Lynas Rare Earths Limited

Welcome to Linus Rare Earths June quarterly results briefing. Following the formal presentation, there will be a Q&A session. Investors and analysts can ask live audio questions during today's call. To ask a live audio question, press the request to speak button at the top of the broadcast window. The broadcast will be replaced by the audio question screen. Use the dial-in number and access pin provided to ask your question via the phone. Alternatively, for those on a home or personal network, you can ask your question via the web by pressing Join Queue. If prompted, select Allow in the pop-up to grant access to your microphone. If you have any issues using the platform, dial-in details can also be found on the homepage under Asking Audio Questions. Press the Documents icon to see today's files and platform instructions. Select the document to open it. You can still listen to the meeting while you read. I will now hand over to Linus.

Good morning and welcome to the Linus Rare Earths Investor Briefing for the quarter ending June 2026. Today's briefing will be presented by Paul LaRue, Interim CEO, and joining Paul on the briefing are Garden Sturtzenegger, CFO, Chris Jenny, VP Sales and Market Development, Daniel Havis, VP Strategy and Investor Relations, and Sarah Leonard, General Counsel and Company Secretary. I'll now hand over to Paul Leroux. Please go ahead, Paul.

Thank you, Jen. Good morning, everyone. My name is Paul Leroux. And as you probably know, I replaced Manala Kaz as interim CEO, following her retirement in June 30th. I'm pleased to share with you my analysis of our performance in this June quarter 26. And of course, I will then try my best to answer your questions, if any. So during this quarter, the market continued to be strong and all the customers I reconnected with since I took this new position indicated a higher than expected growth of magnet demand. raising their concerns for security of supply and supporting, of course, quite healthy price level. So, that's a great situation to be in and this market situation benefited Linus and we achieved a record 98% dollar a kilogram average selling price through the quarter. This performance is the result of a favorable market environment, of course, but also improved offer from Lioness, in particular with the sales of Disposium and Terbium, and fast premium obtained by the team in recognition for reliability. This favorable situation will continue as we finalize the qualification of our newly launched Samarians and move from qualification into commercial contracts. I'm actually in Korea, and following this call, I will head to the signing ceremony, celebrating the new partnership between GS Link and Linus. This agreement includes a $50 million contribution by Linus in the 3,000-ton magnet factory that GS Link will build in Malaysia, as well, of course, as a 10-year real supply contract. Some of you know my attachment to Korea where I enjoyed seven wonderful years and I look forward to further development in this dynamic country surprisingly called modern country which is not very obvious when you work here Anyway, this is an important move by Linus and one more step in the development of our Linus 2030 strategy supporting downstream industry development outside China. On the operations side, I would like to first start with safety because we are very pleased to continue operating safely on our three sites, as demonstrated by the decrease in our last time injury frequency rate, which went from 2 to 0.9 end of the year, so that's a Very good achievements and we're looking forward for further improvement of the situation that is already a very good performance level, safety-wise. On production, I have to say that our production performance was clearly not as good as expected, was impacted by the quality variation of our concentrate as we were mining into transition zone. These variations were impacting the productivity of cracking leaching in both Kalgoorlie and Kwantan, therefore reducing the feedstock, the feed flow to the solvent extraction and therefore the total production. So that explains what has been very frustrating. It has mobilized all the teams together from the three sides and the R&D, and led to a step change in our expertise, including solutions to vary our process, parameters, and sequence, upstream and downstream, to adjust to our quality valuations. So, again, we are disappointed, but we get out of this much stronger, individually and collectively, as everyone has now a deep understanding of the process from mine to BigBug. and how each process step influenced the others. On the positive note, the production of DY and terbium was higher than expected. This includes part of the whip. If you remember last quarter, we explained that we had a low production because we had some whip, but in fact, beyond catching on the whip, our recovery has improved. and that's a very good sign and should continue as we start the ESA meal during this July quarter. Last but not least, and it's quite important, reflective of the improvement of the team in Kalgoorlie, Kalgoorlie has started a new process, a continuous carbonation process, and they did that faster than it takes to write a report, so that's a That's to me a very, very important change, reflecting the improvement of the calculative, the process calculative in the expertise, and that is something that makes me quite confident for future. Project-wise, we just focus on the heavy waste operations since expansion in Mount World is almost finished. We just need to finish the tail end pound, number four. On the HRE project in the quarter, we have reviewed the project so as to allow us to go for a stage, product by product, execution of the project. So you remember, we produced this project in May 25, Terbium in June 25, Samarium in March 26, And now we changed the schedule so that we could reduce Levelinium early fiscal year 28, for the Northern Hemisphere, the summer 27. Yttrium early calendar year 28. And Eutychium, the last one, will be probably around April 28th. So that is very important because we continue to see a very strong demand for every single element that this project will deliver. And so it's very important to be able to produce, to execute and start supplying the market step by step and not wait until the full product is finished. In parallel with that, we have a lot of detailed technical discussions with specific customers and that discussions led to some change in equipment in order for us to match with specific targets specifically very low level of non-rare impurities and even in some cases managing the physical characteristics of the product such as very narrow particle size distribution so this modification combined with now identified source of all equipments outside China you know that we can't buy anymore anything and it took a while for us to really identify contractors who could actually deliver all the equipment needed so now it's done and this all modification together led to an increase of our capex to $294 million plus free capex so it's a so well controlled and precisely defined capex and again what is very important is first we are in control and second we managed to anticipate and start to deliver on this specific product all through the project rather than waiting to the end so all in all this quarter had its shares of challenges and successes but all together this has led Linus improving our cash position by $138 million to $129 million, which is a great feeling and a good place to be at a moment of market opportunities. So that would be my summary of this quarter. We don't make forward statements, but we feel pretty confident for the quarter we are entering and I will take questions now.