Lynas Rare Earths Limited

Good day and thank you for standing by. Welcome to Linus quarterly results briefing. 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 need to press star 11 on your telephone. You'll then hear an automated message advising your hand is raised. Please be advised that today's conference has been recorded. I'd now like to hand the call over to Linus Rath. Thank you. Please go ahead.

Good morning and welcome to the Linus Rare Earth Investor Briefing for the quarter ending 31 March 2024. Today the briefing will be presented by Amanda LaCasse, CEO and Managing Director and joining Amanda is Garden 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. Thanks Amanda.

Thanks very much Lauren. Good morning everybody. Now I'm told by the people who manage this conference there are already five questions in the queue so I will probably keep my remarks very brief therefore so that we have plenty of time to deal with those questions. As always I am certain and that's the reason why you've got lots of questions who've already read the report So I don't intend to pick over it in detail, but simply to pick out a few highlights. The absolute highlight of the quarter was the production outcomes. As we had disclosed in our half yearly, we had a very successful shut for the last six months of last year. And indeed at LAMP, we have put in a major new facility for the receipt and processing of MREC from our Kalgoorlie facility. And this has been done really with very smoothly, minimum of fuss, and most importantly, safely. So not only was the shut managed well, but the ramp up from the shut has been really quite outstanding. We thought that we were going to do better than what we had guided on late last year, and indeed we've done better again at 1,724 tonnes. We think we will sustain that in that sort of vicinity for this quarter. We won't be bringing in a lot of the new capacity that we've now got available to us in Malaysia until we see some further improvement in the market. So a very successful production ramp-up. and we are confident in using our time to test and make sure that the new circuits work. Of course, another highlight is the Mount Weld expansion. It remains on track. Stage one, which some of you will recall, really focuses on our dewatering circuit, which is the current bottleneck at Mount Weld. is very well advanced and we expect to start energising, energisation and commissioning over the next few months. We certainly expect that we will have a step up in Mountwell's capacity by the end of this calendar year and that will be followed by the further step up which will come with the completion of phase two next calendar year. Progress in the U.S. remains very positive as well. U.S. government, as I think nobody would be surprised, is very focused on ensuring that this project moves forward and moves forward as quickly as possible. We received the NEPA National Environmental Protection Authority approval during the period. Interestingly, the DoD was the proponent on that and so it really helped us to ensure that, you know, I know one of the things that people ask is what's it like going into a new jurisdiction and when you're partnering with people who are expert in that jurisdiction you certainly are able to avoid any of the, you know, traps for new beginners. So we've continued with the engineering design review. We've had our engineering teams working together in Malaysia on a number of occasions, and we see ourselves commencing with Earthworks at Cedris by the end of this calendar year. Another highlight was the appointment of the Carey Group for a five-year contract for our mining services at Mount Wells. Kerry is an excellent and proven contractor in this space, 30 years of experience, and at mines which are close to our Mount World mine. It's also really very positive. Daniel Tucker, the principal of Kerry Mining, is from the area, so it's his country. It has many family connections in that area. We're really pleased that we're able to have an excellent mining contractor who also brings the First Nations experience and knowledge of the country in which we're operating. So what were the lowlights? Well, the market continues to be less than kind to us. and to anybody else in rare earths, of course. Paul and Daniel and I have just spent a couple of days at a rare earth conference in Singapore. There's a general view in that conference that the slight improvement in price will probably continue to firm, but not at a significantly accelerated rate. Certainly, as you listen to all of the various industry commentators, their assessments are wide-ranging, but there's a general consensus that the current price is below cost for many Chinese producers and that there's also a general consensus that the Chinese economy is is starting to pick up momentum again. So with these various sort of influences, as everyone would have seen, we made a decision to hold some of the inventory rather than having it sitting in other people's warehouses, appreciating as the price goes up. We thought it would be best if it sits in our warehouse and appreciates as the price goes up. Then the other one which we have disclosed in here is that as we're approaching sort of final, final activities, construction activities in Kalgoorlie, as we're finalising various different contract arrangements and sort of claims backwards and forwards, We think that we're going to end up more in the range of about 800 million in capex rather than the previously disclosed 730. We see this casually as not surprising us in terms of some of the challenges that you face as you're in your early commissioning and ramp-up phase. skilled and capable people on site and look forward to it really now starting to accelerate as we complete a number of matters. The issue with power, certainly I think once again when we did the half year we disclosed the effect of the January power outage in Kalgoorlie. The downside to that was that we didn't have any power at all for two weeks. The upside is it gave us some good learnings around the way that the plant would respond to an interruption of power and we have been able to enhance some of our processes and some of our equipment to deal with that. So we continue to work on Kalgoorlie and right now as everybody knows we have excess capacity theoretically in C&L and we can certainly consume all of the feedstock available from Mount Weld at present. And as we move into the next stages, we commissioned stage one at Mount Weld. We would like to have Kalgoorlie actually ramping up in parallel with that increase in feedstock coming out of Mount Weld. So as said, I'm sure you've all read it and I'm happy to take your questions. The big highlight is production and coming out of our shutdown very well. And we look forward to probably a somewhat better run through to the end of the financial year. Happy to take questions now.