IGO Limited

Thank you for standing by and welcome to the IGO Limited FY23 results webcast. All participants are in a listen-only mode. To ask a question via the phones, you will need to press the star key followed by the number one on your telephone keypad. To ask a question via the webcast, please type your question into the ask a question box and click submit. I would now like to hand the conference over to Matt Ducey, Acting Chief Executive Officer. Please go ahead.

Thank you, Travis. Good morning, everyone. Thank you for joining the call this morning as we provide a summary of IGO's audited financial results for FY23. Joining me on the call today is Kat Bosnich, our Chief Financial Officer, who will be available to answer questions during the Q&A session. Also note that we released both our annual and sustainability reports this morning, as well as our FY23 mineral resource fall reserve and expiration updates. Slide 2 highlights our cautionary statement and disclaimer of note all currency amounts in this presentation today are in Australian dollars unless otherwise noted. Moving to slide 3. Before we move to the financials, I want to discuss the important work we are doing to build a more sustainable business and making a positive impact on future generations. I encourage you to refer to our NICE sustainability report issued today. The report provides a snapshot across the multiple facets of sustainability throughout our business, including safety and wellbeing, our response to climate change, environment, business integrity, our financial contributions, traditional owners and communities, and our people. RGO has a proud history in the work we do in sustainability, and this year is no exception, with some highlights including we have maintained a strong engagement with our communities who support our ability to do what we do. In FY23, we made community financial contributions of nearly $800,000 to a range of organisations and our people contributed 370 hours of voluntary work across our community. We continue to strengthen our relationships with traditional owners, including finalisation of our Reconciliation Action Plan. which reaffirms our commitment and vision for reconciliation. For FY23, we spent over 8 million with Aboriginal and Torres Strait owned or managed businesses. We look forward to ways we can continue to deepen our engagement, support and partner with traditional owners in FY24. We continue to pursue our response to climate change and decarbonisation of our business as we target to be net zero by 2035. Our internal decarbonisation fund generated $8.3 million during FY23, with nearly $16 million currently available to fund carbon reduction and offset projects and programs. Our people are key enablers for everything we do. We have an amazing team and a great culture. It's something that we are deeply proud of. We understand the importance of diversity and we continue to work on increasing female and Aboriginal representation in our workforce. Most importantly of us all is our engagement and pride that our people have in working with IGO. An area that we have to and will improve is on safety. It's disappointing to have recorded an increase in our TRIFA over FY23. While it's reassuring to have seen a decrease in severity of injuries and harm to our people, We should do better and we can do better. The board and management are responding by further boosting resources, training and active leadership to drive better outcomes over FY24. Turning to slide four, which provides a high level financial and operating summary for the year. We delivered an outstanding set of financial results with record underlying EBITDA, record MPAT, record underlying free cash flow. This result was made possible by the strength of our lithium business. Our interest in the lithium joint venture, TLEA, which was acquired in 2021 for $1.9 billion, has in FY23 generated over $1.1 billion in dividends back to IGO. This is an exceptional result. Operationally, Greenbushes was a standout in FY23. delivering record spodumene production, benefiting from strong commodity pricing, while NOVA also delivered strong margins and free cash flow. The ramp-up at our Kwinana lithium hydroxide refinery was delayed, however we expected to see improved performance over the coming year as rectification work continues. At Cosmos Nickel Project, while project development progressed over the year, we have commenced a review to understand the risk value. As previously flagged, we have recorded an impairment on the assets acquired from Western areas which predominantly reflects challenges at Cosmos. I'll discuss this further shortly. Our strong financial performance has put our balance sheet in a fantastic position with a net cash position of $415 million and enabled us to declare record dividends for FY23. come to in a moment. Moving to slide five where I'll lay out our financial results in detail. As you can see here, all financial metrics have improved substantially compared to FY22. Revenue lifted year on year to just over $1 billion thanks to the first contribution from Forestania as well as strong commodity prices. Underlying EBITDA of almost $2 billion rose significantly, driven by an outstanding contribution from the in-business, specifically green bushes. Net profit after tax for the year was $549 million, another record, and an excellent result despite the impact of the non-profit. has now been finalised at pre-tax of $968 million. On an underlying basis, this excludes this impairment. Net profit after tax exceeded $1.5 billion. Underlying free cash flow was nearly $1.1 billion a year, a year-on-year increase of more than three times. This has enabled IDEO to repay $540 million in debt over the year and finish the year strongly with $775 million cash available. Moving to slide six. On this slide, we set out IDEO's performance across key financial metrics over the last five years, demonstrating the transformational growth that has been delivered to the business over this period of time. As noted, today's result represents records across all key financial metrics. IGO is in an outstanding position to move forward in FY24 and beyond. Moving to slide 7, where we reconcile the year-on-year change in the group cash position. I draw your attention to the record dividends received from TLEA of over $1.1 billion. the strong free cash flow generation from NOVA and solid contribution from Forestania, and the accelerated debt repayment of $540 million. I also note the $53 million received from the sale of investments, which reflects our divestment of our hold in MINCOR resources during the year. Moving to slide eight. We have reconciled the underlying net profit after tax periods between 2022 and 2023 financial years. Of note, we highlighted the $1.4 billion positive contribution to net profit after tax from TLAO joint venture, resulting from strong lithium prices and production at Greenbushes. As shown, underlying net pat for the year was $1.3 reduced to $549 million on a statutory basis with the application of the $968 million impairment on the Western Area's assets and other minor adjustments. Turning to slide 9, we recently announced the new capital management policy which has been approved by the board. The new framework showed On this side, it's designed to provide shareholders parity and transparency of RGO's capital management strategy and seeks to strike a balance between returns to shareholders, balance sheet strength and flexibility to fund growth. Under this new capital management policy, the target range for shareholders' return has increased to between 20% and 40% of underlying free cash flow when liquidity is less than $1 billion. When liquidity exceeds $1 billion, the board will use its discretion to consider paying above 40% threshold. Moving to slide 10. In line with the updated policy and reflecting the exceptional cash generation over FY23, I'm pleased to report the board has declared a 44 cent per share final dividend plus a 16 cent per share special dividend for FY23. Both are fully franked. The dividend will be payable on 28 September 2023. This final dividend and special dividend brings total FY23 dividends to $0.74 per share, including the $0.14 per share interim dividend that was paid in March of this year. This represents a greater than seven-fold increase in year-on-year dividend payments and a total of $560 million returned to shareholders in FY23. We are committed to returning excess capital to shareholders in line with our capital management policy. Turning to slide 11, I take the opportunity to speak briefly to each of the core assets within our portfolio. noting that this was discussed in detail at our June quarterly conference call just a few weeks ago. FY23 saw strong performance at Greenbushes, with total spodumene production of 1.49 million tonnes, up 31% year-on-year, while cash production costs were $244 per tonne. Combined with the elevated spodumene prices we enjoyed during FY23, Greenbushes delivered a record EBITDA of $9.5 billion on a 100% basis, up sevenfold from FY22, representing an EBITDA margin of over 90%. As we move into FY24, our focus is on progressing the construction of CGP3, reaching a final investment decision on CGP4, and continuing to realise the potential of this world-class asset. Moving to slide 12 and on to the Kwinana refinery. Performance for train 1 at Kwinana has been disappointing. However, we remain confident that the required engineering and rectifications are being implemented to enable improved performance over FY24. We are committed to successfully completing rectification works and achieving a 50% of nameplate capacity by the end of this calendar year. In parallel, front-end engineering design will progress on train two with expected completion in early calendar year 2024. This speed work is required to de-risk train two. A final investment decision will only be made once this work has been completed. Moving to slide 13 and turning to NOVA and the forest area operations. Nova and Forestania both made a solid contribution over FY23 with group nickel production of 34,846 tonnes and group nickel cash costs of $5.63 per pound. Combined, underlying free cash flow for the financial year was $587 million with an EBITDA margin of 56%. This is a strong result. Looking ahead, our priorities are ongoing optimisation programs of both operations to improve productivity and reduce costs while continuing to unlock value through production blending opportunities. Moving to slide 14 and onto COSMOS where we continue to progress project development during the year. Key deliverables include completion of paste plant, aerodrome and development of the underground chambers for material handling infrastructure. Further, I'm pleased to say that progress processing plant and shaft are also approaching completion, bringing total capital expenditure for the financial year to $338 billion. As announced previously, we have encountered several challenges during the development of Cosmos. We are currently working through a project review on the current life of mine, capital cost estimates and schedule. We expect the review will be completed during the December quarter and will provide an update to the market accordingly. Moving to slide 15 and onto our overview of our exploration activities. We are committed to being a supplier of metals critical for the clean energy transition and exploration is a key part in this strategy. Investment in exploration discoveries is essential if we are to source enough critical minerals to enable the decarbonisation of the economy. In FY24, we've allocated $65 to $75 million to exploration across RGO's portfolio, which is focused on unlocking high-quality nickel, copper and lithium discoveries. We believe we have a fantastic opportunity to deliver significant value through discovery and from this commitment. Turning to slide 16 for concluding remarks. The 2023 financial year was an exceptional year across our business with record financial results as we continued to pursue our clean energy strategy. Greenbush has continued to perform strongly and as we continue to expand production and further optimise this world-class asset. Production ramp-up at Kwinana Train 1 is anticipated to improve over FY24 with a financial investment engineering and design. We are dedicated to unlocking value at the Cosmos project. The project review is currently underway without problems expected by December. We have maintained our focus on shareholder return and disciplined capital management. Exceptional cash flows generated over the last 12 months has enabled the declaration of a $0.44 final fully franked dividend and a $0.16 per share special fully franked dividend. Moving into FY24, we are clear on what we need to do. We need to deliver on our internal growth projects coupled with safe and reliable delivery from our operating assets. Before concluding this call, I would like to express my gratitude to the IGO, TLEA and Taliesin teams. You are making a difference. Thank you everyone for joining us on this call this morning and we'll now open up for questions. Thank you.

Thank you. To ask a question via the phones, please press star 1 and wait for your name to be announced. To ask a question via the webcast, please type your question into the ask a question box and click submit. The first phone question today comes from Levi Spry from UBS. Please go ahead.

G'day Levi. G'day Matt and team, thanks for your time. Two questions, firstly just on the capital management, so the new dividend policy, can you just talk us through what the higher returns piece means in terms of do you have a target gearing level here? Obviously shareholders are happy with the big divvy but what does this mean around the billion dollars liquidity?

Yeah, so I'll hand across to Kath in a second, but in terms of liquidity, liquidity is cash reserves plus balance of undrawn debt. So at the moment we have that $775 million of cash and we have that $360 million of resolver and that's how we define that liquidity. Ultimately in determining the dividend it really shows the strength of IGO both in what has been Do you want to talk about gearing?

Yeah, obviously internally we have our gearing targets and ratios and at this point in time our gearing is quite low. What I would say about that is it's consistent with what you'd expect for an organisation like this and what our peers have and therefore if we were to actually do something that required debt we would utilise those targets in order to determine the amount of debt we could take. Hopefully that answers your question, Levi.

Yeah, kind of. I'm just not sure why you can't pay it out of debt, I guess.

Yeah, I understand the question. Yep.

Okay maybe just the next question then on Cosmos while you're talking I guess. So what are the options that are being considered and can you just remind us, so $3.38 spent in FY23, can you just remind us under the old plan how much was left to spend to get to 1.1 million tonnes throughput? So it's sort of two questions there I guess. remaining capex under the old plan and what's in front of you?

Yeah, what's in front of us, I suppose, is we're doing that whole review, including this reassessment of capital costs to complete, reassessment of schedule, timing to complete, and ultimately what that production profile ramp-up would be under a new plan. So that's this program of work that we're committed to, committed to driving value out of that COSMOS project going forward. So we haven't come out, as part of that FY24 guidance, we haven't come out with that capital cost to complete for COSMOS.

Yeah, I actually haven't got what was left on hand at the moment, but it's pretty easy to calculate from the numbers we've previously given you, Levi. I just don't have the exact number to hand right now.

No problem. I'll do that. Thank you. Thanks, guys. Thanks, everyone.

Thank you. The next question comes from Kate McCutcheon from Citi. Please go ahead.

Thanks, Matt. With the special dividend paid out, would it be premature to read into that around how the timing is trained to at Kwinana might play out or how you're thinking about the downstream battery or pre-cam plant or... If I ask it another way, can you remind me on the timing for how we should think about a train-through decision and also an update on a pre-comp partner and study there?

Yes. So I can provide a bit of an update. So ultimately when we look at dividend, we also factor in our internal growth. So we take that into consideration when we're doing the dividend. So we feel strongly that businesses are in such a good shape that we can continue to fund all the internal growth projects we have in our portfolio, which is quite significant. In terms of train two, we are doing front-end engineering design. We're scheduled to complete that in the first pass of calendar year 24. That will lead into a financial investment decision after that completion. With the completion of that feed, we'll come out with capital costs and timing on that capital spend and ramp-up profiles, etc., In terms of that integrated battery metal facility, we continue to have discussions with Pre-Camp Partner and we're advancing feasibility studies on that facility. The idea is that we'll be in a position to announce Pre-Camp Partner sometime this calendar year with the completion of studies around about mid-calendar year 24.

Okay, thanks, Matt. And then if I can just squeeze in a quick one. After the impairment and the update we're expecting for COSMOS next quarter, will that be underpinned by those FY23 resources you've announced today with the PCS more than halving? It looks like reserves have remained flat there, but you've also used higher nickel price assumptions. Any colour there?

Yeah, so if you strip back on the mineral resource and oil reserve for COSMOS, The resource is – sorry, the variance in nickel tons you see on the resource is at Mount Goode. So what we've done at Mount Goode in the resource is essentially define that to an open pit. It was previously reported at just above a cut-off grade, so you ended up with a lot of metal that would never come into a mining shape. So that resource has more confidence than what had previously been completion of the pre-feasibility studies etc. at Mt Goode. In terms of the reserve, the reserve fundamentally hasn't changed. Any reserve update on COSMOS will come out as part of this update plan.

Thanks Matt.

Thank you. The next question comes from Daniel Morgan from Baron Joey. Please go ahead.

Hi, Matt and team. Just to follow up on that last point. So this reserve announcement today across your assets, which includes Cosmos, there hasn't been any of the review work that's informed that. And so the reserve statement that you've put out could still be at some risk via the review process. Is that right?

Yeah, look, I would state that that reserve is based off previous reserves. We're obviously drilling, doing a lot of drilling at the moment, et cetera, and updating that whole resource model and then feed that into the mine plan and life of mine for Odysseus. If I was summarising just generally that resource and reserve use or depletion come out of NOVA, Effectively, depletion out of forest area on a reserve basis. Some of the resources have come out just because of their resources back-ended. Greenbushes is just a depletion. We're in the process of updating Greenbushes and we'd expect to see a new update on Greenbushes resource reserve in start of calendar year 24.

So on the latter point, What is in scope for consideration for the green bushes updated resource reserve? Like what body of work has been done and what is being considered?

There has been quite a significant body of work in terms of drilling resource extension work on green bushes and then ultimately trying to determine where the optimal open pit would fall.

Is underground or potential underground in scope or is it too early for that?

It will be too early for this R&R statement for calendar year.

I also note in the resource reserve statements that silver knight's been removed. I mean, it was not a large deposit in any case, but you no longer think that that can be processed? And so what, NOVA's got three years left?

Yeah, so correct. So Silver Knight has been taken out of resource because at the moment we don't have, and we're quite tight on resources, so our resources really have to have an economic path to development. At the moment we don't have that economic path to development on Silver Knight, so we've taken that out of our resource statement. Why that case is, as we've talked to previously, is that blending Silver Knight with Nova reduces recovery at Nova. Blending is not an option. It is value-destructive. And then if you treat Silver Knight by itself, then it will require capital, and it doesn't support that capital.

Okay, and last question. On your exploration slide in your presentation, I refer to page 15, you've got in the lithium section the Forestania project. Is that anything material, given that There's a few juniors out there that are multi-billion dollar companies on the back of new lithium projects.

Yeah, there's a summary report in the back of the mineral resource on exploration and it talks to some of the lithium opportunities around Forestania. Forestania, we've got a belt holding that's down straight from Mount Holland, Covalent, and there has been very little done on lithium. There's a couple of... iron cap being one of those which has some promising lithium but again in terms of materiality for us as a business once it's material then we'll highlight that to everyone.

Thank you very much Matt. Thank you. The next question comes from Lyndon Fagan from JP Morgan. Please go ahead.

Thanks and good morning. Just on the green bushes slide where the capacity in fy27 is slated at uh two and a half million tons are you able to confirm that that includes the tailings retreatment and when what the latest guidance on when that uh finishes is yeah okay hey lyndon so yeah so that 2.5 does include tailings for treatment project

And under the original plan, if tailings reprievement program doesn't continue beyond the seven years that it's currently sitting at, then production profile would come off. Having said that, we're working through how we better utilise that infrastructure and better feed that infrastructure so that we can continue to maximise and utilise all processing capacity at Greenbushes.

But just to clarify, I had that ending in FY27. Is that still the latest guidance for when it is meant to finish?

Yeah, I would approximate maybe another year on top of that. But in terms of this is total production capacity at Greenbushes, and we will be striving to ensure that we fill total production capacity at Greenbushes.

okay great and and then uh on on quinana are you able to speak to uh what the latest kind of conversion um metrics look like so how many tons of spodumene per ton of hydroxide and i mean can you guide anything on the conversion cost there

Not really. I mean, if we do, I can probably do a little bit more maybe at the quarter end, but generally in this ramp-up phase, we're trying to keep that, working through that ramp-up because of the efficiencies. What we are doing is we're still getting that ramp-up profile right. We're still confident not getting to that 50% of the nameplate by the end of this calendar year. I wouldn't... I mean, today, because it's not that efficient, you don't get where you think you would be, but everything to date should suggest that conversion's not the issue. The main issue really is associated with these bottlenecks of production, of actually getting material through.

Okay, no worries. I might sneak a final one in, if I may. Just with that reserve downgrade or resource downgrade, particularly at Nova, now that it looks like it's wrapping up in three years. Can you speak to some of what the rehab costs are that we need to have?

Yeah, we have that on our books. Can you remember what that's on?

Yeah, it's about 40 mil that we've got provided for, and we did a review, a very bottom-up detailed review in the last 12 months of that.

So that starts spending when, sorry?

Well, with NOVA, we'll be looking at whether we pop it into care and maintenance for a short period of time because of the way the rehab works. We'd need to pull up roads and things like that for the tailings dam. So as we go through the next year, we'll be doing work on what that plan is for closure. Bearing in mind, we're still doing quite a bit of exploration in that region, so it wouldn't make sense to tear up roads if we've got good prospectivity there. But I can say that in the next 12 months, we'll be looking at the timing of that in more detail based on what we're finding from an exploration perspective.

Right. Thanks for the colour. No problems.

Thank you. The next question comes from John Bishop from Jarden Group. Please go ahead.

Morning, Matt and Kath. Just around intermediary lithium conversion, we're noting that lithium sulfate as an intermediary product is kind of all the rage at the moment. Is it sort of too early to comment on the joint ventures thinking around the commercial outlooks for trains 3 and 4 at Kwinana and any sort of colour as to perhaps what you're thinking around what sort of form they may take?

Hey, John. Yeah, it's probably a little bit early, but we remain open to the different forms. Having said that, you have to remember that most of the savings you get from going to these intermediates is associated with transportation and other elements. For when you have green bushes located so close to your industrial hubs, then you may not see the same sort of beneficiaries you do when you're going to an intermediate And you also see albumol committing to that, lithium hydroxides as well, close to green bushes. So it gives you an idea of where those savings come.

Gotcha. So there's no sort of thought, perhaps, to locate the crystallisation part of the conversion elsewhere, say, proximal to European markets or North American or anything like that? Or is that just too early?

Yeah, it's very early. I would be talking... Theoretically, you can do a sulfate, you can do a beneficiary if you wanted to, somewhere closer would be one option. But again, the variance there on the drivers is transport, transport, et cetera. So you may be actually more benefit just going straight to hydroxide.

Okay. And look, just a bit of a lateral one. Notice that Ian Sandal's title has changed recently. G'day, Ian, if you're listening. He's gone to an exploration business development manager from GM Exploration. Is that a change in remit or a complete change in title and role? And I guess more broadly, I guess the high level questions just around, is there any change in your strategy around organic exploration at all?

Yeah, good observation, John. So you are correct and we have brought in a new exploration manager, Suzanne from Oz Minerals. So it's just part of the continuation of what we do in our business and looking at different skill sets within our business. So there's no change in terms of exploration and exploration approach. remain committed to exploration. Building a portfolio and a pipeline is really important as part of executing strong exploration programs, ultimately leading to discovery. We'll do a portfolio review of our exploration through December and continue to make sure that our exploration dollars are wisely spent.

Right. Thanks for the answer.

Thank you. The next question comes from Robert Stein from CLSA. Please go ahead.

Thanks for the opportunity to ask some questions today. Look, the first one's sort of getting on that intermediary question. One of your competitors came out the other day and talked to some pretty low CapEx numbers in ASEAN as locations for downstream conversion, just questioning whether you're exploring that at the JV level or even at the IGO level around potentially locating conversion offshore to make use of potentially labour cost advantages? That's the first. I might follow up with the second.

Yeah. And look, as a business and as a joint venture, we always explore options to try and create value. So, yeah. If there's an option to equate value, then we would be exploring it. But it's a little bit early. It's too early for us to say that we have a preference of which way we're going to go or how do we actually extract that value.

And sorry, as a follow-up, is that an alternative for Train 2 that you would look to the Train 2 FID and then compare it with other jurisdictions? Yes. And if not, what type of capital synergies or operating cost synergies are you expecting in the Train 2 FID versus, say, what's been executed around Train 1 outside of, you know, the typical type of learning synergies that you would get?

Yeah, look, specifically on Train 2, 30% of our capital already is sunk on Train 2 with the major pieces of equipment. And then the way we view that is that ultimately we're working through the feed to lock down what our capital to complete is. But we are in a huge advantage in terms of having train one, understanding what we need to do on train one, really de-risking train two. For us to go into a new product and not leverage that advantage from train one onto train two would be a really lost opportunity and would actually potentially may introduce further risk in terms of technical risk and engineering risk that we wouldn't want to take on at this point in time.

So if I benchmark that to say, like, and I know that, you know, take the competition's sort of estimates with a grain of salt, but if you say, you know, at a US $6,000 to $10,000 capital intensity with the sunk capital and the learning advantages, we'd be expecting a material change or difference to what was executed on the trained one. Can you give us a rough capital intensity there, or is that... Yeah, I think

Ultimately, what we're trying to do on train two is really fully de-risk it. So when we have a capital number, it will be engineered, it will have all the contracts in place and we'll have firm commitment on that capital. In this sort of environment with these sort of complexities on these facilities, coming out with capital numbers early is not in anyone's favour.

No problem. Thank you very much.

Thank you. Once again, to ask a question, please press star one on your phone. To ask a question via the webcast, please type it into the ask a question box and click submit. The next phone question comes from Matthew Friedman from MST Financial. Please go ahead.

Sure. Thanks. Morning, Matt and team. Maybe just following on there from, I guess, the questions around the downstream and in the context of the number you've put out there. for Greenbush's production in FY27 of 2.5 million tonnes per annum. Obviously, IGO is entitled to 24.99% of that, so a little over 600 kilotons there. Even if you had two trains at Kwinana fully ramped up, that would only consume maybe a little bit over half of that. I guess what's your thinking around what's the goal there for that Spodumene product, for that difference? Are you happy to sell that Spodumene to Tianqi over the long run? Do you look to place that into some kind of conversion solution down the track, either with Tianqi or within Australia? What's the thinking around that product?

Ultimately, the objective is value creation. So it's always focused on value creation, how we drive value for both the TLEA as a joint venture entity and then also for IGO shareholders. You're right. So in terms of green bushes, we are long from an IGO perspective or from a TLEA perspective, we are long on spodumene. and will continue to be long on spodumene as we build up production at Greenbushes. We're comfortable with that. There's margins to be had on just on the spodumene and on that side of the business. Coupled with that is a cautious approach to continue to expand our downstream within the TLEA. That can be done through a number of ways. The first priority is getting train one. up and performing to that 50% and beyond in calendar year 24. Train two, making sure that we de-risk train two, and then looking at whether train three and four or how we drive value maybe out of the sulfate, et cetera. In parallel to that, there is options potentially toll-free if there was options outside of China.

Got it. Thanks, Matt. That's pretty clear. Secondly, can I ask on, I guess, organic and inorganic growth, particularly in the context of the capital management framework you've presented? And, you know, I did ask something along these lines of the quarterly, but I guess, how did the board and management get comfortable with the approach to any sort of major investments in organic or inorganic growth in the future? Obviously, given the learnings from the Western areas, acquisition and impairment, you know, what sort of returns would you be seeking from a major organic or an inorganic project, what returns do you need to clear in order to be more attractive on a risk weighted basis than simply returning that cash to shareholders through your framework as you've outlined?

Yeah, they're all very good questions and they're questions that continually get discussed and at a board level, I'm very cognizant of that. Coming back to us as an organisation is, yes, there is learnings. Good organisations take those learnings and improve. So we shouldn't ultimately strengthen ourselves. You saw at the moment for us, really, it's about the significant investment that we're putting into the lithium business. and into expansion of green bushes and then bringing on those quinata lines of production. When you look at those returns by themselves, then they dwarf anything else that we could do in terms of return to shareholders.

Okay, sure. Thanks, Matt. I guess maybe thinking about it in the context of the review you're doing on Cosmos, I mean, are you still going to assess that in the framework of you know, I guess, putting aside the sunk cost and the sunk capital in that project and looking forward at the returns that any sort of future investment are going to generate and whether they, you know, again, meet the requirements of that framework?

Yes.

OK, short answer, thanks.

The answer is yes. Look, I mean, that's part of... That's why we're doing this work... Ultimately, to get to a good answer and a good outcome, remain confident there's value to be extracted, and we will be able to extract that value, but that has to be assessed against a framework of how do we deploy capital through our business.

You got it. Thanks very much, Matt.

Thank you. The next question comes from Hugo Nicolasi from Goldman Sachs. Please go ahead.

Morning, Matt and Cass. Thanks for the update this morning and congrats on the special. Maybe just one following up on a previous question just around Kwinana, noting that you're aiming to get to 50% of nameplate by the end of the year. Some of your peers have kind of highlighted that they didn't see the need to ramp up production until they're fully battery qualified. Do you want to just remind us where you're at through the battery grade qualification process with your offtake partners?

Yeah. We are confident of getting battery grade qualification and we expect that to be shortly. And that's not a consideration to getting production profiles ramped up. The consideration of getting that production profile is about how we de-bottleneck the processing plant and continue with rectifications.

Great. Thanks, Matt. That's clear. And then maybe just another one following on from earlier, a question around the lithium exploration at Forestania. Understanding the JV, that you have to offer new lithium opportunities into the JV first, does that still apply to assets you already had if you find lithium? Does that still have to be offered into the JV?

Yeah, you're right. So what would happen under a scenario like that is that at some point we would offer that into the JV at some form of market rate. at market terms.

Great. Thanks for that clarification. And just last one just around Greenbushes. Are you able to just update us? Are you still seeing any absentee issues now that McMahons has been on site for a couple of months? And could you broadly maybe just comment on how you're seeing labour broadly across the WA assets? Thanks.

Yeah, okay. Specifically at Greenbushes, we continue to ramp up mining production with that change with McMahons. So that's on going You know, it was short-term, some short-term subsidies, which you'd expect, but nothing material. Labor for WA and the markets. It remains tight, and then each area has different challenges. One of the biggest challenges, specifically at a Greenbush level, really comes down to accommodation and accommodation ability to actually accommodate the workforce, hence the investment in mine village at Greenbush. Within the rest of our business, it really depends on what's It doesn't stay still in one discipline.

Great. Thanks, Matt. That's helpful. I'll pass it on.

Thank you. The next question comes from Tim Hoff from Canaccord. Please go ahead.

Hi, guys. Thanks for the question. Just in regards to the TLEA JV, is it correct that the lithium M&A opportunities ex-China have to come into the JV before the individual companies can assess them. If that's correct, how does IGO start to view it if Tiaji brings in African, South American projects or projects ex-China around the world?

It's a global joint venture, so correct, and it's all related to lithium. How that joint venture works for new projects is a party has to offer it into the joint venture. So then the other counterparty, the other shareholder has a right to say whether they would want it into the joint venture or not. You can see, you'll be able to see potentially that different lithium opportunities may or may not go into that joint venture depending on different returns and different financial considerations or different investment criterias. That's not the joint venture not working, it's actually the joint venture working.

And so does that stand to reason that IGO is going to maintain its Australia focus or will you start to look for out to these other jurisdictions?

RGI will remain focused on value creation. And so that's the underlying thesis for us is we really have to see value and ensure that it fits within our capital management and our risk appetite.

Excellent. Thank you. And then I'm not sure if I missed it earlier, my phone line dropped out, but Forestania, is there any guidance to, I guess, how much mine life that has got left? The reserve indicates it's about a year.

Yeah, so under the current reserves, we've got about a year and a half.

Excellent. All right, excellent. Thank you very much. Thanks, Ted.

Thank you. At this time, we're showing no further questions. I'll hand the conference back To Matt for closing remarks.

Thank you everyone for joining the call. We appreciate everyone's participation and thank you again. Have a safe and wonderful day.