Liontown Resources Limited

Welcome to the Liontown FY26 end of year results call. Following the formal presentation, there will be a Q&A session for investors and analysts. 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 screen. Use the dial-in number and access pin provided to ask your questions via the phone. Alternatively, for those on a home or personal network, you can ask your questions via the web by pressing Join Queue. If prompted, select Allow in the pop-up to grant access to your microphone. If you have any issues using the platform, dial-in details can also be found on the homepage under Asking Audio Questions. Text questions can be submitted at any time and the audio queue is now open. I'll now hand over to Tony Ottaviano, Managing Director and Chief Executive Officer of Liontown.

Thank you, Michelle, and good morning and thank you for joining us today. With me today is Ryan Hare, our Chief Operating Officer, Greg Jason, our Chief Financial Officer and Grant Donald, our Chief Commercial Officer who's based in Perth at the moment. Each will take you through their part of this financial year. This financial year, Kathleen Valley delivered its maiden profit and a strong operating cash flow while ramping up and assisted by better prices in the second half. We generated $182 million in operating cash with an impact of $93 million and an underlying impact of $14 million. The market handed us two very different halves this year. Prices were weak early, so we kept costs tight and preserved cash. When the market turned, we backed our assessment of it, and we are now reinvesting in Kathleen Valley with the same discipline we used to protect it. Following a China trip by our board, we gained confidence that the momentum for growth was clear and strong, and we moved quickly to approve the early works capital for our expansion project. Now on the specifics for the year. We've concluded open pit mining and the underground ramp-up is going to plan. And there's more on that when Ryan does his session. We're on track for 2.8 million tonnes run rate by the end of this financial year, a figure that we've had in the market for some time. As we enter FY27, the focus is three things. Safe, stable operations and a business that is resilient through the cycles. growing responsibly with the final investment decision on Kathleen Valley expansion, which is due next month. We are ready to scale. The processing plant was designed and installed for 4 million tonnes per year from the start, so much of the expansion capacity is already in the ground. This makes the expansion capital efficient and lets us bring production to market incrementally and flexibly, matched to the market rather than in one step. We would fund it from our operating cash and have a strong balance sheet, and we have the team to execute it. Ryan will now take you through the safety and sustainability sections. Ryan, over to you.

Thanks, Tony. You can go to the next slide. Thanks, Michelle. So our safety performance for the year didn't meet the standards that we would expect. Our total recordable injury frequency rate for the year was 10.99. against 7.39 last year, and our lost time injury frequency rate was 1 against 0.92. The increase has been driven in the main by manual handling injuries across contracted workgroups. We've responded with targeted work on field leadership and contractor oversight, and our focus remains on keeping people safe and preventing high-consequence events. The leading indicator is moving in the right direction, Safety observations were 4.74 per 1,000 hours, up from 2.61. That's a near doubling in hazard reporting and tells us people are proactively looking for risks in the workplace. These are rolling 12-month measures, so they move slowly. We expect the work underway to have an impact through the course of FY27. Turning now to sustainability on the next slide. Female participation was 26% and half of our board is female. Female representation in leadership is just over 17%. We have more to do there. Our focus continues to be on creating an inclusive workplace and developing and retaining our team. Renewable power penetration was 80% across FY26. That is the hybrid wind, solar and battery system doing what we built it to do and reducing our exposure to diesel and gas. we recorded zero material environmental incidents for the year. Lastly, we procured around $530 million in goods and services in Australia with around $450 million of that in Western Australia and roughly $24 million in Aboriginal businesses. And with that, I'll hand back to Tony.

Thanks, Ryan. If we go to the next slide, please, Michelle. This year, we concluded our open pit mining on schedule and Kathleen Valley is now 100% underground operation. This was the operational transition which was planned in the DFS in 2021, but we revised it in November 24 and delivered in FY26 against challenging market conditions. With that in context, FY26 was our strongest year of development at 9,737 metres, and that is what unlocks the underground mining capacity for the ramp-up. We mined 2.2 million tonnes of ore with 1.29 million tonnes of that coming from the underground and we processed 2.5 million tonnes of material through the plant at a very high plant availability. We produced 392,000 tonnes of concentrate and we shipped 382,000. Both weighted at an average concentrate grade of 5.1%. This is the foundation for the ramp up to 2.8 and everything we're doing for the year ahead. Go to the next slide, please. To the financials at a headline level, Greg will take you through in more detail as he goes through his section shortly. Revenue was a record $639 million, more than double FY25, on higher production and the recovery in price. Our average realized price for the year was $1,379, And I'll put that in context a little bit later in the presentation. And up 75%, notwithstanding, from the prior year, and it's a stronger second half from a price perspective. That feeds straight to cash. We delivered $182 million of operating cash flow and an underlying EBITDA of $147 million. NPAT was $93 million, which includes full recognition of prior year tax losses, and the underlying NPAT was $14 million. The first underlying impact for Kathleen Valley, positive. One number to hold on to, we generated $182 million in operating cash before operations reached the full $2.8 million unrun rate. This is a business that is cash generative through the transition to full underground production. If we go to the next slide, please, Michelle. And again, I want to sort of put the year in context and FY27 in context. As we sit here today, it's easy to step over the fact that less than a year ago, the market conditions were materially different. This slide illustrates two critical numbers. At June 30 last year, the squat price was $630 US a tonne. 30th of June this year, it's risen to $2,210 US. an increase of 251%. How we got here was a strategic choice which we executed. In November 2024, when the price was weak, we made deliberate decisions. We slowed down the underground ramp up, moved to a flat 2.8 million tonnes a year mine plan from the end of FY27, and we deferred non-essential capital works and pushed out northwest flats to FY31. We took roughly 38,000 metres of development out of our mine schedule. Every one of these moves preserved optionality, which we are now realising. The market has turned. It's turned the way we said it would. The same discipline that we've now used to preserve cash, we will point towards growth. We're accelerating development, restarting the capital we deferred, and recommissioning north-west flats. But we will continue to be disciplined on our costs, and Ryan's team are working on that every day. And we want to make sure that we put our team's innovation to the shoulder and put creativity first and make capital a last resort if we can. This is how we protected the business through the downturn, and this is how we're going to invest in the business as we take advantage of the better market. And we're funding this growth from our own operating cash flows. Next slide please. So given that context, we are now pivoted to discipline growth and we're focusing on three strategic priorities for this year. These are our vision, we start with that, to be a globally significant provider of battery materials, and with four outcomes which are constant, which is safe, stable operations, resilient through the cycle, and being a reliable partner and profitable growth. These are delivered by focusing on three priorities. First, to ramp up to 2.8 million tonnes per year by the end of this financial year, and that scale will deliver cost and productivity benefits. Second, deliver Kathleen Valley's full potential. We've started Northwest Flats. The process plan to give us the full capability of its recovery potential and expansion decision to move beyond 2.8 million tonnes. Thirdly, pursue the next wave of growth by selectively advancing exploration around Kathleen Valley and Baldania, holding on to the downstream optionality, but being very disciplined if we pursue any M&A activities. Under all of it are the three enablers that don't move. We operate responsibly, we keep the mine plant flexible to the market, and we hold the financial disciplines. Now Greg will take you through the detail of financials. Thanks Tony. Good morning everybody.

You can see the top left chart on slide 10 depicts a revenue more than doubling from almost $300 million in 2025 to almost $640 million in 2026. And this was driven by a 35% increase in tonne shift as you can see in the chart bottom left. and the 75% increase in realized price on the USD SC6 basis, which you can see top right. The conversion wasn't quite as high once we got to Aussie dollars, because there was roughly a $0.04 appreciation of the Aussie relative to the US when we compare the two years. Unit operating cost is bottom right. You can see it's 23% higher than the second half of 25, going up to $984. and this was fundamentally driven by the transition to underground mining. Underground ore represented 18% of total ore mined in the second half of 25, with 37% the first half of this year, 100% in the second half, and an average of 58% for all of FY26. Moving to slide 11, you can see the Ibiza end part. So we have $147 million of underlying EBITDA, which you can see on the left-hand side. This reflects the growth in production, sales, and materially higher price. This is compared to an underlying EBITDA of $20 million in the prior year. The underlying NPAT of $14 million is the grey in the middle of the chart. The first underlying NPAT generated from Kathleen Valley Operations includes the transition from OpenFit to Underground. Depreciation and amortization was about $13 million lower than the prior year. We had a lot of amortization of deferred stripping in FY25 because the short life of the Kathleen's Corner open bid meant we had to write off that capital in a short period. And then in 26, we didn't declare commercial production for the underground mine until 1 April, and hence a lighter amortization load for that capital. $31 million of net finance expenses, slightly less than $25 because we earned more interest on cash at bank, and we recognise $10 million income tax benefit from tax losses generated in 26. The reason we've got losses at a tax level as opposed to the accounting is that we get an upfront deduction for a lot of the capital development underground, and we also get accelerated tax depreciation on many straight line football. Moving across to impact of $93 million, that includes a few adjustments for non-recurring items. The most significant is the recognition of $113 million for a deferred tax asset for carry-forward tax losses from prior years. And this was supported by a couple of things. One, the underground line moving into commercial production. And the significance of that is that, of course, the underground line will generate the taxable income against which we'll utilize those losses. And the second factor was the stronger price outlook. The other big adjustment in the chart is that we had a fair bit of accounting noise around the LGES convertible notes with fair value and FX adjustments between 30 June last year and 4th of Feb this year when the conversion occurred. So we back those out to get to the underline. They are, of course, in the headline number. Moving to cash flow on slide 12. We began the year with $156 million in banks, $182 million of operating cash flow. You can see that every quarter got better than the loan before. Pretty good pattern to have. We had similar sales terms across the two halves and the improving operating cash flow from quarter to quarter was driven by the improved pricing. Keep in mind that we've got price lags embedded in our uptake agreements, and therefore the higher pricing in Q3 then resulted in higher cash receipts in Q4. Equity raising in August was the lion's share of the financing activities, and then we had $134 million of total capex on a cash basis, including $14 million of early works ahead of the FIB decision expected is quarter. Closest to you is $561 million, as you can see far right, which gives us a great platform to fully bum the ramp up and the continued expansion of Kathleen Valley. Moving to debt and gearing on slide 13. Total debt, including derivatives, and the derivative was related to the convertible notes, has decreased $353 million to $369 million at year end. This is a massive turnaround from a net debt position of $567 million at the end of the prior year. Gross gearing reduced from 55% to 20%. The net gearing was nil compared with 49% a year ago. Finally, moving to the debt maturity profile on slide 14. Our forward interest and principal payments commence this quarter. will be amortising the board debt at the rate of 45 million Aussie per year and have a balloon payment of 175 million. Next slide, please, Michelle. Yeah, thanks, Tony. So you can see the board repayments. That's the 45 in each of 27, 28, carried on into 29, 30 with a balloon at the end. And we've got a 15 million interest-free loan from the WA State Government under their Lithium Industry Support Programme. and we've commenced paying that off in quarterly amounts that will be done across FY27 and FY28. I'll now pass back to Tony to go through the FY27 look ahead.

Thank you, Greg. This is now actually Ryan. So we'll get to Ryan to do his piece.

Thank you, Greg and Tony. So look, over the next few slides, I wanted to provide some colour on how we get from where we are today at roughly 1.5 million tonne per annum run rate to 2.8 by the end of FY27. Fundamentally, two things drive that, work fronts and equipment. On work fronts, FY26 was our strongest year of development at just under 10,000 metres. That foundation and further development through FY27 opens seven new mine levels and takes us from four active work areas today to 14 by the end of the year. Total material moved nearly doubles from 2 million tonnes last year to just under 4 million tonnes in FY27. On equipment, the fleet nearly doubles from 21 to 41, jumbos and production drills from 4 to 7, loaders 6 to 12 and trucks 7 to 15. The point I want to emphasise though is sequencing. The step-up comes from the second quarter. once the lower levels are open and then builds through the year. Why is this so important? Well, with the undergrounds ramping up, obviously that material becomes the dominant feed, which drives recovery in the plant. On to the next slide, thanks. So this is what one of those levels looks like. This is level 2285, or 235 metres below surface at Mount Mann. And this is our next mining front. Three deliberate design features drive productivity and resilience. Dual access to the level and a dual crosscut design allow concurrent activities. Truck loading bays that are off the main traffic route allow loading to be undertaken and not compete with haulage. So where we are today, shown in blue, access from the decline is complete. The majority of crosscut development is complete. and ore drives, which are shown in orange, commence in September. This is what puts us on track for the step-up from the second quarter. The other point to note, of course, is that we continue to extract from the upper levels at the 1.5 million tonne run rate whilst building these lower levels. On to the next slide, thanks. So this slide shows why the ramp-up gets easier from here and not harder. it shows ore contained by level at Mount Man. In the upper levels of the mine, each level holds between 0.2 and 0.7 million tonnes. The level on the previous slide, 235 metres below surface, holds 1.2 million tonnes. From 260 metres down, levels carry between 2 and 5 million tonnes. In simple terms, the levels we've been mining give us about 18,000 tonnes of ore every vertical meter developed. On current and future levels, that is about 115,000 tonnes, more than six times the ore for the same vertical development. There's two consequences arising from this. Firstly, scale. A single lower level holds, on average, a year of plant feed, and that gives us flexibility in sequencing. And secondly, quality. These levels carry a higher proportion of stope ore relative to development ore, which lists the grade and consistency of what we send to the plant. Next slide, please, Michelle. Turning to the expansion early works, by way of a recap, three main scope items here. Number one, stage one of the permanent mine services area. Secondly, the five and a half meg bore mill, which is the critical path item for both throughput and recovery. and thirdly, underground development at North West Flats. Capital is up to $77 million of early works ahead of FID, and as Greg mentioned, $14 million was incurred in FY26. The project team is in place. 4mm engineering design is well advanced, and 4mm fabrication is progressing. Earthworks and construction are started at the mine services area, and at North West Flats, we have great control drilling, 4mm re-admissioning, and infrastructure works well underway. You can see some of this in the images on the left screen. Lastly, FID remains on track for the end of next month. Next slide, thanks Michelle. Northwest Flats is worth explaining and Tony has touched on. It is the clearest example of the optionality we preserved and are now activating now that we have the signal from the market. In the November 24 mine optimisation, we deferred North West Flats to FY31. We recommenced development at the end of FY26. Additional portals and infrastructure through the open pit commenced in Quarter 2, FY27, with infrastructure established over the last few months. We expect development or from North West Flats later in FY27. Notably, the completed open pit has provided a second entry into the ore body, That gives us a mining front independent of Mount Man, which is what underwrites volume beyond 2.8 million tonnes per year. Next slide, thank you. On the plants, the key point is that the expansion is not a new plant. The circuit was designed for 4 million tonnes per annum under the original feasibility study. Crushing, screening, flotation and tailings are all sized for that. The items in orange are the focus areas of expansion. Bore mill for grinding capacity, magnetic separation, water supply and storage, and concentrate storage. Of course, at the next level of detail, we will also need to upgrade pumps and pipes now. This is why this expansion is expected to be capital efficient and why it can be staged. We are filling in a flow sheet that was built for this volume from the start. And with that, I'll hand back to Tony.

Next slide, please, Michelle. Thank you, Ryan. Let me recap FY27 guidance which we gave at the end of Q4 and be clear about what it actually represents, starting with a point we've reiterated throughout this presentation. Our FY27 guidance includes balancing our plant throughput and stockpiles with mine ramp-up. There's no surprises here. This was the November 2024 plan being executed. and the reinvesting we are doing in FY27 makes it more resilient, moving us from a previous flat 2.8 million tonne well to building the foundations for the new expansion well. With that context, concentrate production of 390,000 to 440,000 tonnes. This production guidance accounts for the additional downtime we require to tie in expansion works during FY27. On our cost guidance of 1,050 to 1,250 a tonne sold, I want to provide some further explanation here. We disclosed to the market in November 2024 that our 2.8 million tonne run rate was by the end of FY27. And Q3 FY26, we also disclosed that our next two quarters of underground production will be flat as we build out the development fronts, which one of those Ryan has just spoken through. for the next increase of production to the 2.8 million tonne run rate. We are therefore not at full run rate, and some of that time is investing into the FY28 ramp up, but also the expansion. These two factors combined are the drivers of the higher cost structures we're seeing in the 27 guidance. Ryan's already illustrated some of those examples as to why these costs have gone. Firstly, the total productive movement has increased from 2 to 3.9 million, a 95% increase. To make this increase, we are bringing on more equipment ahead of the 2.8 million tonnes and started the expansion development in northwest flats. That is the work that takes us to 2.8 million tonnes a year run rate by the end of FY27, and the production shows up in FY28. We see this impact on volume on fixed costs as we get to the other side of it. The investment ahead of production is what we're doing at present. We'll provide further guidance on our forward cost structure when we publish our FID announcement, hopefully later next month, all things being equal with the board approving it. The total capex of $320 to $370, which doesn't include the expansion capital, sits behind next month's investment decision. More on that on the next slide. But before I move on that, Michelle, I do want to go back and look at the Q1 look ahead. So we've already spoken about this quarter being consistent with the previous quarter in terms of our underground production at roughly the 1.5 million tonne run rate. The recovery profile on the basis of that will be consistent with the H2FY26 results due to the feed mix. I want to stress that. and deferred shipment for Q1 FY26 is expected due to significant surge events and planned maintenance at the port. That doesn't mean there's any issue here with volume. It's just deferred and we'll make that up in the course of the year. So that's what I wanted to mention in terms of giving the market a bit of a look ahead for this quarter. So if we move to the next slide, which we'll quickly talk about on the sustaining capital and the capital in total. So we've got $90 to $110 million of sustaining capital. That's basically to deliver a stronger base. That's the business as usual. Tailing dam lifts, underground development, process plant maintenance. Then you've got the ramp-up development work. This is the capital we required to continue the ramp-up to $2.8 million. Then we've got mine infrastructure and optimisation. I mentioned in my earlier slides around the fact that we deferred capital during the low pricing cycle to preserve cash, for example, the mine services area, plant optimization, non-process infrastructure, but we're now reinvesting in the business given our look ahead. And as Greg has already mentioned, we're funding this from a position of strength with $561 million in cash, which means the program can be funded from operating cash. So next slide please. I'll now hand over to Grant Donald and he'll take you through our marketing outlook.

Thanks Tony. On the left hand chart here we've included a fast market slide demonstrating the gap between supply and demand. I think this very helpfully illustrates the size of the challenge for the industry in terms of expansion to try and meet that demand profile. Typically, we've seen supply response in relation to higher prices with much of the restarts now back in the market in the process of ramping up. And now the market supply relies on new projects coming to market, both in the form of greenfield and brownfield expansions. Included on the right hand side, a typical timeline for new operations of five to eight years and brownfield of two to three years. And this is the challenge that we have as an industry to try and keep up with that demand profile. This means that Lionfire is well positioned given that our brownfield expansion is largely already built in terms of the plant with the ball mill that Ryan's given an update on. And as you said, we'll give an update on the blue FID at the end of next month. But that relies on the Northwest Flats that Tommy's talked to a little bit as well. We can go to the next slide. In terms of our off-date book, you can see on the left-hand side here the last nine months of the year have had a significant outperformance of spodumene versus chemicals. You can see this relativity, as we talk about, of spodumene to the chemical linkage, which is hydroxide in this chart, has really stepped out from the historical averages. This has led to an underperformance of anyone who's got chemical linkage in the book. And you can see on the right-hand side that two of our contracts out of three have chemicals referenced for CY2026, so calendar year 2026. But as we move into January, that flips the other way where two-thirds of our product will be linked to spodumene and only one legacy contract on hydroxide. I'll take agreements rented into in 2022 to support the development and financing of Kathleen Valley. And at the time, no reliable spodumene index was available for contracting that was accepted by customers. We have worked hard to try and change the chemical exposure and we were able to resell some of the four tons to change in. in the ramp-up phase until the end of this year.

And from 2027 and 2028, those are released, and we've resold those to CanMax linked to spodumene index.

I think on a look-forward basis, you'd see us start to close the gap a little bit on spodumene, but we do continue to have that one-third of the volume, compacted volume, on hydroxide. And with that, I'll hand back to Tony.

Thank you, Grant. Now let me conclude today's presentation by once again summarising the key takeaways. Five things. One, we delivered a profitable year and a strong operating cash flow of $182 million while still ramping up. The ramp up is on plan and the 2.8 million tonnes by the end of FY27 is on track. And I hope the detailed explanation that Ryan has provided gives further confidence to that. Third point we want to make is the market has turned, we've backed our own judgement and we're reinvesting into our flagship asset of Kathleen Valley with discipline. The balance sheet is strong enough to fund the growth from our own cash and finally we're ready to scale on that basis an expansion that can deliver production to the market incrementally and flexibly. FY27 is the year we invest to make the growth real. FY28 is where you'll see it being delivered. On FY28 and beyond, the production, cost and expansion capital will be part of the final investment decision at next month's board meeting and FID. Today, it's about FY27. The credit for this year goes to our people. I thank the board. Accountability is mine. The shape of the business is right, but the job's not done. We know it. We'll keep our heads down and keep delivering. Thank you, and we're happy to take questions now.

Thanks, Tony. If you have not yet submitted your text question or joined the live audio queue, please do so now. I will introduce each caller by name and ask you to go ahead. You will then hear a beep indicating your microphone is live. Our first question comes from Lyndon Fagan from JP Morgan. Lyndon, please go ahead after the beep.

Thanks, and good morning, everyone. Tony, firstly, I just wanted to pick up on your slide that talks about the M&A. It does feel fairly early in the journey to be looking for acquisitions, but just wondering if you can expand on jurisdiction, Brian versus Hard Rock, what it is you're actually looking for at this stage.

Thanks, Lyndon. I think... I feel that in the course of our presentation today that we left the audience clear that our priority is Kathleen Valley, first and foremost. So we're putting a lot of time and resources into prioritising and ensuring that Kathleen Valley is to its full potential. But at the same time, we have to keep one eye on the broader market as we want to grow as a company. So we will look at opportunities as they present themselves and we've been very public that our core competency is hard rock so we will continue to look for hard rock opportunities but also we can't ignore one of the largest sources of lithium units in the world being brine so we will also keep a close eye on those brine opportunities but we also acknowledge that we do not have capability as yet in that area So any potential opportunity we look at in that area, we will partner with someone of demonstrable background.

Okay, great. And another one I had was slide 16 talks about the amount of oil per level at 2 to 5 million tonnes. In the quarterly, it was quoted at 3 to 5 million tonnes. Was that just a typo, or do we need to read into... that change of the amount at all per level and sort of think about any sort of reduced productivity associated with that?

Yeah, so Ryan here. Look, I think the underlying data that drives that graph hasn't changed. If you go back 12, 18 months when we first started talking about productivity through the lower levels of Mount Van, the data is the same. I think the way we've characterised it, particularly when we've shown that graph, I think it's on slide 18, which actually shows that level. We've probably refined the way we've characterised it, but the underlying data is still the same, still expecting to get the same level of productivity out of those lower levels of the mine. And that's what we're trying to do, a bit of a double-clicking through the presentation today. So hopefully that helps.

No change, Linden.

The next question comes from Austin Yun from Macquarie. Austin, please go ahead after the beep.

Morning, Tony. Ryan here. Just a question on the offtake. Please understand your production will be, you know, flat-ish in the near term before set up in the first half of coming year, 2027. Just keep understanding your offtake commitment across the next 12 months. Are they evenly allocated or would there be any flexibility to suit your production rate? Thanks.

I'll let Grant explain that one. Thanks, Tony.

Austin, Luke, I guess when we start looking forward in the schedule, we typically get our guidance and sit down with customers and agree a forward-tricking schedule. While the general principle is that that has to be evenly spread, I think there's a recognition funds that we have. So as we look forward across the total year, we don't see any issue with meeting our commitments on offtake in FY27.

Thank you, Brent. Just one quick follow-up, if I may. On the accounting side, I note that you changed the EBITDA calculation by removing some inventory movements. Could you please provide some color for that change? Would that, you know, get pushing to the earnings level and also any implication to the unit cost calculation going forward? Thank you.

Yes, Greg, yeah, I'll take that question. It's a change that we made for the half-year numbers as well where we restated half-year 25. So previously, the EBITDA calculation was adding back the depreciation and amortization charged against the assets. But DNA goes into inventory, and then it comes back out into the P&L as we sell the tons. And therefore, the amount of depreciation amortization is actually in the P&L. It's driven by sales tons, not what was put against the assets. And so I think it's a more reflective representation of EBITDA to include the DNA that's actually in the P&L. And half one was restated. until the year 25 was restated, and then 26 was just done on that new basis. Sorry, there was a second part to your question, which was impact on unit operating costs. That unit operating cost metric is a cash cost metric, and therefore the change in method for EBITDA has zero impact on unit operating costs.

The next question comes from... Glenn Lawcott from Baron Joey. Glenn, please go ahead.

Morning, Tony. A couple of ones from me, thanks. Just to clarify, did you have any open cut ore left for feeding in this quarter arena or is it just purely processing the underground that you mine? Thanks.

Are you talking this quarter, Glenn? Say quarter one of FY27?

Yeah, Q1 of FY27.

Yeah, so as we mentioned in the quarterly, we do have open-pit material left in quarter one, but we will hopefully consume that by the end of the quarter.

Okay, so there will be some supplements in the underground. Sorry, I was away for the first quarter. Yeah, no, correct. And then just maybe you could help me understand, the disputed shipment that's in the accounts, What's in dispute? Is that a quality issue or what? Could you just help explain what that is and whether it gets resolved? Thanks.

Yeah, I'll take that one. I can't be specific as to the reason behind the dispute, but there is a dispute that we are currently working through. We've made a provision in our accounts around that dispute over one shipment and we're pretty confident that we'll resolve that pretty shortly.

Okay, is that a timing or quality issue, Tony?

I can't specifically give you the details because it is commercially in confidence because we're in the process of finalising the negotiations.

Thank you.

Well, it's nothing to do with quality, right? I can tell you that.

Thank you. There are no further questions on the platform. I'll now hand back to Tony.

Thank you, Michelle. And once again, that brings our FY26 to a close. We're really looking forward to FY27, so thank you for the questions and thank you for listening.

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