Lynas Rare Earths Limited

Good day and thank you for standing by. Welcome to Liner's quarterly results briefing conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the 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 will be recorded. Bo and I would like to hand the conference over to Linus. Please go ahead.

Good morning and welcome to the Linus Reris Investor Briefing for the quarter ending 31 December 2023. Today's briefing will be presented by Amanda LaCaze, CEO and Managing Director, and joining Amanda, Guardian Sturzenegger, CFO, Paul LaRue, COO, Daniel Havas, VP Strategy and Investor Relations, and Sarah Leonard, General Counsel and Company Secretary. I'll now hand over to Amanda. Please go ahead, Amanda.

Thanks, Jen. Good morning, everybody.

For those of you who are on the east coast of Australia or indeed even the west coast, within the top half, I hope that you're staying healthy during this incredible heat wave that we've got just at present. For those of you who are in cooler climates, I trust you're enjoying it. The quarter which has just passed has been a very productive one for our business. About midway through the quarter we received the very welcome news that our Malaysian license had been varied so that the conditions which were quite difficult for us with respect to management of our facility in Malaysia have now been removed and we are able to continue to operate all areas of our Malaysian facility through the duration of the current license, which takes us through to the second of March, 2026. As part of this license variation, there's only been one further variation from us, which is to dedicate 1% of our gross sales revenue to research. aimed at developing a residue which is less than one becquerel per gram of radioactivity. That process, that research process which is being conducted under the supervision of the Malaysian AELB but in partnership with a number of different tertiary institutions both in Malaysia and also using some of our relationships in Australia is already scoped and in progress. Of course, by getting this variation in the licence conditions gave us confidence to make some of the investments that we have been planning to make in our Malaysian facility, including those which see us reconfigure our flow sheet and solvent extraction and make further investments in product finishing, which will allow us to increase our downstream capacity in Malaysia to approximately 10,500 tonnes per annum of NDPR. In addition, during the quarter, during the period that we were shut down to complete those works, we also undertook significant works in our cracking and leaching and OUR areas both on ongoing maintenance but also some enhancements in operations given that we now have extended operation of those facilities. This was indeed, as you would have seen in the report, the largest, most significant work that we've undertaken on amalgamation processing facilities for the construction of the plant. We had 600 subcontractors mobilised on site and we're very pleased to say that all planned modifications were complete without any injuries. At the same time, during the quarter, we were delighted that we were able to announce feed-on in Kalgoorlie in early December. That certainly takes the pressure off some of the issues with respect to the change in the license, takes some of the pressure off in terms of the speed of the ramp-up in Kalgoorlie. and also has given us the opportunity to demobilize some of the subcontractors on site, which has a beneficial cost impact. And then at Mount Weld, we were delighted because we received the ministerial statement which reflects basically support of the Mount Weld expansion project by the Western Australian EPA. and made some great progress with our early works. Separately from the quarterly report, we've also announced some of the results that we've had from the carbonitide exploration program, which we've been conducting over the past 18 months or thereabouts. These are highly prospective for the future resource development at Mount Weld. So really the quarter has been very focused on ensuring that we are setting up our operations, progressing our various projects to ensure that we are both able to support capacity growth as the market grows but also that we are undertaking efficiency initiatives to ensure that we can preserve and indeed in some instances improve our cost position because in a market, which I'll talk about shortly, which is cyclical in nature in terms of pricing, it is important that we retain a low cost and competitive cost position in the market. So let me turn a little then to sales and also the market. I would point out that despite being shut down for 50% of the quarter, six weeks out of the 12, we had some very good production rates, production during That quarter was absolutely in line with our target 7,000 tonnes per annum. Our sales, notwithstanding the very low pricing environment, were also at a respectable level, which reflects the fact that we were able to sell down some of the safety stock that we had been holding. just in case, I guess that's what safety stock means, isn't it? Just in case we had not achieved the outcome on the Malaysian license that we did. Of course, everybody who is even a casual observer of the rare earth market and generally the critical minerals market and a number of the other not iron ore minerals in the market would know that the market is not helping us at present. And yes, I'm sure you've heard that from many other producers as they've been releasing their quarterly results. It really is all about the subdued environment in China. Generally speaking across our various markets, we continue to see Automotive is pretty strong. Japanese customer demand remains resilient, but really inside China, particularly when it comes to those areas which are associated with the real estate market, we are seeing very soft demand, which is translating to conservatism, in terms of inventory holdings and sales in the red rose market. And so the price is back at sort of pre-COVID levels. We see this as being part of normal sort of cyclical events within the market. And as I said, Our objective is to ensure that we have our operations operating safely and in a cost-effective way to ensure that we are able to continue to compete and be well placed for the market upturn when it happens. And I'm sure many of you who've been investors in Linus for many years would know that this was exactly what we were saying in about 2020 and so we saw the benefits of being in that strong position when the market really picked up in 2021, 2022. So generally speaking, I think we're all fairly pleased with the progress that we have made during the quarter and pleased also with the way that we have been able to manage the business through this time and through sort of having an extended shutdown. And we look forward to this calendar year continuing to be an exciting one as we continue to develop each of those projects further. So with those as sort of opening remarks, I am, as always, happy to take questions.

Thank you. We will now conduct the question and answer 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 Chan Chan from Bank of America. Please.

Good morning. Good morning, Amanda. Can you hear me? Yes, Chan. Hey. Hey, Amanda, thank you for taking my question. A couple from me, please. So congratulations on the NDPR production despite the shutdown, sorry, the temporary maintenance work. I'm just wondering, NDPR capacity, you know, mentioned in the quarterly 10.5 by the end of December 24, so that's end of first half of FY25. Could you please remind us the plan after the 10.5 to achieve 12? Previously, you mentioned it's called Linus Growth Plan 2025. So would you please remind us if the Linus 2025 growth plan is still intact and then the plan after that? Thank you.

Sure. Well, actually, you would recall the original Linus 2025 growth plan was to get to 10,500 tonnes per annum. In addition to that, we have plans to construct the separation facility in the US, which is about 1.3 thousand tons per annum. So that really takes us up to sort of that 12,000. We've got the opportunity to do some further optimization work in Malaysia as well. But essentially it will be a combination of the Malaysian facility with the US facility is going to get us to the 12, which is the capacity that we're installing at Mount Wells. And now with the two cracking and leaching facilities in Kalgoorlie and in Malaysia, clearly we have sufficient cracking and leaching capacity to be able to feed that downstream activity.

Great. Thanks for that, Amanda. That's very clear. Maybe a question on Kalgoorlie, please. So Kalgoorlie will start to fade the mixed rare earth carbonate to your Malaysia plant from the March quarter. If you could give us any color on the cost as an average for Linus Group, I know it's very hard for us to your cash cost will increase including Kalgoorlie, but if you can give us any, how should we think of your cash cost including Kalgoorlie in the next three years? Thank you.

So certainly in this financial year, we have always been very clear that it is sort of an adjustment year. We've had this effect of the sort of long shutdowns There's a number of initiatives that we've had to take, that we've chosen to take in Kalgoorlie to facilitate, you know, sort of the startup there, including using track gas rather than piped gas because of various issues around the gas pipeline. We also, you know, will... where some cost penalties in the early stages as we're adjusting and particularly operations there, reagents, we've got more people on site to ensure that we're getting the commissioning and ramp up process right. So as we move through over the next two to three years, our target, right, and I understand that this is a a challenging target is to keep our cost of production within the same sort of range as we have it now. Now, will we be able to do that? It means that we're going to have to look at efficiency because by definition, yes, you're right, adding a third site is going to add further costs. So we need to look for further efficiencies in both our Mount World and our Malaysian operations, so that when we look at the cash cost on a combined basis, we will not be significantly increasing that cost. Now, I can't give you really what the exact profile of that is going to be. But that's certainly our objective, because as I said, preserving a low-cost position is crucial to our ongoing success.

Understood. Amanda, thanks for the color. And last question from me, please, on Kalgoorlie. I'm just wondering, have you, well, Kalgoorlie has started processing the concentrate from Mount Weld. at the end of last year, any challenges since it started? Are you expecting any technical challenges for processing the carbonate for the rest of the year when you send the Calguri carbonate to Malaysia? Thank you.

Okay, so yes, there are challenges. Stop press. We've got a big, complicated new plant and there's some challenges. And we certainly have been, you know, as we introduced feed, I mean, of course, this actually showed us areas, you know, all of our team had a sort of hypothesis on Where we might face those challenges, well, you don't know until, you know, that's all theory until you actually introduce the material. So there are some areas where, you know, improving and like with any start-up, you start it up, you shut it down, you start it up, you shut it down and do some further works and all those sorts of things. I'm not sure that really the reporting made it to the East Coast, but there's been a very, very significant issue with power in Kalgoorlie over the last week. It was taken out completely by lightning strikes and absolutely amazing, these huge towers which were taken down. For us, fortunately, we actually were not operating the plant at the time as we were doing some of the enhancements because I think that the sudden disturbance to power could have been quite problematic for us as it was. Having no power was definitely an issue. by no means as great for us running an industrial facility as for some of the other residents of Kalgoorlie, and we did our best to contribute and help within the community. So I think that our latest forecast is that we should have power back onto the plant by the end of this week. In the meantime, we have gensets which are providing power which allows us to be able to continue with certain of our final construction activities but as we said with the heat wave we're really sort of focusing on things which are undercover. So we have plenty of challenges but we also have plenty of skills and capabilities to meet those challenges and I think we're all feeling that we can continue with the ramp up in good order. With respect to processing the MREC in Malaysia, fortunately, we're not in a situation where we're trying to do something with no experience and no skills. In fact, we've got a decade of it now. But as well as that, we have the ability to actually produce a rare earth carbonate in our plant, which we have then been able to test through the circuits. This gives us a great deal of confidence that the circuits as they've been designed will work. And so we think that that's a lower risk change from others that we may put in place at various times.

Great. Thank you so much, Amanda, for your color and insights. Much appreciated. I'll pass it down. Thank you. Thanks, Jan.

Thank you. Our next question comes from Daniel Morgan from Baron Joey. Please go ahead.

Hi, Amanda and team. My question just relates to demand. I mean, obviously, it's disappointing the commodity price has been tracking how it is. I just wanted to hear, you know, what thoughts you can give us on your customers. Like, obviously, you've called out air conditioning as being weak and other property-related sectors. But is there any shift in demand from wind customers? I understand that's been pretty weak over the last 12, 18 months as well. And I guess broadly the point, is there any reasons to be optimistic on a turnaround in demand

Oh, maybe I might let Paul take that question.

Suffice to say that certainly, you know, we have seen some wind projects deferred. But look, I'll just hand over to Paul. He's actually been in each of the major markets relatively recently meeting with customers and will be able to give you a bit more colour than I can.

Good morning. Not much to add to that, but I think mainly the interest rate increase has postponed some wind turbine projects in Europe, but that's not really major. Electric car growth is there and it's overall doing pretty well. The key factor is definitely the economy in China. So I think you are more expert than me to forecast how fast the economy will recover in China. I'm just a little serious guy. You are a finance expert for that. But that's the key point. When will China recover?

Yeah, thank you. And maybe how do you think, Amanda and Tim, about bringing on your own supply in the next 12 to 18 months? I mean, you've got the potential to add a lot of supply to the market versus what you have. How do you anticipate sequencing that given the demand for the product has been a bit weak recently?

So demand for our product remains resilient. We continue to have everything that we produce finding a home under I mean, we have a very clear look through in terms of ongoing demand and our major customers continue to forecast increases in demand. Having said that, with any business where any business is dependent upon sort of the general economic environment or, in our case, some specific sort of sectors. And so building optionality into our business, ways that we can sort of make best choices for cost, be able to make choices to dial up or dial down at particular times, is something that we've actually worked on pretty hard for probably the last six years to be able to give us a bit more flexibility in the business compared to the days when we just had to turn out as much as we could as fast as we could and sell at any price. So our customers have still got clear growth trajectories in their forecast consumption. And that's the reason why we continue to invest with confidence in increasing our capacity.

Thank you very much for your perspectives, Amanda and Tim.

Thanks, Danielle. I just want to say to everybody, and Happy New Year.

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

Thank you. Morning, Amanda and the team. During the December quarter, we can see the product mix has shifted. So how should I think about the product mix for both production and the sales for the next two quarters, please? And just quickly also to confirm that the 1.5 thousand ton of production for the March quarter is for NDPR only. Thank you.

Yeah, thanks, Austin. Yep, the 1500 tonnes is the NDPR production that we're expecting. I think this is one of the things that we spent a fair bit of time thinking through, particularly through the shutdown and as we've done some of the testing of the circuits. As you would recall, last quarter we took to having a very soft first quarter this year. and then sort of having the ramp up to the new capacity occurring in the June quarter, we've chosen a smoother ramp up profile, which will actually see us produce a bit more over the six months, which we think is generally a good thing. In terms of the mix, I think as we move back into full production, we will see the mix actually settle back to normal profile.

Okay, got it. Just one quick follow-up. Given the revised ramp-up profile, would there be additional working capital expected or how should we think about any potential cash flow impact if anything that we need to be mindful of?

Thank you. Well I think that it will be as it will resemble much more of a normalised quarter with the exception that this quarter we get the benefit because most things paid on a 30 day we get the benefit of some of the reductions in production costs that came during our shutdown in the December quarter. But no, nothing significant yet.

Great, thank you. I'll pass it on.

Thank you. Our next question comes from Al Harvey from J.P. Morgan's.

Good morning, Amanda and team. I'll just follow up on the supply and demand outlook. So I guess maybe a couple here, just thinking through what your views are on the additional production quotas announced by China late last year, what the motivations there might be, just given prices have already been soft. And then perhaps on the demand side, just wondering if Linus has any exposure to the growing AI and robotics industry, and whether you've done any research on the potential total addressable market there in terms of the rare earth side of things.

Sure. Thanks, Al.

Once again, I think I might pass that across to Paul, but start by saying, yes, we see automation and factory automation as being one of the key growth drivers and as we go forward, but Paul can speak particularly to production quotas. He was in China towards the end of last year and can give us a bit more color on that.

Of course, to you, Paul. Yeah, so there was this surprising announcement at the very end of the calendar year for additional quotas. I understand that this was specifically required by one Chinese major risk player who had consumed his full year quotas. That led, I mean, obviously led to a bit of a oversupply, given that at least the mood and the demand was not very strong. And that explains the the situation we are in at the moment. The key element is always to understand, I mean, China remains the biggest, by far, real supplier on the planet. How much they increase their production quotas reflects their overall strategy. Two points on this one I had to do recently. an exercise for long-term demand of NDPR. And actually, if you forget the quarter, but project yourself 10 years ahead, there is so much need for it that actually this game on production quotas might not be the main driver of all. And the second is, I remain of the same position that actually China has developed downstream clear leadership They leverage their risk production position to do that. Today, they have the downstream leadership established. They should not, you know, we understand them paying so much attention about where the supply comes from because downstream they are really having the lead. This being said, we'll see what will be the quotas after the Lunar New Year. So February 9th, I think, is the Lunar New Year. And so I expect something to be announced in the second half of February.

Thanks, Paul. And you just mentioned that you did a bit of work on it. Are you willing to share kind of where you see the Chinese production quotas or their production capacity capping out in your assumption there?

I don't think I can do that. Sorry. Fair enough. You can as well ask me what the price will be tomorrow, and I won't do that. Surprise, surprise.

No, he won't, but it would be foolish of us to speculate on China government policy, and it's not something over which we have control. We come back to, as I was saying, what we do control is the ability to operate our facilities cost effectively and to develop strong, robust relationships with our strategic customers who are going to be driving demand over the next three to five years. That includes now that we have a very clear pathway to increased production, the ability to engage with some of the customers who have been seeking additional product from us on long-term contracts for some time now, but for whom we've not been in a position to be able to make that commitment until we have real confidence in the capacity uplift.

And just adding up to that, sharing with you a little bit of my trip to China. I hadn't been to China for four years, so for December 19 before COVID. And it was interesting to different aspects. First is that you really feel the economic difficulties. You can see that in the street. The second is that we were suppliers, competitors, saying that Linus is now the most competitive race producer, which means two things. One is the idea of killing Linus is off the shelf. And second, as you know, we always say that in Linus, our costs are our muscles. And so it's important that the efforts have been delivered and recognized.

so that was really the very interesting takeaways from our trip to china sure thanks for that and yeah i do appreciate it it is hard to know what's going on with china i just thought given you'd done a little calc yourself that maybe you'd be willing to share but um so we'll move on just wanted to get um a sense of how you're thinking about uh longer term messaging around the total system capacity for Linus, given you've got call it 15,000 to 16,000 tonnes of cracking and leaching capacity, and notwithstanding the weaker market conditions, what kind of work have you done on looking at a rate beyond 12,000 tonnes and perhaps maybe can guide us on when you might go about stepping out those kinds of plans?

I just love you guys. I mean, you know, here we are still in the process of finalising this significant next step. And now you want to know what are, what more? But actually, what more is one of the reasons why we have continued the significant drilling campaign at Mount Welch. So we are undertaking real exploration and in-fill drilling that allows us to better understand the ore body as it is. And so we have not converted the carbonitide drilling program to a mineral resource at this stage, but expect to be able to do that over the next several months. And so, as always, the value starts with what's under the ground and really understanding that we have sufficient material to be able to feed a larger production capability is critically important. And the results are really very positive for two things. One is sort of additional NDPR and as we've looked at it whilst we... Hello, I'm back. Hi.

You're back. We can hear you again, Amanda.

Oh, my God. I'm not sure where I stopped. I was in full flight.

No, that's all right. You were on a bit of a roll about the Mount World exploration results, so I might just finish with one more on that if I can. I guess I just want to kind of clarify the wording in the release around the grade. So it does say that total rare earth oxide grade in the fresh carbonatite is averaging up to 3.3%. So I guess I'm just trying to understand if that's the peak or it is the average and just how you kind of think about that with respect to the reserves that are currently, you know, approximately 8%. And then, yeah, just want to get a sense of what kind of gives the team out there a view that it could be, you know, the fresh carbonatite could be a simpler and lower cost process versus the higher grade saprolite material at surface.

Okay. I did actually cover some of that when I was speaking into the abyss. But certainly the work which has been done at present on possible ways to... processes material. I think as you know that the saprolyte zone has its own set of challenges with respect to the float circuit, the very fine particles, and the ability to use a simpler process for the coarser grained material. we see as being prospective, bearing in mind that this is an early report. We have not converted this material to a mineral resource. In that way, if that is the case, it does make the ability to be able to cost-effectively process, even though it's on average a lower grade, I think is very positive for our business going forward. So I think that the other thing which I was once saying when I dropped out is some of the additional information that we have been able to get as we've conducted the drilling campaign, particularly on the distribution and availability of heavies is really important because as you know high performance magnets need a combination of both NDPR and also heavies and I think the prospect of being able to mine for element not just mine for grade is also very positive for our business.

Yeah, sorry, just really quickly on that. It does look, though, like the dysprosium grades are, you know, three to four times lower in the fresh rock zone versus the saprolite zone that you're already mining. So just how do we reconcile that?

Sorry, the dysprosium results that we have seen are actually related to the... are actually related to areas which don't sit within our current life of mine, even in the saprolyte zone. So that's what we're actually doing more work on, is to understand in those areas which sit outside, given that our current life of mine plan is primarily focused on grade and by default therefore NDPR, is actually looking at the areas outside of there where we can see further enrichment of the heavies.

I really appreciate all this Amanda.

I think that we're at a stage at this stage where we've got some good prospective results and it's important for us to share those with the market. we need to do some more work and we'll, in due course, convert this into a proper mineral resource and subsequent mineral reserve for Mountwell.

Thanks Amanda.

Thank you. Our next question comes from David Dickerbaum from TD Carwin. Please go ahead.

Morning, Amanda and team. Thanks for squeezing me in here.

A pleasure. I hope it's not too late for you.

No, no, no. You guys came in early this time around. But, you know, I wanted to maybe ask a high-level question. You know, is... Obviously, this quarter, there's a bit of a transition. You all are endeavoring in multiple growth initiatives. I don't necessarily need to know what's next, but I am curious, in the context of the cash burn that's probably foreseeable for the next several quarters, how do you kind of square your capital initiatives right now with the uncertainty of the market, which, as you pointed out earlier, is highly contingent on the broader Chinese economy recovery? which no one seems to have the answer to right now. So how do you think about sort of that risk management right now, and how far away are we from any modification to timing of capital outlays, or are we sort of kind of too pregnant with some of the projects that are ongoing now, so it's more of a let's finish those up commission and then wait and see?

It's an excellent question, David, and I think you would not be surprised to know that we have done a fair bit of work on this. I mean, you know, you cannot just keep spending money blithely or, you know, bankers would say, well, why don't you take on some debt? It's like, well, the market's down. The dumbest thing we could ever do is actually spend borrowed money. So therefore, what are the profiles that allow us to be able to preserve cash if we need to? At this stage we don't see this in the short term because we have been able to develop such a strong balance sheet and really the key project in terms of capital consumption over the next 12 months is going to be the Mount Weld expansion and we see that as being both able to be accommodated within our current balance sheet and highly desirable to complete within that period. But we have a watching brief on us and we have identified what we can do. We just don't need to do it at this stage.

I appreciate that and thanks for the response. Maybe a little bit more in the weeds, but when I look at this past quarter's results, it appears, unless I'm incorrect, that maybe your absolute total costs are increasing right now, and I'm curious if any element of that is a function of commissioning or downtime at facilities that you would deem to be more one-time in nature as opposed to obviously just total operating costs increasing on a unit basis as you bring on Kalgoorlie?

Oh, that's all a bit complicated, but I guess one of the important things here to recognize is that, as you said, in terms of what we report here is a cash flow, not a not as we will report with our half year where we actually get an accounting cost associated with production and the cash cost of course is slightly lags production. So during the quarter we effectively had close to a quarter's worth of cash cost associated with production but 50% of a quarter of production. We will see some of that benefit come in during this quarter. But as you've identified, and as I mentioned earlier, it is an adjustment year, and we will see some increases during this year associated with operation of the Calgary facility, which, you know, once we've got it up and running stably, we will then look to optimize.

Thanks for the answers, Amanda. Best of luck out there.

Thanks, David. Thank you. Next, we have Dim Ariashan from UBS. Please go ahead.

Thanks, Amanda and team. Just on the ramp-up, can you maybe let us know, in terms of optimization, or give us a little bit more color on how you could potentially manage a ramp-up of Caliguli with regards to lower prices? Like, is there any elasticity in how much how much production you can have, how agile is the facility versus lower prices?

Yeah, probably not a huge amount of elasticity in the ramp-up phase to the extent that as start the facility, we need to be testing and pressing its capability. It is an expensive, costly period as we produce during that phase. Once we have sort of view of operating capability and we're operating stably there and at the same time we're operating with stability in Malaysia, then certainly we have an opportunity to look at how do we best optimise that and we may do things differently according to market conditions. But during the ramp-up phase, probably not a lot of wriggle room.

Thanks for asking these questions. Maybe one a little bit more blue sky, if you could just remind us on your heavy rare earth strategy, maybe that's something a little bit more exciting, versus a $50 MDPR price.

We think every day is exciting, and even a $50 MDPR price gives us plenty of exciting things to deal with. But heavies, look, I think that the original exploration, as I've talked about, about wells is really very much about light. Heavies were a happy coincidence that we've grown along with it. The processing, sort of our end-to-end processing was absolutely designed to optimize, say, recoveries for lights. and didn't necessarily optimize recoveries of heavies. And we see that we have opportunities to improve that. As I said, we've got the opportunity to mine in areas that weren't within our current life of mine plan, which would see us produce more heavies as well. These are all important. In terms of then looking at alternate sources for heavies, I think every one of you has written about ionic clay deposits and prospectivity from those. Certainly for us, very close to home are the Malaysian ionic clay deposits which are being progressively developed. The Malaysian government has nominated development of rare earth industries upstream and downstream as one of their important economic focus areas. Working with potential supply sources in Malaysia to complement the material that we have available out of the Mount Royal war body is clearly a priority. And then looking further afield at other heavy sources, of course, is sort of on the agenda. But I would say that those are developing Mountwell, looking to partner and develop Malaysia are the two things that I think are the most prospective at this stage.

Yep, understood. Okay, cool. Thank you.

Thank you.

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

Sorry, just wanted to follow up. Amanda, when should we expect the resource update?

Oh, probably mid-year. We generally provide an update around about the time that we produce our annual results and we would think that we will aim to do it no later than that. Of course, if the team can do it earlier, we'll spread the market accordingly.

And just finally, a bit more of a follow-up, just thinking about, you know, that potential, again, beyond 12,000 tonnes, how do you think, you know, and in the context of Paul's analysis, you know, how are you thinking about whether or not the market could take? I suppose you did mention that you think that there is a requirement for more material, but how do you think about, yeah, feeding in more material longer term?

Well, I think, once again, it's one of the reasons why we've been dedicating time and effort to better understand the Mountwell law body. We continue to engage with various different prospective third-party suppliers. None of them have actually come to market yet but that doesn't mean that we won't over time be able to take you know be able to work with others who may be able to develop a resource to be able to process that resource and as said you know with a particular focus on some of the upstream resources which we do expect to come available particularly in Malaysia this is a It's close to home and it's a jurisdiction where we already know what we're doing and understand the potential sources of additional material. In terms of our processing capacity, as said, racking and leaching, we've now got plenty of capacity. And so downstream, We've got a very low cost uplift from the 7,000 tonnes to the 10,500 tonnes capacity in Malaysia, one of the great benefits of brownfields expansion. I think we're relatively confident that we would be able to take a further step there, but it will be sort of phased appropriately with what we do with capacity in the other stages.

Thanks, Amanda.

Thank you. Thank you. Our next question comes from Paul Young of Goldman Sachs. Please go ahead.

Hi, Amanda. I know it's been a long call, so thanks for taking the question. I just want to dial in on a few specifics, and the first one's around the SWAT upgrade in production for NDPR for the June half. Just want to clarify, you've done the expansion works of de-baldernecking on the cracking and leaching and front end. Have you actually completed the expansion of the solvent extraction, the two solvent extraction trains? Is that still ongoing?

No, it's done. What we need to do now is to stabilise those and increase the feed rate through to those as we bring MREC from Malaysia as well. Bear in mind that we've got to have both the feedstock from Malaysia and the MREC from Kalgoorlie to be able to feed the increased production. The upgrade went really well and we are very confident about those circuits which is the reason why instead of sort of You know, we've been conservative in what we've said previously, which was to halt that production, lower walls so circuits stabilised. Things working very well for us right now.

Yeah, great. That's amazing. Well done to the team. It's probably the fastest expansion I've seen of a back-end refinery in the industry. So well done to the team. Second question, Amanda, just on Mount Wells. I noticed it was running at 80% nameplate in the quarter. Why wouldn't you be running it as hard as you can? I know it was running it basically nameplate a couple of quarters ago. Is that just all type changes or something else?

No, just because we were shut down for six weeks because we've been able to build the inventory and because we are always mindful of costs.

Right, so it's more working capital management that Mount World's running at 80% throughput in the quarter.

And it's now back to 100%.

Great. Okay, fantastic. That's it for me. Appreciate it.

Thank you. Thank you. I would now like to hand the conference back to Amanda for closing remarks.

Thank you. And look, thank you everybody for joining.

I think that it is always, you know, When the market is feeling soft, it's easy for us to feel like having a little bit of a weep. But generally, we see this market continuing to be highly prospective. It's growing. It's important. And we're about making sure that we are in the best possible shape to win in all circumstances, whether the market conditions are really really positive or whether as they are today maybe not so positive but you know we need to be focused on making sure we can be successful across all stages of the cycle so thank you very much and we look forward to a very exciting you know 2024 calendar year and I'm sure I'll talk to you all again soonish as we announce our half year results.

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