Lynas Rare Earths Limited

Good day and thank you for standing by. Welcome to Liner's 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 will then hear an automatic message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to turn the call over to Liner's Readers.

Good morning and welcome to the Linus Reres quarterly investor briefing for the September 2024 quarter. Today's briefing will be presented by Amanda Lacaze, CEO and Managing Director. And joining Amanda today are Gauden Sturzenegger, CFO, Daniel Havas, VP Strategy and Investor Relations, Sarah Leonard, General Counsel and Company Secretary. I'll now hand over to Amanda. Please go ahead, Amanda.

Well, good morning, everybody. Actually, for those in Sydney and Melbourne, now it's good afternoon, isn't it, with those trend of daylight savings? I'm told that everyone was prompt to joining the call today, so I'm not quite sure whether that means that we're in between you and your lunchtime or whether not much else is going on today. Certainly, I think that what we have today in terms of our report is a report on a fairly uneventful quarter in very many ways. As I look around at some of the other financial news hot topics at present, I think I'm quite happy to be in a relatively uneventful space. Across the quarter we saw a slow improvement in NDPR pricing which seems to reflect that it reached a level that was uncomfortable for many producers. I'm reminded of what I think one of the analysts actually told me about the price goes up in steps but it comes down in an elevator and certainly as we've looked across the last month or so We're seeing small steps. I got a bit excited today. I think it was over a dollar that the price went up, but generally somewhere in the range of 30 to 50 cents a day with the occasional backward step. But generally, the trend is good even if the trajectory is modest. And that's good for our business. So within that market environment, we continued to demonstrate our ability to be successful even at low prices. I was just recently at the big annual rare earth conference in Washington with many other rare earth existing participants in the rare earth markets and aspiring participants. And I have to say, I came away with that remaining very pleased that I'm the CEO of Linus and not one of those other companies. During the quarter, production at approximately 1700 tonnes reflects our previous advice that we would align production to demand. It is our assessment and remains our assessment that now is not the time to create supply side pressure in the market or to incur costs ahead of revenue by producing to inventory. During this time of managed production, we are focusing on ensuring that all our assets are in excellent shape for what we see as inevitable future improvements in the market. Mount Weld continues to perform strongly. The release of the dewatering bottleneck with the commissioning of stage one of the expansion is an important milestone and gave us the opportunity to actually just deliver a record monthly production from Mount Weld. And that's producing to two different specifications. and two different packaging formats for LAMP and also for Kalgoorlie. So in a retainer to Kalgoorlie, we're in bulk bags for the LAMP. The photo on page six, which I'm sure to many untrained eyes would just look like sort of two piles of dirt, is quite exciting for all of us and I am sure to those on the call with a more discerning eye who can see the value of the concentrate which has come out of that dewatering circuit. With the commissioning and use of the dewatering circuit, the bottleneck has now moved to the mill. On page seven, we have included two photos at Mount Weld, which I find, once again, very exciting as we look at really Where is all the money going? I mean, we have a big CapEx spend and have had over the past couple of years. But as you look at this photo, you can really see the significant investment that we're placing in our asset at Mountwell with great confidence that this will deliver excellent returns for the company. So the pole neck has now moved to the milk. which will be resolved with the completion of stage two. You can see the photo of the feed conveyor, the mills in place, very excitingly the fine grinding circuit which will allow us, we believe, to recover much of the rare earths which has reported tailings over the past decade. Of course, during the quarter, we also released our resource and reserve statement. I've spoken about this extensively at Diggers and Dealers and then subsequently with our annual results. But I refer to it again now because it should never be taken for granted as it is the foundation for our continued success. And we really are most pleased to be able to look at being a decade on in the operation of this mine and still be able to increase both our mineral resource and our mineral reserve by the amounts that we've done and most importantly the 92% increase in contained DY and TB is very important as we look forward in our business. We've also got the photo of the finished site at Kalgoorlie, another one that gets me a bit excited as I look at it. It really is a beautiful site. It is wonderful looking at new chemical factories when they're still sparkling. Kalgoorlie is generally performing in line with our expectations. In particular, we are seeing excellent recoveries through the cracking and leaching process. And POL is not backward in offering that as a particular challenge to our team in Malaysia and offering them the opportunity to even further improve their own recovery performance. Many of you would know that the closure of the smelter in Kalgoorlie by BHP, the nickel smelter, has offered us some challenges with respect to ongoing supply of sulfuric acid and we are working closely with BHP at present on identifying a new solution. I guess the other thing that I would say as we look at this facility which is still in the early stages of operation where we do have some experienced staff on the team from our Malaysian team but we also have quite a lot of staff who are new to the company that I'm pleased to say that as they are gaining more experience in operating this asset that they are becoming more confident. And then, of course, in Malaysia, I would say that our facility there is operating very well. The new solvent extraction flow sheet, which I've briefed previously, gives us the 50% uplift in production, is now operating in control, and we are particularly pleased with the thought and innovative thinking that went into developing that flow sheet, which has given us such a significant increase in capacity for really very limited expense. The new equipment that we're placing in our product finishing area is continuing according to plan. And importantly, the DYTB investment, which I briefed a couple of quarters ago, is proceeding as planned and we do expect to have this material out in the first half of next calendar year. We are continuing to invest in repairs and maintenance on our cracking and leaching plant in Malaysia, I think, Those who followed us for some time would know that we put a minimum amount of, certainly to ensure that things were operating safely and efficiently during the period of time that we faced potential closure of those assets. But we are now making further enhancements in that area to ensure that we continue to operate that asset efficiently and at best possible rates. Of course, the market is still not really our friend, even though there's been slight improvements in pricing, but we remain confident of the medium and long-term growth. And I would remind everybody as they think about their investment portfolios that the rarest exposure is across a number of market segments. We are not reliant on any one particular segment. For example, battery electric vehicles are growing because in automotive we are in ICE vehicles, we are in hybrids, we're in plug hybrids, and we're in battery electric vehicles. But we're also in wind turbines, we're also in electronics, we're also in automation products, and we're also in many of those items which are used in particularly building and construction like energy efficient air conditioners and elevator systems. We remain confident that the profile of consumption across the various segments still remains very firmly in growth mode and we expect across a number of those segments as the global economy continues to improve that growth will continue to improve as well but notwithstanding that the price is still in you know so the low to mid 50s per kilo of ndpr and so therefore we must remain tough and hard and focused on efficiency and cost management in our business and we are and as you look at the various analyst reports you will see that we continue to improve our cost per kilo of NDPR. So we are continuing to meet the market with a focus on maximising margin We don't believe that this time comes from maximizing volume. We think that we need a slightly more delicate touch than just shove as much product into the market as possible. I think that you're seeing the benefits of that in the results that we're able to deliver at a time when many others are struggling. So with that, I'm happy to take some questions. But bearing in mind that it's getting close to lunchtime for our Sydney and Melbourne colleagues, I'm happy if you want to move through them fairly quickly.