Q1 2024 Piedmont Lithium Inc Earnings Call
Thank you for standing by my name is Kathleen and I will be your operator today at this time I would like to welcome everyone to the first quarter of 2020 for Piedmont lithium earnings calls.
All lines have been placed on mute to prevent any background noise. 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 if.
If you would like to withdraw your question press the Star one again and now I will turn the call over to Aaron Saunders Senior Vice President of corporate Communications and Investor Relations. Please go ahead.
Erin Sanders: Thank you operator, and good morning, everyone. Welcome to Piedmont lithium is first quarter 2024 earnings call.
Erin Sanders: Joining us today from Piedmont, lithium Archie Phillips, President and Chief Executive Officer, who will provide introductory remarks, Michael White Chief Financial Officer will then review our financial results followed by Patrick Brindle, Chief Operating officer, who will offer an update on our projects.
Erin Sanders: Keith will then provide closing commentary before we transition to a live Q&A session.
Erin Sanders: As a reminder, today's discussion will contain forward looking statements relating to future events and expectations that are subject to various assumptions and caveats factors that may cause the company's actual results to differ materially from these statements are included in today's presentation earnings release and in our S.
Erin Sanders: T SEC filings. In addition, we have included non-GAAP financial measures in this presentation reconciliations to the most directly comparable GAAP financial measures can be found in today's earning release and the appendix to today's slide presentation.
Erin Sanders: Any reference in our discussion today to EBITDA means adjusted EBITDA.
Erin Sanders: Further references shipments, our lithium concentrate and metric tons, our dry metric tons. Please.
Erin Sanders: Please note that copies of our earnings release and presentation as well as a replay of this call will be available on our website Piedmont lithium dot com.
Erin Sanders: With that I'll turn the call over to Keith Philips Keith.
Keith Douglas Phillips: Thanks, Erin and thank you all for joining us today for Piedmont lithium <unk> first quarter 2024 earnings call as I like to do at the start of these calls I will quickly reiterate our mission and strategy for those of you who may be new to Piedmont lithium in our story.
Keith Douglas Phillips: Piedmont is one of only three U S based lithium companies in production today, our mission is to be a leading north American supplier of lithium resources to the electric vehicle supply chain. Our goal is to support <unk> efforts to reduce our reliance upon foreign nations for critical materials and strengthen our national energy security.
Keith Douglas Phillips: Piedmont's strategy is based on hard rock production and that is producing and eventually further processing spodumene concentrate from assets, we own or in which we have an economic interest.
Keith Douglas Phillips: Turning to the first quarter the key points, you'll hear about this morning are <unk>.
Keith Douglas Phillips: First at North American lithium is ramping nicely with continued record production, we're really pleased with past that operations on the team is doing a great job.
Keith Douglas Phillips: Carolina lithium is now front and center with the receipt of our state mining permit.
Keith Douglas Phillips: <unk> is progressing through the approvals process and we're evaluating non dilutive funding options and lastly, we're keeping very focused on effectively managing costs and we are on track to achieve the $10 million in annual cost savings we identified in the first quarter.
Keith Douglas Phillips: Finally in thinking of our outlook for the rest of the year I wanted to highlight the 2024 is shaping up as a year of two halves for Piedmont lithium as we transitioned to shipments to our core customers under long term agreements, we expect Piedmont largely shipments to more than double from the first half of this year to the second half of 2024. Furthermore, our capital.
Keith Douglas Phillips: And investment spending was heavily weighted to the first quarter of the year such that second half spending will be less than half of all invested in the first half if we get fortunate on the pricing side, we could have a really strong second half of the year.
Keith Douglas Phillips: Shifting to slide four let's start talking about Quebec.
Keith Douglas Phillips: North American lithium is now the largest producing spodumene operation in North America and in the first quarter of 2020 for the production ramp up continued the operations achieved record quarterly production record lithium recoveries and a record safety performance truly an exceptional quarter and attribute to the great work of the entire team up at North American lithium.
Keith Douglas Phillips: Key capital projects at the operation move toward completion, which are expected to result in an increase in production levels and a reduction in unit operating cost.
Keith Douglas Phillips: The operational review performed in the first quarter by the joint venture partners Piedmont insight on our mining affirm the direction of the operations progress any expected trajectories of both production and costs. We are optimistic that full run rate production levels that Nio will be achieved as expected in the second half of 2020 for supporting our guidance that we expect to ship.
Keith Douglas Phillips: 126000 tons from Quebec, this year with most of our shipments weighted to the back half of the year, Michael will talk more about shipments in his remarks.
Michael D. White: So the progress that's been made in the past quarters, just underscores our excitement about the future of Nal, which is absolutely a core asset for us and was a favorable life of mine Offtake agreement for qualified inflation reduction Act IRA material I believe Nio will be a great asset for Piedmont shareholders for the long term.
Michael D. White: Now shifting to Carolina lithium obviously, the receipt of the state mining permit was a significant milestone in gating item achieved our team had been working with the state for two and a half years to make sure. The project meets the state's exceptionally high standards for development collaborations while its the projects upon which Piedmont lithium was founded we haven't talked as much about Carolina in the first two earnings call.
Michael D. White: While we've been working on this key permit but I believe it's a key project in our development portfolio.
Michael D. White: Caroline lithium is a highly strategic 30000 ton a year integrated mining into lithium hydroxide project. It is well situated in the create a little lithium industry along the same resource that was the foundation of both Albemarle and Arcadia, The Carolina Chin Spodumene belt.
Michael D. White: Looking at page six some of the advantages Caroline lithium is a highlight for those that aren't as familiar with the project base.
Michael D. White: Based on technical studies, we expect Carolina to be a low cost producer of spodumene concentrate and lithium hydroxide at a key contributor to the North American electric vehicle supply chain. The project should benefit from excellent infrastructure, including low energy costs minimal minimal transportation distances, the deep local talent pool and proximity to local markets were industrial.
Michael D. White: Mineral Byproducts Carolina lithium is also located in the heart of the growing U S battery belt with many cathode battery and EV plants under construction or planned the economics of the project should be compelling as a U S. Based project Carolina is expected to benefit from the competitive corporate tax regime offered in the U S. The absence of significant royalties.
Michael D. White: In the absence of a value added tax assessed in countries like in China. After tax returns of what matters and we are not aware of any jurisdiction that better combines the benefits of significant spodumene resources.
Michael D. White: Deep customer markets and low royalty and income tax rates.
Michael D. White: Carolinas should also benefit from supportive government programs, such as the inflation reduction after 2022, and the department of Energy's <unk> loan program.
Michael D. White: Looking at funding. This project, we intend to leverage government funding via the ATM loan program as mentioned and potential strategic partners, who can provide some combination of capital offtake and technical support to reduce our capital burden. We've had a lot of interest in this project from a variety of car companies battery manufacturers and investors and encouraged are encouraged by the.
Michael D. White: <unk>, we've had thus far as for timing the <unk> loan and strategic partnering processes can take some time to complete so we will be refining our timeline for the funding and rezoning of the projects. We're focused on moving judiciously in doing this right Caroline lithium is highly strategic to Piedmont, but frankly, it's also highly strategic for Gaston County in the state.
Michael D. White: In North Carolina in the entire United States, It's more important to do it right there to do it fast and will always be cognizant of maximizing value for Piedmont shareholders as we advance the process.
Michael D. White: Let's turn briefly to Ghana, and our joint venture Project Award here, Patrick and our project team leadership, where in Ghana in April meeting with the Atlantic lithium team and had some good tactical sessions as the project continues to advance through permitting and approvals process.
Michael D. White: <unk> is expected to be a large spodumene producer with attractive economics, a high return on invested capital driven by relatively low capex and relatively low operating cost is going to be a great project for us and our partners Atlantic lithium.
Michael D. White: Right now we're in the process of retaining a financial advisor to assist in evaluating funding options for our share of the capital. We have received multiple inbound calls from interested parties all with the idea of minimizing dilution to Piedmont lithium shareholders.
Michael D. White: I also want to mention our Tennessee project, which is fully permitted and designed for 30000 tons of lithium hydroxide production, Tennessee offers an additional opportunity to expand downstream capacity and we will be evaluating as development timeline, given the receipt of the Carolina mine permit.
Michael D. White: We believe Piedmont is well positioned for the long term with growth opportunities across our broader portfolio with the assets, we own or have an interest our plan with each of these three projects to invest in their development strategically and always with the goal of minimizing shareholder dilution.
Michael D. White: Michael will provide a more detailed discussion so with that I'll turn it over to Michael.
Michael D. White: Thanks, Keith turning to slide nine I'd like to provide a high level review of our first quarter results. We shipped approximately 15500 dry metric tons for the quarter and recognized $13 4 million in revenue, resulting in a realized price of $865 per metric ton.
Michael D. White: This compares to a realized cost per metric ton of $799.
Michael D. White: Notably we ended the quarter with $71 4 million in cash.
Michael D. White: First quarter GAAP net loss was $23 6 million or $1 22 per share adjusted.
Michael D. White: Adjustments this quarter included a loss of $13 9 million related to the sale of our equity method investments in Scioto mining and Atlantic lithium a $1 $4 million gain on equity securities.
Michael D. White: $1 8 million in severance and severance related costs associated with our cost savings plan.
Michael D. White: $3 $1 million associated with the tax effect of these adjustments and to a much lesser extent other costs.
Michael D. White: Including these adjustments we reported a first quarter adjusted net loss of $11 9 million or <unk> 61 per share.
Michael D. White: In the first quarter, we initiated our cost savings plan to achieve $10 million in annual operating cost savings and defer 2020 for capital spending to 2025, we expect to achieve the majority of our cost savings in 2024.
Michael D. White: Turning to slide 10, we earned $13 4 million in revenue as a result of two customer shipments during the quarter and a positive $300000 adjustment to revenue related to the final settlement of our November spot shipment.
Michael D. White: The majority of the tons, we shipped during the quarter were tons, which were originally scheduled to depart in December as part of a spot shipment, but were delayed to January due to weather and port congestion included in our first quarter revenue was approximately $2 million of improved pricing related to the January shipment as lithium prices.
Michael D. White: As experienced double digit growth between the data of shipment and the end of the first quarter.
Michael D. White: Our second smaller customer shipment during the quarter was part of a long term customer supply agreement and reflected a significantly higher realized price than our January spot shipment.
Michael D. White: Turning to slide 11.
Michael D. White: I'd like to review, our cash and working capital balances for the quarter, our beginning and ending cash position for the quarter were relatively flat at $71 6 million and $71 4 million, respectively. We bolstered our cash position during the quarter by selling our entire equity holdings in Scioto mining and a portion of our.
Michael D. White: Holdings and Atlantic lithium for net proceeds of $49 1 million.
Michael D. White: We paid approximately $26 million for these shares in prior years. These.
Michael D. White: <unk> sales aligned with our strategy as communicated during our fourth quarter call in February of monetizing non core assets. Further these sales had no impact on our joint venture ownership, our offtake rights.
Michael D. White: We significantly improved our working capital balanced by $32 million during the period, while we saw improvements across several categories. The most notable was a $21 million decline in current liabilities primarily related to cash payments made to settle 2023 spot sales where the final price settlement.
Michael D. White: It was less than the provisional prepayment we received.
Michael D. White: Moving to slide 12.
Speaker Change: I'm pleased to discuss our 2020 for outlook.
Michael D. White: There are off take agreement with Santa Quebec, we have the right to the greater of 113000 metric tonnes of spodumene concentrate or 50% of annual production.
Michael D. White: As mentioned earlier, our January spot shipment was scheduled in 2023, but rolled over into 2024.
Michael D. White: As a result, we now expect to ship approximately 126000 tons this year.
Michael D. White: Based on current discussions with our customers we plan to ship the majority of our tonnage in the second half of 2024.
Michael D. White: Note that factors, including shipping logistics and customer requirements may impact the timing of deliveries.
Michael D. White: For capital expenditures and investments and in advances to affiliates, we expect to see a decrease of more than 50% in the second half of 2024 as compared to the first half of the year.
Michael D. White: Our forecasted capital expenditures, primarily relate to continued advancement of our wholly owned Carolina, lithium and Tennessee lithium projects, while investments in and advances to affiliates reflect cash contributions to sayano, Quebec and advances to Atlantic lithium for the <unk> project.
Michael D. White: As always our current outlook is subject to changes in market conditions.
Michael D. White: With that I'll turn it over to Patrick rental for a review of operations and project updates.
Patrick H. Brindle: Thanks, Michael we can now turn to slide 14 for an operational update on Nal as Keith noted we're pleased with the continued success of the ramp up at Nal. The team. There led by <unk> has done an excellent job getting operations to a nearly fully ramped right concentrate production has ramped steadily.
Patrick H. Brindle: From last July through this March with New production records achieved each subsequent quarter safety has also improved steadily with operations achieving their lowest recordable quarterly incident rates since March 2023.
Patrick H. Brindle: During the quarter Piedmont, except the deliveries of 15500 out of 58000 dry metric tons shipped by nal during the quarter, while the remainder of shipments were sold to third parties.
Patrick H. Brindle: Moving ahead now to slide 15.
Patrick H. Brindle: Q1 production of Nal increased 18% from the prior quarter to $40 439 dry metric tons in March operations achieved a record production month with 15669 dry metric tonnes of spodumene concentrate production, including three new daily production.
Patrick H. Brindle: Records set between 710 to 750 dry metric tonnes.
Patrick H. Brindle: Global lithium recovery reached a record 69% exceeding the ramp up target of 67% while global recovery has averaged 62% during the July 2023 through March 2024 period.
Patrick H. Brindle: Average mill utilization during Q1 was 73% we expect that this number will materially improve upon commissioning of the crushed ore down.
Patrick H. Brindle: Construction of the crushed ore dome is now materially complete and has been tied into the existing operations commissioning activities are underway and should complete this quarter.
Patrick H. Brindle: The <unk> project as well as a new crushed ore re feed system should result in continued improvements to mill utilization rates increases in production levels to full ramp rate and a corresponding reduction in unit operating cost.
Patrick H. Brindle: Al is forecasted to achieve full run rate production by the second half of 2024.
Patrick H. Brindle: Concluding now on Nal ramp up remains on track with Nal management's production target of 140 to 160000 dry metric tonnes of spodumene concentrate from July 2023 to June 2024, and sales of 160000.
Patrick H. Brindle: To 180000 dry metric tonnes.
Patrick H. Brindle: I'll now move to a brief update on Ghana, and the or will your lithium project as Keith mentioned I was in Ghana last month together with Piedmont's project leadership team for a series of technical meetings with the development group at <unk> work continues with DRA global EPC contractor advancing optimization studies on the Dms only.
Patrick H. Brindle: <unk> spodumene concentrate or while other social environmental mining and infrastructure work streams progress.
Patrick H. Brindle: In Q1 Atlantic lithium progressed and offtake partnership process for the JV portion of the off take from a Williams Atlantic has received bids from several interested parties and is now in the due diligence phase Piedmont is also evaluating a similar off take partnering process to support our portion of the capital requirements for.
Patrick H. Brindle: William.
Patrick H. Brindle: Atlantic Lithium is also planning to incorporate 2023 and 2024 drill results into an upgraded mineral resource estimate later this calendar year Atlas.
Patrick H. Brindle: Atlantic Management continues to work closely with the minerals Commission and the government of Ghana towards ratification of the projects mining lease.
Patrick H. Brindle: Here in the United States, we have our wholly owned Carolina, and Tennessee lithium projects and I'll provide a brief update as you may know both projects are strategically located in the growing battery belt and are critical to the goal of achieving some level of lithium self sufficiency in America.
Patrick H. Brindle: As Keith spoke earlier about Carolina in depth related to the receipt of our mining permit I will just make a couple of comments from an operational perspective.
Patrick H. Brindle: We own lease or have the right to purchase all of the property within our newly received mine permit boundary at the same time, we have actively worked to defer purchases of additional properties that sit outside of this permit boundary as a cash management exercise. This effort has materially improved our cash outlook for the remainder of 2020.
Patrick H. Brindle: For.
Patrick H. Brindle: With the receipt of our mining permit in hand, we will continue to engage with the local community refine our development plans and explore funding options.
Patrick H. Brindle: Over in Tennessee at Tennessee, lithium, we're continuing discussions with the city of <unk> and Mcminn County to annuity option agreement for the project site and as Keith stated we are evaluating the timeline for this project with Carolina lithium in the context of receipt of the state mining permit.
Patrick H. Brindle: That concludes our update on Piedmont Global project portfolio with that I'll turn it back over to Keith for an update on the market and our funding strategy.
Keith Douglas Phillips: Thank you Patrick I'd like to conclude our presentation with some thoughts about the lithium market. There's a narrative in the market that EV sales are imploding and that is simply not true in the first quarter of 2024 global EV sales were up 30%. The same increase as the market experienced a year ago. While there has been some softness in the U S.
Keith Douglas Phillips: This is a global story and I imagine there are a lot of minerals and chemical Ceos, who would love to see 30% year on year growth in our key end markets.
Patrick H. Brindle: Several Oems have announced April 2024 results are showing continued year over year increases Ford marked a 129% increase in EV sales from a year ago. Volvo grew 53% from the same period last year key to hit an all time monthly EV sales record up 61% and the list goes on.
Patrick H. Brindle: Moving on to slide 18, two years ago, we reached historically high prices for lithium as you know those prices have come down sharply but around February we began to see some recovery over the last eight to 10 weeks spodumene concentrate prices have risen by 30%, which is obviously good news for US is the spodumene concentrate supplier we are hopeful the prices continue to recover.
Patrick H. Brindle: <unk> as we believe current prices are well below the incentive levels required to fund and develop most of the world's greenfield lithium projects.
Patrick H. Brindle: As you can see in the third graph we've experienced this volatility in lithium before lithium is a young fast growing industry inevitably demand growth will be more linear than supply growth, leaving the highs and lows we've experienced over the past decade I expect the cyclicality to continue for some time as I think the market is at least 10 or 20 years away from reaching maturity.
Patrick H. Brindle: If I'm right 2024, it seems like an opportune time to be deploying capital into the sector.
Patrick H. Brindle: Moving to slide 19, I, just want to highlight again piedmont's strong leverage to a possible rise in lithium prices. The forward curve is in contango and if prices rise. We believe will be a direct beneficiary. As you know you really only have leverage to rising prices, if you're actually producing something.
Patrick H. Brindle: <unk> is north America's biggest spodumene producers and through our off take agreement, we could have a more material subject to a cost ceiling. So any improvement in lithium prices should directly impact our gross profit.
Patrick H. Brindle: The mute when asking your question.
Speaker Change: Again, Please press star one to join the queue.
Speaker Change: Your first question comes from the line of David <unk> S. P. D. Cawood. Please go ahead.
David Cawood: Good morning, Keith password <unk>, thanks for the prepared remarks today in the market overview.
David Cawood: Keith I wanted to start maybe just on some of the micro stuff for the balance of this year is there any color that you can give us to sort of inform what your expectations are for pricing relative to what we're seeing on the index for the rest of the year as you ship more to some of your off take partners or maybe just <unk>.
David Cawood: Testing the shipments to date that have gone into your I'll take partners and what the go forward as the rest of the year and how that might tie back to some better pricing.
Keith Douglas Phillips: Yeah, David Thanks for the question.
Keith Douglas Phillips: So as you know our first shipments were all in the spot market in the spot market evolved during 2023, so we really receiving pricing kind of M plus one or can I post delivery as opposed to the convention, which had been to receive pricing based on the ship. The date that ended up being at two four in some cases six months difference in prices were falling rapidly. So.
Keith Douglas Phillips: Had a big impact on us and some others.
Keith Douglas Phillips: Our contracts are you I won't go into the specifics of them, but they're more traditional and they're they're based on based on market.
Keith Douglas Phillips: Market reference prices on lagged basis, and they're based on.
Keith Douglas Phillips: In one case is based on the concentrate price another cases based on the hydroxide price. The legs are a little different so I think what you'll see is pricing there'll be smoother.
Keith Douglas Phillips:
Keith Douglas Phillips: Certainly as the legs Gotta go look backward right now and going for the next month or two or three we would actually be negatively impacted by those legs with prices, having fallen from 2023 and the early 2024.
Keith Douglas Phillips: Hopefully going forward that will reverse with things so.
Keith Douglas Phillips: The our contract our customer requirements are really back ended this year or.
Keith Douglas Phillips: As we build into those shipments will see considerably more shipments in the second half of this year it'll be it'll be a unique have uhm and I can see things the more steady from there on out we still have some slots shipments probably later this year.
Keith Douglas Phillips: And in the spot market and that markets evolving and some other people as you may have seen have achieved better spot pricing in the last month or two then had been experienced two or three months earlier, partly through the.
Keith Douglas Phillips: Approach to the market. So that's something we're considering as well.
Speaker Change: Helpful color, Yeah, I wanted to shift gears, just talking Caroline up from a strategic perspective discussed obviously, the tennessee's fully permitted.
Speaker Change: I know that you're you're pursuing thinking a T V on loan application for Tennessee, you talked about financing options for Carolina, and then obviously funding options for a lawyer.
Speaker Change: But I guess just to back up I mean, obviously the intention was to feed Tennessee lithium with you will you'll feedstock.
Speaker Change: [noise] Carolina B, a project that you pursue as upstream only or do you see a requirement to have a vertically integrated plan there as well that would sort of F. I D or at least come online and coincident with the upstream side.
Speaker Change: Yeah. We're we're at a point now with the mind permit receive that was a massive achievement for the team and it's really got us thinking about what the right timeline for development of the two big U S projects is they're both large large capital projects.
Speaker Change: It wouldn't be prudent for us to try to develop them simultaneously.
Speaker Change: So you will be thinking about doing that sequentially.
Speaker Change: Carolina, obviously has a significant advantage over Tennessee, and it has its own where body. So as we've had strategic conversations with people around Tennessee and around Carolina.
Speaker Change: You know the Tennessee projects exceptional to great location, great infrastructure, great people in that location surrounded by customers a lot of the same benefits as North Carolina, but it doesn't it's not on a spodumene build so it relies on important spodumene in Wisconsin plate of bringing that material from Ghana.
Speaker Change: Carolina has its own spot right on site and then the cost savings benefits of doing everything together a pretty substantial.
Speaker Change: So we have we have submitted an application for an ATM alone at Tennessee, We formerly had applied for an ATM loaded for Carolina.
Speaker Change: We put that on hold and we proceeded on Tennessee.
Speaker Change: Will make it make a formal decision and the communication here in the coming weeks and months is that we are with.
Speaker Change: With the cadence of these projects will be.
Speaker Change: But certainly we're excited about Carolina, just because again it has four body becomes a superior project and when you think about projects economics around the world is really interesting we've got very close to this being in Quebec.
Speaker Change: Uhm.
Speaker Change: I was doing really well, but for the time being there's nowhere to send spotted me concentrate in North America.
Speaker Change: There is a customer of ours is developing a facility, but there are no existing.
Speaker Change: Plans, which means you're sending material.
Speaker Change: Either directly or indirectly in China, because that's where all the conversion capacity is and the transport costs involved in the V. A T involved average around $300 a ton.
Speaker Change: In Carolina, it's gonna be about a dollar return to convey material from the concentrate plan to the chemical plant on the same site just a massive savings.
Speaker Change: And and it'll be the only site on the planet, where the chemical plant is on the same site is the mind. We may do the same thing at N. A L. As you know there's a.
Speaker Change: Dorman, partially built facility there, but that has a huge strategic advantage, there's something will be thinking about.
Speaker Change: Thanks Keith.
Speaker Change: That your next question comes.
Speaker Change: From the line.
Speaker Change: <unk> <unk>. Please go ahead.
Speaker Change:
Speaker Change: Keith entertain just one quick question from the place Firstly, yeah. Congratulations again on the approval of the mining permit I'm. Just wondering if you could share some kind of the the phone options to understand you try to get some government support.
Speaker Change: Just wondering like any colors on the potential of debt and equity split and they'll be very helpful. Thank you.
Keith Douglas Phillips: Thanks, Austin, Yeah. That's a great question. So we we were we we're happy for our friends that lithium America's they announced a loan package from the <unk> several weeks ago and it was approximately 75 per cent of the total funding package was an ATM alone and they have corporate level of equity coming in from general Motors and from the market.
Keith Douglas Phillips: I N a year earlier as you know had had.
Keith Douglas Phillips: Secured an ATM alone <unk> year, or so ago, we've been looking at those and others I think.
Keith Douglas Phillips: To getting that funding in the range of say 65 to 75 per cent of the total capital would be something we'd like to target.
Keith Douglas Phillips: We'd like the equity in an ideal world for us the equity coming into the project would come from apart a partner or two and it would come at the project level rather than at the corporate level. If our market cap was what lacks market cap was when they first brought in general Motors, we might happily do something to the corporate level, but with our current market cap reform or focused on <unk>.
Keith Douglas Phillips: <unk> level funding.
Keith Douglas Phillips: And we've had conversations with a number of.
Keith Douglas Phillips: You'll really substantial <unk> through the a list of people that you think might care all care about Carolina, it's one or two significant use spodumene project.
Keith Douglas Phillips: We talked a lot about location, we think he'd gone and we have the best asset that's located lithium asset and all of Africa. We think any <unk> is by far the best located lithium asset.
Keith Douglas Phillips: Canada, and we think Caroline is the best located lithium acid in the world people people are looking at the project are interested in the project and it will take time and realistic of the ATV M process has been a two year process where people.
Keith Douglas Phillips:
Keith Douglas Phillips: <unk> commented recently, they think the timeline can be expedited will see that but we're viewing.
Keith Douglas Phillips: Funding process is sort of an 18 to 24 months process not a great time right now at least lifting prices to line up financing frankly, so but getting ready to benefit from a hopeful hope for recovery and the market will be.
Speaker Change: Good. So my guess is you'll see you may see some partnering announcements later this year time will tell.
Speaker Change: But but certainly we hope to bring that together, obviously before project development later in 2025.
Speaker Change: Great. Thank you I just one quick question.
Speaker Change: Question I Y a project.
Speaker Change: Understand the company he said what can a decent finally options, while minimizing the potential dilution uhm.
Speaker Change: That have any potential impact on the offtake appointment that you have for the project, which is at the moment the assumptions around 50 per cent off the protection.
Speaker Change: Okay.
Speaker Change: Yeah No great question. So a lawyer are capital requirements for Awhile I think it's around 120 million based on the D. F. S levels. So were you were.
Speaker Change: You know, we're budgeting for a possible.
Speaker Change: Awesome, you're modest capital Capex creep there. So our hope is to fund is to use our off take agreement and use our offtake right, which is for 50 per cent of the materials. So it's around 175 or 80000 times a year.
Speaker Change: Quality concentrate a mile from the Atlantic Ocean. So it's material that can go anywhere and there are a lot of people interested in it.
Speaker Change: <unk> is obviously.
Speaker Change: Announced the process with with with an advisor where they're they're in touch with potential parties to secure funding for their share of the capital by committing their off take to the funding party. We're gonna do the same and.
Speaker Change: And we have we have half the material and really in these off take discussions that the question of value in funding and how much money you can raise all depends on how much material you're willing to commit.
Speaker Change: Commit for longer the more money you can raise upfront. So that's something will be hiring an advisor over the next several weeks and formally convincing that process, but we've had inbound inquiries and we we have we're confident we were optimistic we may be able to raise all of the funding for our way of Capex via <unk>.
Speaker Change: Meeting the Arctic to a customer on kind of a prepaid basis ie alone.
Speaker Change: So that's something we'll be pursuing aggressively over the next several months.
Speaker Change: Alright, thank you.
Speaker Change: <unk>.
Joseph: Your next question comes from the line of Joseph Speaker astronauts M. K M. Please go ahead.
Joseph: Thanks for taking my questions.
Joseph: So kind of continuing on the warrior topic first.
Joseph: There seems to be a bit of a debate out there about the timing of when I construction decision might occur there.
Joseph: What what's your current outlook on when you would have to actually fund that $120 million or so.
Speaker Change: Yeah, I'll give a brief comment Patrick may be can chime in 'cause Patrick's Patrick is you know it was on the board of Atlantic lithium until we sold on our steak. He was just in Ghana, a week or two ago is closer to some of the details I mean ultimately our requirement. So we've we've kind of earned the 22.5% stake in the project by funding exploration of the defendant.
Patrick: The feasibility study to earn the other 27 and a half per cent to get us to 50, we need to fund the first $70 million of development capitals small amount of that's already been funded frankly at and then our share of the remainder. So that's a commitment we made and we're very comfortable with it because we're running into a great project and we think that an attractive level. So the real question.
Speaker Change: That is when do you get to the point, where you are.
Speaker Change: Your.
Speaker Change: F. I D. Essentially you know and that's and that's a little bit of a moving target as it is for any project. There's there are a number of approvals still required.
Speaker Change: There's engineering work still being done I think the Atlantic guys have conveyed a sense that they're hopeful that this can be.
Speaker Change: Wrapped up in the second half of this year my expectation is it'll more likely spill into next year not for any reason related to Atlantic. We're gonna have it just because it's the money business and things tend to take time and a dragon in some cases were looking government ratification of mining leases et cetera, and those things.
Speaker Change: Really move on the timeline you hopefully move so our view is we're likely to be in a position in the first half of next year. We will begin to really find that in earnest and then the funding will take place over time, it's not like we'll write a 70 million dollar check in January that it might be 4 million one month's 12 million. The next et cetera, as you build at the plant over 12 to 18 months. So.
Speaker Change: Our best that's that's my best perspective, Patrick anything to add to.
Speaker Change: Add other.
Patrick: And we continue to.
Patrick: Work together with our partners at Atlantic and they are working really hard.
Speaker Change: In.
Patrick: I'm trying to move the ratification of the mining lease through.
Speaker Change: Element.
Speaker Change: That's a timeline that we collectively do don't control S. In the hands of government, that's a principle gating item or with a project to move forward alongside of other E. P. A.
Speaker Change: Minerals Commission mine operating permit et cetera regulatory approval.
Speaker Change: Project still requires before a decision to mind can be taken by the partners.
Speaker Change: <unk>.
Speaker Change: Just a further thought you know people I have conversations all the time about people <unk>.
Speaker Change: Rising away as a as a funding commitment which it is with you very.
Speaker Change: Very much as an investment opportunity, it's an exceptional project the return that the Capex and I'll have to ask a really competitive on a global scale is the kind of projects that can get built in a down market, which is not necessarily the case, where a lot of high other higher capex projects. So from our perspective, it's a really high return an opportunity to put money to work, we'd like to get that money for.
Speaker Change: From third parties, who are who we have this I'll take agreement and we don't need the material. We don't have a tendency lithium bill to take the material. So to the extent, we have 175 or 80000 tons a year of material, we can commit to somebody else who needs. It who alone has the money to build the project, it's something where.
Speaker Change: Right attracted too.
Speaker Change: Okay.
Speaker Change: Fair enough and then shifting over to N. I L. You know given the improvements you guys have made.
Speaker Change: Oh, what's the longterm goal and your guys find for you no annual production rate and cash operating costs you have on a per per ton of spodumene basis.
Speaker Change: We are.
Speaker Change: Joint venture operated by Cyana soda so to some extent we're limited on what we're comfortable saying to get ahead of them cause we we tend to you know they're the operator.
Speaker Change: I'm on the board of the joint venture, we're very active in the joint venture, but fundamentally we sort of rely on them to provide guidance and we follow it but but yeah. They did publish it defend the feasibility study.
Speaker Change: <unk> optimistic that costs will trend toward that whether they achieved GFS levels that that'd be hard an inflationary environment like we've been in but we think costs will improve meaningfully with some of these capital projects there'll be being completed, particularly the dome. We think production levels will increase meaningfully so the D. F. S targeted 226000 tons a year I think that's.
Speaker Change: That's probably a stretch cool my own view, but I think exceeding 200000 tons, a year or something I think the J V hopes to accomplish and I think we hope to get to that run right in the second half of this year, so that'll be more tons.
Speaker Change: Lower unit costs and it makes it will make the asset quite competitive in the Morton's B, we get the greater of 113000 tons, a year or 50 per cent. So.
Speaker Change: Up to 226, the J V benefits the most from increased production, but that's good for us. It makes the J V that much more viable we only 25 per cent of the J V.
Speaker Change: So we're excited to see production ramp up and I think one thing we haven't talked about but I think there's been a lotta drilling going on within a L.
Speaker Change: It was a big announcement last fall I think you'll see future announcer from say on it in the joint venture.
Speaker Change: This is a very large.
Speaker Change: Potential mineral resource I think the opportunity for future Resourcing reserve increases my life extensions, perhaps even production increases.
Speaker Change: In the medium term is pretty interesting and I think I was gonna go from an asset that has been misunderstood given it sort of history to be very highly strategic asset. We think it's by far the best located asset in Quebec. It's 40 miles from rail is 40 miles from the town of Al Dor.
Speaker Change: Every other projects is really in some version of the hinterlands in the frozen tundra <unk> [laughter].
Speaker Change: So, it's really advantage and and we think it's gonna get bigger and better and are very excited about it.
Speaker Change: Thanks.
Speaker Change: Your next question comes from the line of <unk> B P. I G. Please go ahead.
Speaker Change: Yeah, Hey, Thanks, and good morning, everybody and good afternoon, I'm, Keith I I did want to touch a little bit more on some of your comments you you've been talking about you know the the the the the given takes between going forward with Tennessee, and obviously, North Carolina and congratulations on that.
Speaker Change: I I guess my question is around you know be cause the a T V. M alone is in process already in Tennessee.
Speaker Change: The the the sequencing of adaptive if we have a better line of sight on securing financing for the a T V. In my I think you mentioned for North Carolina. It might take 18 to 24 months like how do we think about.
Speaker Change: That pool of money going to eat but you know on both projects in terms of you know making that decision to move forward.
Speaker Change: Yeah, we need to make a decision reasonably soon as to which project we're gonna advanced first.
Speaker Change: Uhm.
Speaker Change: That's that and will articulate that reasonably soon I am not today, but hopefully by fourth of July and and we need to and we're doing a lot a lot of work on different different scenarios, but fundamentally the ATM process is very involved with the government does exceptionally deep diligence work as you would expect a lot of work that's been done in Tennessee.
Speaker Change: Benefited from the work with an earlier been done by the D. O T. One Carolina, it's the same chemical plant. So a lot of the technology work at the same. So the work. That's been done is is largely transferrable from a technical perspective, and I, but I didn't get it in either event, we haven't advanced so far in Tennessee that where we are weeks away from a loan commitment and giving giving up that's a big deal where it's not that far.
Speaker Change: <unk> it for strategic reasons, we've known Carol <unk> been optimistic about the Carolina mind from it for some time. So I think you were in an environment, where we think lithium prices are still at I would characterize a depressed level like a level, where I'm building a billion dollars plus project is something that.
Speaker Change: Even if you could do it it might not be the right time to do what we seen other companies.
Speaker Change: Announced similar thing so we're not we're not in a hurry. We we think there's massive strategic value as we think about our business I mean, we're a joint venture partner in the biggest bothers me producer in all of North America, We have an Arctic agreement associated with that is very favorable in a sort of an asset in his own right. We have a lawyer, which is relatively near term production that <unk> and low Capex and then we have these big strategic projects.
Speaker Change: Which are realistically.
Speaker Change: 22nd half of the second half of the decade kind of production.
Speaker Change: So it's really important to get it right, it's really important to get the funding right get the right partner or partners <unk> <unk> <unk>.
Speaker Change: Come in to help technically help with I've taken help with funding.
Speaker Change: And to do it on on the basis.
Speaker Change: Least dilutive so we're gonna be patient and we're not in a hurry, we but where I think our timing is excellent because we're gonna, we expect to see positive momentum and lithium market and.
Speaker Change: The strategic interest remains very very strong and I think I think our time, you might end up being pretty darn good to bring this altogether over over kind of 2025 and six from a funding perspective.
Speaker Change: Okay, Great and then I did want to touch on <unk>. Thanks for the macro higher level slides you know I mean, despite what <unk>, what what a lotta people say you know <unk> E. V penetration continues to increase you know just just under that backdrop has there been any change in cadence right I mean, I feel like for you know.
Speaker Change: Obviously, you're having multiple customer conversations multiple off take around multiple projects.
Speaker Change: That kind of cadence changed at all over the last couple of months just simply as you know.
Speaker Change: Lithium pricing says have stabilized kind of recover demand.
Speaker Change: Demand has slowed but it's still op has there been any kind of change or is it kind of.
Speaker Change: The conversations that we're having six months ago are kind of the same once we're having now.
Speaker Change: Yeah, I would say, it's I think it's changed it.
Speaker Change: Different parties that might have changed there are one or two parties, who think they've kind of achieved a lot of what they need for lithium in the next several years.
Speaker Change: Talking about customers here in customer funding there are others, who have arisen who are making big investments who need supply.
Speaker Change: Macro basis, I would say demand from big Blue chip customers for substantial amounts of lithium way more than we can produce or any one of these projects can produce remains very strong strategic interests are very strong hasn't wave hasn't wavered at all.
Speaker Change: To some extent is more active now is lower prices with prices lower than people trying to be opportunistic, but we're in a position to take our time and bide, our time and we will.
Speaker Change: Interest is interest is I would say frothy in particularly for it as it like an American or Canadian S. It where there's only so much north American material, that's really gonna get developed on a meaningful timeline and end of that very little of it frankly to spot <unk> and and I would say just about everybody has come to the realization that while there's some interesting things.
Speaker Change: Some other things that are pretty interesting that the probability of success with a spotted me an operation is basically 100 per cent.
Speaker Change: You may have execution issues, but anybody with a good spot me nor body can produce a material that can be turned into battery quality hydroxide carbonate.
Speaker Change: That's still to be proven by a lot of other people with a lot of other projects. So the strategic guys get that and they think they are increasingly focused on spodumene, where they can find it particularly in good locations.
Speaker Change: Super helpful. Thank you very much.
Speaker Change: Thank you thanks, Greg.
Speaker Change: Your next question comes from the line <unk> Peter sign up J P. Morgan. Please go ahead.
Peter: <unk> Peterson uhm.
Peter: Uhm, maybe starting off Carolina, what is your latest thinking on pursuing resigning at the landfill mining purposes, and if the answer to that.
Peter: 2024th Street or the 2025, and then can you may be able to touch on any estimated costs associated with this process.
Peter: Yeah, no great great question the costs associated with it are pretty modest I mean, there's some engineering studies will be doing as part of that process, but it's it's you know through the life of the rezoning processes in the single digit millions of dollars.
Peter: I think my timing perspective, we're looking at the project kind of Holistically and as we think about funding timeline that's.
Peter: 18 to 24 months from the time, we commence it and we're just now really sort of convincing it the rezoning process, we think of as a sort of six to nine month process and the question is when's. The right time to do that we've kind of reached a conclusion at the right time to do that is probably during 2025.
Peter: We're in an election year, we're in may we'd be bumping up against timelines, if we kind of rushed it and we don't think it's the right thing for us to do or for the county, frankly for us to rush, what's a pretty important process. This is the biggest economic development project in the county in years and years and years, if not ever from a capital perspective.
Peter: So our plan with that is to really prepare ourselves properly.
Peter: Over the course of this year to kind of embark on that formally.
Peter: In 2025.
Peter: Okay. Thank you for that kind of.
Peter: Maybe a second question on out and do you expect to get <unk> protected normalized cash or in the back half of this year and considering you'll get the full run a production or is there room for cost of 25 and beyond.
Speaker Change: I'll give you my answer Patrick can pipe in if he has a different view I think we're gonna see pretty substantial progress. This year I think Patrick mentioned, the inventory adjustments that effective <unk> costs in Q1.
Speaker Change: <unk> reported I think those are reverse and kind of work their way of average out over time, but I think on a cash cost of production basis, we hope to see substantial improvement in.
Speaker Change: We hope to see improvement in queue to some meaningful improvement the second half of the year and and I would think we should be at kind of run rate and then is it really a question of are you in a quarter or two where the orders of higher greater quality and maybe this uhm.
Speaker Change: Movements, but I think what we expect to hit hit those targets are internal charges by the end of the year you agree with that Patrick Yeah, I I agree with that we we would expect as as production increases.
Speaker Change: You see meaningful improvement in.
Speaker Change: <unk> awesome, it's unproduced basis.
Speaker Change: I think we mentioned last border, we're still working through.
Speaker Change: Some of the old underground works in the in the.
Speaker Change: And that will persist through the greater part of 2024, So I think.
Speaker Change: Even going into the first half of 2025, there's still some room or some level of cash operating cost improvement as we get through those old works and we're back in.
Speaker Change: Kind of restaurant.
Speaker Change: Okay operations.
Speaker Change: Okay I appreciate it thank you.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Craig Jones of B N capital markets. Please go ahead.
Gregory Jones: <unk> Uhm. My first question is regarding the timing of shipments for 2024 and I'm looking forward to it.
Gregory Jones: I heard Michael comment that the reasons for the back half way to <unk> related to timing customer demand.
Gregory Jones: How should we think about the sales heading into 2025 and beyond do you expect that those might smoothed out.
Gregory Jones: The amount that you sell under contract increases relative to to spot sales.
Speaker Change: Yeah listen I think uhm. So this is an unusual year and that we had a delayed shipment. So we're shipping 126000 tonnes.
Gregory Jones: Versus 113 on a normal basis, so 113 would be the kind of expected number for 2025, unless there's some delays later this year and there's also an unusual year and that we're transitioning into customer shipments. So are two customers are kind of gearing up to receive material we.
Gregory Jones: We think there'll be fully geared up over the course of this year to do so which so right right now where we said.
Gregory Jones: When the two customer contracts.
Gregory Jones: Account for around 110000 tonnes a year, our our entitlement is 113000 tons a year or so effectively all of our material will be shipped to our contract customers beginning in 2025.
Gregory Jones: And on a relatively smooth basis now to the extent those shipments I'll go by vessel.
Gregory Jones: It's.
Gregory Jones: Possibility of things being lumpy and having shipments to.
Gregory Jones: To ship it to one quarter one ship in the next et cetera. So that's something we'll we'll be working with our partners to say on the on the actual shipping schedule for next year, the calendar and that we have we're not quite there yet but.
Speaker Change: Yeah. This is just an unusual year and then we have the extra shipment be our customers are ramping up in and they don't they don't just need the material now, but they do need. It later this year. So so that's why we have the back ended.
Gregory Jones: Shipments that may work to our benefit from a pricing perspective, it may not who knows.
Gregory Jones: We don't can't predict lithium prices, but uhm.
Gregory Jones: This will be a somewhat unusual year.
Speaker Change: Thank you.
Speaker Change: Regarding Tennessee in Carolina I appreciate the comments he made earlier on the call around assessing the timing of the two projects.
Speaker Change: There was a note in today's release that keep my exited the purchase agreement for industrial complex.
Speaker Change: Tennessee can.
Speaker Change: Can you. Please elaborate on on that decision and is there any read through that we should take in terms of.
Speaker Change: Without meaning Caroline I might jump ahead, and the development of sequencing.
Speaker Change: Yeah. It's a good question I I would think of it more as a cash management that thoughts of so when we when we secured the option on the core property in Tennessee, that's permitted.
Speaker Change: We became aware of a property you know just down the road.
Speaker Change: Very very close by there was an industrial property that had a lot of existing infrastructure.
Speaker Change: Had shut down it was an old foundry and it was available for sale and if we were in a little bit more of a frothy market, where we saw Gee. If we can pick that up for four or 5 million Bucks. It's close by it's got some infrastructure construction might be helpful. There may be capital efficiencies. So we so we options that property, we thought that made sense and we think it did at the time.
Speaker Change: As we move forward and we realized it was a nice to have we didn't need to have at our technical studies on the Tennessee lithium project did not contemplate having that property.
Speaker Change: And writing a check in a difficult market, where were selling non-core assets and laying people off we just decided.
Speaker Change: We just walk away from that property uhm.
Speaker Change: It was it was a potential benefit for us we haven't really even done all the engineering work, yet I figure out how much it might it might benefit. So it was a decision we made there's nothing to do with the core property.
Speaker Change: Where we are.
Speaker Change: Are permitted.
Speaker Change: And I wouldn't read into it anything about Carolina or the decision and who knows we may one day.
Speaker Change: Secure that property again or some of the property in the area. There's lots of property that might be available, but that was really kind of tactical decision just based on cash management in a down market.
Speaker Change: Thanks, and one final question, if I could <unk> loan program office recently clarify did it made fun production or mining extraction activities is or.
Speaker Change: Eligible expenses.
Speaker Change: In relation to Carolina is zehr understand you anticipate on the portion of the the main funding. In addition to what you may be pursuing under the ATM loan program. So you sort of benefit from from both aspects of of this more recent announcement.
Speaker Change: Yeah, No. We saw that we note of that NASA was interests that good as you know as you may know the ATM program doesn't doesn't extend itself to mining operate the pure mining operations. It does extend it uhm a lot of it.
Speaker Change: When you think of is well I think it was the downstream part of the upstream business. So so the concentrate plant would qualify the mining activity would not qualify in the mining the mining share of the overall capex is not that high.
Speaker Change: So as we've thought about Carolina historically, we've assume we wouldn't have availability for a loan for that money activity. That's something we're obviously reevaluating now that will be good news and and and the teams is really big into that just digest that what it really means but yeah. It seems like there's a lot of activity in D C around.
Speaker Change: U S critical minerals projects and global critical minerals projects. So we're still in discussions with the D. F C around Ghana for instance.
Speaker Change: And I think of it.
Speaker Change: So that's that's it's encouraging.
Speaker Change: Great. Thank you.
Evercore ISI: Your next question comes from the line up stiff and we tried to sign off Evercore ISI. Please go ahead.
Stifel: Hi, good morning, sorry to jump on late here a couple of quick ones Keith So on the on the previous comments about the timing of the the Arctic shipments from Nal and what the balance of your and just kind of squaring what Michael said earlier in the script in terms of you could have some off some some more spot.
Keith Douglas Phillips: Shipments in the back part of the year are you dependent on kind of teslas ramp up at Corpus and kind of <unk> I know you probably don't Wanna talk too much about your your customers, but are you kind of dependent on their ramp up in terms of and is that creating some uncertainty in terms of what you'll deliver for the balance of the year.
Speaker Change: Well as you said I don't want to talk about other customers, specifically, but I think I think I think you know when you have a project like this with longterm I've taken ability people take the material.
Keith Douglas Phillips: Each of our customers are taking material into supply change that didn't exist a year or two ago. Yeah. So the material is going to do our other customer is kind of going through a process, where the converted they're using that convert that material is kind of effectively building capacity for that as well. So it's just I think it's a natural thing so yes, it's true if either.
Stifel: One of these customers needs less material later in the year then they're currently expecting.
Stifel: We would turn to spot shipments for that material spot markets evolved in a way that we think we can do better slash events than we have done in the past just based on some of the announcer we've seen from people like Cobra in Albemarle and others.
Stifel: But yeah, it's possible I think it was and we'll we'll get to a regular cadence with each of our customers.
Stifel: Hopefully later this year if it slips into 2025, that's okay interestingly as <unk> as you may recall, when we announced these there they're not long term agreements one of them.
Stifel: Three years, it's really 25 months and one is four years I'm confident each of our customers is gonna want to renew those those will be discussions will have over time, but.
Stifel: So long as we're having material coming out of any of that we want to shift somewhere we're really happy with the two customers. We have in with the agreements we have and looking forward to fulfilling them as their requirements really kind of evolved.
Speaker Change: Okay. That's clear and then can you remind us as well as the the payment terms on these I'm assuming it is it fair to assume that the you'll get paid more promptly on the off takes then you do what you saw on the spot market just in terms of I. Appreciate some of the comments earlier on working capital.
Speaker Change: Yeah. It's interesting. It's it's just so it's sort of the opposite in that spot.
Speaker Change: Spot shipments are generally done via via trading companies, who are generally happy to pre paid for the material. So let's say, it's a 10 million dollar ship it they might make a provisional payment of 80 or 90% of the value of the shipment upfront. So that's what happened to US last August when prices were over 3000, we got a big provisional payment in August.
Speaker Change: Reverse all that and we actually owed money to the customer because by the time to settle it was after the delivery had occurred.
Speaker Change: In that case I think five months later, so with our customer with our contract shipments they pay on standard terms, we've negotiated and it'll prepay. They pay you know reasonably promptly after shipment and the timing is reasonably good and I think we're hopeful that with and we're.
Speaker Change: Hopefully that on average will be paid by them before we have to pay the JV. We have 30 days effectively the pay the J V for the material.
Speaker Change: So it's interesting we we'd we'd rather shipped to our long term customers. We think the terms are generally better for us and the and the more stable one of the advantages of the spot market as you can get people to prepay for the material. It costs you, it's not free as a funding costs associated with it but but you can get the money upfront.
Speaker Change: Understood. Okay. There's been a lot of things asked about Carolina, just just one last one on on my part so I understood. The comments on zoning sounds like a 2025, a fair just remind us where you are on an E P a and and how that fits in and then you know considering this kind of timeline.
Speaker Change: Plus the funding in partnership conversations when would be the the right timeline for your next cut at a a D. F. S. Acknowledging that you've done multiple kind of runs at this over the last couple of years.
Speaker Change: Yeah, we haven't given a lot of thought updating the technical study, but but yeah. We're obviously been updated technical work on an ongoing basis for we did front and engineering design in Tennessee last year spent a lotta money did some good work on that was there were some good learnings from that so I think as you think about the timeline I think we're gonna be commencing these.
Speaker Change: Funding discussions of strategic conversations daily conversations this quarter.
Speaker Change: They're already sort of beginning but we're gonna formally begin them and they'll take they'll run their course and.
Speaker Change: T G part partnership process could be could be multiple parties involved depending how it rules as it could be announcements this year it could be but.
Speaker Change: But I think I think bigger comprehensive funding conclusions will kind of take place really over the course of 2025 and if you think about the timeline we think.
Speaker Change: Development decisions probably.
Speaker Change: Give or take two years from now.
Speaker Change: You could be earlier and it and it was a question as we professionalism.
Speaker Change: If lithium market recovered.
Speaker Change: More quickly we can move things more quickly if we want to but at the time, that's sort of the way we're thinking about it in terms of updating technical studies, we haven't really given that a lot of thought we are updating technical work internally.
Speaker Change: We will at some point around you know kind of the conclusion of a partnering process.
Speaker Change: Maybe bring new economics in the market, but but generally speaking we think the economics of the project.
Speaker Change: Remain really compelling.
Speaker Change: Both projects Franklin.
Speaker Change: And E P a keith.
Speaker Change: Oh, sorry, yeah that permanent.
Speaker Change: Air permit is underway I think we're we're hoping to accomplish that air permit. This year I think we have October sorta slotted in as a target, but it's these are moving targets. Some some of the some of the details around requirements have changed during the permitting process. So we're accommodating that in doing fresh work, but I think we see we've obviously received in there for.
Speaker Change: From it.
Speaker Change: Tennessee, we received an air permit for our Kids Mountains property, three or four years ago, we're pretty comfortable that process, we don't see that as a particularly significant risk, but but the timing perspective, that's something we're targeting for the second half of the year.
Speaker Change: Okay. Thanks.
Speaker Change: Thank you.
Speaker Change: And there are no further questions I will now turn to conference Smack on Friday, I mean Sanders closing remarks.
Sanders: Thank you that concludes our call today as a reminder, you can find our earnings release presentation that in a replay of the call on our website and we thank you for your time and interest in Vermont lithium.
Speaker Change: Thanks.
Speaker Change: Gentlemen.
Speaker Change: That concludes today's call. Thank you all for joining give me now disconnect.
Speaker Change: [music].