and higher spot prices.

Unit operating costs declined to $812/dmt, compared with $818/dmt in the September quarter, enabling NAL to generate a quarterly gross profit for the second time since restarting operations.

Capital expenditure for the quarter amounted to $7-million and was primarily directed towards tailings storage facility upgrades and sustaining projects.

In its management commentary, MD and CEO Lucas Dow said that Elevra delivered a significant increase in revenue despite a challenging operating environment at NAL.

“Operationally, the December 2025 quarter was challenging. Spodumene concentrate production declined compared to the prior quarter, primarily as a result of reduced lithium recoveries associated with lower lithium grades and higher iron content in the ore feed.”

In response, the company plans to increase grade control drilling density in areas adjacent to historical underground workings to improve scheduling and ore blending.

“Consequently, the company has revised its production guidance until the benefits of increased grade control drilling and improved ore blending are realised,” Dow said.

Cash at the end of December stood at $81-million, reflecting merger-related advisory fees and change-of-control payments. Christian Cortes was appointed CFO during the quarter.

Merger-related cost synergies remain on track, with a further update expected with the 2026 financial year interim results in February.

In terms of growth projects, Elevra advanced plans for the staged expansion of NAL, progressed environmental baseline work at Moblan and continued engagement with authorities regarding ratification of the Ewoyaa mining lease in Ghana.

At Carolina Lithium, the company secured general stormwater permits and continued engagement with regulators and community stakeholders in support of environmental permitting.

Looking ahead, Dow said the company remained encouraged by improving lithium market sentiment and strengthening prices.

“Looking forward, management remains encouraged by improving sentiment in the global lithium market and the continued strengthening in lithium pricing."