Liontown Resources Limited

Welcome to the Liontown Resources FI25 results call. Following the formal presentation, there will be a Q&A session for investors, analysts and media. Participants can ask both text and live audio questions during today's call. To ask a text question, select the messaging icon, type your question in the box towards the top of the screen and press the send button. To ask a live audio question, press the request to speak button at the top of the broadcast window. The broadcast will be replaced by the audio questions interface. Press Join Queue, and if prompted, select Allow in the pop-up to grant access to your microphone. If you have any issues asking a question via the web, a backup phone line is available. Dial-in details can be found on the Request to Speak page or on the home screen under Asking Audio Questions. To view documents relevant to today's meeting, including more detailed instructions on how to use the platform, select the Documents icon. A list of all available documents will appear. When selected, the document will open within the Lumi platform. You will still be able to listen to the meeting while viewing the documents. Text questions can be submitted at any time, and the audio queue is now open. I will now hand over to Mr Tony Ottiaviano, Managing Director and CEO of Liontown Resources.

Thank you Michelle and welcome everybody to our full year financial results for financial year 25. With me today is our Chief Operating Officer Ryan Hare. Welcome Ryan, this is his first results presentation for Liontown. Secondly, there's our Chief Commercial Officer in Grant Donald, and also our Interim CFO, Graeme Pettit. 25 has been a milestone year for Liontown. Our first year of production at Kathleen Valley. Today, I'll take you through the performance for the year, our financial results, our sustainability achievements, and importantly, how we are positioned for FY27 2021. 26 and beyond. So next slide, please, Michelle. It's the usual important information. Okay, so just a quick summary of where we stand at the moment. FY25 has been a year of delivery. We've successfully constructed, commissioned and transitioned Kathleen Valley into production. we've generated nearly $300 million in revenue in our first year. Despite the tough market and therefore the softer lithium prices, the impacts of a ramp-up, we still produced a positive underlying EBITDA of $55 million and held an operating cash flow at break-even. This is a strong sign of the scale and quality of this asset. We've also strengthened the balance sheet with an equity raise completed after year-end, ensuring that we can see ourselves through this current price cycle and transition the underground in FY26. Our sustainability foundations remain a key differentiator. A strong safety performance, 81% renewable power penetration, deeper partnerships with our traditional owners in the Joal, So we see ourselves looking forward in FY26 and then beyond with a lower cost base and a platform for growth. Finally, with an asset such as Kathleen Valley, it presents a long-term value proposition with scale, quality and sustainability to endure the various price upticks as they go through the cycles. We continue to maintain our optionality should the cycles change to expand the asset. We can go to the next slide, please, Michelle. So FY25, it's been a milestone year for us with strong financial outcomes. Firstly, our concentrate production, nearly 300,000 tonnes there. Concentrate sales of 283,000 tonnes. Strong plant availability in a ramp-up year of 89%. And again, lithium recovery of 58%, but if you look at it as a tale of two halves, the second half we averaged 60%. As I mentioned in my opening piece, our revenue nearly hit $300 million in this ramp-up year. And we finished the year with a strong cash balance of $156 million, which has been further strengthened by the capital raise and about 11,000 tonnes of saleable concentrate on hand. Finally, our second half unit operating cost of $800 a tonne and our underlying EBITDA of $55 million. So if we go to the next slide, please, Michelle. I'll now turn the discussion over to our interim CFO, Graeme Pettit, to take you through the financials. Thank you.

Thank you, Tony, and good morning to everybody on the call. Starting with revenue, and despite a volatile price environment, with spodumene prices down 24% in the June quarter, Liontown delivered the $298 million in revenue in its foundational year. The average realized price for the year was $673 per DMT, which translated to $10.50 in Aussie dollar terms. As I mentioned, underlying EBITDA, $55 million, demonstrates a positive operating leverage even in weak prices. Our statutory NLAP of $193 million was largely driven by non-cash items, including the $81 million NIB wipe-down of OSP stockpiles and $159 million of depreciation, which includes open pit mine costs being depreciated over a short mine life. Operating cash flow was breaking even in our first year, which was a great achievement in the context of ramp-up and lower prices. At year-end, we held $156 million in cash, which has since been strengthened post-year-end following our $372 million equity placement in August. Next slide, please. Turning now to the reconciliation of our earnings. We reported a statutory net loss of $193 million, as mentioned. As you can see on this bridge, the majority of that loss reflects non-cash and ramp-up related items, rather than the underlying operating performance of the business. Touching on some key items. Firstly, NRV. As flagged in the June quarter, where we provided a range of $75 to $85 million, the write-down came in at $81 million. As a reminder, this is a non-cash accounting adjustment, and mainly related to OSP, all of that is associated with the Open PIP line, which is scheduled to end in December this year. Depreciation of $159 million, which was the depreciation of open pit mine assets over the short open pit life, as well as half a year of depreciation of the processing plant and related assets. The depreciation of underground related assets is expected to commence during the third quarter of this year. Quick points to note on income tax. We expect to commence the recognition of deferred taxes during FY26, with the commencement likely linked to the declaration of commercial production at the Underground Line. Underlying EBITDA of $55 million reconciles to $1 million positive cash flow from operating activities, and the key adjustments are related to working capital movements. Next slide, please. Turning now to cash flow. In our first year of operations, operating cash flow was break-even, which is a solid result given the two headwinds we faced of lower lithium prices through the year and naturally higher costs associated with the ramp-up of an operation. On financing, we received strong support from our partners with $250 million convertible notes from LG Energy Solution and $15 million from WA Government's Lithium Industry Support Program. These inflows supported liquidity through our ramp-up. On the investment side, we spent $331 million off CapEx, the majority of which related to growth and commissioning at Kathleen Valley, completing the processing plants and advancing underground line development. All up, we closed the year with a cash balance of $156 million at 30 June. And importantly, Poster Ends, that position has been fortified with $372 million in gross proceeds from the August capital raise, giving a positive Next slide, please. The charts you see here demonstrate the change in composition and quantum of Liontown's capex spend. By FY26, the capex spend reflects the continued investment in the underground mine, establishing life of mine infrastructure. We expect total capex to remain at similar levels for FY27 before declining in future years. Next slide, please. For the project capital... It's now complete. Yes, it's now complete. Finally, turning to the balance sheet, at 30 June, cash increased to $156 million, up from $123 million the prior year. Since your end, that position has been strengthened, as mentioned before. Property, plant and equipment rose by $142 million, reflecting the completion and commissioning of the Kathleen Valley processing plant and the continued investment in underground mine. Payables decreased to $88 million, down $40 million year-on-year, consistent with the completion of project construction. borrowings increased to $831 million, which included the fully-grown floor facility and the US $250 million LG convertible notes. The convertible notes are classified as a current liability because LG may elect to convert the debt into equity in the company at their option. The only time a cash payment can occur is at the maturity of the notes in July of 2029. Next slide, please. I'll quickly step through our debt position. So we've deliberately structured our funding to be low-cost, covenant-like and flexible, with strong support from our off-take partners. On the left, you can see gross debt position over the past three years, with the increase in FY25 driven by the US250 LG convertible notes. On the right, the maturity profile shows these facilities are spread out. The chart highlights the maturity timing of the LG convertible notes. In the event that the notes are not converted into equity, Blindtown would need to repay or refinance the notes in July 2029. The gearing ratio 30 June, being total debt plus equity, was 59%. The gearing ratio reduces to 47% on a pro forma basis if we consider the impact of the August capital raising. I'll now hand back over to Tony.