Piedmont Lithium Inc.

Ladies and gentlemen, thank you for standing by. My name is Abby and I will be your conference call operator today. At this time, I would like to welcome everyone to Piedmont Lithium's third quarter 2023 earnings call. Today's call is being recorded and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I will now turn the call over to Aaron Sanders, Senior Vice President of Corporate Communications and Investor Relations. You may begin.

Thank you, Operator, and good morning, everyone. Welcome to Piedmont Lithium's third quarter 2023 earnings call. Joining us today from Piedmont Lithium are Keith Phillips, President and Chief Executive Officer, who will provide the introductory remarks. Michael White, Chief Financial Officer, will then review our financial results, followed by Patrick Brindle, Chief Operating Officer, who will offer an update on our project. Keith will then provide closing commentary before we transition to a live Q&A session. As a reminder, today's discussion will contain forward-looking statements relating to future events and expectations that are subject to various assumptions and caveats. Factors that may cause the company's actual results to differ materially from these statements are included in today's presentation, earnings release, and in our SEC filing. In addition, we have included non-GAAP financial measures in this presentation. Reconciliations to the most directly comparable GAAP financial measures can be found in today's earnings release and the appendix to today's slide presentation. Please note that references to shipments are lithium concentrate and metric tons are dry metric tons. Copies of our earnings release and presentation will be available on our website at piedmontlithium.com. With that, I'll turn the call over to Keith Phillips. Keith.

Thanks, Erin, and thank you all for joining us today for Piedmont Lithium's very first earnings call. Q3 2023 has been transformational for Piedmont on many levels. First and foremost, seven years since our founding, we have transitioned from an explorer to a developer to become a lithium supplier. and generated our first revenue. Huge milestones. I'll note that since this is our first earnings call, we will take a little time throughout the discussion to provide some background for those who are newer to the Piedmont story. Some of the areas we'll cover today, most importantly, production is ramping up at North American Lithium, our joint venture operation in Quebec. We made our first two shipments of spodumene concentrate in the third quarter. We achieve strong gross margins and positive earnings per share despite a difficult lithium pricing environment. We have an exciting development pipeline and a strong balance sheet. As we think about future growth, I'll spend some time at the end of our remarks discussing our disciplined approach to funding along with our outlook on lithium markets. To that point, I thought it would be helpful if I started with a quick overview of Piedmont Lithium, our mission and strategy. Piedmont is one of only three U.S. domiciled lithium companies, and our mission is to be a leading supplier of lithium resources for the U.S. EV supply chain, supporting U.S. efforts to reduce our reliance upon foreign nations for critical materials and strengthening our national energy security. Underpinning Piedmont's mission is a strategy to focus on hard rock production by processing spodumene concentrate from assets we own or in which we have an economic interest. We believe the execution risk in spodumene concentrate is far lower than for some of the more exotic resources or chemical flow sheets that others in the industry are pursuing. We have been fortunate that the first two of our spodumene development projects have relatively low CapEx and potentially high returns on invested capital. North American Lithium, because it's a brownfield project. Aloe in Ghana, because it is a simple DMS only flow sheet. We ultimately aim to convert our spodumene concentrate production into lithium hydroxide for the U.S. market with planned projects in Tennessee and North Carolina. We believe American consumers will continue to prefer larger vehicles, SUVs and trucks, and they'll want to continue to drive long distances, all leading to a requirement for more lithium hydroxide production in the U.S. Over the last several years, we have strategically assembled a global portfolio of four capital projects to build an integrated business. Our joint venture investments in Quebec and Ghana provide low capex, upstream resources, and our planned projects in Tennessee and North Carolina are aimed at providing downstream and integrated operations. Through the development of this portfolio, we expect to one day produce an estimated 60,000 metric tons per year of lithium hydroxide that is compliant with the Inflation Reduction Act. To put that in perspective, there is only about 20,000 tons per year of lithium hydroxide produced in the U.S. today. But first and foremost, we're focused on our hard rock spodumene strategy and revenue generation, which centers on our control of resources that ultimately will produce about 525,000 metric tons per year of spodumene concentrate. Patrick will talk more about our projects in a little bit. With that backdrop, let's segue to highlights of our third quarter. Our key news, of course, is that we made two customer shipments this quarter from NAL, our JV operation in Quebec, with operating partner Sayana Mining. NAL began production in March of this year, joining a fairly exclusive group. By our count, there are only about 10 significant spodumene-producing companies in the world today, based principally in Western Australia. NAL is the largest operation in North America and obviously is very well positioned strategically. We own approximately 12% of Cyana Mining and 25% of Cyana Quebec, the joint venture we formed with Cyana in 2021 that includes North American Lithium. We are not only an investor in the NAL operation, We are also its largest customer. Our offtake agreement with Scionic Quebec provides us with a greater of 50% of production or 113,000 metric tons per year, again, whichever is higher, of spodumene concentrate at market prices with a floor price of $500 a ton and a ceiling price of $900 a ton for the life of the mine. In some ways, the agreement is analogous to a metals royalty or stream. So with respect to our Quebec partnership, we benefit in two ways. We recognize revenue and cost of sales through our offtake agreement, and we separately record our 25% share of the JV's profit or loss as an equity method investment. In Q3, we generated a revenue of $47.1 million through our offtake agreement and income through our equity investment, resulting in an adjusted net income of $17 million and adjusted earnings per share of $0.88. While we are pleased, Piedmont is now making physical deliveries of lithium concentrate and achieving positive earnings. Our results were materially impacted by the roughly 40% decline in spot lithium prices during the quarter. The majority of our offtake tonnage will ultimately be sold under long-term contracts announced earlier this year, but our initial shipments are being made on the spot market. And contract pricing traditionally occurs on a lag basis. So if you ship in September, you price the shipment based on the pricing in the months leading up to the shipment. date depending on what the party has negotiated. In the spot markets, shipments are increasingly priced on a look-forward basis, with the final pricing based on market parameters at or around the time of delivery rather than shipment. Spot-to-meat concentrate prices fell from over $3,500 a ton in early July to approximately $1,900 today, directly impacting our quarterly results as our spot shipments are price-settled around the time of the customer receipt. In other words, we've had to bear the full brunt of falling prices in Q3, largely due to timing, but Michael will provide more details on the financials in his presentation in a moment. As we've been growing our business, we've been able to build a stellar team of experienced professionals to support our mission. From mining and process engineers to safety, environment, and health experts, and the legal, financial, and other professionals needed to support our growing business, we've increased our team by more than 50% to 65 employees this year. And we're developing a culture of success, safety, and commitment to sustainability. In fact, we issued our inaugural sustainability report in June of this year, which governs our ESG efforts as we develop our operations and advance our equity interests. With that, let me turn it over to Michael to discuss our third quarter financials and fourth quarter outlook.