Q1 2024 Lithium Americas (Argentina) Corp Earnings Call

Operator: Thank you for standing by. My name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.

Thank you for standing by my name is Kathleen and I will be your conference operator today at this.

Kathleen: Time, I would like to welcome everyone to the first quarter of 2024 earnings Conference call.

All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star 1 again. Thank you. I would now like to turn the call over to Kelly O'Brien, Vice President of Investor Relations and ESG. Please go ahead.

Speaker Change: After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

Speaker Change: If you would like to withdraw your question press the star one again thank.

Speaker Change: Thank you I would now like turn the call over to Kelly O'brien.

Kelly O'brien: Vice President of Investor Relations and ESG. Please go ahead.

Kelly O'brien: Thank you, Kathleen. I want to welcome everyone to our earnings conference call this morning. Joining me on the call today to discuss the first quarter results is Sam Pigott, President and CEO of Lithium Argentina. Alex Shulga, Vice President and CFO, will also be joining during the Q&A session. Our earnings were released after the market closed yesterday, and you'll find the press release, the MD&A, and the financial statements posted on our

Kelly O'brien: Thank you Kathleen I want to welcome everyone to our earnings Conference call. This morning, joining me on the call today to discuss the first quarter result is Sam ticket president and CEO of lithium Argentina.

Sugar: Sugar, Vice President and CFO will also be joining during the Q&A session. Our earnings are released after the market closed yesterday and you'll find the press release, the MD&A and the financial statements posted on our website I remind you that some of the statements made during this call, including any production Guiling expected company.

Kelly O'brien: I remind you that some of the statements made during this call, including any production guidelines, expected company performance, gum fangs, strategic investment in pastos grandes, the timing of our projects, and market conditions, may be considered forward-looking statements. Please note the cautionary language about forward-looking statements in our MD&A and news release that was filed last night. I will now turn the call over to Sam.

Sugar: Formats gum things strategic investment in Pastas Grande the timing of our projects and market conditions may be considered forward looking statements. Please note the cautionary language about forward looking statements and our MD&A and news release that was filed last night I will now turn the call over to Sam.

Sam Pigott: Thank you, Kelly, and a warm welcome to everyone joining us today. It's been six weeks since our last earnings conference call, and I'm delighted to have this opportunity to provide you all with an update on our progress. As we move forward into 2024, our focus remains steadfast on several key priorities. Firstly, supporting the successful ramp-up of Kachari Oluwadami.

Sam Pigott: Thank you Kelly and a warm welcome to everyone. Joining us today, it's been six weeks since our last earnings conference call and I'm delighted to have this opportunity to provide you all with an update on our progress.

Sam Pigott: Secondly, ensuring the company remains sufficiently capitalized through the ramp-up and to support our future growth plan. And thirdly, advancing the regional development plan for the Pasos Grandes Basin with GANFA. In the first quarter of 2024, the Kachari project achieved a production milestone of 4,500 tons of lithium carbon, a 20% increase compared to the fourth quarter of 2023.

Sam Pigott: As we move forward into 2024, our focus remains steadfast on several key priorities firstly supporting the successful ramp up of <unk>.

Sam Pigott: Yes.

Kelly O'brien: Secondly, ensuring the company remains sufficiently capitalized through the ramp up and to support our future growth plans and thirdly advancing the regional development plan for past described is based in Wisconsin.

Qatari project: In the first quarter 2020 for the Qatari project achieved production milestone of 4500 tonnes lithium carbonate 'twenty.

Qatari project: 20% increase compared to the fourth quarter of 2023.

Sam Pigott: As production increases and different components of the plant have been pushed to higher levels, the operation has encountered increased variability consistent with a ramp-up. I'm very proud of our team at SITE, including some of GANFANG's most senior and experienced individuals, and their ability to address any challenges that arise. I have confidence in their technical expertise, commitment to the project, and focus on the goal of successfully completing this ramp-up. Looking ahead to the remainder of the year, our primary objective is to continue ramping up production consistently and sustainably towards our 2024 production targets of 20,000 to 25,000 tons of lithium carbon.

Qatari project: As production increases and different components of the plant had been pushed to higher levels. The operation has encountered increased variability consistent with the ramp up.

Speaker Change: I'm very proud of our team, including some again, thanks, most senior and experienced individuals and their ability to address any challenges that arise I have confidence in their technical expertise commitment to the project and focus on the goal of successfully completing this ramp up.

Speaker Change: Looking ahead to the remainder of the year. Our primary objective is to continue ramping up production consistently and sustainably towards our 2024 production target of 20% to 25000 tons of lithium carbonate as.

Sam Pigott: As the project reaches near nameplate capacity and begins to see levelized production and sales volumes, we will work with our joint venture partner to enhance disclosure later this year. We expect the increased disclosure to coincide with more normalized operations that are less impacted by short-term variability tied to startup and present a clear picture of the project. In line with our commitment to operational efficiency, we have initiated a corporate cost reduction program.

Speaker Change: As the project reaches near nameplate capacity and begin to see localized production and sales volumes.

Speaker Change: Work with our joint venture partner to enhance disclosure later this year.

Speaker Change: We expect the increased disclosure to coincide with more normalized operations that are less impacted by short term variability tied to startup and present, a clear picture of the project.

Speaker Change: In line with our commitment to operational efficiency, we've initiated a corporate cost reduction program.

Sam Pigott: It is important to highlight that although cost reduction efforts are being made, we remain committed to the neighboring communities and provinces in which we have development projects and operations. The company is working with Ganfang to pursue additional long-term debt options to leverage improved lending conditions in Argentina and support future growth plans. The Pasos Grandes transaction remains on track to be finalized around the end of Q2, providing a further $70 million to support our operations in Argentina.

Speaker Change: It is important to highlight that although cost reduction efforts are being made we remain committed to the neighboring communities in provinces in which we have development projects and operations.

Speaker Change: The company is working with Dan Thanks to pursue additional long term debt options to leverage improved lending conditions in Argentina and support future growth plans. The pathways Grandad's transaction remains on track to be finalized around the end of Q2, providing a further $70 million to support our operations in Argentina.

Sam Pigott: Additionally, the Regional Development Plan for the Pasadena-Grandes Basin is progressing this plan. Furthermore, there has been a significant amount of work conducted by both GANFANG and Lithium Argentina. In recent weeks, this information has been compiled and organized to support completing a comprehensive development plan by the end of the year. In summary, despite encountering some challenges as typical of any ramp-up, our efforts are yielding positive results in terms of both volume and quality, and we remain on track to meet our guidance for 2024.

Speaker Change: Additionally, the regional development plan for the patents branded space and is progressing as planned.

Speaker Change: There has been a significant amount of work conducted by both can bang in lithium Argentina in recent weeks. This information has been compiled and organized to support completing a comprehensive development plan by the end of the year.

Speaker Change: In summary, despite encountering some challenges typical to any ramp up our efforts are yielding positive results in terms of both volume and quality and we remain on track to meet our guidance for 2024.

Sam Pigott: We extend our gratitude to our dedicated teams in Argentina and abroad and our joint venture partner Ganseng for their continued efforts and expertise. Looking ahead, our focus this year will remain on key priorities of ramping up production, maintaining a strong balance sheet, and advancing our regional development. With that, I'll open it up to questions.

Speaker Change: We extend our gratitude to our dedicated teams in Argentina and abroad, and our joint venture partner John Thank for their continued efforts and expertise look.

Speaker Change: Looking ahead, our focus this year will remain our key priorities of ramping up production, maintaining a strong balance sheet and advancing our regional development plan with that I'll open it up to questions.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, please press star 1 to join the queue. Your first question comes from the line of Ben Isaacson of Scotiabank. Please go ahead.

John Thank: Thank you we will now begin the question and answer session. If you have dialed in and would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.

John Thank: If you would like to withdraw your question simply press Star one again.

Speaker Change: If you are called upon to ask your question and our listening via a loudspeaker and your device. Please speak up your handset and ensure that your phone is not on mute when asking your question.

John Thank: Again, Please press star one to join the queue.

John Thank: Your first question comes from the line of Ben Isaacson of Scotia Bank. Please go ahead.

John Thank: Yeah.

Aparva: Good morning, everyone. This is Aparva on for Ben.

Benjamin Isaacson: Good morning, everyone. This is <unk> on for Ben I've got a couple of questions. My first is that obviously Qatari AR continues to advance through their ramp up and you noted that you're testing a higher production level can you clarify exactly what this means.

Aparva: I've got a couple of questions. The first is that, obviously, Kachari continues to advance through the ramp-up, and you noted that you're testing a higher production level. Can you clarify exactly what this means?

Sam Pigott: Yeah, thanks for the question. [inaudible] Just under a year since production began, the project, we're very happy with how the project is going. It's moving in the right direction, both in terms of increased production volumes and consistency. However, as part of the ramp-up, it's not a straight line. So as we test different parts of the plant at higher and higher levels, we will identify issues and address them in order for us to be able to sustainably achieve those higher run rates.

Speaker Change: Yeah. Thanks for the question.

Benjamin Isaacson: So.

Speaker Change: Just under a year.

Speaker Change: Production began.

Speaker Change: Project, we're very happy with how the project is going.

Speaker Change: It's moving in the right direction and both in terms of increased production volumes and consistency.

Speaker Change: As part of the ramp up it's not a straight line. So as we test different parts of the plant the higher and higher levels.

Speaker Change: We will identify issues and address them in order for us to be able to sustainably achieve.

Speaker Change: Higher run rates.

Speaker Change: So when we talk about testing capacity, that's exactly what we did.

Sam Pigott: And so when we talk about testing capacity, that's exactly what we did, for instance, at the end of March, prior to the April shutdown. So we test the higher capacity, we identify issues, we affect and implement solutions, and we continue going on. It's just kind of a typical, typical ramp-up.

Speaker Change: Instance, at the end of March.

Speaker Change: Prior to the April shutdown, so we test the higher capacity, we identify issues we effect.

Speaker Change: To implement our solutions and.

Speaker Change: And we continue going on.

Speaker Change: Just kind of typical a typical ramp up.

Sam Pigott: My second question is kind of alluding to that. As you ramp up, can you quantify what production looked like in March and April and perhaps what it might look like?

Speaker Change: Understood. Thank you my my second question is kind of alluding to that as you ramp up can you quantify what production looked like in March and April and perhaps what it might look like in May just to help us understand the shape of gross as you ramp.

Sam Pigott: Sure, I'd say we're not going to be providing monthly production figures just because you know we are in a ramp-up and there is variability over months and months and so we don't want to introduce confusion. I'd say just in terms of cadence of production, obviously, the second half is expected to be higher higher volumes than the first half and as we progress towards nameplate capacity and achieve these

Speaker Change: Sure I'd say, we're not we're not going to be providing monthly production figures just because we are in the ramp up and there is variability over months and months and so we don't want to introduce confusion.

Speaker Change: I'd say just in terms of cadence of production of it through the second half is expected to be higher higher volumes in the first half.

Partner: And as we progressed towards nameplate capacity and achieve these more normalized production levels. We will work with our partner again things are kind of enhanced disclosure and.

Partner: And provide more details.

Aparva: Great, thank you. I'll get back in the queue.

Partner: Great. Thank you I'll get back in the queue.

Operator: Your next question comes from the line of David Deckelbaum of TD Cowen. Please go ahead.

David Adam Deckelbaum: Your next question comes from the line of David <unk> of TD Colin. Please go ahead.

David Adam Deckelbaum: Yeah.

David Adam Deckelbaum: Morning, guys. Morning, Ben. Thanks for taking my questions today.

David Adam Deckelbaum: Good morning, guys morning, Ben Thanks for taking my questions today.

David Adam Deckelbaum: I just wanted to understand, and maybe this is overly logistical in nature, but just what does planned maintenance look like at Kutchari? I know that you all remarked that you took some downtime in April. Can you elaborate a little bit more on those plant improvements, and this is something that we should kind of expect every six months or so, or how should we think about that as you all kind of ramp towards capacity, especially once you achieve that run rate? Sure.

David Adam Deckelbaum: I just wanted to understand and maybe this is overly logistical in nature, but just.

David Adam Deckelbaum: What his plans maintenance looked like at two chary I know that you're all remarks that you took some downtime in April.

Benjamin Isaacson: Can you elaborate a little bit more on this plant improvements and this is something that we should kind of expect every six months or so or how we should think about that as you all kind of ramp towards capacity, especially once you achieve that run rate.

Sam Pigott: Sure. So through Q1, volumes continued to ramp up. We started testing the plants at higher and higher throughputs, and as part of that, we identified issues that needed to be addressed in order to sustain those higher and higher throughputs. And so the April shutdown was planned to go in and address, particularly reliability issues. And so the specifics would be, we replaced piping in certain areas where we had identified leaks and cracks. We had identified certain motors where seals needed to be replaced, so typical stuff, and this often arises during ramp-ups as you push higher and higher throughput capacity towards nameplate design.

Benjamin Isaacson: Sure.

Benjamin Isaacson: So through Q1 volumes continued to ramp up.

Benjamin Isaacson: Started testing the plants at higher and higher throughput.

Benjamin Isaacson: As part of that we identified issues that needed to be addressed in order to sustain those higher and higher throughput you saw the April shutdown was planned to go in and address particularly around reliability issues and so specifics would be.

Speaker Change: We replace piping in certain areas, where we had identified leaks in cracks.

Speaker Change: We had identified certain motors, where steel is needed to be replaced so typical stuff and they often arise during ramp ups as you push higher and higher throughput capacity towards nameplate design.

Speaker Change: So it's.

Sam Pigott: So it's downtime to enable us to achieve higher production rates on a sustainable basis. And so when I mentioned in the previous answer to the question that, you know, ramp-ups aren't a straight line, there are periods of time where there will be downtime to address issues, and they unlock our ability to operate at higher sustaining rates.

Speaker Change: It's downtime to enable us to achieve on a sustainable basis these higher production rates.

Speaker Change: And so when I when I mentioned in the previous answering the question that ramp ups are on a straight line. There are periods of time, where there will be no.

Speaker Change: Downtime to address issues and they unlock our ability to operate at higher sustaining rates.

Speaker Change: Perfect. Thanks.

Speaker Change: And then.

Sam Pigott: And I'm just curious, for Passos Grande, I know it's a bit early, and you guys are going to confirm some of those details around development, but there has been mention of the use of DLE. Can you talk about some of the motivations for that? Is it specific to just the geology around Passos Grande and Sale Lacuna, or is this Is this sort of a commercial endeavor that's looking to build out either an internal technology with Gungfung or relying on a third party?

Speaker Change: And I was just curious.

Speaker Change: <unk> Grande.

Speaker Change: I know, it's a bit early.

Speaker Change: And you guys are going to kind of confirm some of those details around development, but there has been mention of the use of DLA.

unknown: Can you talk about some of the motivations for that or is it specific to.

unknown: Just the geology.

Solvay: Around process Grande and Solvay lacuna or is this.

Speaker Change: Is this sort of a commercial endeavor.

Speaker Change: Looking to build out either an internal technology with <unk> or <unk>.

Speaker Change: Aligning with a third party.

Speaker Change: Okay.

Speaker Change: I can say I mean, <unk> spent a lot of time investigating different process technologies and I think.

Speaker Change: Since their involvement in Qatari.

Speaker Change: There's been a lot of advancement and DLA I'm, just generally in the industry, but also specific to what <unk> been working on so I think when they look at past described as there is a slight slightly lower lithium concentration which.

Speaker Change: Doesn't it doesn't obviously rule out conventional but does does make it appropriate to investigate new technologies in.

Speaker Change: Dan thing is world class.

Dan Thanks: In terms of processing technologies, they've made great strides in terms of advancing their proprietary daily technology.

Sam: Thanks Sam.

Sam Pigott: [inaudible]

Speaker Change: Your next question comes from the line of Joel Jackson of BMO capital markets. Please go ahead.

Sam Pigott: Um, I can say, I mean, Gantt Bank spent a lot of time investigating different process technologies. And I think, since their involvement in Kachari, there's been a lot of progress in DLE, just generally in the industry, but also specific to what GenFeng's been working on. And so I think when they look at pastos grandes, there is a slightly lower lithium concentration, which doesn't obviously rule out conventional methods but does make it appropriate to investigate new technologies. And, you know, GenFeng is a world-class company in terms of processing technologies, and they've made great strides in terms of advancing their proprietary DLE technology.

Speaker Change: Hi, Good morning, <unk> could you give us an update at the cachet all arose what inventories are like.

Speaker Change: At the end of the quarter or now of carbonate and then could you could you tell me what.

Speaker Change: What is the kind of price quality relationship.

Speaker Change: What kind of price.

Speaker Change: Discounts as a product getting versus different grades. Please thanks.

Speaker Change: Sure.

Operator: Your next question comes from the line of Joel Jackson of BMO Capital Markets. Please go ahead.

Speaker Change: So we did we did have some meaningful inventory build particularly at the end of Q1.

Speaker Change: I'm not going to disclose exactly what it is but it's substantial.

Speaker Change: And that's just a function of improving our regular shipment.

Speaker Change: Shipment plans and it's all kind of part and parcel with the ramp up.

Joel Jackson: Hi, morning, Sam and team. Could you give us an update on Castrera de la Rose about what inventories were like at the end of the quarter or now for carbonate? And then, could you could tell me what the kind of price-quality relationship is? You know, what kind of price and discounts is a product getting versus different grades, please?

Speaker Change: In terms of the the second question.

Speaker Change: So in terms of quality quality and price are obviously very linked.

Speaker Change: The pricing we receive.

Sam Pigott: Sure. So we did have some meaningful inventory build, particularly at the end of Q1. I'm not going to disclose exactly where it is, but it's, And that's just a function of improving our regular shipment plans, and it's all kind of part and parcel with the ramp-up. [inaudible] In terms of the second question, so quality and price are obviously very linked, it starts with a reference price for a battery quality product for carbonate and then makes adjustments for quality and processing costs in order to get it to battery quality.

Speaker Change: With a reference price of battery quality products for Carbonite, and then makes adjustments for quality and processing costs in order to get at the battery quality.

Sam Pigott: And I can say there was a meaningful improvement in quality between Q4 of 2023 and Q1 of 2024. Right now, we are meeting most technical and battery specifications. Let's say the outlier is, in large part, potassium. So this is the function of getting the KCL trains up and running on a consistent, reliable basis. So, as the product improves, the price that we receive improves, and there's been a dramatic change over the last few months in terms of product quality and reflectivity. And given this time and this, improved pricing will be reflected in Q2.

Speaker Change: And I can say there was a meaningful improvement in quality between Q4 of 2023 in Q1 of <unk>.

Speaker Change: 2024.

Speaker Change: Right now we are meeting most technical and battery specification, but I'd say the outlier.

Speaker Change: And in large part as potassium.

Speaker Change: This is a function of getting the kcl trains.

Speaker Change: <unk> up and running on a consistent and reliable basis.

Speaker Change: So as product improves the price that we received improved and theres been a dramatic.

Speaker Change: Dramatic change over the last few months in terms of product quality and the reflected pricing.

Speaker Change: And given given this time.

Speaker Change: Improved pricing will be reflected in Q2.

Speaker Change: Okay.

Speaker Change: Yeah.

Joel Jackson: Okay, um, and then Sam, what are your kind of updated thoughts from earlier in the year?

Speaker Change: Okay.

Sam: And then Sam.

Speaker Change: Sam what are your kind of updated thoughts I know.

Joel Jackson: Well, there are some trade-offs, obviously, right as you now try to trade off utilization, operating rates, sorry, versus quality, and whether you can produce battery grade at the site, which of course, is the preferred outcome. But as you had said, are you taking down the plan in April? What are your thoughts on, you know, what is a more likely path going forward when you're fully ramped up battery grade, not battery grade, something in the middle, different operating rates? What are your updated thoughts over the last few months?

Sam: Earlier in the year there are some trade offs, obviously right as you know try to trade up utilization operating rates, sorry versus quality and what you can produce battery grade I'd say, which of course is the preferred outcome.

Speaker Change: But as you had are you take another plant in April learn more about.

Speaker Change: What are your thoughts on what is a more likely path going forward. When you are fully ramped battery grade not bad grades have been in the middle of different operating rates. What is your updated thoughts for last few months now.

Sam Pigott: I think it's consistent with what it was six weeks ago, which is, you know, the priority is getting volumes up. This is a plant that operates best as it moves towards nameplate capacity and is operating sustainably and reliably. As volumes increase, what we've noticed is the product volume. I guess it's not. Not a big surprise that, you know, it was designed to produce at a certain rate, and as we move closer and closer to that rate, product quality is tracking along with it.

Speaker Change: I think it's consistent with what it was six weeks ago, which is the priority is getting volumes up.

Speaker Change: Listen this is a plant that.

Beth: Operator, Beth as it is.

Beth: It moves towards nameplate capacity is operating sustainably and reliably.

Beth: As volumes increase what we've noticed is product quality increases I guess, it's not.

Beth: Not a big surprise, but it was designed to produce at a certain rate and as we as we move closer and closer to that rate the product quality is tracking along with it.

Joel Jackson: Okay, and just more on that, that we took some downtime in April to learn more about the plan and to look at the piping and look at different things, look at reliability. What was sort of the biggest surprise that maybe you learned and or something that you're going to work on? Or, yeah, what was sort of the biggest lesson that you're now trying to figure out?

Speaker Change: Okay, and just more on that that we took some downtime in April to learn more about the plan and to look at the piping and look at different things like reliability.

Speaker Change: What was the biggest surprise that maybe you learned in or something that you're going to work on or.

Speaker Change: Yeah, well the sort of the biggest lesson that you're now trying to figure out.

Sam Pigott: I mean, I think the downtime was to address things that were identified weeks ago, so it was planned downtime. You know, the piping is one area.

Speaker Change: I mean, I think that the downtime was to address things that were identified.

Speaker Change: Weeks ago. So it was it was planned downtime.

Sam Pigott: So they went in, and they replaced the majority of piping that was giving them some issues. You know, I think, aside from that, it's just ensuring that we are able to identify challenges as they arise, implement changes, and limit downtime. And I think what surprised us was how effective I think our team has been. I mean, ramp-ups are going to encounter issues. It doesn't matter the project; lithium projects, in particular, have a spotty track record.

Speaker Change: You know the the piping is one area. So they went in and they they replace the majority of piping that was giving them some issues.

Speaker Change:

Speaker Change: You know I think I think aside from that it's just ensuring that we are able to identify challenges as they arise.

Speaker Change: Implement changes limit downtime and I think what surprised US was how effective I think our team has been I mean ramp ups are going to encounter issues doesn't matter. The project lithium projects in particular have.

Speaker Change: Spotty track record.

Sam Pigott: But what gives me great confidence is just seeing how the team went in, managed to obviously identify these issues, affect the changes, and limit downtime. And now that the plant is back up and running, we're seeing significant improvements in terms of stability. So there wasn't anything that surprised us going in to inspect. I think most of the issues were well known in advance, and it was really just a very focused, targeted process in terms of replacing piping, fixing seals on pumps, and those types of things.

Speaker Change: But what I'm what I E.

Gives me great confidence is just seeing how the team went in.

Speaker Change: Managed to obviously identify these issues affect the changes limit downtime.

Speaker Change: Now that the plant is back up and running and we're seeing significant improvements in terms of stability. So there wasn't anything that surprised us going in to inspect I think most of the issues, we're well known in advance and it was really just the very focused.

Speaker Change: But our focus process in terms of replacing piping fixing fixing sealed on pumps and most of those types of things.

Operator: Your next question comes from the line of Katie Leshapel from Canaccord Genuity; please go ahead.

Speaker Change: Your next question comes from the line of Katy Lachapelle from Canaccord Genuity. Please go ahead.

Katie Leshapel: Hey guys, thanks for taking my question. I do want to focus more again on the ramp-up. Sam, as you mentioned, the potassium chloride circuit that's being integrated right now. Is that, I would say, one of the largest components of what's limiting you in terms of volumes getting up? Or where specifically in the plan are you seeing that issue?

Katy Lachapelle: Hey, guys. Thanks for taking my question I do want to focus more again on the ramp up.

Katy Lachapelle: Sam as you had mentioned the potassium chloride circuit, that's being integrated right now.

Katy Lachapelle: Is that I would say one of the largest components of Watson limiting you in terms of volumes getting up or where do you play in the plan.

Katy Lachapelle: Sure.

Sam Pigott: Sorry, KCL was the focus, and it has been the focus. [inaudible] So we went in during April and stabilized one of the plants. We replaced a lot of the piping that was creating some leakages.

Katy Lachapelle: Okay.

Katy Lachapelle: Focus.

Katy Lachapelle: It has been the focus.

Speaker Change: So we we went in during April and we stabilized one of the plants, we replace a lot of the piping that was creating some leakages.

Sam Pigott: So yeah, KCL is definitely the focus of the GenBank team. They're largely responsible for overseeing that operation. We're very thankful that we have such an experienced team looking at this. So, you know, KCL was the last of the subsystems to commission, and it is currently in commissioning. We've run both trains independently and tested them at pretty high throughput. So it's progressing very well, and yeah, there'll be more on the second quarter conference call to describe, but KCL is certainly the focus.

So yeah I can't Kcl Kcl is definitely the focus of Dan Thank team, they're largely responsible for overseeing that operations.

We're very thankful that we have such an experienced team looking at so.

Speaker Change: <unk> was the last of the subsystems to commission them.

Speaker Change: It's currently in commissioning we've brand both trains.

Dan Thank: Independently and test them to pretty high throughput.

Dan Thank: So its progressing very well and there'll be more on the second quarter conference call to describe but kcl certainly focus.

Katie Leshapel: And maybe just a quick follow-up, are the improvements that you're seeing in product quality for Q1 relative to Q4 a direct impact of some improvements in the KCL plant? Anyway, I think...

KCL: And maybe just a quick follow up are the improvements that you're seeing in the product quality for Q1 relative to Q4, our direct impact of.

KCL: Some improvements in that case, you all plants.

Sam Pigott: I think they're kind of spread out, but that would be the most meaningful impact. Got it. Thanks.

Speaker Change: I mean, I think I think they are kind of spread across but that that would be the most meaningful impact yes.

Speaker Change: Got it.

Operator: Your next question comes from the line of Noel Parks of Dewey Brothers. Please go ahead.

Your next question comes from the line of Noel Parks of Tuohy Brothers. Please go ahead.

Speaker Change: Yeah.

Noel Augustus Parks: Hi, good morning. I just had a couple. I wonder if you could just maybe talk about sort of the remaining stages ahead on the road to completing the comprehensive development plan, just sort of what what's still outstanding needs to be done, you know, needs further analysis.

Noel Augustus Parks: Hi, Good morning, just had a couple.

Noel Augustus Parks: I Wonder if you could just.

Maybe talk about through the remaining stages.

Noel Augustus Parks: On the road to completing the comprehensive development plan.

Sort of what what's still outstanding needs to be done needs further analysis et cetera.

Noel Augustus Parks: Sure.

Sam Pigott: I mean, we're starting from a position of having a rich database of information on both Pazuelos as well as Pasos Grandes, so a lot of work has gone into both of those. So we're obviously merging and consolidating these resource bases, and we're sharing information on the hydrogeological model. We're conducting kind of infrastructure trade-off studies; all of that information is readily available, so it's just about compiling it and getting the teams aligned and focused. So there'll be more, obviously, there'll be a much bigger update towards the end of the year. But that kind of gives you a flavor of what we're doing.

Speaker Change: I mean, we're starting from a position of having a rich database of information on on both <unk> as well as past those grounded so.

Speaker Change: Lot of work has gone into both of those so we're we're obviously, we're merging and consolidate in the resource bases, we're sharing information on the hydro geological models.

Speaker Change: We're conducting kind of infrastructure tradeoff studies.

Speaker Change: All of that information is readily available. So it's just about compiling that and getting the team.

Speaker Change: Teams aligned and focused.

Speaker Change:

Speaker Change: So there'll be more obviously there'll be there'll be much bigger update towards the end of the year.

Speaker Change: That's kind of gives you a flavor of what we're doing.

Noel Augustus Parks: Great, thanks. And I was just wondering, is as you, you know, look at future design phases and implementation phases. I'm just wondering, is. Is the experience of country OROs so far? going to be like a pretty meaningful template sort of for standardization of process and equipment for for subject projects or that you mentioned for example Gunfang and it's made improvements in its own technology in recent years? Or is it sort of like a essentially a fresh look more starting from scratch than you know, than the sort of, you know, following in, you know, the sort of the model that came together, you know, five, six, seven, eight years ago for Countrydale? That's a good question. I think we're

Speaker Change: Great. Thanks, and I was just wondering if.

Speaker Change: As you.

Speaker Change: Look at future designing phases and implementation freezes.

Speaker Change:

Speaker Change: I just wondering.

Speaker Change: Is.

Speaker Change: The experience is a country of all arrows so far.

Speaker Change: Going to be.

Speaker Change: Like a pretty meaningful temp, where it sort of for standardization of our process and equipment for for subjects.

Speaker Change: Projects or.

Speaker Change: You mentioned for example.

Speaker Change: Got a thing and it's made improvements in its own technology.

Speaker Change: In recent years.

Speaker Change: Or is it sort of like a essentially a fresh look more starting from scratch then.

Speaker Change: Yeah.

Speaker Change: The reserve.

Speaker Change: Following.

Speaker Change: Sure.

Speaker Change: Sort of the model it came together.

Speaker Change: 5678 years ago.

For a regulatory or OS.

Sam Pigott: That's a good question. I think we're very pleased with what we're doing at Cachari at the moment. Obviously, for Patsos Grandes and Pesuelos, there are other factors, not necessarily mitigating factors that would prevent us from pursuing a similar design, but things like recharge rate have a direct impact on how much you can pump. There are studies around how much, you know, pond capacity you could have and where we'd be on the salar, whether it needs to be on the berm and associated additional capex with

Speaker Change: That's a good question I think we're very pleased with what we're doing at Qatari overall at the moment.

Qatari project: <unk>, obviously for patents granted as well as there are other factors.

Speaker Change: Not necessarily mitigating factors that would prevent us from pursuing a similar design, but things like recharge rate has a direct impact on how much you can pump.

Speaker Change: There is there are there are studies around how much you know pond capacity, you could have and where we'd be on the <unk>.

Speaker Change: Whether whether it needs to be on the berm and associated additional capex with that so all of those things are kind of being factored into the trade off studies around technology and some of the infrastructure.

Sam Pigott: So, all of those things are kind of being factored into the trade-off studies around technology and some of the infrastructure. So, we're certainly using it as, you know, one of the potential development scenarios, but for the reasons I described in the variability of the different salars, also, you know, the grade, the recharge rate, the pond capacity on salar, those things are all being taken into account in these trade-off studies that will obviously guide the regional development plan.

Speaker Change: So we are certainly using it as.

Speaker Change #100: One of the potential development scenarios, but for the reasons I described and the variability of the different Lars also the grade the recharge rate the ponds with brine capacity on <unk> those.

Speaker Change: Things are all being taken into account these trade off studies.

We: We'll obviously guide the regional development plan.

Speaker Change: Yeah.

Speaker Change #102: Great. Thanks, a lot.

Speaker Change: Yeah.

Operator: Your next question comes from the line of Mac Whale of Cormark Securities. Please go ahead.

Speaker Change: Your next question comes from the line of Mac whale of <unk> Securities. Please go ahead.

Mac Whale: Hi, good morning. Sam, you noted that as you ramp up, the volumes, and the quality are improving when it comes to the major operating cost items, such as the reagent. Intensity, like per ton output, is that also improving as you ramp? Yeah, I mean, as we ramp and get to more normalized, more sustainable higher levels, it allows us to kind of focus in on things like, you know, specific consumption. And so, you know, like, everything during a ramp, it's testing out and optimizing.

Speaker Change: Hi, Good morning, Sam as you noted that as you ramp the volumes the quality is improving when it comes to the major operating cost items, such as say reagent use intensity like per ton I would put it is that also improving as you ramp.

Mac Whale: Yeah, I mean, it's.

Sam: Yeah, as we ramp and get to more normalized more sustainable higher level that allows us to kind of focus in on things like spitz.

Sam: Specific consumption and so.

Sam: Like everything during a ramp its testing out in optimizing and so there certainly will be opportunities to hone in on those things like soda ash specific consumption lines specific consumption of these are material cost drivers.

Mac Whale: And so there certainly will be opportunities to hone in on those things, like soda ash specific consumption, lime specific consumption, these are material cost drivers. I'd say costs so far during the ramp are tracking to our plan. Once we get into higher sustained levels, we'll really be able to kind of narrow down our focus on to those specific kind of specific, specific consumption target rates. Okay, so we talked in the past about there being really two elements of bringing cost down.

Sam: I'd say costs, so far during the ramp are tracking to our plan.

Speaker Change #104: Once we get into higher sustained levels won't really be able to kind of narrow narrow down our focus onto those specific kind of specific specific consumption target rates.

Speaker Change #105: Okay. So we've talked in the past Theres really two elements of bringing costs down. There's one just pure volumes going to cover your overhead better but these specific.

Mac Whale: There's one, just pure volumes is going to cover your overheads better, but the specific, The first thing is to get your volumes up. That does a huge amount of work in getting [inaudible] Any reason yet to expect any meaningful difference in the levels you're aiming for versus the feasibility?

Speaker Change #107: You see to items as well are almost I would call secondary but the first thing is get your volumes up that that does a huge amount of work and getting tier feasibility costs, but then the second level is really ratcheting down on the reagent specific like this is that correct.

Speaker Change #106: Correct Okay.

Speaker Change #105: <unk>.

Speaker Change #106: Any reason yet to expect any meaningful difference in the levels youre aiming for versus the feasibility.

Sam Pigott: I mean, in terms of specific consumption, no. Okay. But I don't know what the reagent price tag was in the feasibility study.

Speaker Change #105: I mean in terms of the specific assumption no.

Speaker Change #108: I don't know what the reagent price deck was in the feasibility study maybe maybe some some differences there in terms of specific consumption, though.

Mac Whale: There may be maybe some slight differences there. Sure. But in terms of specific consumption, no. Okay.

Sam Pigott: Okay. And then just follow up on the inventory buildup question: your answer, was that in terms of finished product buildup, or is that units of lithium in your pond? Jonathan Seshadri.

Speaker Change #108: Yeah.

Speaker Change #109: And then just follow up on the inventory buildup question. Your answer was that in terms of finished product buildup or is that units of lithium in your part inventory no no offense finished product.

Mac Whale: Okay, and how is the pond inventory now that we were there? I guess in April, it sounded like everything was well on track into your, through your 25th production, is that correct?

Speaker Change #108: And how is that pond inventory now when we were there I guess in April it sounded like everything was well on track into your three year 25 production is that correct.

Sam Pigott: Yeah, our pond inventory is very healthy. It's certainly not the bottleneck to achieving your nameplate capacity at this time.

Speaker Change #110: Yes, our inventory is very healthy.

Speaker Change #110: Certainly at this time.

Speaker Change #108: The bottleneck to achieving your nameplate capacity, Okay, and then lastly on the power outages are those problems behind you essentially now like as has the weather gotten back to where you sort of expect it to be and then can you speak to perhaps power conditioning or any any changes to that that power connection.

Mac Whale: Okay, and then lastly, on the power outages, are those problems behind you essentially now? Has the weather gotten back to where you sort of expect it to be, and then can you speak to... perhaps power conditioning or any changes to the power connection that you are contemplating to eliminate that issue?

Speaker Change #108: That you are contemplating to eliminate that issue.

Sam Pigott: Yeah, I mean, it's really a seasonal thing. In February and March in the Puna, we saw an unusual number of electrical storms. I mean, typical season, you're going to see a lot of them. And that led to power disruptions. So we're out of that season now, and the mitigation plan that's been developed is being implemented. So, you know, we expect to address these issues.

Speaker Change #111: Yes. It is.

Speaker Change #111: Really a seasonal thing in February and March and the Pune, we saw like an unusual number of electrical storms and then typical a typical season, you're going to see a lot of it.

Speaker Change #111: And that led to the power disruptions. So we're out of that season now and the the mitigation plan that's been developed.

Speaker Change #111: Being implemented so we expect to address these issues.

Kelly O'brien: That concludes our Q&A session. I will now turn the conference back over to Kelly O'Brien for closing remarks.

Speaker Change #111: That concludes our Q&A session I will now turn the conference back over to Kelly O'brien for closing remarks.

Kelly O'brien: Thank you everyone for joining the call today. I welcome you to reach out to me or anyone on the team between now and the next earnings conference call. Thanks, and have a great day.

Kelly O'brien: Thank you everyone for joining the call today I welcome you to reach out to me or anyone on the team.

Kelly O'brien: Now in the next earnings conference call, Thanks, and have a great day.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.

Kelly O'brien: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Speaker Change #111:

Speaker Change #111:

Speaker Change #111: [music].

Speaker Change #111: