IGO Limited

Thank you for standing by and welcome to the IGO Limited Q4 FY25 results call. All participants are in a lesson only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question via the phones, you will need to press the star key followed by the number 1 on your telephone keypad. In the interest of time, we do ask that phone participants limit themselves to asking two questions at a time, and to ask further questions, you may rejoin the queue. If you do wish to ask a question via the webcast, please enter it into the Ask a Question box and click Submit. I would now like to hand the conference over to Mr Ivan Vela, Managing Director and CEO. Please go ahead.

Thank you. Good morning, everyone. Thanks for joining the call. Welcome. As per usual, Our CFO is joining me for the call. There's a bit to cover in the update. I guess we'll start by just recognising some really strong operational performance at both Nova and Greenbushes, and we can dive into that. But I think most pleasing for me personally at the top of this call is really calling out the safety improvement across the operations in IGO. As you know, this has been a significant focus since I started in my role. It's tremendous work. Naturally there's always more to do but I'm really pleased to see the step change and continued improvement in our safety culture and the results that are flowing through. What's also been a big feature in this quarter of course is the volatility in the lithium market which I don't think is new to anyone or a surprise to anyone and I'm sure we'll talk a bit about it, get a range of views. I think that's probably the most interesting thing to me is just the diversity of views across the industry. analysts, commentators and otherwise on the subject and it shows you just how difficult it is to pick what's still an immature market growing very rapidly with lots of different forces. You would say unseasonally cold and I think we actually had a day the other week which was a record for 15 odd years or something. Some people are calling this the end of the lithium winter. So we'll see. I suspect it will warm up in Perth a lot before we see a real shift in the lithium markets, but that's something we can certainly dig into. Overall, as I said, a strong operational quarter across Greenbush's and NOVA and we'll explore both, obviously for different reasons and different drivers. If we jump into the results summary, I'll just touch on the headlines first. Key point I wanted to make, as I said, on safety, I'm going to talk to you in the next slide, so I won't spend too long, but a real step in improvement there. And we've seen that right through the FY25 period as the team's done their work quarter on quarter and we've lifted performance. For green bushes, look, the key headlines, solid production. There was some impact from some unseasonably wet weather. In fact, June was as wet as it's been in a long time and I guess this is the world we live in. It is volatile. We had a couple of dry winters the last few years and this looks like it's going to be a very wet one. They had some lower grades, a few other challenges but still ultimately delivered well production-wise and a very strong margin. You can see in the chart there's 60% EBITDA for the quarter, which is just outstanding given where we are in the cycle. Sales was a big catch-up and I think I've said this in the last couple of quarters, that'll go up and down with the Bunbury port and just the movement of material. There's really not much more to see than just a logistics flow and trying to get the volumes out and managing that with shipments and other congestion at the port. But it's good to see that the team closed out the year moving a bunch of that inventory on. And... I guess we'll dig into the rest of it a bit further. At Nova, a whole range of operational improvements and focus on how we manage the extremities of the ore body has paid off through the second half of the financial year and obviously particularly in the last quarter. It's great to see the team meet guidance. They had a very, very tough start as you know in the first two quarters and I think got their arms around some of the challenge, changed a number of things in the way they were operating and have delivered That gives us obviously more confidence with our guidance and the focus looking forward to the end of the mine closing out the end of 2026. We've also really ramped up our focus on closure planning. As I mentioned in the last quarterly, that's something that we expect to go straight into. We don't see any period of care and maintenance ideally and that means there's a lot of work to do to get the feasibility done, understand all of the work and have that ready and approved so that we can step into that straight after we close up the operations. Kunana, the key headline is they had a better quarter, but still a long way short of expectation and a number of issues again with equipment, which has affected their production. Costs proportionally were lower on a unit basis based on that increase in production, but still obviously make it very, very difficult to generate any real value given the market. What I guess is the standout there is we have indicated that we expect to take on a further impairment, taking out the full value of Train 1. That's being assessed and we'll finalise that through our annual results. And a couple of other bits and pieces we'll pick up at the end from a corporate point of view. But look, let's dive into safety in a bit more depth. As I said, with something we've been working on, I obviously had a personal focus on this since I arrived 18 months ago and the team's had a focus of improvement here regardless to drive a sustained improvement in our safety performance and what's so pleasing is now really starting to see that come through quarter on quarter. You can see in the chart that we put in that step down in the quantum of injuries and obviously trailing that the three-month and 12-month TRIFA That 12-month will taper off, obviously, based on our work to sustain that performance. But you can see the shift down. I think the other big standout here is the severity of injuries. Clearly, we want no injuries. We want less injuries. But we also want low-severity injuries if they do happen, so there's less impact on people, less lost days. And that's certainly a very positive trend there. You see in the orange lines that declines. The other... The point I wanted to call out on this slide was just the update to our ESG framework which you'll see play out in more depth in our sustainability report that will be issued soon and I think that captures or frames the way we think about the major pillars, valuing and protecting our people which obviously speaks to safety, health and wellbeing and our people partnering to create shared value, our socio-economic contributions mine closure, working with traditional owners and communities, transitioning to a low-carbon future, so thinking about climate decarbonisation and the impact of our operations. The fourth is driving our environmental stewardship through biodiversity, water, tailings, waste and non-GHG emissions, and operating with integrity, business integrity, cyber security and a responsible supply chain. I just wanted to call that out, something that Fundamentally in our purpose, a big part of who we are as IGO and how we do mining and how we operate in this industry is important to us and this framework I think reflects or captures the key elements there that you'll see play through in the way that we make decisions and think about our presence in those operations. Moving on to green bushes, I've covered some of the headlines but just to touch on a couple of additional points. The teams managed through some unusually high rainfall, particularly in June, which certainly affected them. That was compounded with some lower grade ore that was available, affecting mill recoveries, throughput, so on, all resulting in less production than we probably anticipated, but still a pretty solid quarter you can sort of see in line with Q3. But we still came in very close to the top of guidance for the year, and I think credit to the team there, managing issues that will come up from time to time through the mine, but still delivering a very good outcome. There's a significant amount of improvement work going on across the board. I'm sure there'll be some questions on that. Key areas, you know, focus naturally things like asset management and asset health, work that the team's Stepping through and mine productivity is the other big area, of course, we've also talked about. We're thinking about this holistically and the business under Rob Telford's leadership are thinking about that life of mine or life of asset optimisation and how these threads come to bear. He's not waiting until all of that work's finished. He's getting on with the obvious streams of work and I think delivering good outcomes. The last comment I'd make here is just on costs. The team did a great job, came in you know, for the full year with a great cost result. It is an amazing ore body and it does make that, you know, easier than most to deliver those outcomes. You'll see a reduction in our guidance indicating a step down. And I think, you know, based on the ramp up for CGP3, which is still to come and that really, you know, we're expecting that first ore right at the end of the year with a ramp up into 26th. Based on the rate of ramp up, we've obviously stitched our guidance around the financial year even though Greenbush has plans on a calendar year. So we've taken a view on that. We're not being aggressive with our guidance but the team, naturally there's some uncertainties when you ramp up any plan. It's certainly got a lot of capability wrapped around it and given Similar to CGP 1 and 2, we've got parallels that we can draw from, but all that aside, we need to let the team get on and do that work. And as you can imagine, based on that ramp-up, we'll see some of the fixed costs diluted further, and that may then give us confidence to see those costs come down further just on the rate of production. But we're also going to see the team continuing to put downward pressure on costs through all the productivity programs and improvement programs across the business through the calendar year 26. Capital guidance, look, I think again we're stitching guidance. We're trying to take in what we see in terms of completion of CGP3 and then various other projects across the business, tailings, other non-process infrastructure and of course stripping, which is a continuation. So I won't be able to go into intricate detail there. As you know, it's not something that we share in any specific detail, but that gives you a range of where we're thinking things will look. As I said, we're stitching trying to pick timing of capex across a financial year, which is difficult, so we do our best at this point to take a perspective on that second half even without a plan, and we'll obviously update as appropriate and as we did through FY25. Onto NOVA. Great outcome, great to see the team. They really lifted and I was so pleased for them to tip over the bottom end of guidance. You know, obviously, I'm sure everyone was nervous and watching and we were too and we had confidence. The team had a good plan and they were executing and we could just see them delivering day after day. It is certainly challenging and I think anyone who's been through the work getting to the end of life or the edges of an ore body knows how much variability and extra challenge comes in and they had... some really tough moments in the first half. They've turned that around and delivered two quarters in a row, really good performance. And that, of course, turns out in nickel production and obviously the unit costs as well. Copper has also been up and that's largely grade driven, but it's nice to see that we're recovering that and feeding that back into the market at these times. We've just updated our guidance there, which we've already sort of signposted last quarter, 15-18, for nickel production, and that's through to the end of 2026. You know, we can get into it further, but, you know, through that quarter, we expect production to stop. It's a reasonably flat profile through to the end, and, you know, I think rather than trying to to pick it too tightly or separate this year. We thought it's better just to maintain that guidance given it's only a few months past the end of the financial year and the cash cost guidance obviously ties in with that. I've also mentioned closure planning, so that's really ramped up in earnest. We've got a very strong team focused on that now. One of our key processing managers has stepped in and he's now full-time in that role, Zach, working through the the efforts to have that plan and all the estimates in place and that's something that's as important as how we run the mine as well. We really want to be proud of setting a great example in taking the business through to closure. On the licking downstream in Kwinana, I think maybe my first comment would be that that part of the industry is certainly under enormous pressure. I don't think there's anyone globally making much in the way of margins there, or enjoying the period we were in. The operational challenges at Kwinana, of course, just compounded massively. And while we did see a lift in performance and production from Q3 to Q4, and that was signposted to the team, they still just missed guidance that we put down, which we thought was reasonably conservative, continue to have issues with equipment failure, outages, downtime, etc., And we, you know, I guess have been clear about it, our level of confidence in the plan actually achieving sustained operational improvement and cost improvement given the context that they're working in. I want to be clear though, the team, there's no shortage of effort going in. I mean, they're all in. They are working night and day. They're so dedicated to it and it is a very, very challenging situation for them to work through those issues. I think beyond that, we've given you some guidance for next year. Again, it's a stitch. We think that's good for now given what we see. Naturally, we're continuing to discuss and look at the future for the refinery and what's the best decisions we can take. On the financials, I might throw to Kath to just give you a few key reflections.

We've had solid results delivered in the quarter in what is a challenging market. Operational improvements have been implemented as well as catch-up sales at NOVA which contributed to higher EBITDA of 59 mil. There's also a positive contribution in our EBITDA from our listed investment portfolio this quarter. Our underlying free cash flow remained positive albeit down from last quarter when we had the inclusion of a final tax refund during the period. This reflects the quality of NOVA operations even as it comes to the end of its life. The balance sheet remains strong with $280 million cash with $300 million available from debt facilities which we resized and extended during the quarter. As part of our year-end procedures, we've earmarked that we're still working on impairments and rehabilitation provision and we've provided some information in our quarterly to help you with the estimate of the impact of this. Based on, as Ivan has said, based on IGO's assessment of the Quenona Refinery, we anticipate impairing the full amount of this asset and the change from last or the half year is mainly about the forward look on commodity prices and the like. I think that's the financial summary, Ivan.