IGO Limited

Thank you, Ashley. Good morning, everyone. Welcome to our March cooling results call. Kath has unleashed our CFOs joining me again for this call, and it was important to step here through our results for the quarter. Obviously, being a challenging quarter with a number of issues in the nickel and lithium businesses. Before I get into that, though, I wanted to talk a little bit on safety and reflect on our safety performance through this period. And while we are seeing some positive trends in our leading indicators and very good engagement from our leaders across the business, greater injuries and incidents continues and remains about as stable as the prior quarter, but is far from acceptable or the level that we're all aiming for. And this is, of course, both mine and the broader leadership team's highest priority, something we're focusing heavily on. I'm confident that the work program that we've got underway is and will make a difference. And... clearly reducing harm to our people is the most important work we've got to do. That really takes us through a strong engagement with our teams right across the operations. And in the quarter, we actually took some time out with some safety resets, safety stops, to talk about that and everyone's role in identifying and controlling the hazards that are across our business. As I noted in our half-year results call in February, we had very serious incidents We're a contract exploration crew at Forestania. We're involved in a vehicle rollout. One of the individuals involved in that was seriously injured and is continuing his recovery. Quite a challenging road ahead, and I think that is a start that might be right across our business of just how safe he is and the work that we need to do every day and every shift to keep improving. Moving on to the team business, and I'll start there. Look, there's a well signposted for IGO, our balance sheet remains in a great position. And, you know, that's despite recording our first quarterly loss for a long time, many years now since that happened. And that result was driven predominantly on the performance of the listening business, reflecting both the roll-through of the lower prices that we saw through the quarter, but also the sales volumes that we signposted. with the lower nominations from the joint venture partners. On a positive note, though, I'm very pleased to announce that we've just confirmed agreement with Winfield Joint Venture to sell 200,000 tonnes of Spodumene SE6 from stockpiles at Greenbushes to our partner TLC. And that volume is over and above their off-take volume, and that sale will be booked through the June quarter. That will largely clear the imagery of the site and will give us a good runway to make sure that Greenbush is operating in full production through the rest of this calendar year. Being in Greenbush a bit further, you know, we announced obviously production for the marsh quarter was going to be lower than the mine's capacity as the Taliesin team worked to manage their imagery build against the production demand from the JV partners. when it was 280,000 tonnes, was 22% lower than the prior quarter, and sales were reduced even more than that. As a result, the lower production, cash production costs were marginally higher at 386 Australian per tonne, and our sales revenue of 286 million, obviously substantially lower than the previous quarter, which would be both in part to the volumes, but more significantly lower real-life prices, which dropped to around $1,000 a tonne in the US as compared to $3,000 in the prior quarter. As you also know, the new monthly pricing mechanism took effect through this quarter. The other point I wanted to mention around greenhouses was our capital program. Work continues on the bill of CTP3. I was down there a few weeks ago with Matt, having a look at that, and while that had with some of the piling early on. It's progressing well now. We saw the steel coming out of the ground and they've really got to rig them up. So I'm pleased to see that's getting full attention from the team there. We went through the mine services area. That's the complete commission and they're just finding out the bugs, but they're all up and running using that for the mine. And the completion of the first couple of hundred rooms the accommodation is done, there's more work coming, and we expect that facility to be done around the mid-year. Turning to Kwinana, I was also down there a couple of weeks ago, and it was great to sit down with the team and look at their detailed plans for the rest of 2024. What we did see, though, was a continued ramp-up improvement of the performance. Obviously, still we're below main plate and our expectations, They are producing, very consistently now, the right factory-grade product. 96% of the product is hitting that target. Very low levels of impurity in the material as well, which is well sought after by our customers. So the quality of the product is hitting the mark, and that's very important. It is obviously all about the right compartment volumes now. And we spent some time looking at their plans, and I was very encouraged by both the level of thought and work that had gone into that, but also the team. I mean, the leadership team there were well aligned, were teaming well, really thinking through how they need to support each other through what's going to be a challenging year, but I expect will deliver a step change in their production output. Moving on to our vehicle business. I'll start with COSMOS, and as we announced in January, we transitioned COSMOS into care and maintenance. That's been a difficult process for our people. You can imagine the significant impacts of the people who had signed up there to be part of a new mind with a new future. And so we managed to have a lot of care and attention, and I give a lot of credit to the leadership team and the way that they've gone about that work. They've really been very sensitive and thoughtful about the impact on individuals. They've also put a lot of focus onto the assets, of course, and, you know, brought the mine to effectively to a stop, ramping down the assets and putting those in storage on site and on site as needed to make sure that everything's kept in good shape. And obviously we're in the process of milling the available ore and producing concentrate. We produced or processed 127 millilitres in April. There's a further 161,000 tonnes of ore available to be processed at the end of March and we expect that as that's produced to be sold, certainly mostly by the end of June this year. The total cost that Coles was for the quarter was $61 million, some of which has been capitalised in the industry but much of it is now being expensed going forward. We expect the June quarter to benefit from that revenue that's flowing through from our product sales and offset some of the remaining costs as we rank down in the caravans. Setting aside aid and moving into NOAA, the quality of result there was impacted by a number of challenges. The weather, which I think we saw right across that part of Western Australia, impacted our operation as well. But more significantly, there are enough operational issues coming out of the scheduled shutdown in March we saw a big impact on mill availability. And, of course, that flowed through into our copper nickel production and, of course, indirectly to our costs. Copper and nickel production were 10% and 16% lower, respectively, quarter on quarter, and rather than cash costs, up 21% to start at $5 a pound. No revenue was managed by due to the production of sales. and the average realized price was in line with the private quarter of around $25,000 a tonne. Donors' free cash was lower quarter of a quarter, again, attributable to the lower sales and signing. And despite the continued weakness in the nickel market and obviously lower production, we're still generating positive cash flows, and year-to-date total, it's just over $200 billion. Move on to Forrestania. And as you know, that mine is coming to its end of life. We're starting to see more and more of that variability and those challenges with your body as we get through the final sections of it. We achieved marginally lower quarter-on-quarter production and cash costs were also lower, which was good to see. They did experience some challenges with their trucking product to get it out to our customers. That was by the function of the weather that we saw, but also some road access constraints. That impacted revenues through the quarter, but we expect that to improve through the June quarter coming up as we clear much of that backlog in the industry. Importantly, Forestania continues to generate some free cash through the quarter, thanks to our hedge position, which is priced at $32,000 a tonne. Recognising, obviously, we've got a fairly short line of life left at Forestania, we're well into our work on planning and starting that breakdown into care and maintenance and thinking through the rehabilitation plans that will follow that so that we can have an orderly and responsible transition for that operation. Moving on to slide 10 and exploration, I don't want to go into the detail of the individual work programs. We've got some more of that in our quarterly report. But I do want to mention that we are, our work committees, are comprehensive working through that closely with the team to help us prioritise our project exposure and portfolio capital employment in this space. We've got absolutely stellar capability in this space, amazing technical skills, and I think real capability right through the pipeline and lifecycle of exploration. It's a unique capability in the industry in Australia, and we have an amazing portfolio of some real value. respective grounds to come through. So we need to make the very best of that, realise, or not wasting the opportunity, but equally look hard at how we're translating that to value through our business. And so that review is progressing and we'll provide an update the next quarterly on that work and the outcomes. I'll come back and wrap up with a few summary comments in a little bit. But first of all, let me hand over to Kath to run through some of the financial highlights of the report.

Thanks, Ivan. We'll turn to slide 13, where we summarise our financial results for the quarter. Of note, we've seen a decline in IGO share of profit from the OEA, which was a loss of 10 million for the quarter. This reflects lower lithium prices and sales volume at Greenbushes and an EBITDA loss at Kwinana as expected for an asset in Redpath. The EBITDA loss at Kwinana of $63 million in the March quarter was significantly lower than the loss recorded in the December quarter, primarily due to materially lower non-cash in-upday adjustments, as well as higher revenue generated by hydroxides. Non-cash adjustments accounted for just over one quarter of the quarter's results. The group recorded an underlying EBITDA loss of 15 mil for the quarter, meaning the loss recorded by our business excluding lithium was 5 mil. The predominant driver here was the loss impact from COSMOS. The group underlying free cash flow was 79 mil for the quarter, and we referenced our cash position on the next slide. You'll note our cash balance stayed steady over the quarter at $276 million, despite several notable movements, including the interim dividend payment of $83 million and a $72 million cash outflow related to COSMOS. Key inflows included a $106 million income tax refund, a $25 million dividend received from TLEA, and a $52 million received from our operating people business. Importantly, and NOMA and forestry operations continue to generate underlying free cash flow despite challenging market conditions and the sector. Our balance sheet remains strong with liquidity just under a billion. It not only provides us optionality, but also provides a strong platform for growth and to expand our market experience. To you, Ivan.

Okay, thanks, Kat. Maybe just a quick sort of wrap up in summary, and then we'll open up for some questions. First thing on safety, and I mean, the five priorities I've set out here, I've talked about really since my first quarterly call back in January. Safety is clearly the highest priority for us. We've made some progress, but there's plenty more to do. I'm confident we've got the right work environments, the right program, and the right engagement from our leaders, but there is still plenty to do. In terms of our results, it was a challenging period for ADO on multiple fronts, but the most significant of course for that was that we hit prices and lower production compounded in the same period. With that said, the additional 200,000 tonnes of sale I just mentioned will definitely unconstraint the production team and allow them to focus on poor production rates. I think that's a very healthy outcome for the rest of the year. We are focusing on working closely with Agenda Partners to optimise the Green Wiltshire asset. I've talked about that previously as well. There's plenty to do. It's a fantastic body. It's got a very long life. Lots of opportunity, and I think bringing out collective strengths will help unlock that. Kwinana, look, you know, that's been a real challenge for this business for some time. I was very encouraged coming in on our last visit and discussions, working through their new start plans. Their agenda and their plan for 2024 is hard. I want to make light of it, and I think as I've learned more about this industry, I see that across the industry, anyone working in the lithium hydroxide refining process has got plenty to think about. What I see, though, is it's very clear on those challenges. They've got the right actions in place. They know where they need to focus on their risks, and they're managing NASA better and better each month, which is great to see it. Notwithstanding some of the operational difficulties that Nova and Frost are staying in, some out of their control, some in, the businesses are generating cash and we've got plans to manage those and optimise their cash flow safely and sustainably through to the end of the month for each asset. And I've talked a bit about exploration. Look, you know, I don't want to state It's the first investment that we've made so far, but this is not something that we want to shy away from. We want to make sure it's targeted and managed very thoughtfully, but don't underestimate the capability and the dedication that our team has and, you know, I'm convinced, their work programs are going to lead to some great success. It's a key part of our strategy and as we work through our refresh, that'll come through. I'll share more of that in the coming months. once we can complete that through the next quarter. Moving on to slide 17, look, I think there's a lot to be excited about IGL at the moment. We're coming out of a difficult quarter, but if I look at the level of commitment and dedication to our purpose and the focus across the broader business, living our values, fantastic to see the energy from the team. IGL has been a great position. We have a fantastic platform and our financial strength and a balance sheet of cash generation, exposure to the world's best lithium asset, and our Nikolaev business remains cash-positive. Our people and culture, which I've talked about previously, continues to shine through. And then, most importantly, our purpose and clarity of where we're taking the business as we refresh the strategy stands as our iterative setting. So, lots to be positive about, to build on. Thanks for listening so far. I'll head back to the operator now to walk through your questions.