Q3 2025 IGO Ltd Earnings Call
Thank you for standing by and welcome to the idea of limited third quarter FY 'twenty five results call.
All participants are in a listen only mode. There will be a presentation followed by a question and answer session.
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Ivan Bella: I would now like to hand, the conference over to Mr. Ivan Bella managing director and CEO. Please go ahead.
Speaker Change: Thanks Darcy.
Speaker Change: Hi, everyone. Good morning, Thanks for joining the call.
Speaker Change: As usual cast that exists with the FCA.
Speaker Change: But I would also like to see.
Speaker Change: She said she is right now I'll make it really as.
Speaker Change: At the corporate Affairs Knowhow.
Speaker Change: Richard Glass is taking a really exciting separated Friday with his family for the next 12 months, Besides southeast probably sitting in Karl by hopefully not listening to this call, but anyway, well lithium but sounds.
Speaker Change: Come up to speed very quickly so you'll get to meet their energy costs.
Speaker Change: We will cover a few highlights and then get into some questions. I mean look over what was a solid quarter. Some some big change with X pricing, which I'll come to that.
Speaker Change: This is a business that just starting to put some rhythm which is good but it's on site.
Speaker Change: The actual lagging results.
Speaker Change: So sort of flat similar so there was a period of 60 days that we went without any recordable injuries.
Speaker Change: So too early April, which we're really pleased about it.
Speaker Change: There's been a lot of focus obviously, United from let's say over the last 12 months starting to see.
Speaker Change: So strong progress there.
Speaker Change: Louis to behavioral safety program called to taking control of blood safety, it's getting fantastic feedback.
Also on the claim side that'll be rolled out rod across sides.
Speaker Change: And that amongst a number of other areas of pockets inside.
Speaker Change: That'd be really impact.
Speaker Change: He had a new head of health safety environment Harrington land access join Us in February.
Speaker Change: Strong very strong pedigree in spice and he's he's having a huge impact which is it's great to see.
Speaker Change: I guess more broadly in terms of results. The prime boost has had a had a really solid quarter as well production was lower than the prior quarter. That's just.
Speaker Change: Brian and mine plan effective latest does nothing to see there in terms of the actual underlying performance in fact, and I'll talk more to the performance continues to improve broker settled in and he is making tremendous progress there.
Speaker Change: As you say and you know already.
Speaker Change: We're a very strong whole body it off as a fantastic margins, 68% EBITDA.
Why 25 died.
Speaker Change: The range of oil price on frame instead of continuing recoveries all mentioned, but that's all happening and then I guess that brought up strictly is yes. It was you in last mile optimization work that's otherwise.
Speaker Change: Everyone's asked about dividends and it wasn't even high for windshield into the into the joint venture partners is 110 million U S dollars and in the quarter.
Speaker Change: This business generates a lot of cash and converted to cash.
Speaker Change: And that's going to flow out is as we said so even at the bottom of the cycle even in the most difficult period for lithium.
Speaker Change: Businesses out there this is a business that still generating qunar.
Speaker Change: Coronado envelope was tough caught off yup.
Speaker Change: The challenge with more equipment issues and.
Speaker Change: Shut down related to some of that work.
Speaker Change: The Hot Rod I guess was the announcement of.
Speaker Change: I'm trying to decision of course.
Speaker Change: One of the one of you on the call like she said you know when when bad news is good news and that's it was based you know of course crisis and of course development more downstream processing of minerals and metals into stride here is attractive.
Speaker Change: We have that unit, but it's got to be economic it's gotta be sustainable it's got to be something that can deliver through the cycle and we didn't see that pathway to trying to instead of the joint venture partners to best decision, which we talked at length about half.
Speaker Change: Nova smoke.
Speaker Change: As you know has had a very tough stop the face new yeah I.
Speaker Change: I had a good quarter and it teams and they say.
Speaker Change: We'll come back to some more about forward looking guidance on production, but overall, yeah, we're starting to get a better handle on the ore body in white at the highest end its extremities.
Speaker Change: Deal with the lower recoveries with me in hot areas of M. G. I N S.
Speaker Change: Generally speaking a more stable performance, which is very good to say and the teams working hard.
Speaker Change: With that I know.
Speaker Change: On the financials, they'll come and start having to share and payments and all the other challenges so simple caught up generating some cash and.
Speaker Change: And getting back to basics side overall.
Speaker Change: South corridor.
Speaker Change: It's good to see some some rhythm problem. The key operations you know Paul Yeah.
Speaker Change: But just dive into a greenbush is even more debt.
Speaker Change: I can't stress enough what are unimpressive.
Speaker Change: Unimpressive mine issues.
Speaker Change: As an ore body is very privileged to be noted that's world class the ability to generate margin in its commodities through the cycle and the cash conversion I think puts it in a very unique spice.
Speaker Change: T. I just sent margins through this period is extraordinary and I am sure. She just how capable necessities and that's all knowing that theres still a lot of upside and Rob is he's building out his team and building that momentum with with your organization, he's making change at a steady and very sensible.
Speaker Change: I'm very thoughtful pace there is a lot of challenges to manage as you make those changes and some of you might have picked up the you guys and with local residents in the community around dust that was played out in some of the media in the last couple of months. That's the kind of thing that brought us front facing and.
Speaker Change: We know that he is.
Speaker Change: Taking this very seriously he's thinking about non technical risks. He told me thinking about the impact.
Speaker Change: Very practical why he leaves down in the region and with his team Hayes.
Speaker Change: I'll take that.
Speaker Change: I played it to help skus for the garage into development. She they'll change to do that in Hawaii that the impacts are managed a very thoughtfully and engage with the communities and other stakeholders has done leaving them feeling like this is a significant contributor which I believe it is to the region in two.
Speaker Change: Until like community, but.
Speaker Change: Their voice is really not much to it and all the teams working through those challenges.
Speaker Change: So all credit to Robin a greenbush is old telephone team there and how they are doing that with newer income rates look I.
Speaker Change: I think I've mentioned before that this is obviously, it's a privileged all bought in that office up opportunity, but equally it seems doing a great job continuing to drive recoveries up in Sydney as well above 80% very impressive what the team's doing there and then.
Speaker Change: Of course, applying those learnings back into CGP to naturally that want to carry that into C. E trade when it comes on but I mean this is just a benchmark in the world coal recoveries some really strong.
Speaker Change: Strong focus on that and that includes plans for important and just asset stability as well, which we all know is a key.
Speaker Change: A key driver of recoveries and ultimate performance.
Speaker Change: The dividends, which I think it's good to say $110 million, 100% basis.
Speaker Change: The broader optimization work is he's on the White house.
Speaker Change: That would be more on that I mean it.
Speaker Change: And then capital expenditure I'm, probably key points Nowadays, we revised down our guidance for.
Speaker Change: For FY 'twenty five we previously said 50 to 60, we brought that back in at 700 800 and that.
Speaker Change: Really if I could solve the game and what <unk> got in and worked through these with with his team and Nicole its influence of course Strongbox, a song capital Green really careful to prioritize capital spending money on the right things and making sure we get more value for every dollar that you spend.
Speaker Change: And I'm being very frugal ultimately, we don't want to say the chain.
As it health or not investing in sustaining capital of course, that's pretty cool and we want to continue to see this business perform at its very best but equally we need to be very thoughtful with how we can be more capital in that space. So it's great to see that progress I'm very very positive about that shift down and I think you'll see that continued pressure.
Speaker Change: On slide because maintained obviously to what you would expect at the bottom of the cycle, what we need to do is carried right through the cycle when the when the market turns and makes sure that disciplined studies are in place and he gave me throw at you probably lost key point on this slide is it's tracking well on budget as we've signed pause to first production.
Speaker Change: The expected in the back end of this year.
Speaker Change: So.
Speaker Change: Moving on putting up a quick slide.
Speaker Change: Nothing new on this for anyone who's been through these kind of processes its don't necessarily totally unique but it is significant green bushes and we're also progressing this it'll take some time to work through.
Speaker Change: All of the elements.
Speaker Change: So I don't know why it got sort of adult point, but since that you know.
Speaker Change: First part which is looking like.
Speaker Change: Lastly, top down and what the upside is what is this thing and so what's the outside what is it that we need to go and pursue and how do we prioritize that.
Speaker Change: And then breaking that down into the bottom up which is when I say phase two it's running in parallel it's upside that's told sky, but getting back into the funnel building out that teacher of mine from the ground up I understand your characterization I understand yes, it's understanding the product demand and understanding how we get there.
Speaker Change: The very best value out of this business for a long time and I think the last play box is absolutely critical and I've talked about engagement with community stakeholders and impacts.
Speaker Change: All of the non processing infrastructure and other non technical aspects are fundamental in how we think about growth and the requirements around.
Speaker Change: There's not that many processes structure is absolutely fundamental to get rod so having that done strategically in the long time and being able to look at it. It's not just a short period is really important for us to get the best value from this asset.
Speaker Change: And so what does all that deliver on these slides nothing you are though I mean, you cannot put this together from from the information you've got but it just utilizes the leverage on this asset and so yes, we generated great amounts of cash at this point in cycle.
Speaker Change: At the same price spodumene price moves deliveries just extraordinary and this is a picture of as he's before C. G. P. Three and before the improvements and that's really the message I want to leave you with is.
Speaker Change: Constant blight, we will do our best to unpack that as we go and we worked through that with the joint venture partners.
Speaker Change: You know what is that potential and what is it that way, but are showing them how can the asset to live a more productivity more throughput lower cost.
Speaker Change: Can we optimize that amazing ore body halfway guard the resource reserve in Hawaii that drives a material value for the business and that works on Hawaii, I guess that the leverage when you city, sorry down quite far down on the cost curve is very significant.
Speaker Change: Kona.
Speaker Change: Look I'm a couple of key points I mean, coverdale it speak to or trying to I won't go into that further at this point it might be some questions.
Speaker Change: The quarter was was you know a challenge with some of the weakness side, you're going to shut down.
Speaker Change: So dealing with some of the the residual work you know try to shut down because hedging costs trended down and naturally tied obviously to ball games as well but.
Speaker Change: There's still some work to do there and the capital guidance is probably the major takeaway here, we've revised that down for FY 'twenty five I think that's important to know that we've got obviously a strong focus on capex. Yeah. It's not a case of just being in a book by any stretch but need to be very very soon.
It's all about where we allocate cash in this business and both joint venture partners are equally attentive to the states out making sure. The team are very careful very well planned and executed each of their projects.
Speaker Change: That degree of care to make sure we get the money that we expect.
Speaker Change: And you can obviously see in the <unk>.
Speaker Change: The guidance that that's a fairly material step down from what was anticipated.
Speaker Change: Also no I've asked Lucas nice to say the same you know fine at Feight and had a good quarter that had some good recoveries that got some better right. They've got some good rhythm team are working really well with <unk> and you know all of that with that much better safety as well.
Speaker Change: Tiny small.
Speaker Change: I'll look back on the quarter and it was just nice to see the same finding their rhythm and delivering and that's continued into April which is code side. You know I think we'll continue to focus hard and drive obviously that performance and we've got a young high ambition brought through the organization to do that to show the quality of mining.
Speaker Change: <unk> <unk> has they did have a very tough first half inside this was quite to say Oh credits and gives credit and a recognition of the very hard work they've done. This for this financial year in a very difficult period with your body it hasn't been con to us and side.
Speaker Change: I mean in a sense, it's because they were getting our hands around it the big Tycho I think on these pages. We've put in there is some guidance at the end of loss. So the asset for the mine to take thousand to 18000 nickel tonnes.
Speaker Change: Through to the end of last which is pretty much the end of next year.
Speaker Change: What you've paid for the long lots of mine now maybe due for wise, we've looked at it three different angles. There is still work going on in that budget thoughtful mindful to fine tune that but we don't see any scenario where that changes. We think it's it's got good economics through the cycle unless there's some major shock to the nickel market, which we can't say.
You know, we got some real clarity and certainty.
Speaker Change: And and confidence around how it alone and we're just finishing the detailed budget work around that so we can look at costs and manage that in.
Speaker Change: Isn't that ramped down as we guide side IRA.
Speaker Change: Overall, a nice quarter, neither a load onto the same.
Speaker Change: On exploration book.
Speaker Change: Is it it's been tough here and.
Speaker Change: <unk> always got a long pedigree and a long history of exploration, it's where the company started he has T T capability insane and some of them that much capable individuals.
Speaker Change: Is G O is that you could find.
Speaker Change: And we had a strategy, which I'm focused on these belt scale tenements.
Speaker Change: Focused on you know a very broad stay.
Speaker Change: Standing across Australia, and we've tested that as you know over the last 12 months, we've looked at where we stand how we want to see what we think will drive economic outcomes.
Speaker Change: And we've made a major change to the operating model to the structure of the team to the sides of the same and we've rationalized that portfolio of tenements heavily or in the process of doing that that's been a very challenging process to go through I mean, the team has done exactly what they're off doing them extremely well they were responding in delivering against the strategy.
Speaker Change: Business, and we changed that and that's created impactful individuals', which is why I haven't wanted to talk about the deaths up until this point I think it's it's just not ideal or respectful to do that until we've made through the work, but that's not a complaint. So march while this quarter was a tough period for the team I'm very sad to say very long.
Speaker Change: Team <unk> team members leave it contributes a huge amount of the business and I want to thank all of them.
Speaker Change: It's been part of the same does style equally feel that challenge probably more than most and it's it's.
Speaker Change: Still a difficult time as we get through that we finished the rationalization, but I have deep conviction here and Brett has as linked into this personally we've all side how to change it for the head of exploration.
John Kilroy: John Kilroy has been appointed he's got a very long pedigree in the Spice worked right across Australasia and in beyond that.
John Kilroy: Very very capable individuals to late to tame a bright speak personally involved and I think both at all types of it is time to find out rhythm again, but we've got conviction, we've caught up for it because we've got a very good plan. We've looked at this really hard and we've also as part of East Coast and got us that you're going forward on what we think our expenditure.
John Kilroy: It will be in this space and we've indicated next financial year.
John Kilroy: The woods effective blazing that sort of.
John Kilroy:
John Kilroy: Guidance range of 30 to 40 million.
John Kilroy: When we put that out there to sort of size, though this is where we were.
John Kilroy: I think the right sort of investment feeds based on our understanding of how the tenements that we hold the way. We think we can make a difference on what's appropriate for the scale of that business.
John Kilroy: So that's hum as it being a tough process, but it's good that's behind us and why now.
John Kilroy: In a place to look forward because a lot of confidence for exploration.
John Kilroy: Oh, the financial results and not a lot to cover there I mean, obviously last quarter was it was heavily weighted by the impairments all I'm trying to I'm trying one this is a cleaner quarter, where you can kind of see that are the underlying numbers and cash starting to play through.
John Kilroy: But some of that's tax return, which is just a function of cash timing from last year, but ultimately you know through the cycle, we are generating cash and copper right now our corporate exploration and other costs you you'll be aware of course that we still airing real cost for the care and maintenance activities at forest tenure in Cosmos.
John Kilroy: All of that tightening was still are in a very strong position in our balance sheet continues to to stand well behind us as we look forward and pursue a lot of really exciting opportunities with crank wishes.
John Kilroy: And beyond.
John Kilroy: So look just to wrap up I mean, I say, Oh, that's reflecting in that this is sort of effectively 12 months of full cycle. It seems like this you know.
John Kilroy: I pulled 2024 as my first phone call late and I explained.
John Kilroy: It's been a tough 12 months theres been a lot of times, there's been a lot of hard decisions. So we've had the tightest attain and that's really difficult when you come in and you work through so much so quickly.
John Kilroy: And that definitely leaves people feeling.
John Kilroy: Challenged and uncertain and anxious and knowing what's the future of the business, but I think what we're starting to say now is a much cleaner view of what is Archie I'll end capability Bacci Island.
Speaker Change: The potential with Crane Bush's we have a fantastic leadership team and fantastic organization World class asset in grain bushes with huge upside.
Speaker Change: And no either at a stable place to deliver cash right through the end of next year and a reset exploration organization to to go and shoe and helped us find some exciting drugs. So.
Speaker Change: I'll leave it there and I'm not for some Q&A.
Speaker Change: If you wish to ask a question via the phone so you'll need to press the sake for it by the number one on your telephone keypad.
Speaker Change: If you wish to ask a question via the webcast. Please type your question to ask a question box.
Speaker Change: Your first question comes from Keith and Nick Lachey from Goldman Sachs. Please go ahead.
Speaker Change: Oh, good morning, I entertain thanks for the update this morning, and the extra detail and they're really.
Speaker Change: And that went to give it in to the partners. Great. First question just on the Capex reductions that grant bushes, and Coronado and now that you've completed those initial spending reviews can you just elaborate on where those capex reductions that come from at Crane brushes and how we should think about that whether that's more of a deferral or spin and then it can honor as well what you think the ongoing spend.
Speaker Change: Train one now it looks like beyond FY 'twenty five.
Speaker Change: Okay. Thanks, Hey, guys.
Speaker Change: I can't give you.
Speaker Change: It's at least two things for for Green bushes robbing the same basically stepped back and looked at the portfolio and going through with a fine tooth sky and challenged all of the projects now so some of it will be tiny way does it fit in the pipeline and some of it will be we don't need to do this now I don't want to get into specifics I'll give you an edge.
Speaker Change: Anecdote as an example, there was some plants to pipe certain cop box and I decided that wasn't required.
Speaker Change: There'll be certain facilities or die modern wanted the dive I said look we don't require so I E d's buys deferral and it's.
Speaker Change: Okay. So as I said, pushing things that impact us at health I mean on one of the biggest preponderance and I'll leave with many assets why that has happened and it is painful and I, one that's not who I am as a leader and as a board director on strong advocate for us maintaining it and putting the right investment into our assets to make sure they're healthy.
Speaker Change: Ravi is that kind of later as well because he's also lived through those issues. The other directors are as well. So I have complete confidence that we're not cutting corners. Here. This is a bad its just being really disciplined and frugal thoughtful with that capex. The other lever that he's pulling his he's challenging value for money a sign or what.
Speaker Change: Is the right amount to spend on that what is the right standard how fast should we go on that particular requirement and so with bias looking at Capex intensity and allocation and I think this will only continue to improve as a as a committee that goes through this very closely with the business and you know it's all the things that you would expect.
Speaker Change: From strong capital governance strong discipline in the way that allocate that cash.
Speaker Change: With regard to Qunar I can't give you guidance yet we will next next quarter. Once the update there I think it's fair to say that we've got a very very strong focus on any additional capital that.
Speaker Change: We want to make sure it's extremely clear what difference it will make what's being spent and the engineering and science and thinking behind that sorry, I cant give you numbers at this point I will soon as possible I appreciate you're more uncertainty there and we will give that to you as soon as we can but I'm just.
So I guess.
Speaker Change: Be confident that we have got a huge focus on every dollar spent on the refinery.
Speaker Change: Great. Thanks for that and I shouldn't say guang across two another one on Quinonimine, if I look at the overall production pace and I. Appreciate you still got some repair work to get through in May, but if we look at some of the discount for non battery grade hydroxide at the moment. It looks relatively small is there an opportunity to ramp up more unqualified material there to try and.
Speaker Change: So the unit economic pace and then just as a tack on can you maybe clarify how much government assistance.
Speaker Change: What are there as well.
Speaker Change: Yeah look the <unk> trying to move as much because we have got inventory as you know and are absolutely trying to monetize that and drive it and working capital down. So that's that's happening and they were looking at a range of channels to to do that and I think with T O sees connections and support and guidance to the market.
Speaker Change: That's really going well.
Hum.
Speaker Change: The second part of your question.
Speaker Change: One campaign that we got at that time during the course of that impact today.
Speaker Change: In the yoga or its about $8 million and we will say that continuing to come through but at much lower levels is that just for the quarter on quarter yeah.
Speaker Change: Thanks, Kathy was going to say so that's the number that didn't have it in hand, but there's sort of a.
Speaker Change: A new program, which might be it might be everyone's not familiar with switch try and governments.
Speaker Change: Launched late last year, and we've applied and received that supports quite material.
Speaker Change: Don't have the exact quantum because it's effectively an all state on a number of things like utilities and all the other costs that we would occur it could but at least quite material and very well received and we're really pleased with that support from the west Australian government and some might be well, we're looking to see if we can give you more clarity on that.
Speaker Change: For the next quarterly.
Speaker Change: From a forward looking point of view. So do you have any sense of what's coming.
Speaker Change: Got it thanks, and I'm going to have off at all.
Speaker Change: Thank you. Your next question comes from Kate Mccutcheon from Citi. Please go ahead.
Kate Mccutcheon: Hi, good morning.
Speaker Change: Train one this is the first time that you've sent in writing about discussion for an acceptable train one pathway have been pud fall. It site discussions for an exact for train one pathway being talked about Capex has been pulled back it.
Speaker Change: That's another eight email Aussie Canadian hearing a corner that might make it plain Iga Schalit is ha how do we think about the bookends of options here isn't carrying maintenance continuation one party consolidating ownership of all the things on the table and possible timing if you can say.
Speaker Change: Yeah.
Speaker Change: M. K. Unfortunately, it was the last 0.1st.
Speaker Change: It doesn't have any time frames are not used to love that I'm, sorry, I can't be more specific there look I think we.
Speaker Change: But you know we're working through it.
Speaker Change: So I'm positive this half, but you know we are talking with T. L. C. About trying one we'd have concerns about its capacity to perform and.
Speaker Change: And that's five technically he's tree and all size of the market. It team and we are talking about a full range of options of.
Speaker Change: What might be a solution I think the important thing to know, though is as we stand to die. It's all Friday and have a team there. They are working hard to make it perform and were all old behind that.
Speaker Change: But shareholders are supporting the same and that's why but of course, we know we have to look at and think about what's next and where there's differences between the two shareholders, we need to work through that in a respectful and thoughtful manner and that's underway, but you know I would say, there's no one offs or one.
Speaker Change: And sought to these.
Speaker Change: Cellphone my point of view naturally.
Speaker Change: Every extra dollar of cash that gets consumed.
Speaker Change: I cannot that doesn't drive value is undesirable software.
Speaker Change: Extremely patient and driven to see that change. This business has had enormous investment since we became a joint venture partner and I think we've been extremely patient and supportive we remain supportive of the same in the way they are doing but we cannot continue to just spend money without sleep.
Speaker Change: The way that types of us economically.
Speaker Change: I know, that's not being too specific fed aside, but what I can say that it had to sit in a very thoughtful way with with a partner and as soon as we've got some more news or more clarity. We'll give you is that the important takeaway being that we are on Friday teams doing a great job trying hard to to them.
Speaker Change: Prove that performance and we're right behind them until we take.
Speaker Change: Any other decision.
Speaker Change: Okay. That's helpful. Thank you I know I ask you this every quarter.
Speaker Change: And then the wind if your balance sheet actually just noticed equations for March quarter, Albemarle said, they didnt expect to pay dividends at this calendar year that we have won them and it looks like net debts increased seven email quarter on quarter and I can see that after the dividend that was cash generating assets.
Speaker Change: This challenging around drawing down.
Speaker Change: That's by another U S. T 16, a quarter on quarter. If my math is correct. How do we think about hearing of that asset is the capex spend rolls off into next year and I'll say, if you go with JV partners have a different balance sheet position to actually I like that anything you can say around that would be helpful.
Speaker Change: Yeah, let me comment broadly that might be cast and can get into some more of the specifics I mean.
Speaker Change: This debt.
Speaker Change: Bundle, they're in and the team will go around that way that I think's appropriate funding Capex and garage switch and you can say you know if you pull the numbers apart the company the business all of this net cash put to decide and.
Speaker Change: And I think that's the first tight why this this business is generating cash.
Speaker Change: Amortization of debt for that growth Capex and the timing of it when you think about striding dollar U S dollar times.
Speaker Change: We're making really soulful decisions here and <unk>.
Speaker Change: Well at the desk. He was dealt with denominated it's not drawn of course that does create some opportunity for us and look in and robots are very conscious of that.
Speaker Change: You know there's no.
Speaker Change:
Speaker Change: Since he has it.
Speaker Change: We want to I think either SaaS it to partners or older Elan and very cautious on that way. We look at these things because with a great deal of care all of that ratio I think covenants well well in plywood.
Speaker Change: Very good shape.
Speaker Change: So I would say that.
Speaker Change: This is just paying very prudent thoughtful and actually it's quite that you were crazy. When you think about how we're applying that debt in the business and the timing of the drawdown.
Speaker Change: Pat do you want to go on that I think I've covered most of it. The one thing I think hi, or reiterate is the debt status and the capital and them as well.
Speaker Change: Thinking hey strain.
Speaker Change: When it comes to an HSA and the capital profile. It's gonna look different we've got very strict or joint venture has got very strict capital management there.
Speaker Change: Net gearing ratio and collaborate rationalize liquidity levels theory still today and looks at I think now the balance sheet is strong.
Speaker Change: I blamed leveraged at all.
Speaker Change: Unfortunately, it's not to say that this is a very important asset for us that it all say is look at the best cost of capital on the line of Sun today's things and that's very different to any other miner, sorry, I wouldn't set expectations that that day is going to grow significantly it's gonna be utilized as hakan setting in a thoughtful way during that.
Speaker Change: Hi, Sachin, obviously I can't get there in place.
Speaker Change: Yes, there is.
Speaker Change: Like swim lanes that we are working in order to do that.
Speaker Change: You know I said plus cash gets distributed what she looked at that chain to the joint venture part. He says as he has seen in this quarter and if you. If you pull up the 24 accounts, which have been posted by Towson Winfield recently and you just do the like for like I mean actual net debt.
Speaker Change: If you look at the cash balances the debt.
Speaker Change: China $75 million of U S. I think in the quarter. So it's pretty material, you're granting field times when you pull it apart your comment on the dividend look odd.
Speaker Change: Sure I can comment on a mouse.
Speaker Change: Marks there.
Speaker Change: This business generates cash it's a great asset brought through the cycle you see plus news it it just gets even more exciting and even better and you know I don't see any reason why we should expect otherwise as you as you know late this year, we have another huge chunk of production start to come online and couldn't be.
Speaker Change: Better time to be honest when you think about the run into into 2026, where we probably will expect to see the market more in balance.
Speaker Change: And some some improvement so you know a better benefit of drivers for spodumene and lithium cross.
Speaker Change: Hi, just to expand on the.
Speaker Change: The back of that if you look at Abbott miles by strikes in earnings calls and N type.
Speaker Change: Conference materials, saying actually in a steady state would be a more normal content during the day and per ton is one area might fade and like I said like last June 19th and that actually see masks in the U S announcements.
Speaker Change: [noise] announcements public information.
Speaker Change: So at that time to that.
Speaker Change: Okay. That's helpful. Thank you I have any gas.
Speaker Change: Thank you. Your next question comes from Levi Spry from UBS. Please go ahead.
Levi Spry: Hi, yes, good morning. Thanks.
Levi Spry: Thanks for your time, often in time, a couple of questions about Green Bush's key value driver for the business.
Levi Spry: I guess, it's almost capex.
Levi Spry: Reduced capex, just confirming there's no I'm not.
Levi Spry: No deferral of any of the price plans when it relates to.
Levi Spry: C J P. Three and then I'll.
Levi Spry: Sort of a headlong and you pay private there I mean at some sort of.
Levi Spry: Our submission for some time and you can you can you affirm that was for a trial for or anything to do with say a PE just talk through the growth plans. There I guess, that's the piece that's missing from slide five.
Levi Spry: Okay. So oh, yeah look yeah, no change it and as I said in my opinion Remoxy G P threes tracking well, but.
Levi Spry: Production expected back end of this year. So that's that's fine and I think that's well in trying and yeah. There was a.
Levi Spry: Obviously, a bunch of money spent on us for the quarter and constructions, you're not getting to the end LTE into their pre commissioning and sell them soon.
Levi Spry: Hum.
Levi Spry: So that's fine and yeah, there's no backhaul phone on planned cross all the all the things that are already in focus there and I told you about the if it's all I'm trying to in football T. G. P. Two in CDP, one pretty big three core asset health all of those kind of things continue to get signed in the mine.
The approvals in some of the media you are saying around EPA submission space to some of that non process.
Levi Spry: And processing infrastructure that you would expect as you grow any business and that includes obviously a wife's.
Levi Spry: Store wife's dumps for full rock waste rock and.
Levi Spry: We've got to think about that in the near term and the long time, that's how we do that there's also what going on around water and I've mentioned that in the last call. So we obviously drove.
Levi Spry: Grandmother, it's all surface runoff and so lifting dams and creating more water catchment is all what they're thinking about and of course, the third big area is tilings and tailing storage facilities and.
Levi Spry: We're in good shape now, but we do need to think about a long time as well. So those are examples of areas, where the team are going to continue to need to build out the strategy and then have those plans and the specific assets and garage cell digests its approved stage by stage and that's part of what's being paid.
Speaker Change: In the intermediate risk environment, So nice surprises ultra plan tracking tracking well, Rob Scott you know he's got a full book, there's a lot going on for him, but yeah. It's not all back on a growth that's felt the cause for the capex. It really is about discipline focus timing and in the sense of if we don't.
Speaker Change: Need something now, let's push it out and also value for money.
Speaker Change: Okay. Thank you and so just on the on a C. G. P. Three then can you remind me what the expected ramp up time is for that.
Speaker Change: Although we haven't given any specific detail that you could expect it's about 12 months, that's a normal ramp up for those types of plants. The team will give us a more detailed schedule in due course and will stay that way, we can naturally we want to run hard.
Speaker Change: For those who've covered odd yellow green bushes for for some time now you'll remember the TTP too as he dropped it in its ramp up on and off and really didn't have a great stopped a lot which is very hard for the asset into the pain. We certainly are not anticipating anything like that yet this is about running a pod.
Speaker Change: Maximize the throughput and production as quickly as possible get it delivering full value as fast as possible side.
Speaker Change: I think we've got a very clear goal for the team and they will resolve well set up they put a great plan I think though they'll deliver extremely well against that.
Speaker Change: Okay, Yeah, thanks, and on the optimization. Thanks for the extra couple of bits of data will we get some more.
Speaker Change: Great food and some of the other inputs I guess and just can you confirm that you're still producing technical grade on the roof. That's it yeah.
Speaker Change: Well, yes to both questions. Yes, we will give you more detail in due course as that flows through and yes, we have reduced technical right.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you. Your next question comes from John Bishop from Jonathan. Please go ahead.
Speaker Change: Good morning, Kevin and thanks for taking the questions just to take Kate's question liquid foods are you.
Speaker Change: Are you able to disclose whether theres any prescribed amortization profile for the day and or milestones to trigger principal repayments within Winfield.
Into Everett facility. So it doesn't actually have them get retirement, starring Nicole So that and I'll, just say it'll have standard covenants.
Speaker Change: A SIFI well, meaning evergreen it's that there's no every school.
Speaker Change: Okay I see in terms of what you answered previously I guess these are sort of a high level agreement amongst the joint ventures to how you will treat those gearing ratios going forward in terms of any forecast or payments I guess, what I'm getting to is some.
Speaker Change: How should we start to manage out forecast for for cash are retiring that debt position once the G. P. Threes finished for example.
Speaker Change: I'm actually kind of full year churn, so I would say thinking about that and we will manage it we didn't have that bridge and gearing ratio.
Speaker Change: And well see that well that get embraced finance potentially closer to that point in time.
Speaker Change: Well. Thank you and then just regarding some logistics, obviously you had about 80000 tons.
Speaker Change: Misdeed video commerce between your production and sales figures for the December quarter. It was a bit of a catch up this quarter, how do we sort of think about that production and sales pace going forward certainly as you expand production out of grain bushes, just they're going to be sort of a reasonable amount of volatility, whereas the reasonably well set up to manage.
Speaker Change: That increase.
Speaker Change: And therefore, we should expect a generally all things being equal our normalized <unk>.
Speaker Change: Production and sales smoothing in lock step.
John Kilroy: Ah is a fantastic question, John we would love it to be in lock step and our customers would love it to be in lock step as well last thing, we wanted to inventory and working capital bills.
John Kilroy: It is the challenges the port as you've noted and that's one of them across other areas of work is being down there and working with our partners in the port. It is difficult. There are you know its congestion is there's a lot going on so that he's working on options to try and just you know help help improve that and.
John Kilroy: Smoothed out our logistics portfolio, because as we grow the volumes that just becomes more challenging.
John Kilroy: Yeah, and as I said in the last call.
Speaker Change: Oh, I'm, sorry somebody had in the hot and the Cold Lake.
Speaker Change: You know there was some concern around south its just timing and logistics. It was just shipments and particularly with Christmas He had some of that.
Speaker Change: It's painful but there is a very clear intent just clear the product as quickly as we can and we've done the last thing we want to do is have any.
Speaker Change: Timing or realize that.
Speaker Change: Alright, thanks, very much I'll pass it on thanks.
John: Thanks, John.
Speaker Change: Thank you. Your next question comes from Daniel Morgan from Baron Jamie. Please go ahead.
Tim: Hi, I'm, Tim just a quick follow up on <unk> question regarding how C. G. P. Three would be ramped up the pace of it.
Tim: Just wanted to explore that a little bit more on the market piece, obviously, we're in a very hum soft market right now.
Tim: I'm, putting a lot more volume into the market and it's not going to be necessarily helpful. Just wondering if your views on ramping it up Oh, Gee I abuse or is the broader alignment within the JV.
Tim: About the ramp up in lot of the market. Thank you.
Tim: Oh well.
Speaker Change: Daniel what I said to label I'll wrap it up as fast as we can.
Tim: Played alignment that's what drives value for us.
Speaker Change: And you got the lowest cost producer in the world.
Speaker Change: Every ton is Holly value of Crazy then that's what we'll be chasing.
Speaker Change: Yeah, there's not thinking that we're not someone who is going to be cautious okay. Coram plumbing. The market. This is a basket, yes, it online and get them producing because every time produces is he's got to generate cash.
Speaker Change: Okay, that's clear and just a second question.
Speaker Change: It's good to see a life of mine plan.
Speaker Change: And at the end of last obviously don't Cry and that's life, but everything every good thing comes around.
It has a few more tonnes than I had thought given that theres been some variable performance.
In recent times, just wondering if you could expand on.
This plan you know how robust is the risk embedded in our.
Speaker Change: Well you know should we expect a still quite a bit of volatility in the end of life planning okay.
Daniel Morgan: Yeah, Daniel good good question.
Daniel Morgan: I didn't put that out lately and I know it was he was the issue or challenge to you guys. So that's why we wanted to give you some more direction, we'll give you even more next quarter.
Daniel Morgan:
Daniel Morgan: We've stress tested this really hot and cold and I am very carefully as it came.
Daniel Morgan: Very tightened we'll have gone through thoughtful I looked at your body looked at the.
Daniel Morgan: Uh huh.
Daniel Morgan: Yes, the economy shoes that we've been experiencing and how they'll play out we have rich why did this so I you know I have two.
Speaker Change: Sit here and guide absolutely certain of course, you know we're not in.
Speaker Change: Mining that things can happen, but we're putting this out with some comments that that's why we've given it's a reasonably wide range I would say given the level of what we've done and that's probably a little bit of me and just caution and cast is just how we do things we don't want to disappoint, but that we've done a lot of really good homework and comforting.
Speaker Change: <unk> and confident to put that out as a range.
Speaker Change: Thank you Don just last question on exploration I mean, you've got it.
Speaker Change: What it go forward kind of looks like in that space for 2020 six beyond I presume are just it's just what are the business outcomes that you're trying to achieve like was the Surat number and what is what's the return we can get on this capital going forward. Thank you.
Speaker Change: Yeah, Alright, I mean, maybe we picked it up in more depth some constant time.
Speaker Change: Quarterly oil makes up a change in tone.
Speaker Change: Total, you'll even get one of them one of the same in to help support that but.
Speaker Change: We've done.
Speaker Change: This was both top down and bought a mom.
Speaker Change: That you clearly we want to be putting forward defining resources and putting them in place whether they want that we develop or not is beside the point.
Speaker Change: We have got some very prospective ground that we're working on across that portfolio.
Speaker Change: I think it's a significant change in approach from where we were in terms of how it prioritizing sort of commercial focus.
Speaker Change: Being built in.
Speaker Change: Across exploration and for me I think.
Speaker Change: As to why as I look at it one.
Speaker Change:
Speaker Change: Fundamentally we need to bring more critical minerals to the market and that isn't a bad just maybe in the deck chairs around through through asset ownership, it's about actually discovering you able ore bodies and getting them out of the ground in a responsible manner as quickly as possible. That's something we're deeply focused on and one of my different sand and.
Speaker Change: Demonstrate our capability I think that team has got absolutely world class pedigree in this area you set them up for success I think give them some runway and that they'll deliver.
Speaker Change: Second part of course is the return on investment. So when you think about this as capital as an investment and we've gone through it with a view of what's appropriate for the scale of that business. We've looked out five years and we've said you know what does that business look like what are the sort of scenarios and what's the right sort of envelope and this is the number that we've come to.
Speaker Change: So that's hence the top down and bottom up.
Speaker Change: I feel like this is an appropriate number each material don't get me wrong, we recognize that.
Speaker Change: If we look across that P group, which we've done were a standout for Greenfield and we've got you know.
Speaker Change: Capability and focus here that we think will drive real value for our shareholders.
Speaker Change: Thank you so much.
Speaker Change: Mhm.
Speaker Change: Thank you. Your next question comes from Matthew Freedman from M. S. T. Please go ahead.
Speaker Change: Sure. Thanks morning, oven and team and thanks again for the disclosure in the discussion on the capital management in England failed and the dividend flow.
Speaker Change: And out of that vehicle I guess, if we if we take that down to the next level and look at daily eye.
Speaker Change: You know clearly as you've called out the cash for any steel rail, but at least perhaps it's a little bit more normalized or stabilized compared to prior quarters.
Speaker Change: And certainly you know as you May know it is there's no need to build the balance sheet for investing in trying to now going forward. So I.
Speaker Change: So I guess the question is is there anything in your view that would preclude a resumption of dividends out of Healy I say in the first half of FY 'twenty six is there any major shutdowns of remediation works on the horizon or any other navy new appear to be building cash on the balance.
Speaker Change: Balance sheet. Thanks.
Speaker Change: Ah well opinions is not it is nothing stand out to build cash when we need to make sure we've got liquidity and the cash to support the business and to support Ford work.
Speaker Change: I think you've got enough information that you can sort of sit back and look at what the cash requirement is.
Speaker Change: And beyond that there'll be no reason to hold cash so we're not guiding on dividends into the next financial year at this stage, we will we'll we'll provide more when we can but no there's nothing.
Speaker Change: I guess, what I would leave you with is nothing that's unique or special or that you need to be aware of that you should model.
Speaker Change: The in that space.
Speaker Change: Out of the ordinary it really is just around the business as it is what we've got indicated and the rest of the money will flow out to the shelves.
Speaker Change: Okay. Thanks for that.
Speaker Change: And then I guess.
Speaker Change: Rather than looking at it from an operational perspective, it might be more from a I guess, that's almost like a philosophical off from it so the capital management framework perspective, obviously.
Speaker Change: You've done some way in the Winfield JV to establish a really kind of more firm capital management framework does that exist within Kelly I is similar with today and I guess he is that part of the ongoing discussion that you're having with your JV partner. There is there anything we should think about from that perspective at the high level yes.
Speaker Change: Yes, absolutely.
Speaker Change: That's exactly but the focus and yes that work is underway.
Speaker Change: Okay, great. Thanks very much.
Speaker Change: Matt.
Speaker Change: Thank you. Your next question comes from Rob Stone from Macquarie. Please go ahead.
Speaker Change: I've been passed some.
Speaker Change: Just stop pointing out I guess, the grain bushes optimization slide that you put in the deck was interesting in the sense that way.
Speaker Change: Would you say, if you had to sort of benchmark yourselves and industry maturity alone.
Speaker Change: The I guess, the scheduling and equipment design and operational management parts of the of the China.
Speaker Change: Obviously, you're looking at strategic options reviews and you've.
Speaker Change: The source of the products that you're looking at but just interested in.
How big the next steps off to to get that benchmark productivity, specifically around mine planning.
Speaker Change: With Boston understand that.
Speaker Change: I wrote a book.
Speaker Change: Good question will.
Speaker Change: I'll have to think about how we can give you more sustaining and so on.
Speaker Change: Good site and I think I've indicated I think the opportunity is significant robbins are ready with the team, making good progress on die to die praises from productivity both in the mine and the meals.
Speaker Change: But when you stand back inside you know what.
Speaker Change: Is that potential and how do you get out in significant and some of the Chinese bauxite will take time.
Speaker Change: The.
Speaker Change: Optimization of that ore body.
Speaker Change: I don't want to try and even signposts because I just thought I think we don't know what we don't know what we need to do the work or characterization you need to do the mine to mill optimization, you need to understand.
Speaker Change: That much better and I think we've got a fantastic team technical team in the mills doing work pulling power ease up.
Speaker Change: I didn't even think we unleash them yet you know I think if you give them more spice and more support.
Speaker Change: Support through in terms of inflows back into the mine and I think that can drive huge upside, but then translation of how that falls and how you might change your schedule on sequence for the mine.
Speaker Change: My point would be calling him because he just we just see making at all we just have to do some more of that work before we can indicate I guess, what I want to leave you with is I think it's significant the outside and our system is going to be quite a bit of hard work to get to so I'm not I don't want us sort of indicated <unk> got a couple of tricks up your sleeve and it will suddenly.
Speaker Change: Oldest change, but he's doing the day to day work now and I think building out a very good long term plan to to draw the loan value.
Speaker Change: And I guess the subsequent point just looking through the end of the quarterly result, saying then production in Brazil.
Speaker Change: Salt down Q on Q.
Speaker Change: Is that is that just a re sockets of mine planning and sequencing to open up the ore body.
Speaker Change: To get access to.
Speaker Change: It's more for stage.
Speaker Change: He looked into obviously bring on say J P. Three mm in the coming quarters. As you did in the mine plans actually set up to have changed from the outset is that how we should look at that given that you. Yes, I think 78% of your annual guidance has been a change a midpoint of annual gardens sustained change on production C well sort of bad debt.
Speaker Change: Okay.
Speaker Change: Yeah, we I mean, I think we indicated loss.
Speaker Change: The quarter and the half as well, we expect to be right at the top of guidance.
Speaker Change: It was a push it well why don't we go to regard above that because we looked at the Ford plant I would say look I think we just got them a land. That's you know based on what the mine plan was they shouldn't just right no great variation, which you do getting that ore body is privileged to cities you will see that up and down through <unk> through a couple of years of crisis.
Speaker Change: That's one of the things that we might see come out of the optimization is that we want to blend and stabilize that all and that might drive a lot of value, but at this point, we're still seeing that variability of grade through the mills and that drives differences in production so nothing more than that.
Speaker Change: It's something you should draw a line up or down off it really is at this point just how the months run and I think that signals, a signpost very likely opportunity that smoothing that out and having a more consistent fade will drive better outcomes and better value on a roll.
Speaker Change: Peggy.
Peggy: Thanks Robert.
Speaker Change: Thank you. Your next question comes from Tim Huff from Canaccord. Please go ahead.
Speaker Change: Hi, Good morning, I was just following up from the question from Levi meetings being submitted for the waste storage expansion at Green bushes and it shows that it's going to be impacting like opportunities habitat, which there's been a few issues with U P. S Saturday, two and I'll call out.
Speaker Change: What's the timeline for the approval and give them the submission points to this being made in 2020 seats are there contingencies in place to to handle the 70 odd percent of materials that it points to.
Speaker Change: Oh why storage capacity.
Speaker Change: Thanks, Tim and Luca.
Speaker Change: Approval timelines I mean.
Speaker Change: Not really comment as always see the agencies all the time that the team.
Speaker Change: Came out very whereas 10, even if I just tell them that they've done a lot of work there very well pad I think I've engaged extremely well here. So they set up for success.
Speaker Change: And we do have some some I guess contingencies as you'd put as you put it all we brought up plan.
Speaker Change: It was to be some critical July but you know.
Speaker Change: Because he has to get through these approvals manage the impacts professionally and we'll get the outcome.
Speaker Change: Okay excellent and perhaps once you cast them at Green bushes. Your accounts receivable turns it's moved to 190 days and there's some factoring of SaaS is that just a part of that liquidity management that you mentioned or is there something else driving that change and and is there any impact on for safe pricing there.
Speaker Change: Yeah.
Speaker Change: Yes, it's interesting plants such that it's not there's nothing unusually most of what was the second part of that question I missed it sorry.
Speaker Change: It doesn't impact the price to receive like a is there a factoring of price.
Speaker Change: No. It's just it's just not working capital but the.
Speaker Change: The price is determined on that month, one month modest one leg.
Speaker Change: Four P O rise et cetera, very deterministic.
Speaker Change: That supply regardless.
Okay excellent. Thank you very much guys.
Speaker Change: Thank you. Your next question comes from Jonathan Chang from CLSA. Please go ahead.
Jonathan Chang: Yeah morning, often insane.
Jonathan Chang: Questions pretty fast and coming up to the end of the house. So just one simple question for me.
Jonathan Chang: Can you just share you'll you'll kind of be on the lithium market, particularly what you're seeing in terms of customer demand inventory levels and.
Jonathan Chang: Discussions around sports you made in hydroxide, just interested to see what why G. I was hearing and seeing out there in the mine.
Jonathan Lloyd: Ah Thanks, Jonathan Lloyd So I can think.
Jonathan Chang: I think I've got much.
Speaker Change: But you wouldn't have already wait.
Speaker Change: A strong demand growth then obviously, China is doing a fantastic job building storage spiteful ebay's and for vehicles and for stationary storage that prices continuing to track to expectations and and obviously, there's some other markets in the world, which was a contributing as well.
Speaker Change: But for US, it's really more supply side issue and the market is oversupplied and hence the prosper shall we say tend to conversion in chemicals, you know I think the.
Speaker Change: The demand is obviously quite strong for covenant lifesize for hydroxide and again, we see that play through in the pricing.
Speaker Change: I'm really not as much we can add to what you'd probably go through.
Speaker Change: Through through the channels, we see a very consistent view on.
Speaker Change: Dine don't expect much related full months change this year and probably into well into next year. Maybe this time next year, we might start to see the market balance come back.
Speaker Change: But demand I guess, the cadence of demand continues to grow it right. It's not been interrupted the disrupted by any of the other things going on in the world and it seems that.
Speaker Change: That demand is pulling through and performing extremely well and I guess with lithium prices is probably a strong correlation there translates to two a flush through in the value chain, that's very I'm very interesting for customers.
Speaker Change: Yeah. Thanks interested interesting to hear your thoughts I'll leave it there. Thanks.
Jonathan Chang: Thanks, Jonathan.
Jonathan Chang: Thank you that is all the time, we have for questions today, I'll now hand back to Mr. Behler for closing remarks.
Jonathan Chang: Alright. Thanks, Darcy you Yeah look we're right on time, so I want to say much other than thanks for joining as I said at the top of the call look it was nice to not pay.
Jonathan Chang: Whiting through major.
Jonathan Chang: Challenges and changes in payments and so on and start to see a core of Firestone, Yes, it's hard to stop production focused on safety and the big the Big news in there I think is a bad exploration in that reset there and really pleased with the way that St has gone about it and our forward looking up I'll call them confidence in.
Jonathan Chang: And what they'll bring.
Jonathan Chang: So we'll leave it there thanks for your time and I look forward to our next update at the end of the century.
Jonathan Chang: Thank you that does conclude our conference for today. Thank you for participating you may now disconnect.
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