Lynas Rare Earths Limited

Good day and thank you for standing by. Welcome to Linair's quarterly results webcast conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during a session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To assure your question, please press star 11 again. please be advised that today's conference is being recorded. I would now like to hand over to Linus. Please go ahead.

Good morning and welcome to the Linus Reris Investor Briefing for the September quarter of 2023. Today's briefing will be presented by Amanda LaCasse, CEO and Managing Director, and joining Amanda are Gardin Sturzenegger, CFO, Paul LaRue, Chief Executive Officer, and Daniel Havas, VP Strategy and Investor Relations. I'll now hand over to Amanda. Please go ahead, Amanda. Thanks, Jen. And good morning to everybody.

Thank you again for joining us. Well, we have had another busy quarter, which means that we have a jam-packed quarterly report. To start with, I would just like to highlight what for us is really fabulous news which is that at Kalgoorlie all areas which are required for production, construction and commissioning is now complete and we have switched the kiln on. I say that in quotation marks, it's not quite switching it on, it's not like turning on the light when you walk into the room. But this is a major milestone and I know that everybody on the team is really very excited that we're there. We now have to go through a heat-up cycle and this will be followed with first production. So we're just going to take just a moment to enjoy that but I think the team is already very, very much engaged in the next steps. Moving on and just looking a little at the quarterly results, We had slightly lower production in the first quarter of FY24 compared to the final two quarters of FY23. That really reflected the fact that we had to do some planned and preventive maintenance on the cracking and leaching facility in Kwan Tan, maintenance which we had delayed in the previous quarter. The result of just over 1500 tonnes is still very good when we calculate it back to a daily production basis, taking out the lower equipment availability for the days that we were unable to operate the kilns because we were conducting maintenance. As I've indicated in the quarterly report, For the first time, actually, in the time that I've been in Linus, we did not sell every gram reproduced, not because we didn't have enough demand, but as we've explained in the report, we are still managing for potentially different scenarios over the next six months. which may include a variation in our licence conditions in Malaysia and certainly recognising that any ramp up of a plant of the size and complexity of Kalgoorlie is inherently unpredictable. So we have held some NDPR inventory within our own warehouses and we also have NDPR inventory sitting with our distributor to ensure that we will be able to provide supply continuity for our key customers. In addition, we have actually held some SEG inventory as well, which we're holding for purely commercial reasons as we see the price continuing to strengthen. It's been sensible to hold some of that back. The other very big news which we've included in this quarterly report is the fact that we have now decided that we will go ahead with our upgrade to LAMP downstream operations. And as we've explained in the report, we need this additional capacity in solvent extraction and product finishing under either of the two key scenarios that we're considering. If there is a revision to our licence conditions in Malaysia, then certainly we want the downstream plant in Malaysia to be able to process both material which is processed in the cracking and leaching facility in Malaysia and also the mixed rare earth carbonate that Malaysia will receive from the Kalgoorlie facility. If not, as we indicated last quarter, we now are able to produce up to 9,000 tonnes a year once we reach name plate capacity at Kalgoorlie and so therefore we need to increase our downstream in Malaysia. So this first stage where we'll be Making changes to about NDPR separation trains in solvent extraction will take us to the 10,500 tonnes which has always been our FY25, our Linus 25 target. The process that we'll be doing that is completely innovative and is something of which we're very proud because it's an in-house development. As we look at this, we are conservative as to production in the third quarter because we expect that solvent extraction circuits will have to equilibrate, come back into balance before we're able to achieve the significant uplift in production for which they'll be designed. In addition, we will be putting some extra equipment into product finishing once again, which will enhance efficiency, continuous precipitation circuits and some new furnaces in that area. They'll take a little longer, but we will be able to take advantage even with our current PF configuration once we have the ESSEC circuit stable and producing. So the decision to make these changes in the downstream area, as said, they're needed on any scenario. We're pretty excited to be doing them, but they will affect this quarter and next. And I think we've spoken for some time and foreshadowed the fact that this really, this financial year is an adjustment year. to ensure that we are in the strongest possible position as the market returns to what we hope will be better settings in the near future. The Mountwell project continues on track. We're very close to the end of stage one. This is a logical time for us to review stage two scoping costs, ensure that we've actually engineered this to give us the best possible efficiencies as we move forward. Our Stage 2 estimate is slightly up on the original estimate, but well within the sorts of variations you would expect at this stage of the project. Of course, during the quarter, and we've spoken to you previously about this when we released the annual results, finalized the Heavy Rare Earth Contract with the US Department of Defense. We're pretty excited about it. It's an expenditure-based contract under which all of our properly allocable construction costs will be reimbursed. The team is champing at the bit to move forward on this. We've had our US-based engineering partners in Kuantan for an extended period of time. working with our in-house engineers to ensure that we're able to move forward with that project on the most efficient basis possible. And of course in Malaysia we continue to engage with the Malaysian government and the regulators on the conditions associated with our licence and indeed also continue to pursue all of our rights under Malaysian law. And we think that this is important as parallel path to the much preferred pathway of actually reaching a better outcome with the regulators and the government. So as I said, a jam-packed quarter and a jam-packed quarterly report. Very exciting times for us. Everybody in the business has been sort of holding their breath as we wait for Kalgoorlie to come on and a smooth ramp up is now our target. A smooth and rapid ramp up is now our target. Also in Malaysia it's very exciting to see us be able to do some of the upgrades we're talking about there. So with that I know there's always loads and loads and loads of questions so I'll leave us with 50 minutes through to the end of the call so that I can take as many questions as possible.

Thank you Amanda. I will now conduct the Q&A session. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by as we compile the Q&A roster. Our first question comes from Paul Young from Goldman Sachs. Please go ahead.

Yeah, morning, Amanda. I hope you're well. Yeah, a fair bit going on in this quarterly, as you highlighted. I guess the first question I have is, around Kalgoorlie and just the timing on the commissioning, I guess we are, if you step back, we are probably four or five months late now on this project to hitting the kiln. And as you point out, Amanda, we're hoping for a smooth and rapid ramp-up, but unfortunately those things rarely happen. So if I look at the ramp-up on... Potentially the ramp-up at Kal and trying to produce enough... rare earth carbonate to feed LAMP if it does restart post the upgrade in the June quarter next year. That doesn't seem to be a lot of time for the ramp-up. That's only effectively four months. So I guess the question then is what gives the team... This seems, again, like a stretch target. And maybe one point is that, you know, really what we're after is some realistic and achievable guidance on the ramp-up and... you know, to 9,000 tonnes and to 12,000 tonnes. So I'm just still struggling to see how we achieve the ramp-up in time to restart an expanded lamp to achieve 750 tonnes per month.

Thanks, Paul. So, as always, a very critical approach. So, as you would have noted, you know, we have aligned these... to ramp up phases. So this means that, you know, we are actually giving ourselves, yes, potentially a quarter of pain, but it's one quarter. It's not, you know, sort of stringing it out over a period of time. So we will be limited even downstream in Malaysia on the amount that we're able to produce. And we see that as, you know, That's one of the reasons why we've timed this in the way that we have, because if we have even a modest ramp-up trajectory, then we think that these will be more closely aligned than they might otherwise be. On the other hand, very possibly we'll have cracking and leaching in Malaysia operating, in which case this will be moot.

Okay, thanks Amanda. And then on LAMP, you're good to see the extra detail on the expansion of LAMP to the 10,500 tonnes per annum. Can you step through, just on that, is it really just the expansion of the, you said the product finishing, but you're also expanding the solvent extraction? And I think you've previously said it's quite capital light. Can you maybe just provide another estimate, if you can, of what CAPEX is involved in?

So the capital is included in our financial report for the year end. We gave guidance on capital cash costs this year. It is included within there so that it's no additional cost over and above what we've already provided.

Okay, that's great. And then last one, Amanda, just on the US refinery, still targeting first production FY26. Good to hear that the engineering team, US team has been in Malaysia to still work through the feed and everything else. But when do you need to start construction, do you believe, to be able to achieve that FY26 target?

Paul, I'll get Daniel to call you back with that date. We're expecting it will be within this financial year.

Okay, so within FY24, so sort of two-year construction timeframe? Yeah. Okay. Okay. Alright, thanks Amanda. I'm still working through a bit of detail here. I might join the queue and I'll pass it on.

Thanks Paul. Thank you. Just a moment for our next question please. Next we have Chin Jan from Bank of America. Please go ahead.

Good morning Amanda. Two questions from me please. In the release, it mentioned planned shutdown from Malaysia in December quarter as well as March quarter NDPR separation upgrade. Would you please provide some color on your rare earth oxide production and NDPR? Is it fair to assume your inventory will draw down in the upcoming two quarters despite minimum production from the shutdown and the separation upgrades? So we won't see a big decline in sales despite minimum production. I have another one after this. Thank you.

Thanks. Yes, we will see some smoothing because, as I said, we've built some of that inventory. And the primary reason for that is not smoothing of the revenue, but it is, in fact, to ensure that we maintain reliable supply to our key customers. We have provided sort of an outline. We will have the lamps shut down from mid-November, so I think it's reasonably easy for most of you in your models to be able to backfold for that. We've provided a conservative estimate of somewhere around about 300 tons a month for quarter of next calendar year followed up by we would expect our first step up in production to occur in the final quarter of this financial year when we'll be able to go up to about 750 tonnes a month and then finally we'll move up in the following financial year to our target rates in Malaysia.

Right, right. Thanks for that, Amanda. A second question, just a follow-up, please. Are we, well, by looking at Kauguli designed capacity, 9,000 ton per annum equivalent NDPR, and then the separation facility is 10.5. I'm just wondering, are we still on track to achieve the 12,000 ton of NDPR equivalent? in your Linus 2025 plan? We are less than 18 months away, I guess.

Each of the phases, and I understand that this can be a little bit tricky, but because we've got a number of production phases, we're not a simple miner with just one beneficiation plant. we have a number of different production phases. And so our investment decisions are to do the most efficient upgrade in each of those at any particular time. So Mount Weld, we are upgrading to 12,000 tonnes per annum because that is the logical next step from where we are today. When we look at then our cracking and leaching capacity, Kalgoorlie will take us to 9,000 tonnes. If we have the variation to our licence in Malaysia, in fact we will have excess capacity well and truly over the 12,000 tonnes in that cracking and leaching stage. The next logical step with solvent extraction is to go to the 10,500 tonnes. And then once we've done that, stabilised, then we can consider taking the lab facility up the next step as well. So yes, we have slightly different uplifts in capacity as we go through, but we believe we will be able to get all of these aligned to meet our strategic goal of the 12,000 tonnes in 2025.

Right. Thanks for that, Amanda. Maybe last question, please. In the release, it mentioned during the shutdown, the Malaysia cracking and leaching staff will be deployed to Australia to assist with the startup process in Kalgoorlie. I'm just wondering what does that mean? Like, do you allocate the whole team to Australia to assist Kalgoorlie during the shutdown?

Not the full team but key members of the team. We already have about two dozen of our Malaysian people are actually working and some have been working for quite an extended period of time in Kalgoorlie and we are really fortunate. Anyone else who was proposing to start up a rare earth processing plant will not have access to the sorts of skills that we have. So when we think about how do we de-risk the ramp up phase, bringing in people who have, and because we retain our people, we've actually got onsite in Kalgoorlie, the same team that commenced the the heat up cycle for the kilns in Malaysia a decade ago. So, you know, we have this enormous amount of owner IP in this area. So we've got those who have already been working with us. As I said, some have been actually in Australia for over a year, others for several months. When we shut down, we will have a number of our operational leaders from the cracking and leaching facility in Malaysia as well as additional technicians who will come to Australia and who will assist in both the ramp up but also ensuring that our new workforce in Kalgoorlie is trained. Over the last six months, all those that we have recruited into Kalgoorlie have also been to Malaysia so they can actually see and experience and learn from the fact that we already have a facility operating.

Right, that's clear. Good to see you have skilled staff from Malaysia to Calgary help with the ramp-up. Thanks, Amanda. Thank you.

Thank you.

Thank you. Just a moment for our next question, please. Next, we have Daniel Morgan from Baron Joey. Please go ahead.

Hi Amanda and team. First question is you've given some quantified guidance on best case scenarios for the March and June quarters next year. Should I read this as assuming a positive Malaysian policy change scenario? Under an adverse scenario, i.e. you don't get a positive outcome and you're reliant just on Kalgoorlie, I imagine you would expect production to be below these levels. Is that fair?

I think that the famous statement about there are the things that we know that we know, there are the things that we know that we don't know and then there are the things that we don't know that we don't know does really apply when you're talking about sort of ramping up a complex plant. So what we do know is that it will take time to ramp up the plant. I think that you can see from this that we're modest in what we're talking about as the potential production in the first quarter of next year. We would love to overshoot that if we do indeed have the variation to the life conditions in Malaysia. Even with the very, very sort of best knowledge that we've got, modelling the various different sort of McNulty curves and experience based on Malaysia, it is difficult to give you any more precise guidance than what we've already provided in the report.

Okay, I understand. Separate question, Malaysia. There was a lot of news in Malaysia in the past couple of months about a new rare earth strategy. How do you read this as a company? Is this an opportunity for you? And is this a softening of the government's stance potentially towards cracking and leaching in-country?

I think that we all are very pleased that The Malaysian government has recognised the rare earths industry as an engine for growth in the Malaysian economy. I think that there is absolutely a recognition that Malaysia is a step ahead of just about anywhere else because Linus operates in Malaysia and Malaysia has articulated, the Malaysian government has articulated a desire to both develop their upstream and their downstream, upstream actually, they say upstream, midstream and downstream capability in country. We see that all as very positive.

And on the separate parallel process, which is the court process, the high court process, if you are successful in getting a stay, is there any expectation on how long a process can take? I mean, I'm not familiar with the court process in Malaysia. Can it happen in days and weeks, which I imagine would be a bad outcome for an adverse ruling? But if it's a protracted process and you have a stay, then you could have a less disruptive time in the first half of 2024, is what I'm thinking.

Yes. Just like I would never suppose to be able to predict what governments might do or on what timeline they might do it, I would be even more averse to predicting what courts might do and the timeline on which they would do it. So, yes, you are right. The stay, we think, is an important strategy and we think that we have a strong argument for why this should be allowed to occur as the matters are considered in front of the court.

Thank you very much, Amanda.

Thanks, Danielle.

Thank you. Our next question comes from Austin Yun from Macquarie. Please go ahead.

Morning, Amanda and the team. Just two questions from me, please. The first one is to extend a question from Daniel. Just would like to understand, given the comment from the Malaysian government, what would be the kind of a potential path from now on? Would you expect the government to start provide additional funding or tax breaks to encourage the development of the industry there? Or would you expect to see a tighter control from the government because they really, you know, get interested in this part of the operation? So just wondering what you're hearing on the ground. I'll come back with that. Thank you.

I think based upon... Yeah, thanks, Austin. I think based upon their public commentary right now that we would expect tighter control. You would have noted that, you know... the government and the regulators understand the value of the ionic clay deposits in particular in Malaysia, and that reflects a geological formation which is common across Southeast Asia. And so one of the announcements from the government was that they intended to ban export of raw material, so in its raw mine form. And we would see that as being very positive because we actually know how to separate mixture of earth carbonate, whether it comes from ionic clay or whether it comes from some other source. So we would see that as being very positive. And I think that this government's intention is to ensure that This is a key focus area for economic growth. Malaysia still has an automotive industry and has aspirations to have a larger and more vigorous automotive industry. Malaysia seeks to be a leader in terms of green energy and the energy transition. There is a very clear understanding amongst policymakers of the importance of rare earths materials as part of driving those industries. So I think there will probably be more rather than less control and I think it will be done for the purposes of facilitating industry development in Malaysia.

Great, thank you. Second was on the sales volumes for the rest of the year. Do you have any minimal commitment to your customers in terms of NDP and other various products for the December and March quarter?

Our commitment to our customers is that we won't disrupt their production by not being able to provide continuity of supply. And so we have a number of strategic customers, many of whom we have been supplying now for eight or nine years. We know what their forecast is and we're managing our inventory to be able to meet that forecast.

Okay, thank you. Sorry, if I can just squeeze in one last question. Just on you, production capacity expansion to 12,500 tonne NDPR, how should we think about the capex for those additional 2,000 tonne of capacity?

So it's 10,500 is the step that we're going to in Malaysia and it The costs associated with, we call it the LAMP industrial plan, are already included in the CAPEX indication that we've provided with the annual report.

Yes, I understood that. Just wondering for the next step after the 10.5 is to have a 2,000 tonne of gap, right? Try to understand the CAPEX intensity for the last lag of the expansion.

We expect it will still be relatively low capital intensity because, as I said, what we've done is that in this first step, we're making certain changes to two of our NDPR separation trains. We have four. When we go to the next step, it will be changing the other two of our separation trains.

Thank you.

Thank you. Next, we have Al Harvey from JP Morgan. Please go ahead.

Yeah, morning, Amanda. Just a very simple one to start. Just wanted to double-check the ramp-up next year, the tonnes per month. Is that quoted in total rare earth oxide or specifically NDPR oxides? Great, thank you. And then secondly, just I guess you've indicated that there's been some continued drilling out at Mount Well. Just wanting to understand when we might get the resource update and if it will include the rare earth oxide split that we haven't had for a while.

You'll get it as soon as we have finished all of the test work. We're all sitting on the edge of our chairs waiting to be able to bring that forward but we've done a lot of drilling as you can see from the report and we've done drilling both within the current life of mine where we've done a lot of additional drilling to understand distribution of elements, not just grade, but also to understand grade. And then, of course, we had the carbonatite drilling program as well. So there is a lot of work being done on this. Our team of geos are absolutely flat out But I can't give you a specific time on that. But we're working on it.

Great. Thanks, Amanda. Maybe just one last one. You mentioned the Malaysian ionic clays. Note that they don't require cracking and leaching. Has there been any discussions on utilising your solvent extraction and product finishing for local Malaysian ores? Maybe use that as a... a source of feed there at LAMP?

Sure.

Sure there has been discussions? Sure.

If you've got a resource and you want to value add to it and you've got someone who knows how to do it. Yeah, I mean there's a whole complex of matters associated with how we may or may not feed the land facility including whether we're able to operate in the way that it was designed and on the basis on which we made the investment. So yes, we have discussions about these various matters. We have no further update to provide on the licence at this time. But I can assure you, you will all be the first to know once we know it.

Yeah, sure. So, yeah, I guess I'm just thinking then if there's, you know, potential that, you know, that could be used as feed, does that potentially give the Malaysian government, you know, a little bit of a reason to put off overturning the cracking and leaching ban if You could process their local material with your downstream.

Well, it just could do, couldn't it, Al? Yeah. So, clearly, as I go back, I say, you know, we see it as very positive that the Malaysian government sees the opportunity for development of rare earths industry in Malaysia both using their upstream capability and further developing downstream capability. We, of course, have been very active in promoting the value of having the only proven operating rare earth separation plant in Malaysia. We have been very active in providing that to the Malaysian government and the benefits that could accrue to the Malaysian economy. And we continue to operate, we continue to meet all of the regulatory conditions and we continue to be of the view that the decisions should be made which are good for the Malaysian economy and which are also good for Malaysian industry operations, recognising that we are we are compliant with all regulation and we run a safe operation. So yes, we have advocated very strongly for the benefit of having the Linus plant operating in the way that it was designed to operate.

Sure. Thanks, Amanda. Really appreciate it.

Thanks, Al. Thank you. Our next question, just a moment, please. Next we have Tim Ariashin from UBS. Please go ahead.

Thank you. Thanks, Amanda and team, for the report. Just one quick question from me. On the inventory, obviously most of it is being managed to accommodate for central disruption in the next couple of quarters. But you do make notes that you're also withholding some of the SEG stocks in anticipation of higher prices. Can you maybe talk about what sort of quantum in price you'd need to see before you kind of deliver back into that market?

Hi, Dan. Yeah, look, I think that we're seeing significant strengthening in that market, you know, sort of already. And, you know, we will... I guess we don't have, like, a singular number where we'll say we'll do something about it because, you know, the way that we sell our SEG is such that we need to have confidence in, you know, both the demand and the price But I would suppose that if market trends continue the way that they are now, that we will start to unwind some of that inventory over the next two quarters.

Yeah, awesome. Cool. And then one other, just noting that a lot of the questions on modeling have been answered this is just for um excuse me if this is a bit uh amateur but in terms of uh um disclosure going forward now we're going to be probably a bit quiet until next year um notwithstanding that there'll be a lot happening uh with Kalgoorlie and with Malaysia um So will we be getting updates when we get the first MREC from Kalgoorlie? Or is it a case of no news is good news potentially? Apologies.

Don't apologize. We're delighted that people want to know sort of the detail of the way things are moving forward. I think that as we look at this, we know that we're only a month out from our AGM. We usually like to provide a fulsome update on what's going on at that time. So it's not quite as long until a next normalised update would occur. But we will certainly disclose anything which is material as and when it occurs. So, but don't worry that we won't talk to you until, you know, sort of late in January. I mean, at a minimum, you know, the AGM becomes a sort of a next point at which we would certainly provide an update.

Yeah, cool. Okay, thank you. Thanks, Deb.

Thank you. Our next question comes from Regan Burrows from Bell Potter. Please go ahead.

Thank you. Good morning, Amanda and team. Just a couple of questions from me. Firstly, just the impact of the shutdowns in November on the solid extraction and product finishing plant in Malaysia. Just sort of interested in the quantum of that. Is it sort of, I guess, similar production levels to this quarter, or are we sort of guiding to potentially considerably lower?

So basically we'll shut down from mid-November, so we're shut down for half the quarter.

Okay, so that would be a complete shutdown through to the end of the quarter? Yeah. Okay, cool. And then I guess just as a follow-up on that, you've obviously been stockpiling mature for a couple of quarters now. Just interested, I guess, in terms of a runway or how many quarters you can sort of sustain say, current sales levels going forward? Because we don't really have a breakdown of what's NDPR, what's SEG.

No, and it may not surprise you now, I'm not going to give you that on a time-by-time basis today either. No, that's fine. Suffice to say that, as I said, we've been, you know, as we've indicated across now a number of months, We've had detailed scenario planning and those scenarios have ranged from a very slow ramp up at Kalgoorlie through to what we would hope would be more of the trajectory and they have included both that we get a variation to our licence that continues to operate in Malaysia or we don't get a variation to our licence. in Malaysia and so we are managing to that to ensure that if we do have a very low production quarter in the March quarter of this financial year that we will be able to sustain supply to our customers.

Okay, so it will take you through to March sort of timeframe. And just, I guess, a final one sort of confirming Dan's comments earlier just on the sort of second half ramp up scenario that you've provided in those 300 tonnes per month stepping up to 750 in sort of next financial year. Just confirming that that assumes no overturn in the operating licence?

Yeah, those are our solvent extraction, that's actually the solvent extraction capacity that we're indicating there. And indeed, it may be better than that, it depends upon how long it takes for the changes in solvent extraction to stabilise. It's lower production for the March quarter, but then higher in the June quarter. So we will see some increase towards the back part of this financial year.

Okay, okay. So, okay. Thanks for that. I'll leave it there.

Thanks, Reagan. Thank you.

Thank you. Just a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. Next we have Paul Young from Goldman Sachs. Please, Paul.

Hi Amanda, it's Paul Young again. Just to clarify Amanda, the June quarter of next year, 750 tonnes per month target, which equates to 9,000 tonnes per annum of NDPR. So that's the nameplate of Kalgoorlie. So if it ramps up by then, then you can, in theory, feed 9,000 tonnes to LAMP. But it could be from wrong. Mount World can do about 7,000 tonnes at the moment. It's obviously the throughput there and production is all based on the head grade and you've obviously got the environmental... approvals for a set amount of ore throughput right so you can flex the head grade and therefore the concentrate production but I don't think Melwell can do more than about seven and correct me if I'm wrong so if you're going to achieve the 750 tons per month or 9,000 tons of NDPR annualized from the June quarter is that reliant on maybe what you might have alluded to earlier to a question around potentially you know feeding in some of those ionic clays in Malaysia into the plant?

No, Mad World actually has proven itself particularly over the last year to be able to do a bit better than the 7,000 tonnes a year because as we indicated in the full year report we've been able to not only feed Malaysia at essentially a 7,000 tonne equivalent but also build inventory for feedstock for Kalgoorlie. So, yeah, I mean, it's always the case of sort of managing each stage to optimise. But, you know, we're very pleased with the performance at this time and we think that we've got some headroom to be able to pick up. Second thing is that with the expansion project, The current bottleneck at Mount Weld is in fact in our dewatering circuit. So the first thing that we will be bringing online with the expansion is the new dewatering circuit which is substantially upsized from what we have currently. So we have previously indicated that Mount Weld it's 7,000 tonnes today and it's 12,000 tonnes tomorrow but we will have a couple of steps in there as we bring the equipment online and of course this is the benefit of being on a brownfield site. So releasing the constraint in the dewatering circuit will give us a step up. So we're fairly confident about our ability to match these tonnages through the process.

Okay, that's great Amanda. So that means, just to confirm, that means that potentially you could run the December half of next year, depending on the production settings in Matwell and performance, but you could potentially produce 9,000 tonnes per annum, a run rate of 9,000 tonnes per annum in the December half of next year?

Potentially.

Okay, very interesting. Thank you for that.

Thanks Paul. Thank you. I see no further questions at this time. I'd like to turn the conference back to Amanda for closing remarks. Thank you Amanda.

Thanks very much and once again thanks everybody for joining us this morning. I wish I could reflect and say gee we've had a really busy quarter and now we're just coast into Christmas but actually we're looking at another really busy quarter ahead. and certainly we'll keep you informed as we continue to develop the business.

Thank you. This concludes today's conference call. Thank you all for participating. You may now disconnect.