Half Year 2025 IGO Ltd Earnings Call
Thank you for standing by and welcome to the IGT limited half year results call.
All participants are in a listen only mode there'll be a presentation followed by a question and answer session.
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Speaker Change: I would now like to hand, the conference over to Mr. Ivan Bilic, managing director and CEO. Please go ahead.
Ivan Bilic: Thank you good morning, everyone and he was a cash advantage.
Ivan Bilic: Sydney for these coal so it's Todd we're outside of W. I S.
A bit earlier in the diet.
Ivan Bilic: Sounds like it's going to be a busy period for off the market in general with lots of results coming through.
Ivan Bilic: Right up the front end of the queue.
Ivan Bilic: It's been a busy half for us as well as as you no doubt bookings for about our results and.
Ivan Bilic: I guess walk through the key messages and headlines from that now and then get into some Q&A.
Speaker Change: Thanks Lee on site.
Ivan Bilic: There's nothing more material for us.
Speaker Change: <unk>.
Speaker Change: We continue that focus I am very pleased that we've got a new head of health safety environment and Harris each onboard he started.
Speaker Change: We can have the guy atomized, good long pedigree in the industry and.
Speaker Change: Well just let's just start there I think was his experience.
Speaker Change: I mean, the full bundle.
Speaker Change: So I guess, the honest way to programs to improve that performance at the moment the lagging results off stadium.
Speaker Change: I think not showing that.
Speaker Change: Yes, I'm very pleased to say the improvements on the leading indicators, which I guess at the beginning of the change that we're looking for a novel continue to sample size like this.
Speaker Change: As we continue through this calendar year.
Speaker Change: Tens of results. So let me just sort of touch some of the high points I'm going to try to cast to walk you through the numbers.
Speaker Change: And then just draw out some of the things that we want to make sure we probably missed your attention on.
Speaker Change: Suddenly over the last six months and there's been a lot of challenges you know I get asked that question you know, how you're going to be a year in how you're feeling and it's it was a tough year in 2020 for the calendar year. It was a difficult period. There was a lot of challenges in the business to work sorry, there were a lot of things that I guess I didn't expect to be.
Speaker Change: The outset, when I joined and that's the way it rolls in.
Speaker Change: Things that we worked through and I'm very proud of how the teams addressed those issues and works for them I feel like we've been taking hard decisions that needed to be taken are they all are.
Speaker Change: I guess, Oh, I see you know position to set the business up for success in the future.
Speaker Change: Outside cause I guess naturally is on the coal value in the business in its first instance is green bushes and working through the joint venture with T. L say to make sure that we're bringing out best to that to that asset and I'll talk more to that later.
Speaker Change: Broadening out our position in lithium obviously news on Kalana to die, we signed post the impairment Castle told it's really more of the specifics.
Speaker Change: If he can and obviously he has a massive impact on our results, we don't shy away from that but again. It's one of these are hard decisions. We've walked through very salt play very carefully I think the team's done a very thorough job and that's reflected in and the decisions that we've taken and the results that we're presenting.
Speaker Change: Coming back into the core of the business and I guess, where we're at it's been performing and known for a long time is out is that nickel business and neither it is getting hotter. We've had a tough half I think we're going to see a better half looking forward. The team is doing some excellent work as we get to the edges of the ore body and it does get more challenging to manage that.
Speaker Change: More proactively and get the best from it but there's no question that our results have been impacted in the in the last half because of the declining grades and now the challenge is that exploration. So we've been working on it now for some time and.
Speaker Change: A lot of change there again come back to it further in the call until talk through some of the work that's.
Speaker Change: Well progressed I wouldn't say.
Speaker Change: Klutzy niche, but don't file types of a massive review of that portfolio and again, you'll see the impairment that we've taken up on a number of exploration interests and that reflects I guess that reset that we're going through on exploration and obviously it stepped down in the amount of resources that we're allocating but I want to be clear that there is.
Speaker Change: Dol vacuum that conviction it really is about being very focused with how we allocate our resources and focus.
Speaker Change: For me all of these things line up behind the strategy that we announced in September our we've got a strong focus on that we are tracking well. We've got a you know a very diligent a set of activities and teams working through those aspects and.
Speaker Change: The vast majority of the work of course, he's about the existing business once that's in.
Speaker Change: In great shape that positions us well to do these things are looking forward from there and.
Speaker Change: We are continuing as as we've talked about working on the playbook, which is a way of capturing how the business runs and how we can try and and and and really capture all of the.
Speaker Change: Otherwise working the processes managing all Friday system into one.
Speaker Change: Single place that reflects the discipline and the.
Speaker Change: Yeah, probably even performance of we'd expect from the business in a repeatable ways of working brought across the city are they open.
Speaker Change: And to me, that's about bringing that artist mindset to life.
Speaker Change: Please see that through the hard decisions that we're taking that we are working with that approach and wont be too.
Speaker Change: I'm going to Jose and throw it to cats I will talk you through the next slide on our financial results and the summary, and called out some of the headlines and the cash flow as well and then I'll come back and pick up some more specifics beyond that.
Speaker Change: Thanks, Kevin.
Speaker Change: Hi, everybody.
Speaker Change: And as.
Speaker Change: As you say, we reported a substantial net loss of 792 million, which has been significantly impacted by impairment charges.
Speaker Change: Yeah, I sure can pay them and if the Coronado refinery is 525000.
Speaker Change: Which was called Shadow if you like Sky, they always always kind of a deferred tax asset.
Speaker Change: Do you see I know not recognized impacting the tax expense and.
Speaker Change: In addition to that way recognized 100, and sustainment payments related to exploration assets.
Clay: Clay that's related to phrase that Brian and West school of projects, which have been de prioritized as part of the aggregate experience in pulp Holly I am getting a strange thing.
Like that's like Hess on Hulu, and focusing on commercial opportunities in that portfolio.
Clay: Our underlying loss, which removes the impact of.
Clay: Data items was $85 million loss, reflecting soft lithium process retained by grain bushes and lower operating results from by sniper and signing of operations as far as tiny of dialing into care and maintenance during the period and neither impacted by likes us.
Clay: And the lots of times price as well as some challenges.
Clay: Our balance sheet remains strong with 247 million in cash and we've got a pilot hole facilities et cetera.
Clay: No.
Clay: And just specifically on the corner and Pam.
Speaker Change: <unk>, which is G. I use assessment base, we've gone through a really thorough process to assess the bad news.
Speaker Change: Kweisui without outages at our partners.
Speaker Change: And the impairment testing requires us to make a range of assumptions and we eat of lives. One way blades is a very reasonable assumptions based on our understanding of quanta.
Speaker Change: And if you look at our financial statements and night time, we actually provide international on the case assumption say.
Speaker Change: The impairment is reflected in our share of net loss from Taylor I say, you want to say it as a separate line in the profit and loss and this is aligned with.
Speaker Change: Panting.
Speaker Change: And then Pam and Alex I relates to fight to try in one and two.
Speaker Change: So it's clarity place campaign.
Speaker Change: G. L. A is fatty liver quinine are at less than 200 million and that's a stride in on 100% basis.
Speaker Change: The impairment recognizes the current market conditions as well as the ramp up challenges have trend. One. It also recognizes the cessation of trying to lap two the same as we announced last month the change at the project.
Speaker Change: Got it uneconomic by some partners.
Speaker Change: If we move to the next slide which walks through our cash flow a reconciliation of cash.
Speaker Change: Cash maintenance of knowing in play we still generated $80 million of cash from Knight earns as far as China, Despite challenging market conditions and there was a small N fly from Cosmos I'm given that it's in care and maintenance and that's a likely what we got said I am costs.
Speaker Change: Exploration and evaluation and played steady 1 million, which relates to pure exploration and the remaining is business development and pre project about you I shouldn't expenditure and that includes things like commercial evaluation of the south on Catholic Cosmos projects.
Speaker Change: And I'm going to spend a little bit of time on corporate and other costs and because there's a lot in that there's a number of one offs. So that's 37 million, but there's a number of one offs for example, and that's the way for restructured exploration and Cold press. There were a number of papers he left the business and as part of the business we paid out there.
Speaker Change: And long service life stay one offs.
Speaker Change: And there's a number of things that aren't corporate is heads and examples of that Lego cost associated with the Tropicana matter and I'll say technical services, which is fundamental for our strict delivery against that strategy.
Speaker Change: There's timing issues say, there's actually quite a large working capital adjustment, which relates to timing of payments of accounts payable.
Speaker Change: In the order of three to 5 million just to give you some.
Speaker Change: Thank you chip.
Speaker Change: And lastly, as part of resetting the organization, we actually changed our pricing model to a centralized model and therefore, we're actually allocating less to the business units under that model than we previously had.
Speaker Change: And so the 37 million isn't the run rate going forward, it's got a lot of noise in that but you'll get a better idea of what the run rate is in the next half.
Speaker Change: And.
Speaker Change: I can assure you that with very strong cost control and continuing to rationalize that as time goes by.
Speaker Change: And the cash outflows include a dividend from FY 'twenty 497 mill that was paid during the half.
Speaker Change: I also I just wanted to know like the absence of dividends received from the tailing I enjoy picture in the house. This reflects the way Clicky America capital spend associated with them complaining say, Jade, Hey, gray at grain bushes and the cash requirements to support the corner on our ramp up and generally just taking a prudent approach.
Speaker Change: The current market.
Speaker Change: As previously announced we don't anticipate paying dividends or receiving dividends from tailing I in FY 'twenty five.
Speaker Change: Well, we don't guide beyond FY 'twenty five financial statements provided consolidated balance sheet.
Speaker Change: I am a nice 10, which indicates there is 491 million in cash and the majority would be sitting on grain bushes and when does it end sort of like broadly consistent.
Speaker Change: I think that kind of compensate for seeing a nice tasteful I'd tell handouts Chile.
Speaker Change: Thank you Kat.
Speaker Change: But.
Speaker Change: I can start with George Bush's another.
Speaker Change: So the strong performance from from grain bushes over the last half step up in production, which are a place to say and you know their I'll talk more to the guidance in a minute, but right at the top of our guidance.
Speaker Change: For this financial year, obviously, the planning for Wingfield with talisman cuts across that cause I plan across the calendar year.
Speaker Change: But it really plays into say that continued focus Rob as well settled he's doing a fabulous job undecided place to say are the franchise that he brings in Hawaii's rallying the team lifting the fucker, so on on productivity and and I'm trying to understand the full potential of green bushes, he's asking the questions.
Speaker Change: Through the business, which I think we'll see enormously fraud for the team as they get into it and understand what they can do.
Speaker Change: Of course trade it all the time, so I was sort of inline ne which describe say and the sales was it five cause seen in the last quarterly look.
Speaker Change: I guess I'd just race died right up from there's nothing to say there other than just it's there's a lot of logistics challenges getting out to fund report getting through the roads and managing that diet I am doing well.
Speaker Change:
Speaker Change: Naturally I'm eager to see the tons out there and not have any inventory at all.
Speaker Change: But there's really not not concerns that I have booking forward in great voices.
Speaker Change: Production and getting that treated about two two customers.
Speaker Change: The margins Fantastic just bought this thing Oh wait point in the cycle for lithium 68% pretty impressive EBITDAR and just shows you how unparalleled necessities as it's an amazing ore body and lots more potential that we're working through all that they are.
Speaker Change: Optimization work that we saw and plus it is well under way now robes changing in and leading that work with us with a very strong team and I think that will will surface space will help us better understand the potential but also deal with that brought a detailed optimization in that lots of my view and in all of the strategic challenges.
Speaker Change: We have with any big mining operation in terms of waste water tailings and so on and how we need to think about infrastructure in and managing them all of the impacts associated with the mining activity in a very professional way being very sensitive to the local communities and supporting them and making sure their interests are at the full.
Speaker Change:
Speaker Change: I'm really looking forward to seeing the impact from hedges for 2025, I think it will be pronounced and I look forward to reporting more on that as we go probably the only other point of C. D. B three as I said in the call. They look it remains on track for for the last quarter of this calendar year.
Speaker Change: Commissioning and it'll be great to see that come up and stopped producing into hopefully what is a more buoyant lithium market.
Speaker Change: Yeah.
Speaker Change: Looking forward.
Speaker Change: Coronado look you know as this has been a bit of a challenge when I started I said look let's not talk about Alex Yeah, let's pause on guidance, let's pause on putting numbers out like give the same spice and time to work through the challenges and try and give us a bit of a sense of of what's possible with you.
Speaker Change: And how it might look in this market.
Speaker Change: We've we've done that I think works through it very diligently as cats called out the change being extremely thorough looking at yes. It is potential decisions and you know how far it goes on capital allocation here is right at the forefront we are crystal clear on criteria and.
Speaker Change: We manage that capital you can see that was a decision I'm trying to we continue to has a very strong focus on trying one what is embedded base, where the process will be that accounting treatment. There is still and I said that it is operating and running every day the teams down there doing their best thought we would continue to.
Speaker Change: Ah <expletive> because all of our energy to make sure that we've got the very best pathway.
Speaker Change: What started with T L C for for coating on it going forward.
Speaker Change: The neither.
Syed: Syed a horizon you know what.
Syed: What a great ore body, it's faint I wish we had another 10 years ahead of us I'm. The team are dealing with that challenging tile now with less until you used to guard and that's tough and I was out there early last week for one of the shut downs on the plant sitting with the team and working through some site interactions. They continue.
Syed: Moving to to do a great job managing the challenges that face waiting right and the change in old characterization.
Syed: I think they've got a I a good piece of work going on to really deeply understand that and revised life of mine and as I said, we'd share that with the market as soon as possible. So that you've got a very clear view of the middle and the performance we expect from from neither through to the end of its flaws. We can then trial against that.
Syed: You know as you know much more predictable white.
Syed:
Syed: Free cash flow to $70 million.
Syed: Obviously, you've slightly weekend nickel prices, but the grade in the life. So lack of middle of the slides for it was the biggest impact there and that's that's hot in focus and I guess, most importantly is it's coming back to the people and focusing on safety and engagement and that's that's right at top of mind for for the whole leadership team right.
Syed: The business.
Syed: Uh Huh John.
Syed: Going back to guidance as I mentioned, we were not changing any of our guidance parameters, but just to give you some more clarity or color on it on green bushes wastes angle, we expect to land right at the top end of guidance on Tom's. So there's the 15 50.
Syed: Cash and cash costs in Capex are at the bottom end of the guided range. So that should give you a bit more clarity there.
Syed: No I've remains unchanged, but we expect production at the La Rams and you can you can always he say he was the first half that it doesn't.
Syed: Hum.
Syed: Make that easy bet weeks, we do expect them to take at the lower end of guidance, there and cost because of that will be at the higher end Kirana you said I guess to my earlier comments Tom we've.
Syed: Provided any directional guidance on that in some time and will obviously refine that and update that as we guide for the new financial year, but to close yet this financial year. We've given you. Some some numbers to work with and I'm sort of outlined our expectations for that asset.
Syed: There was also I guess, just annoyed and unplanned shutdown in Coronado in January which we've taken into account you know in our numbers as we roll forward.
Syed: They cutting out of capital guidance remains unchanged. We had given you are signaling that we expect to come in right at the bottom of that guidance.
Syed: As I look forward to the outlook and the the priorities a strategy as you know is at the forefront and I think it gives us a really clear path of the areas to focus on naturally green bushes is.
Syed: In a strong focus and working through the joint venture to do what we can to support Robin and the team.
Syed: And help them set themselves up to the very best performances is a strong side because.
Syed: The results for them to work through but I, just see more and more momentum building and I'm sorry, the place where the way that team is rallying getting CGP thread across our line will be a big piece of work. This year naturally wallet. The diet. It stops is one thing, but all the laid up in terms of Ah can be seen in Australia and this is critical and there's a huge amount of focus on that as a team.
Syed: It also works on the existing operations and plants to make sure that we continue until they just didn't create their performance and improved recoveries and all the other factors like that.
Syed: Hey, I guess the overall results you know today at headline level is disappointing and it's a challenge to suit to turn off and report a net loss of that scale, reflecting impairments on assets predominantly coding on it but also the exploration.
Syed: But I think Oh, I guess I take some comfort that we are really getting under the covers of the business working through these issues and taking a hard decisions in a thoughtful way we're doing it very calmly and very great.
Syed: Professionally to make sure that what he thought we were taking these decisions by taking all the information into account they're the payment.
Syed: So you know a challenging moment, but.
Syed: It reflects the work that we've done there and a deep understanding we have of the asset and its future potential.
Syed: I want to again, thank the chain and recognize them for the challenges of diabetes for he was cast sharing the news, but you know theres a big team behind us doing really hard wood to them to get us to this point and positioning us for for future opportunities to position our business for more success in obviously.
Syed: To continue to chase that purpose and in our strategy.
Syed: Beyond that look.
Syed: The.
Syed: Oh, the best thing to do as I've been out with some Q&A I'm sure. There's lots of questions hilltop as you've absorbed the results and some of the headlines we've covered and I'll come back and wrap up after that.
Syed: Well, let's turn it up to Q&A. Please.
Syed: If you wish to ask a question by the science across the stocky for it by the number one on your telephone keypad.
Syed: If you wish to ask a question via the webcast. Please type your question Anthony I'll ask a question box.
Speaker Change: Yeah your first.
Speaker Change: Question. It comes from Hugo de Kolache from Goldman Sachs. Please go ahead.
Or having a kind of thing. So you have to have this morning did you guys have just two questions just firstly cast and the smartphone clarification on JV can you just confirm whether a tailing I as a standalone has any debt drawn place.
Speaker Change: Okay.
Speaker Change: As a stand alone, we actually don't disclose that and that just put them in our financials, but if you actually look at night and say you can work that out because we actually disguise them Tonight.
Speaker Change: The titling that.
Speaker Change: What green bushes that is which pretty much.
Speaker Change: We'll give you that huh.
Speaker Change: Perfect. Thanks for that and then I then just one on grain Bush's.
Speaker Change: Most annual technical report is out and I. Appreciate you had 12 months ago. We went through that you know there's a lot of differences in reporting standards. It will impact in a life of mine assumptions.
Speaker Change: We'll leave there is that there was some comments in there just looking at the water balance and in standing up tomato is it potentially the risk is.
Speaker Change: Having enough water on sort of a 12 to 24 month view it was probably a bit sooner than maybe what we were expecting them. However, it looks like the technical grade plant actually consumes about 50% of the water balance it at crane bushes, despite being less than 10% of the volume So my.
Speaker Change: Is there a can you just remind us of how much of the technical grade volume is currently contracted and until when is there any flexibility in an ice hockey games and now it is water maybe the reason why technical grade utilization on that plants being less than 55%. So six of the last seven quarters.
Speaker Change: Okay. There's a lot in that question, maybe let me try and deal with some of the real specifics the best I can and then we'll come back to the water on the Hull look take rate as you know.
Speaker Change: Largely driven and it's a tried between obviously the grade available and in the mine plan.
Speaker Change: And the demand from the two customers.
Speaker Change: In terms of what's contracted on one I won't comment specifically on that but set aside the volumes at pretty modest in the scheme is although our whole business.
Speaker Change: And and I kind of manage that.
Speaker Change: Cook for each customer to off mall until say to sort of meet the amaze trial is very time.
In terms of the water demand from the tech grade plant, you're saying, 50% of the total water I hadn't noticed that I'll double check I didn't see it that way because obviously.
Speaker Change: Total water balance recognizes mine water usage for dust control.
Speaker Change: Do you have different demands.
Speaker Change: I'd be very surprised if the volumes reflect 50% of the title. If that's what you meant but maybe coming back up a level load to water. It look at each of our key strategic challenge for the business to work through we green bushes.
Speaker Change: Has grown rapidly in the last five or six years and of course consumes more particularly the mine as it expanded its operation and so Robyn the Tamar working through one of the states I tied to make sure the way we deal with that and of course, it's compounded by variable precipitation that had a very dry couple of years.
Speaker Change: Past and naturally we don't know what the future holds its you know the variability is the issue and they're building. Some planes are walking through some some steps to give us some more head room, there and mitigate those kind of challenges I think it's.
Speaker Change: Key risk equally I think as demand grows we have to make sure. We've got a good long time playing on tilings.
Speaker Change: Along the same plan on water, but along the same plan on on waste management from the mine and I Wouldnt I mean, nothing got him report cold that water singled it out more so than others I'm not sure I.
Speaker Change: Agree entirely with that I think Rob Scott maybe guys in place right now and I think the issue is as this brand continues to grow in TEP three comes online that challenge on it gets harder and so he's really got to go to move with some real fun because over the next 12 to 18 months and get a lot of those strategies implemented and things in place.
Speaker Change: Yeah.
Speaker Change: Thanks, and I wish I could I, just clarify that and so that's it's ideas U S. H P. Three ramps up at the moment, but what I won't be an issue there or you have enough mitigation in place that if it is a risk you don't say that actually disrupting the wrap up well I think that's that's what we're all working through I mean, the thing I'm guess I'm, saying is I can't predict the rainfall.
Speaker Change: All right. So obviously you have an extreme.
Speaker Change: Whether we're the period, where you're very very significant drought, then that's going to be a challenge that we manage that's going to affect a lot of other people as well. That's the piece that you know we don't have a source of groundwater role or pipeline or some other backup at this stage. So we are relying on one surface water and that.
Speaker Change: And obviously recycling and management through the tailings facilities. So I can guarantee the weather, but what I can say is that Rob and the team are working very diligently on the plans to make sure they've got more headroom and they can manage the that challenge looking forward.
Speaker Change: Hey, great. Thanks for that Oh, I'm I'm not following some of that up right at the top has something out he says.
Speaker Change: Okay. Thank you.
Matthew Freedman: Thank you. Your next question comes from Matthew Freedman from MST Financial. Please go ahead.
Matthew Freedman: Yeah sure. Thanks morning oven in cats.
Speaker Change: I guess continue on with some of his comments in the reserve and resource statement and it's good to see some detail on the plans for the strategic option study Oh, sorry could you say that they kind of assessment.
Speaker Change: Of that report. This is the aim of taking her reports that are out in this way. Thank you very much for compiling that and putting that together I'm just picking up on some of the comments obviously you cited at future reporting.
Speaker Change: From Towson is likely to be more conservative more aligned with them.
Speaker Change: S reporting requirements I guess one of the features of the album All Technical report was that it didn't include C. G pay fool.
Speaker Change: And obviously despite that the capex is around.
Speaker Change: Around 20% higher than in than the Towson estimates, which I guess with now but I guess the question is how is the strategic study.
Speaker Change: Thinking about approaching you know maximizing the value of green bushes. This as any sort of volume or yeah market constraints I mean, obviously green because she is volumes have an important bearing on the market as a whole and you know you're happy to sort of completely study before the end of this calendar year. So I guess, how he screen Bush's sorry, how is the study thinking about green bushes.
Speaker Change: Options around volume growth versus value next month's ash and things.
Speaker Change: Well I think bill Grubbs Roman span five or six of course on value and so.
Speaker Change: Does it feel a bit of size of food value over volume.
Speaker Change: Semi street that the the team working on it we'll look at that mine and as I said, it's growing rapidly and really could point to tight stock insight what is the the optimized pathway for that that entire resource how do we how do we best manage it and how do we.
Speaker Change: Grow it.
What's the right pace and what's the sort of.
Speaker Change: Goldilocks level of production at that mine can sustain even the infrastructure and the other resources that would demand.
Speaker Change: So yeah.
Speaker Change: I wanted to give you confidence that it is a bad bad you, what's known about sort of made some particular tonnage target up or down or whatever.
Speaker Change: Yeah, Okay. Thanks that makes sense and yes certainly.
Speaker Change: The frightening maybe.
Speaker Change: To cast a if I look at that guy and that sort of consolidated balance sheet.
Speaker Change: I know you don't separate it out, but if I do the math to me seems like it's probably about $90 million of cash in in Sydney Telia itself and the rest is in Winfield I guess the question is you know is that sufficient if you look at that outlook that you've given and you know what you expect it yes. It would be the second half of this year is that a sufficient level of cash.
Speaker Change: Particularly in the context of obviously, a $167 million EBITDA loss in the last quarter, obviously, not all of that was cash but you.
Speaker Change: Pretty significant cash draw from the asset and potentially.
Speaker Change: Not a lot coming in in the way of dividends from Winfield. He said is that level of cash sufficient entirely I. Thanks.
Speaker Change: And we've got it and I think it was just before Christmas we don't expect to dividend.
Speaker Change: And a clay windmill.
Speaker Change: And guiding to we're expecting to pull caching, so I think that.
Speaker Change: And since your question.
Speaker Change: Yeah, Okay, maybe the extension of that is what all of that mechanisms would tally T. L. I.
Speaker Change: Look to draw upon in order to continue funding Konami if required or in other words would you draw downs it until you for quad.
Speaker Change: And for Claude Yes, we would that that would require going straight boards and appraisals and at Etsy.
Speaker Change: Certain levels at board level and shareholder level.
Speaker Change: But I'll just say Greenbush has had a high school Apache and there there are other avenues to get cash into tailing off.
Speaker Change: Okay. That's clear thanks very much.
Speaker Change: Thank you. Your next question comes from Matt <unk> from Jefferies. Please go ahead.
Speaker Change: Hi, Good morning, Robin and Kevin I don't think so I've just got one question today.
Speaker Change: Thanks to the fact that we forgot to put on a you are negotiating them and I'll come with minimal to both parties I guess what are your non negotiable. She pulled out a couple of allocation of the peso because all of them, but what are you on the guy shows and what do you think would be the key outcomes.
Speaker Change: Oh JV partners.
Mitch: Mitch in for Mike.
Mitch: Difficult question to answer and that's why I'm, saying no no gosh I mean, we're in a partnership that JV is very important to us and that relationship.
Mitch: Wei.
Mitch: I'm not likely to see everything the same eyes, and that's like any relationship or partnership I think then its about having been conversations and working through it the perspectives and the different issues.
Mitch: You know really candid and pragmatic why we we've done that on trying to and found alignment and I think it might a very responsible decision, albeit hard you know it's I think one of the headlines win win bad news is good news.
Mitch: He wrote it but it summed it up say well as we look at trying one.
Speaker Change: Yeah, there are a bunch of variables, we've taken a view on it and.
Speaker Change: It's a case of working through all the tradeoffs and all the back and forth about you know, what's the best the best path and how we see that that asset performing looking forward. So.
Speaker Change: No I'm trying to I'm trying to figure out a way to to give you some more substance there because it's not a bad throwing red lines I. Just don't think that's helpful. In a partnership with we read it together no. Other party you put in front of my question.
Speaker Change: Yeah, correct correct frame the question slightly differently than Robin one of them rather than non negotiable. What are some of the key issues that are on the table being discussed and if you could also easily have a timeline that you're working to as such I'm almost discussions.
Speaker Change: Yeah, well look let me talk about things from my point of view, so what I'd like to see in any asset that other workplaces.
Speaker Change: Clear understanding of the the Karen.
Speaker Change: Status of the asset the performance of the asset so the more clarity in in data in it.
Speaker Change: Central basis, the better so that's that's the case, so I guess I'd like to make decisions from affects a good fact base and secondly, what are the issues in an engineering sense. So we know that they sustain a challenge ramp up so the more clarity I can say with which we looked through all of them.
Speaker Change: Our problems all of the things that need to be fixed or changed or amended based on what we know and we've had obviously a lot of talk now to learn those things. So that's the second thing that I have a strong expectation on and then it's about saying, okay with that clarity what are the what sort of investments required to close the gap and what sort of a.
Speaker Change: Four months till we think can be delivered from that and of course, that's where it gets a bit more more challenging year, a couple of steps away from from from the that's at today and how it's performing.
Speaker Change: And then you know you start weighing in well what do you think the market is going to do how do you think.
Speaker Change: The thing is going to play out globally, there's obviously a lot of moving parts around the lithium and energy storage industry right now.
Lots of geopolitics and so it's it's difficult. So that's I guess the paces that I'm asked before looking at you know always going to come to the table. When I told you that capital allocation inside unless we can say that pathway or at least it with a reasonable sensitivity that generates an appropriate return.
Speaker Change: Then we're going to push back on that capital inside we want more clarity we want a different pathway. We want another solution. We want another way of doing things to get to the pool kind of performance that are that we expect and we've got to get a return from from every dollar that we invest that's I guess, the default position that which I think.
Speaker Change: Thank you very much for the color that's it for me.
Speaker Change: Thank you. Your next question comes from Rob Stein from Macquarie. Please go ahead.
Speaker Change: Okay.
Rob Stein: Having cap just on Coronado. So obviously the payment came through between them I mean quantum can decide if it means I'm reasonably expected.
Speaker Change: Thank God and Oh.
15000 U S. A roundabout for God. It's of course, how can we expect that to come down in the future, obviously, that's not going to be acceptable.
Speaker Change: Your Chinese JV pays its significantly higher than refining costs in China, and even more broadly.
Speaker Change: Other countries in Asia.
Speaker Change: How can we expect that number to come down over time.
Yeah, Rob look I think you.
Speaker Change: You know obviously.
Speaker Change: Called out the the key challenge there and it's largely a volume driver like you know like anything when you're operating in a plant like that as the volumes come up that will amortize down.
Speaker Change: I mean, you you probably got models that breakout the underlying costs, what's variable what's fake nats.
Speaker Change: Naturally I'm not having more tonnes through trying to makes that harder problems not easier looking forward, but that's the issue in front of the team is to get the volume up as quickly as possible and that's what will will move the dial on the cost per tonne processed.
Speaker Change: In terms of actual guidance I mean, we've given you. This now as a as a sort of fair.
Speaker Change: First update and we will revise and refine that for the next financial year in due course.
Speaker Change: Thanks, I'll pass it on keeping the business of the day. Thank you.
Speaker Change: Got it.
Speaker Change: Thank you. Your next question comes from Tim Huff from Canaccord. Please go ahead.
Tim Huff: Hi, Thanks for the.
Speaker Change: Christians guys.
Speaker Change: Our probably most of the questions being answered I was just looking at so far but in terms of the.
Speaker Change: Green bushes and C. T P for obviously that whether that's included or not it's going to be a fairly large drive and now obviously that comes with a trade off study as to whether you end up going underground and a lot of goodness.
Speaker Change: But it's just interesting that you've got a couple of different studies going around with different partners sort of.
Speaker Change: Putting out different information.
Speaker Change: Like what what work's being done to align that.
Speaker Change: That work.
Speaker Change: To provide a consistent view on this asset is that what will likely stay at the end of the year or is that going to be at your guys' view of the world to adding to the snakes.
Speaker Change: To me that's a really good question on.
The work that Rob has commenced now on this.
Speaker Change: Broader optimization study for the mine.
Speaker Change: Will give us in your baseline that kind of work hasn't been done and I think the U K report, an RPM reports that come out from all the miles Hum.
Speaker Change: Regulatory reporting cycle.
Speaker Change: <unk> study, it's it's a reflection of a point in time.
Speaker Change: What I can say based on a set of rules. It doesn't it's not forward looking in terms of improvements or changes old planes and how the business thinks about optimizing and growing the value of the business and so without that update.
Speaker Change: Completely appreciate you've got all these different pieces of data, but nothing that gives you that full picture and I think rubble.
Speaker Change: We'll bring that together and I would expect that once that's done then the.
The partners in golfing in Green bushes can consider then how would I say that with the market and give everyone more clarity.
Speaker Change: Until that time of course, yeah, you're just getting the sort of point in time regulatory reports that just give you some insight, but obviously not not the whole picture and so I would I'm very pleased to see the work that Rob has kicked off and I think with the economy.
Speaker Change: He's got involved very very strong strong team working on that I think we're going to get a fantastic result.
Speaker Change: And then maybe moving to Coronado could you give us a rough rule of thumb of how you might think about a fixed cost versus variable cost are you in that within that sort of guidance that you've given.
Speaker Change: A little too much how do you read that for Coronado shall we just don't got to provide that level of detail I think that kind of information is generally available in the market for benchmark refineries. This is obviously not a benchmark refinery inside.
Speaker Change: You know it doesn't necessarily mean, it's a parallel but I think that you can you can start to back calculate based on the tonnes workout, where it's sitting knowing the fixed costs.
Speaker Change: And then and then going from there.
Speaker Change: Oh, Wow playground, and perhaps just finally on Qunar.
Speaker Change: Yeah, you know I think following up on the previous question around the cost base.
Speaker Change: Yeah I guess.
Speaker Change: Do you see a drop dead date for when you're going to make a decision as to whether this asset.
Speaker Change: It just gets turned off as well.
Speaker Change: Yeah by the end of the year, we've ramped up to where we're going to get too because I.
Speaker Change: Yeah, It was sitting at $15000 a ton.
Speaker Change: Pathetically situation of course, but a is that a drop dead date for whether you continue to assess it.
Speaker Change: Not so there's no drop dead date, it's a case of US working closely with that partner with T O say and what I can try to find the very best pathway that that we'd buy some but not happy with.
Speaker Change: Thanks very much Louis.
Speaker Change: Thank you. Your next question comes from Matt Thomas from Bofa Securities. Please go ahead.
Speaker Change: Yeah. Thanks can I give everyone I'm, just maybe just Greg could you going back to C. G. P. Three and just wondering one question from my end, perhaps you could just give us a little bit more color on not expecting any guidance for for FY 'twenty six but just in terms of how you're thinking about those.
Speaker Change: We're ramping that that ramp up profile no volumes versus margins, just a little bit of color in terms of what we can kind of expect going into the into the new year.
Speaker Change: Hum caught short met understand that volumes on margins I mean, though that the team will work through a plan to commission and ramp up the plant in a steady way.
Speaker Change: Effectively as quickly as possible I mean, there are a set of steps I've Gotta go through as they bring it online I think the key measure for me is how quickly it Rob and his team get it stable and that's on two fronts. You know from a throughput point of view, yes, it's stable and is it available in generating the kind of run.
Speaker Change: Time that we expect and we look at C. G. P. One as the benchmark seem to be too is still improving.
Speaker Change: So we get that stability the better and you would normally expect a plant like this you would achieve that within 12 months. The second issue is obviously recoveries.
Speaker Change: And again, we have a great benchmark from C. G. P. One CEB to still behind that you probably saw some of those numbers in the report.
Speaker Change: The team is doing great work, improving that and they've made progress through 2024, I'd expect that that will continue that.
Speaker Change: Well it can do some more improvements reached 25.
Speaker Change: That's of course, a big lever on that ramp up and the quicker you get those recoveries up it is linked of course with stability and the residence time is as I mean is that the the lithium passes through the <unk>.
Speaker Change: But.
Speaker Change: Two areas I guess yeah.
Speaker Change: They typically move as quickly as possible. We haven't provided specific guidance as you called out in 2026 on what that looks like in India of course, you know see what information. We can we can share that might help you understand what that ramp looks like.
Speaker Change: Yeah. Thanks, Thanks, Tom that's helpful. Alright, that's it for me. Thank you.
Speaker Change: Matt.
Speaker Change: Thank you. Your next question comes from John Bishop from Jonathan. Please go ahead.
John Bishop: Hi morning, guys. Thanks for taking the questions.
John Bishop: You've obviously called out the Quinn on a payment is $200 million.
John Bishop: Gross carrying value remaining in terms of I guess decision, making on that project going forward.
John Bishop: A deed notes that there was a headline article couple of weeks ago talking about the Chinese.
John Bishop: Banning exports of processing intellectual property is.
John Bishop: Is that sort of influence C. T I discussions at the moment and I guess as a negative dragging on the ability to improve the operational performance of that asset.
John Bishop: John It's a really good question and I'm on the phone.
John Bishop: That news as well, it's still not entirely clear how that plays out and I think the intense been stated.
John Bishop: China, how that translates into their actions and decisions and I'm not sure.
John Bishop: In terms of direct relevance hooking on it no that hasn't come up as a as an issue or it hasn't been a specific area of focus.
John Bishop: Could it be an advantage or disadvantage I could you know I could imagine both looking forward.
John Bishop: Arguments.
John Bishop: By twice.
John Bishop: And you know we do rely on providers from outside of China to support Coronado, It's not a case of it all being by some Chinese input, albeit you know that has got such deep experience and you know most of the well virtually all of the working refineries in the world are in China, and they're all performing side.
Speaker Change: Yes. The quick answer is no it hasn't been in discussion hasn't been in part because and how could it play out I could see an argument H Y at this point, but there's a lot of unknowns.
Speaker Change: Okay, that's fair.
Speaker Change: And maybe just turning to green bushes again then.
Speaker Change: How does the optimization study is looking at it.
Speaker Change: Catch a any underground component is that part of the the kind of work.
Speaker Change: Well, Yeah look he will look at the entire reserve resource and how best to access that mining method, just being one of the factors in that work sorry.
Speaker Change: I you know you will pick up in the reserve resource update that we've issued from Palisson effectively re badge if they work.
Speaker Change: There's been a lot of drilling them that hasnt all been absorbed yet either so this is the amount of work. The team has got to get through as I think about how they expand that reserve resource how they access and make more of an economic how they optimize the costs around it and of course mining method using underground to get onto some.
Speaker Change: Some of the the that potential.
Speaker Change: Oh body underneath infrastructure is something no doubt they will test and consider as they go through it and see what our what the economics Oclock.
Speaker Change: Okay can I, just take that a little bit.
Speaker Change: I guess does that have a direct influence on the timing is if all day on CGP food do you expect.
Speaker Change: As part of that work to lay out and cleans I guess the market timelines.
Speaker Change: C G pay for which I. Thank you Friday Notionally was to occur sometime in fiscal 'twenty six ish.
Speaker Change: Yeah.
Speaker Change: Hum.
Speaker Change: I think all of that work has to be laid out and through this further supports the grubbs Lady and that kind of.
Speaker Change: Full reset so yeah, I mean I'll take that on notice.
Speaker Change: Take that with a stone is a key question to give.
Speaker Change: More clarity on and when we've got some more certainty around how that plays out we can maybe give us some timelines all work that through with the other partners as well.
Speaker Change: Alright, thanks for taking the questions.
Speaker Change: John.
Speaker Change: Thank you once again, if you wish to ask a question. Please press star one on your telephone I'll ask you a question and ask a question box. Your next question comes from Levi Spry from UBS. Please go ahead.
Levi Spry: Morning, Oh oven and Kathleen Thanks for your time two quick ones. Please so on the exploration are you there.
Levi Spry: The write down there I guess can you tell us what's left and one number you have given us a FY 'twenty six is a exploration well below 50.
Levi Spry: Do you come up with that number what's the appropriate exploration spend going forward.
Levi Spry: Thanks, Levo I look what's left I want to try and go through each of the tenements, but yeah.
Levi Spry: We've we're rationalizing.
Levi Spry: Some areas that we've had a lot of five outside of the US I think you know that.
Levi Spry: The range is a big example are some of them some of the ground Dr. Golar, which has pass through a few sets of hands I think goes.
Levi Spry: It goes way back WMC I look I think the western area as well.
Levi Spry: You've had it for a bit side you know, there's some some long history with some of this Ah theres still some strong focus in the Kimberley obviously, we got presence in the Paterson, albeit that's been rationalized northern territory, but not new ground. It looks really interesting we've got near time work happening in but as far as tying year in cosmos properties, which.
Levi Spry: It's quite interesting there's ground around green bushes, which we're continuing to look at and we are working through how we best partner with through T. I and with all of them all on that to make sure that that's done in a very coordinated way with talisman and we think about that in the broader optimization of green bushes, but I'll.
Levi Spry: Summit laid the anecdotal view at least is that that whole area offers up a lot of prospectively and potential which is no surprise given the scale of the ore body.
Levi Spry: So theres just a quick sort of run through as it is.
Levi Spry: As we look forward and maybe what we could do is think about them rather than next quarterly or the one after that might be just doing a bit more of a deep dive in exploration and give you an update on the Ford plan and how we see that playing out.
Levi Spry: With regard to costs look it's it's the team are working through the tenements and obviously as we were languish or sell or like golf tenements and costs holding costs. That's been a significant part of the exploration spend.
Levi Spry: And then the commitments associated with that of course, plus some of the partnerships and JV is that we were in as we unwind some of those in places.
Levi Spry: All of that's being taken into account, but sort of stops to get us to two a new baseline and then we look forward and say well wait wait or we think it is the areas of focus that we want to invest them. What's the right of progress we think we can make credibly.
Levi Spry: And we stopped and then put the team in the drilling in all of the other costs around that so that's I guess a bit of a build up and I'll kind of give you. A you know an exact number it's it's not a case of defining an envelope and saying you've got to stay on it that it really is bottom up as they look at all those pieces and then getting to a.
Levi Spry: And investment that we think's appropriate I would also argue and you know I think the message is comes through to me through here from shareholders loud and clear that we were spending well over $80 million of yeah for for a while and that just was out of kilter with what my sense I agree with that and we've adjusted.
Levi Spry: That.
Levi Spry: To be spending less than 50 is still significant amount and we want to make sure that spent very wisely I don't for a second think that this is all science in the sense that yeah. You can have an exact spreadsheet model of how that works out team are very experienced.
Levi Spry: <unk> very very capable G L isn't scientists and the guidance in the January the team and the broader exploration team to see that's important so we need to give them some spice and let them do what they do best but equally make sure that we we know where that could end up and I think the biggest change we've said is look.
Levi Spry: If we're gonna go and drill a target we need to know what kind of mine, we expect that would turn into and if we can't see what that analog is and how that might play out then we need to be cautious on on how much we invest until we better understand that and that work's going on through the year end or through 2024, and I think giving US you know a lot of clarity and.
Levi Spry: Real widest five because the the resources and the expenditure going forward.
Speaker Change: Okay. Yeah. Thanks, and then just coming back to Coronado, one more time and dancing around these timelines I guess.
For the assumptions in your impairment testing, but can I just be clear win when you have it or are getting too. So I assume it's running at the best you're expecting them to run at 1000 tonnes a month.
Speaker Change: So the next couple of months of stay Safe Boy, but then you're expecting that to double at some point in time when.
Speaker Change: Yeah.
Speaker Change: Get label I kind of give your garden. So soon it's okay. [laughter], we're just not at that point, yet so I look at it how do you find that your guidance. We have provided helpful. I realize we've had a bit of a vacuum for awhile and as we have more clarity and coming to FY 'twenty six will give you that update.
Speaker Change: Okay. Thank you.
Levi Spry: Thanks Levi.
Speaker Change: Thank you.
Speaker Change: Other questions at this time I'll now hand back to Mr. Behler for closing remarks.
Mr. Behler: Okay. Thank you look thanks for the questions I think we covered the ground.
Mr. Behler: That we needed to obviously, a very challenging half when you stand back and look at the headlines.
Mr. Behler: Just to reinforce I think things are tough.
Mr. Behler: Top seasons, we had to take we've been through a very thorough process and I feel good about you know how we've gone about that.
Mr. Behler: Set us up well for the future and I guess to finish all of them on the highs I think firstly the team I'd say you know what it is through these kind of difficult periods. The very best in our people and how they are turning up and working through the challenges and I couldn't be more pleased water capable our amazing teams supporting each other and ours.
Mr. Behler: And secondly of course that potential that we can see being unlocked by Robin attainment Green bushes, its very exciting and I think you know I've been a obviously a long time coming he's making such a big impact so quickly and I really look forward to being able to report and share more of that progress has he as he does that.
Look through them through the rest of this year.
Mr. Behler: Thanks for everyone's support and lifting and I'll, let you get on with the di I'm sure. It's a very busy time.
Mr. Behler: Thank you that does conclude our conference for today. Thank you said participating you may now disconnect.
Mr. Behler: Okay.
Mr. Behler: Yeah.
Mr. Behler: Yeah.
Mr. Behler: Okay.
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Mr. Behler: Yeah.
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Okay.
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Mr. Behler: Okay.
Mr. Behler: Yeah.
Mr. Behler: Yeah.