MP Materials Corp.

Good afternoon. My name is Chantal and I'll be your conference operator today. At this time, I would like to welcome everyone to the MP Materials fourth quarter and full year 2020 earnings conference call. 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'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. At this time, I'd like to turn the call over to Martin Sheehan, Head of Investor Relations. Martin, please go ahead.

Thank you, Operator, and good day, everyone. Welcome to NP Materials' fourth quarter 2020 earnings call. With me today are James Lutensky, Chairman and Chief Executive Officer of NP Materials, Michael Rosenthal, Chief Operating Officer, Ryan Corbett, Chief Financial Officer, and Sheila Bangalore, Chief Strategy Officer and General Counsel. Before we get to James and Ryan's opening remarks, I'd like to remind you that during today's call, we will make certain forward-looking statements that do not constitute historical facts under the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from forward-looking statements in this communication. For more information about factors that may cause actual results to materially differ from forward-looking statements, please refer to the cautionary language in the earnings release and in our filings with the SEC, including the risk factors section in our recent SEC filings. During the call, management will also discuss certain non-GAAP financial measures which we believe to be useful in evaluating NP materials operating performance. These measures should not be considered in isolation or as a substitute for MP Materials financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our current report on Form 8K filed today and can be found on our website, investors.mpmaterials.com. With that, I'll turn the call over to Jim. Jim?

Thanks, Martin, and thanks, everyone, for joining us today. Welcome to our fourth quarter and full year 2020 call. I'm going to cover a few things today. First, I'll recap our strong fourth quarter results, capping a milestone year for MP. Second, I'll update you on our stage two optimization plan in Mountain Pass. Then I'll turn it over to Ryan for some color on our performance. And lastly, I'll share some perspective on the current market environment and how we're positioned for it. Starting with the financial highlights. In the fourth quarter, we generated strong production volumes as well as records for both shipments and revenues. These results show that we are clearly enjoying the benefit of strong pricing, which has continued to rise post-year end, but we are also demonstrating operating leverage on a unit production cost basis. You can see the combined effect of these trends in the significant margin expansion we've reported for the fourth quarter. we believe the growth and cost improvement illustrate that we continue to operate our facility at best in class levels with both uptime and yields remaining at or near the record levels we've established since restarting mountain paths all told fourth quarter tapped an awesome year from a performance standpoint and we are continuing to execute at a high level 2020 was also a milestone year in charting mp's future As you know, we completed a go public transaction in November, which gave us a fortress balance sheet as we execute on stage two and beyond. We also took important steps to scale the company as we prepare to become a leading global producer of separated rare earths, both onsite and in building out our management team. We currently have over 300 employees across our engineering and site personnel, as well as important public company functions across finance, legal, communications, and other key areas. And finally, We closed out the year by putting the final pieces in place to execute on our Stage 2 optimization plan. We have now implemented important design improvements that we believe will significantly de-risk Stage 2. Essentially, we invested further in the front engineering stage of our Stage 2 project to improve our processes and circuit design. Through these efforts, we believe that our technical team identified ways to improve product yield, expected first pass on spec production rates, and reagent usage efficiency, including recycling. Importantly, I'm very pleased to tell you that due to these achievements, we believe we no longer need to restart the chloralkali facility to achieve the 2023 expected operating model we outlined last year on an apples to apples basis. This is because we believe we found ways to permanently reduce the reagent usage per ton of REO. We think this is a significant de-risking of our stage two, though we still remain maniacally focused on the key work streams of commissioning the roasting circuit, product finishing assets, salt crystallizer, and other site upgrades. I will walk through more details on this in a moment. But first, I'd like to cover our production metrics. The team is doing an outstanding job executing, illustrated by a strong fourth quarter and 2020 year-over-year growth in production. Importantly, while we've increased shipment volumes by 20% in the quarter and 40% for the full year, concentrate pricing in the fourth quarter increased 70%, demonstrating that the demand for NDPR remains very strong. And you can also see here the production cost improvement I highlighted a moment ago. For the full year, we've reduced production costs on a per metric ton basis by nearly 28%. As we move through our stage two and contemplate future initiatives, including evaluating heavy rare earths, moving downstream into magnets, and other potential initiatives, we believe the progress and rapid learning we're achieving today will lead to significant additional opportunities to increase profitability and cash flows. As we've said to many of you, 2021 is about execution on stage two. For those who aren't as familiar with our strategy, stage two is our plan to move from today's profitable concentrate production to separating rare earth oxides, thereby restoring downstream production of these critical elements to the United States of America. Upon expected completion of this project in 2022, we will be scaling toward full annual run rate production of more than 6,000 metric tons of NDPR. As we stated during the going public process last year, we expect 2023 will be the first full year of production at these levels. Keep in mind, though, that the 2023 target of $250 million in normalized EBITDA that we outlined last year assumed a spot NDPR price of $70 per kilo. NDPR spot today is actually roughly $88. So with that background, I'm pleased to report that Stage 2 remains on track. Long lead equipment is arriving on site, our fixed price engineering and procurement contract is signed and construction is underway. That said, with our unwavering owner-operator mentality, we do not rest. In recent months, our team made important design improvements that we believe significantly de-risk the project, enhance our potential long-term operating model, and reduce our environmental footprint. So for those of you who followed us, we originally announced estimated Stage 2 project costs back in July. They consisted of a total of $200 million in two primary parts. The first $170 million related to mainly reinstituting the roasting step and adding a salt crystallizer, which is intended to restore the separations process flow to how it worked successfully for decades at Mountain Paths. As the chart here indicates, this capital outlay has not changed since we first announced those plans. We also had a Stage 2B, which was focused on the restart of a core alkali facility for managing reagents used in the refining process. This project was to consume the remaining $30 million of the Stage 2 capital costs. The successful completion of Stage 2 construction and core alkali were the execution drivers needed for us to achieve the normalized 2023 EBITDA target that we shared with you. But we've been busy. We believe that what is now underway on an apples-to-apples basis versus July should have lower structural costs per areometric ton produced, as well as improve upon our already strong environmental profile. And we no longer need to restart chloralkali in the near term to achieve those previously disclosed targets. So let me be specific. The redesign will significantly reduce the amount of reagents used per ton of REO processed in our refining process, in some cases by over 10%, reducing our original expectations for operating costs in Stage 2. Restarting the chloralkali facility in the future remains an option for us, but one might now analyze it as a separate and new incremental potential high return investment opportunity that could further enhance shareholder value. Restarting this facility in the future means we could potentially have more accessory agents to sell into the open market, driving an improved ROI. Therefore, we now have a contracted stage two underway with a net capital cost consistent with prior estimates, despite what we believe are significant design improvements for all of the reasons I've outlined. Moreover, I believe this is a pretty remarkable achievement for our team when you consider the rapid cost inflation that we are seeing throughout the economy. This is particularly acute for infrastructure materials like steel, lumber, and concrete. In fact, since our July 2020 estimate, steel prices are up 150%, lumber prices are up 130%, and concrete is up 30%. As we execute, we hope to experience the upside leverage that could come from rising commodity prices against an in-place multibillion-dollar and difficult-to-replace asset base. I would also add that this is particularly powerful to consider in light of what we believe is the beginning stages of a demand-driven commodity cycle. Whatever the market thought new supply would cost, I think it is fair to say it has recently gone up a lot. Now I will turn it over to Ryan to talk through financial highlights. Thanks, Jim, and hello, everyone.