Largo Inc.

Q4 2022 Earnings Conference Call


spk_0: and thank you for standing by welcome to august fourth quarter and full year two thousand and twenty three were cast and conference call at this time offered latin are no with and only mode after the speakers presentation there will be a question and answer session please limit it to two questions i would now like to him the congress over to your speaker today out guthrie senior manager of external relations please go ahead
spk_1: good morning everyone and they for joining our fourth quarter an annual tweet tweet you are news conference call and webcast on the call today is danielle tell it to fargo's interim ceo and director earnest cleave argos to find it was shirts and pavlov burgers vp of commercial to company the call today we've uploaded a a supplemental what presentation which is available on our website at largo intercom our annual twenty twenty two financial statements related and dna and most recent area for also available on the website as well as unseat are and edgar before continuing the call i would like to remind you all that some of the information you're here during today's discussion would consist of forward looking statements including without limitation those regarding seated this isn't like please refer to fight to for full description of the cup cautionary note the agenda for a call today is as follows daniel provide an update on the cup this pew for and year and progress with a new look for the your head followed by ernest to run overview of our fourth quarter in an orphanage results and poll cause a call with an update on the top the cells and trading progress don't need a market and an update on largo physical vanadium following these updates we will then open the call for questions we as that participants restrict their questions to to and then recuse if there are additional lessons to allow others the opportunity to participate so with that all now turn the call over to daniel
spk_2: thank your legs and was more name and good afternoon for those here in toronto and males were at blows the globe as you know we're going to be discussing our for water and year twenty twenty two resolves do they let me start with this lie number five twenty twenty two was a and twelve months for us and it led to their underperformance on both production on cosmetics in queue for weeper lose just over two thousand metric tons don't two or five arctic ice cause as blues and royals these of five fifteen dollars per wow as we know noted previously in that were brave report their operation update in january you for production was cleverly affected by of normally high rainfall in december was floated the be and made it difficult to access or or with typical have sufficient stockpiles to have a seat with unexpected impacts to the barrios checked bones alone our up whereas or route however our mining contract are transitioning september result that in their lack of the stockpiles to help mitigate the impact of the rains they seem bugs when combined with prevent the been corrected maintenance on the plants i see think you one twenty two and a blank kill and cooler refractory a men in few three twenty two made for less than favorable animals production of just or over ten thousand four hundred dorms or be door five as of and was gosh operating caused glorious royalties or five sixty seven dollars per phone or adoption game in six percent below our revised production guidance and cash cause were two percent of or about our revise gosh boys guys and store twenty twenty two for the unfortunately dumb spills effect from their rainfall in december continue to impact production in january and february they're spies despite these impacts with that theory mine in line with the quarterly production guidance for few one twenty twenty three likely landing closer to the made boeing of two thousand and fifteen dawns or just under since i started assuming the role of insurgency all by made last month i have a span of bird bit of time without variations the aim is marcus in i am very gone optimistic about the expected improvements in production lead levels for the remain in of the year we expect a ten percent increase in production in twenty twenty three over twenty twenty two which includes an aggressive side siberia the by now of production plan to made the increase their man and expect to sail over twenty five of overproduction into the sex or in plenty twenty three this support this production girls management changes have been implemented in rock does including the promotion of mr alvarez sam from operations director to see you all of our brazilian operations on projects alvaro has has banned the last seven years of our operations in iraq guy and he says his full support over all of our operations been to get the job done post management is it both priority for largo and we expect guys cause the including royalties to the trees are this year progresses
spk_3: with
spk_2: a half of the year in twenty twenty three cause being closer to the law work and of our were reported guidance range or four eighty five to through five twenty five per pound of be to fight song do you to elevated operating costs them working capital requirements as well as girls gap is related to our eliminate blind we secure additional working capital facilities in december and january to effectively manage our cash knees during the is there the first graph of the year i ever we are in the process of implementing cause controversy the years including a analysis of pursue brother pvt to an nc five idea of business where weekend reviews cause and improve performance who they were already seen distribution costs ease and expect to recognize some additional cost savings on some of ours you consume levels these years i will lead in to these guys these matters in detail later on the goal this is a good moment also to this cause some of our respective get the least in our in our key priorities for the remainder of the year in addition these shows the growing production level this year an increase in that word by navios banality on sales and besides purity sex or largo human i plans remains on track of or completion on a suspected to generate a new revenue source of the company we anticipate providing guidance on these my night production for the year closer to the completion of the plan is start been in the cycle second half of the year we also remain on track with a completion of while we never be are as be deployment for and male green forward in spain in shape the remain in six twelve electrolyte a storage components in it he merely twenty twenty three where we shall have saved his acceptance which include the completion of our operational based in it by email is suspected to be completed by the end of may twenty twenty three also as largo clean energy energy and and sell the green take continues to focus on the formation of a joint venture for the manufacturer in and commercial deployment of b r s bees in the european africa and middle east by our generation market as not to the an operational update in january the company previously announced a more you has been a standard to mars that he first twenty twenty three to allow for being there was shares on a name to rent a joint venture an older ancillary
spk_4: agreements
spk_2: i think it's safe to say that they manufactured an installation of i was the first buttery bro yeah was a significant learning curve for the theme of l c as you are aware we having guns or in some delays with these deployment but they were gone season that they with these the first buttery project will be a crucial step forward for i were clean energy business we on pc pay that the compilation of this project was percent of each or deployment opportunities in the future with one of our most advances the are as be technologies and they make a theme that is among the most knowledgeable in the industry were gone through them that they we a one of the best long duration solutions in the world i think it is important to note that they we continue to receive an addressed barrios inquires of our for hours of from significant players in the sector
spk_4: balls in the us and in general
spk_2: as our negotiations with us or on size of progress and we finalize installation of our but the arena spain i hope to share more with you regarding developments developments of said see very soon lastly i want to chat thoughts on largo continues focus on e s g principles of the company we continue to improve our overall he has the performance and fully disclose shorting twenty twenty two and this is reflected in addition improve rating it's and his tours this is most evidence in our to stand there and blue a founder of wars global sea of say rating seven improve approximately by thirty eight for same place in the company and be took part in the top court filed of his mining peer group for twenty twenty two we look forward to issue join our fifth consecutive sustainability report at the start of the second half of this year i would like to write the rate that we're focus to return into as the as bait operations and cause management as we experience in previous banner years this year i believe largo is an inflection point as our production been a strengthening and more of a where's your needs are place in the premium markets our clean energy the region continue his focus on delivery our first br their feet in spain which will switch we believe will unlock position as a potential for additional deployments in the future this guy must have an opportune time as one of the on demands reminds quite strong the long term market fundamental for the commodity looks extremely attractive driven by the a resurgent in their man from the address they've sector i'm from new deployments and capacity or these show for new deployment of be are as bees as we embark on the next job there are largo i am confident we have the right team in place and i look forward to assist in the company in a by have been seen that what his strategy was the war continues his search for the permanency your under being by significant growth in by now the on the man as we continue the execution of or on our to be largest druggie as if the or one by now on supply your with an emerging clean energy business i sincerely believe that they would blows devaluation god for loud google and offer consider love say opportunity for new and existing shareholders of the company with that let me turn the ball over to oversee of for agnes leave to review over financial performance for the large there and a year earnest and you don't you good afternoon to those on the cold today presented on slant seen as a brief overview of the company's financial performance in the fourth quarter and year and twenty twenty two or begin with a review of a consolidated financial results before touching on oct twenty twenty three guidance and the balance sheet the was marked both favorable increases vanadium prices which lead to top one growth of sixteen to and twenty twenty two over twenty twenty one particularly driven by revenues recognized and que to of last year and twenty twenty two revenues for cancelled women dollars and thirty eight saints and that represents a and ninety percent increase over twenty twenty one into for of twenty twenty two regenerated forty seven point five million in revenues from the sale of two thousand seven hundred and seventy two tons of the to of five equivalent was seven dollars and seventy seven for sold revenues decreased around six percent when compared with que for twenty twenty one while revenues for pump sold were largely of line with the same compared to period last year i think last year can really be defined by costs both from a inflation perspective but also from increases and operational impacts and right times throughout the year for twenty twenty two operating costs increased twenty percent to proximity one hundred and seventy million this was largely driven by twenty six two percent increase in direct mine and production cost and seventy three percent increase and distribution costs the increase in derek mine production costs will largely driven by increases are not critical consumable including a two for ammonium sulfate and sodium carbonate which was further compounded by the increased consumption of these critical consumer bulls due to operational impacts throughout the year the increase and product execs acquisition costs reflects the company realizing costs from the sale of purchase would eighty material during during the year which was required to seek to be managed customer contract commitments as daniel mentioned earlier as we move through the year and i unit cost should begin to decrease in closer to the lower range of our gardens by year end we're already seeing some transportation costs easing this year and are expecting additional savings on sodium carbonate as the of progresses for twenty two into your think what's important to note is that the company's coal mining business was profitable with mid income of twenty three point five million the camping crude various nonrecurring expenditures of around sixteen million including approximately five point one million and legal provisions and approximately six point four million which related to an inventory right done it c the increase in legal provisions relates to a supply agreement for the marcus mentioned mind which was found to the codes way back in october twenty four team and the ruling requires the company to pay months do plus interest in legal fees additionally the company wrote done better component infancy to the expected make realizable value which relates to a first year of be project at a clean energy division is daniel mentioned this is the case for most for tom davis and is not uncommon uncommon in this particular sector as these type of demonstration projects generally exhibit learning opportunities and development gross
spk_5: moving to slide eleven we plan to invest approximately fifty million on capital expenditures and twenty twenty three including thirteen to fourteen million on sustaining topics
spk_2: at twelve to thirteen million on capitalist stripping and seventeen and a half to eighteen and a half million on completing the i plant the increase in sustaining capitals largely driven by maintenance required at the crushing and be to his veto three circuits with increases for kept tripping being driven by the movement of ways to the pits and accordance with i'm i'm fine we've also allocated to million dollars to purchase an additional drawn magnetic separate of which will provide greater three and flexibility in the processing of oars moving on to the statement of financial position cash during was approximately fifty four million dollars with date of forty million and a networking working capital surplus of one hundred and sixteen million dollars subsequent a year and we're we acquired additional data of twenty five million as as described in the annual financial statements
spk_5: i'll close on for mentioning that management has made the decision to postpone the company's existing plans to develop it's titanium plant until additional funds were made available either internally or externally at this time we continue to explore alternative debt financing or strategic association option
spk_2: with advisors and we will provide an update as things progress
spk_5: let me not to the call over to pull
spk_6: my soon as and sixty one for going to the moving on to slices him and let's briefly discuss of says reason for last year and move on to some very exciting developments in the minimum thickness annual sales were within or revised doesn't friends and we saw eleven thousand and ninety one thousand abysmal five equivalent in twenty twenty two which included a thousand and fifty seven tons such as material thanks for the use of dump likely compared to twenty twenty one largely due to put us in fact smother yeah as earnest mention of first for father says he says this year quite significantly you know the summit contractual obligations however as we begin to normalize put up some level as a spokesperson for the thing to be and twenty twenty three improve logistical situation for it should also have to increase same swells the gradual reduction of a stock levels moving on to exciting developments and have any the market with pleased with the recent threatening of and prices and as of today the best mcbride abysmal five in europe is trading just below eleven dollars a pound this compared to about nine dollars and fifty cents at the end of of of the previous year and a forty four percent increase from the laws of twenty twenty two this increase is due to has the consumption from forty markets and especially in the hi suzy sectors
spk_5: aerospace the meant in back faster and stronger than anyone expected after the laws of twenty twenty two twenty twenty one and another back to pre coffee levels
spk_6: when and advantageous position as a key supplier of both high grade between five and be two or three and are able to place more units in the sector so as to benefit from the the city price premium we intend to capitalize on this demand growth for many years to come however do most significant sense and consumption and future expectation is coming from the energy storage industry
spk_7: especially in china
spk_6: when you via deployments good so thought around to deal with our of approximately ten percent of global venom output in twenty twenty three additionally recent announcements from china also indicate the potential for new be as the manufacturing capacity of around twenty gigawatts our over the coming years as they did mention lottery says he's an inflection points but that has to add that prevented some industry is also at one as well to supply this energy storage capacity and men saying the current level of consumption in a traditional markets the venom industry would have to grow by for that hundred percent over that period already according to that effect a global village i'm organization deserved this sector was the second largest source of energy demand justice to see him into sweet twenty twenty two government support is also growing as long duration energy storage becoming a key priorities the was become an invasion let's pause here and put this into perspective sense of marcus overdue as most of you are aware dubya be technology was invented in the seventies by a professor in australia from that point that is the head of twenty twenty one the i've been approximately four hundred megawatt hours of the i've beaten stores across the globe in twenty twenty two alone there was another four hundred megawatt hours of the ip deployment essentially doubling deployments in one year done or or the deployment over the last forty to fifty years
spk_8: this is quite remarkable
spk_6: but more importantly it is estimated that another to go us hours of the been we've been so twenty twenty three representing another two point five times decrease from the previous installation mouth historically the idea of accounted for approximately one to two percent of global village and consumption in twenty twenty two that number is estimated to be around six percent any twenty twenty three it could represent more than ten percent of normal consumption i think it's safe to say that this is the definition of exponential growth i love know we're extremely excited about it and it good strong presence to the via become a musician story but also supports albinism supply of up with additional sources of the men
spk_5: historically supply has been slow to respond to dramatic demon shots and it's important to put this in assess with the structural changes sense
spk_6: let's move on to another potential source of increase demand for any them sector largo physical vanadium or as the be i met is we are very proud of having created as with this is the truly innovative to for investors seeking exposes with the metal and would be a cornerstone to us is not good in advancing it's clean energy strategy as it is net assets on the other ninety percent and physical been and products and near to commitment the lounge of at cb september twenty twenty two coincided with know of any don't price which allows us to purchase vintage community a favorable market prices as of march eighth as he does not is not it daughter two points fifty six percent a thirty five percent above the closing surprised of kinda and daughter one point nine on the same day
spk_9: it the as the be as on
spk_6: we believe our extreme not to share price discount authors current a new investors and attractive investment case and closing this disconnect is not as the bees keep up his we now working on a broad marketing and communications campaign to raise awareness and investment proposal going forward i stop there and thirty bucks to daniel
spk_2: thank you paul before moving into gear on a i want to highlight this a slight fourteen that summarizes our gate bridge or it is for twenty twenty three as i mentioned at the beginning of this call the return of are normalized production level cost control in advance in our clean energy divisions remains front and center in the ensuing year this guns on the back of in grades the man in the by and sector and bury felt as a month of zone for the future for both the commodity and a new global b r f b deployments by successfully achieve in all these priorities we have to raise the and of twenty twenty three with as solid foundation to maximize shirts have you checked out church shareholder value of the company with that let's go ahead and open it up for questions
spk_10: like asked across
spk_11: pressing star wow
spk_12: to secrecy
spk_0: my classes
spk_13: sir yes sir the streets are incredible
spk_14: at one time
spk_0: a possible
spk_1: as long as rbc
spk_15: hi good afternoon i'm so as well as about and saw though that the that's a partnership their a little bit more to that degree that you can talk about it before it actual agreement has concluded can you images provide a little more detail on on how potential partnership my wife what unsolvable praying one of our whole brain
spk_16: and what what's the plan for
spk_17: on that and that's in europe
spk_2: to thank you andrew a thing of can start by saying that was yeah we believe that you know any potential deal with some salt of would be a very significant milestone and as for the organization and soldered brings a number of of of things to the table but not least of which is is there industrial capacity the technical mouse the know how in the energy industry so we we look forward to to hopefully concluding as successful a joint venture an arrangement with them it would be absurd traditional jb top structure the ugly fifty fifty were and saw the would fun some some of the early development costs and and start of close to something green after that point share equally in the operations of the business and it's outcome so we we think that the ability of and soldered see and gender and enable our european business is is very significant so we're extremely excited about it i'm the deal is not done yet the decision no guarantees but our negotiations have been very strong
spk_15: we have a great relationship with on solo so we look for to totally having a very positive act on them great and then i read just for paul here i thought to look them up in am prices are strength or maybe just the south a little bit more bullets at in a how much of that but the recent trying to have attributed to tell by china reopen a ah or the battery project as built their
spk_6: and how sustainable at current prices right now she'll think that i'm new to the some with very hard to predict where where where where prices are going but being in divinity market everyday ah i'm very confident looking at the at the number be many not financial markets and essentially know steve
spk_5: and chemicals is strong and and visited there is a business there is there a lot of a reason to to to be a bad as the about these numbers but the the outliers there are two is the aerospace industry
spk_6: we we have to think back about two three quarters ago the aerospace industry was the not suffering from the the effect of cookies and it was the general industries expectation that ah there will be a gradual recovery too frequent level and would be there by twenty twenty five to twenty twenty six six months later i think everyone and industries convinced that would be back to twenty twenty two two cause free copy level busier right to reduce at the races that recovery by two to three years which is it you know extremely good useful for loss of silence to to to adapt better pacific year ago facebook is in front of us busy other outlier as as i mentioned doing my part of the or of the corn is is the abyss d v growth in deployment of the advantage on results for battery and growth in capacity to business battery has just been in of nothing short of amazing that that they said they are many over to gigawatt hours to be deployed and twenty twenty three as ooh to go without represented roughly twenty thousand and some a bit what five equivalent that's about ten percent of the was production the studio amazing right when we coming from one to two percent of the vanadium industries just a few years ago to about ten percent it's true did you do amazing growth busy amount of the gap a city that has been business or so mind blowing the the about twenty years ago as though of new capacity and now just in the month of february
spk_15: so yeah we've been of ah i think the current prices another objectified that there is nothing in the market that is telling us that that things would be slowing down and them and i said it's hard to predict was gonna go but that but would be very comfortable with them the state of the members of base
spk_6: okay let me just one quite follow up on that china or the rp a green know they have an alien more already secured or is that something that the purchasing a market like a holiday inn yes it is today question stood just as if you know background sign up for the season consumer but fifty five percent of the vintage amused global right so is it really by far the largest market globally so busy up the units right they they they they have enough you need to to to justice is the as be but unless is the thing is the concerns in there in supplies structure which has no no no one thing can happen in the shot them he nodded it's gonna be extra demand that would have to be ah met by excessive lies and if sign up become a the net importer in india in the closet to come easy to possibility sign up for the past year has been and is a mountain or exposed on monday morning potter they're very you know balance the market he could be that far yet the center becomes the and it's important that you know when we'll see what happens in vain becoming quarters of that them good official statistics above that that we follow very closely but services such as not have any the resources but that he sees the news and extra more than ten percent
spk_18: a city he nodded and distrust of market without consent
spk_2: oh
spk_19: cater thanks for taking my question is can hear me or it
spk_2: great thank you perfect or thanks rose up and twenty twenty two the company's net that loss include about fifteen million law recurring stuff cure for was six point three million or that
spk_19: our two weeks away from the and the que one the mean given the veil fairly large a consistent numbers is there any nonrecurring but cash expenses that we should expect the same you want by code you know every every reporting period and of period which we were do our energy analysis on and been she's like cetera but there's nothing that that you know we're anticipating at this stage so that signal something that we should plan for
spk_2: got it will come and now since i got you anyways me a gave a lot of our on the overnight project earlier on this called everything's on track everything's fine and i know you'll be giving guidance after commissioning and a plan putting just they did give a bit a collar on what's been spent year to date and and asked me just go through the the requirements of in cash spent by by water if you that yeah so i'm not going to be able to cash been by quarter but but last year on the on the your monoxide we we spent just shy of nineteen million and guidance is is is nineteen two grandsons was nineteen to twenty one million and then remaining to be spent this year we're looking and mother seventeen and have to eighteen on a half million to be spent the last year
spk_20: relatively even i guess ultimately between you wanted to to because we're supposed to be up and running and sunninghill menards by two three of us here so
spk_15: but i give some color
spk_5: court of law a good afternoon guys are taken my call og pretty simple question for a air the lower recovery to thumbnail with a subway a reflection of processing the stockpile material
spk_2: i think it's a function of stockholm serial arm and the end the actual progress and three the put at the time because we couldn't access you know higher grade magnetite at the bottom of of the deuterons it had some impact so i wouldn't overstated but a bottle handed over to dinner with my have some additional color unless it's a matter of their the combination between disseminated material that as you know of has lowered magnetics in my
spk_21: asif material who has the sky of my magnetics so when you're makes the the air blend in between the disseminated and a massive material that's when you have an effect in there and the recovery of the kill so that is something that they were working right now in order to keep their right blame the
spk_2: in and you can keep the bullet right blaming when you have the stockpiles from when you can reached that a combination of different materials but sometimes say recoveries i've been effective when you're you don't have the right blend in okay thank you very much and as my they were second i may or are we are around the current run rate for sterile been eating production are expected to our fluctuate artist we had we had lower production as as everyone is aware and and que one from the the list over impacts of of of the ring for but we're back up and running and so you know we not predicting any in a variation of deviants from when i have zero vanadium production we reproduce be to five and syndrome for conversion at at to serve a native converters but the amount of sarah let's say that we're to zone for the are still roughly the same the and
spk_21: is they not change at all basically the citation of the heavy rain would a lot of stress on the sequence of mine in that they up and bit but they right now and then the month of february we are almost back to normal and our intention i will describe as during the
spk_22: come to during mike my presentation was that the our intention is to try to normalize operation as we move along during the year
spk_23: okay great thank you very much the album with martin slava
spk_24: yeah
spk_25: yeah thank you very much i wasn't it
spk_2: thank you good afternoon everyone just have one question of would you mind sharing widows and how much of the electrolyte impure vanadium electrolytes that is gonna go into the and nail green power a spain and battery out it will be produce or to our has been produced by by of i'm allowed to clean energy i am
spk_26: the and oh that electrolyte
spk_23: it's it's one hundred percent with one small cabinet or when we when we acquired the the assets of i on expect in the day
spk_2: some of the assets required was some some inventories of electrolytes arm and so we've actually use some of it in this particular project but largely it's coming from from the season own production
spk_23: but i saw to last coming from from the from the stop as if i understood correctly are you currently in a position to produce that electrolyte yourself
spk_26: what would you have to rely on their body purchases
spk_2: it's a real we would purify electrolytes the the first stage of electrolyte to dumb production we would we would seem to third parties to produce the electron from vanadium that we provide to them and then we have painted and purification processes to further refined that electoral on so ago i mean it's a mixed bag answer as as is is a reason why you are not able to produce the and
spk_23: ah hundred percent of the process a house or two hundred sounded was same house
spk_0: notices me choose to do it it's basically just a very simple chemical process the first start of the first one of the process so we sent to toll computers were marked as it's it's really cheap to do that some and it's not consequential to the oval process that if we wanted to spend a couple of millions above
spk_27: to but by some tanks and do some mixing ourselves we could do so but it's not it's not key or critical to those to the process
spk_6: bounces back thank you very much
spk_28: he will come
spk_6: of silver with guests restarts
spk_29: ah thank you in the they keep taking the questions appreciate all the details in the prepared remarks and between that and the q and a so far most of my questions is been as bad as ha hoping because the is as broadly and if you could provide a color on quantifying the high demand in the aerospace market or to
spk_6: says relates to the overall production capacity for the company i just trying to size up the potential to recognize d m t premium for the high purity market in the total products sold both this of thinks this earth and a c thursday aerospace industry is expected to get back to to quicken loans there could be this year
spk_27: we can expect her around five to six thousand and v both of us census and ten to two twenty thousand don't have the school size equivalent and required by the industry the this year and i love those two soon capacity and mental capacity the one twelve thousand songs
spk_2: and we we are the laws we have the largest capacity globally for high to receive the production so essentially i think know with off a sign of production we could cover do the would be met and cover obviously we we we won't be able to do that the we have a competitive demoted but i'm very confident that this year zazzle was be the largest supplier to deemed to to the aerospace industry so pdt he is he says i guess we we have the capacity in house to supplies close to the entire market and and we we we do our best to or two two two two
spk_5: who are to perform in the market
spk_2: great support and i'm one last one just trying to size up or as you move forward with the i'm clean energy business and getting close to servicing one deal potentially stab us in the day the for other opportunities are given the potential for long contracting for new opportunities in the space just trying to get a sense of how you look at dm
spk_27: the progress in the clean energy business in terms of know when you might expect recognition from market as you continue to execute on that plan
spk_30: i'm your one hundred percent correct the the negotiations and the to commissioning and construction of these projects take a long time so we're we're very hopeful
spk_2: an anticipatory and to around ability to to enter into contracts with some point this year but you would not see those contracts being delivered so early as next year and some of them may be them to years or but during that time overseas uses be constructing and the involved in in any number of was project so we're
spk_31: working hard on that roof now
spk_21: i'm very optimistic you know that could come from a number of sources in a real we have potential projects on the wing i should be a joint venture actually see fruition am and we talking with other parties in the us as well
spk_31: on potential projects as well which are all ongoing so we have to bring some good news to the market in the future
spk_32: okay said empathetic of a technical license
spk_6: mid west yeah i think of shake my questions and that again unless they have you aboard largo really
spk_33: what about the high purity marketplace
spk_6: what's your definition of high purity please and all secondly is what traits team are you realize for the a high premium activity peruvian thank you thank you james bond can you take care of it to has been tough
spk_34: the does no clear definition of hi suzy but essentially disagree that is above what is required by the scene industries two two two to two other a broad range and this will find equivalent is now
spk_5: know great between ninety nine percent plus the ninety nine point five percent plus
spk_35: i'm to you
spk_36: the moment is also very important in the high school product is no contaminants
spk_21: no no intuitive to be the real question on premium as as imagine is is extremely confidential very very
spk_37: she's a of negotiation with with a customer so i won't be able to share that's not what i can share those does different customers as different specifications themselves be to have five purity and also from her contaminants
spk_31: a and and and in the high doo doo doo doo doo doo requirement is the higher premium so so this there is a fairly wide range as depending on a specific applications the aerospace can be gone in belgium results will that reputation
spk_21: i thank you
spk_31: in the second question came to that effect of the electrolyte issue
spk_2: because it seems that this the three the savage that you're not really producing an electrolyte accurate as he take near beneath your details attitude produces the marriage as facility in brazil you're sending it to a
spk_38: outside third party
spk_39: and they're making a lot and you can expect cleaning it up
spk_21: to just say how's the our going forward as strict i'm sorry you know honestly was literally volumes oh lord you wouldn't explain the the with the capital costs to create your own mixing for the first stage which is just producing the electorate again it's a simple chemical process
spk_5: so you seen that have to talk on vs on thereafter we put it through of had some birds still sedation closer to the or two steps to it
spk_2: but if you have sufficient volumes and you know number of different contracts amy we would spend some additional topics to to actually have the first part of the prices and house as well so i don't think it starts with it but eventually you'd have it announced as well okay so is the where were the the zidane to delivering to get to stewart said the electrolyte is happening in europe in brazil or worse for is taking place in it is being up it's facilities in boston or what
spk_0: he say that it's then to their find and boss is it happening boston
spk_40: full moon we currently have some gym boston to do that that's correct but once you enter into contracts logistics of very important so you would likely in the absence of having join us
spk_15: first stage of the prices for the use of token but and whichever region your project to them
spk_21: and then we have ability to actually put in place on such institute on sides are electrolyte purification so you would not send it back to to massachusetts and then back to the projected so if it was in europe you would actually do the purification close to the project so majestic super important
spk_31: but it was not go back and forth to a woman to facility that's just where we have a driver
spk_40: you will save a lot of money gym by doing the cumbersome close to the where the side of the project these otherwise you're moving liquid from boston or from brazil to the different places where you are building batteries a in order to safeguard is much better to have all these
spk_6: version of the electrolyte where the project is him and that is in the that his intention that they were planning into the near future i said bryan watson break out good afternoon year the the first question is are pounds kind of a two super question year the market price for about two three twenty two and for twenty two was was relatively consistent and you realize price was about a dollar less or quarter over quarter and then as it is we look back a couple quarters for for that are you realize price was higher than your the market price for each the last two quarters and then it was lower this quarter to the first explain why you had the drop in realized price in argue for and and how we should be looking at realize price vs market price as we enter into twenty twenty three children i think this is two main points that are like make you question number one he is this tiny right is it is a new you writing thing that sense that sometimes have realized prices not perfectly aligned with the market price and that's because the vast majority of a contract are based on a good this month they use that phrase one to two months the i soon market price as you a simple example when we did is a a see on this month the same in march and the time of delivery most of our lives will be some sort of a formula based on the february price so that when we we did either the material the price is known right so at the end of the the over long periods of time we follow exactly the train with we just training so or that as as the first thing on timeline it is sometimes not physically adjusted and be seconds
spk_21: and so that i'd like to make things a new things and you said it you know some places we make slightly learn something slightly higher than the publish price is because i think what most people are looking that is the these vintage i'm trying to find price right
spk_31: but a large portion of our say are done on or off several the any price myself any gyms the product that goes into the city district be too
spk_40: index is a very core related but depending on supply and demand
spk_41: the situation from time to time diverse currently film an idiom on have any doom
spk_31: unit baby is treating and deep discount to be suicide right so far between five as say we getting a better price on the beanie babies compared to feminism say it was not always the case that you have feminism was trading at a premium to be to advice but does that that that that
spk_15: that probably explains as the first part of your question if you're only looking at one decks and it difficult to get the food be to you need to look at the those indexes invite away with within products in europe with they put us in asia with the put it in the us and on his resume are different pricing from time to time
spk_21: i'm very cool related over long period of time but that specific point of time they could be very significant premium a discount so if you only looking at one index of one product in one region you do don't always get of full picture
spk_2: okay thanks and or this question it's for earnest buy the product acquisition costs it's something that you don't pride provide guidance on i was twenty four million and not and twenty twenty two and that's twenty four million a year not not getting march and on and
spk_5: that i guess by my question has two parts it again or what is the amount of purchased inventory that you have on hand at twelve thirty one and at this point in time i think you'd have a good seal as to
spk_2: how much purchased and mentor you'd have and que on and i'm guessing that perhaps either that more just because it's allow production of right so it you comment on that sort salumi just cricket deal was with the the actual acquisition cost it is not something to be concerned about because it's think of it is essentially a wash so there's a cost for it but you're earning the revenue at the same time the only times that we do that is for instance when we run into issues on logistics where the delivery timelines that are different from other oden was wasn't a spade on this was especially true and twenty twenty two your sometimes forced to go on to the market and purchase materials make sure the to fulfil your contractual obligations but it's not a method for us to to essentially trade in the market it's really just for fools of a practical a necessity so last year we actually made money on purchase material but there was on there was our plan we made in the region open and poke in elucidate on it as well but you probably might four million dollars on the until last year it was a plan to trade it just it was pure happenstance of the time that we purchase the product and folded later we'd gotten again so i would not focus on it and we certainly don't plan for it or or or budget for it's at this stage or objective is to so what we produce and if there is some on unforeseen or untoward event that requires us to to go on purchase on the market we will do so but it's not it's not something that we forecast or or even anticipate
spk_0: in terms of in terms of what said hand the during it's about four hundred just over four hundred tons right now
spk_1: we've already taken you know whatever energy rant on would have been required at the end of december so in theory we look forward when when when when we preparing the your in financial statements from already know what we would have made on the material so you don't make additional gains or losses on the material there again awash so it's not something the

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.