Lynas Rare Earths Limited

Good day and thank you for standing by and welcome to the Linus Rare Earth Quarterly Results Conference call. At this time, all participants are in a listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to Linus. Thank you. Please go ahead.

Good morning and welcome to the Linus Rare Earths Investor Briefing for the March 2021 quarter. Today's briefing will be presented by CEO and Managing Director Amanda LaCaze and joining Amanda for the briefing are CFO Dardenne Sturzenegger, General Counsel and Company Secretary Sarah Leonard and VP Strategy and Investor Relations Daniel Havard. I'll now hand over to Amanda. Please go ahead, Amanda.

Thanks, Jan. Good morning, everybody. Thank you to all those who have joined the call today. It seems just like yesterday that I was talking to you with the half-year results. These sort of quarterly reports do bring us all together on a regular and frequent basis every quarter. We're delighted, of course, to present another excellent quarter. Our production was in line with our planning. As I've identified in the quarterly report, we've opted to keep production at 75% of LinusNix rates. We continue to have challenges both with inbound and outbound logistics. Until we're able to build a significant store of concentrate ahead of the plant in Malaysia, it's not our intention to dial up production significantly. We keep putting concentrate on the water, but it keeps having sort of variable delivery dates. I'm pleased that our costs are in line with plan and remain very much under control. as we're operating at the 75% level. Of course, the market remains very buoyant and we're delighted with that. NDPR pricing is strong. Pricing for heavies is also very strong. And demand also is very strong. Many of our customers, not only back to pre-COVID levels, but some of them are in fact looking to further growth in the short term. Like many other firms, we were frustrated that our ship got stuck in the Suez Canal. And so as we look at our results here, we were well and truly on track for an absolute record quarter, but there was a couple of hundred tons, frankly, that didn't make it before the end of March as a result of delays in shipping. But that material has left our plant in early April. I guess where I'd like to, I mean, you know, some of the business as usual is pretty clear from the report. I'm just, you know, sort of a moment thinking about in this strong market, how do we make sure that we meet our objective of growing with the market. So as demand grows, how can we ensure that our capacity grows? And of course, that's associated with some of our key projects. And keen readers will note that certainly the expectation from Chinese producers is that the market will continue to strengthen with some quite significant announcements regarding capacity uplifts. So our key projects, which are going to allow us to grow with the market, include, of course, the Kalgoorlie project and the work on the development of our US rare earth processing facility. So Kalgoorlie first. Kalgoorlie's work is continuing apace. The project team is growing, as would be expected at this stage of the project. And we now have most of the key positions with respect to managing that project within Linus are now filled. And we are making really good progress on tendering and letting the contracts for a variety of different elements, equipment, engineering and other work. We've included some photos in here so you can see how far progressed the fabrication of the kiln is, which is of course very exciting. But as well as that, as part of the approval process, the EPA has given us you know, limited, approval for limited preliminary works on site. And it's important to note that these are, you know, works which will ensure that when we start receiving the equipment, providing we have the final approval, we will be able to move quickly. But they are not works which presuppose a ministerial decision. So the relevant Act provides provision for minor or preliminary works that are associated with an implementation of a proposal but are unlikely to have a significant environmental impact, and that's exactly what we're doing at present. But it is very exciting to actually have people on site doing those works. We've started to see... slight ramp up of capital associated with the Calzuli project with a further step up expected in this quarter ahead of, as we've indicated previously, the large capital spend, which we expect will be primarily in the FY22, in financial year 22. Of course, the other exciting news during the quarter, which we did cover when we did the annual results is the agreement from the DOD for a contract to partly fund the development of a light rare earth facility which we proposed to have operating alongside our already planned heavy rare earths and specialty facilities. This effectively means that our facility in the US is really a very substantial facility with light separation, heavy separation and specialties all on the one site. We think it's very exciting and really provides the fundamental, you know, sort of foundation the development, the further development of the rare earth ecosystem in the US. So we really think about it as a platform for development of further activities in line with government policy. And of course, we've all seen that governments continue to be very focused on the rare earth sector. And of course, as we think about this, It's for reasons which are strategic. Of course, geopolitics are an important part of that and ensuring that there are resilient supply chains in all key supply chain areas, but particularly for critical materials is at the forefront of government thinking. The second area is, of course, that these are materials which underpin new technologies and modern manufacturing capabilities. And so governments all around the world are keen to ensure that they are part of the significant development that we expect to see over the next couple of decades. as we adopt new technologies which are going to be, frankly, better for our planet, but also better for consumers. And, of course, the third reason why governments remain very focused on this sector is that it is a critical part of economic recovery. And as we see the continuing demand in key sectors for our materials, We see this as being a very positive thing for our industry and also for all of the industries which we feed. So as I said, I don't have a lot more to say other than the quarterly report speaks for itself again. A very good quarter. We continue to see very positive and buoyant market conditions. and are looking forward to finishing the year in very good shape. So with those as introductory comments, I'm very happy to take any questions that people might have.