AMG Critical Materials N.V.

Ladies and gentlemen, thank you for standing by and welcome to the AMG Q4 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. I must also advise you that today's conference is being recorded Thursday, 25th of February, 2021. And I would now like to hand the conference over to your first speaker for today, Michelle Fisher. Thank you. Please go ahead.

Welcome to AMG's fourth quarter 2020 earnings call. Joining me on this call are Dr. Heinz Schimmelbusch, the Chairman of the Management Board and Chief Executive Officer, Mr. Jackson Dunkel, the Chief Financial Officer, and Mr. Eric Jackson, the Chief Operating Officer. AMG's fourth quarter 2020 earnings press release issued yesterday is on AMG's website. Today's call will begin with a review of the fourth quarter 2020 business highlights by Dr. Schimmelbusch. Mr. Dunkel will comment on AMG's financial results, and Mr. Jackson will discuss operations. At the completion of Mr. Jackson's remarks, Dr. Schimmelbusch will comment on strategy and outlook. We will then open the call to take your questions. Before I pass the call to Dr. Schimmelbusch, I would like to comment on forward-looking statements. This conference call could contain forward-looking statements about AMG Advanced Metallurgical Group. Forward-looking statements are not historical facts but may include statements concerning AMG's plans, expectations, future revenues or performance, financing needs, plans and intentions relating to acquisition, AMG's competitive strengths and weaknesses, reserves, financial position and future operations and development, AMG's business strategy and the trends AMG anticipates in the industries and political and legal environment in which it operates, and other similar or different information that is not historical information. When used in this conference call, the words expects, believes, anticipates, plans, may, will, should, and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that any predictions, forecasts, or similar projections contained by such forward-looking statements will not be achieved. These forward-looking statements speak only as the date of this conference call. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in AMG's expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based. I will now pass the floor to Dr. Schimmelbusch, AMG's Chairman of the Management Board and Chief Executive Officer.

Thank you, Michelle. AMG's highest priority is the health and safety of our employees. Out of over 3,000 AMG employees at 33 sites in 15 countries, AMG has three active confirmed coronavirus cases globally. That compares to a peak of 34 cases in early December. AMG has zero current COVID hospitalization cases. We are also pleased with the safety performance across AMG's business units. The lost time incident rate, the number of lost time incidents per 100 employees, is now at 0.62 a 23% improvement over the very good figure of the previous year. The total incident rate, the number of OSHA recordable equivalent incident per 100 employees, was 1.05, a 28% improvement over 2019. Both ratios are year-end all-time lows for AMG, and compares very favorably with industry standards of primary metal manufacturing. 23 of our 33 sites, that's about 70%, had zero workplace injuries in 2020, which is, again, a further indication that zero workplace injuries is an obtainable goal. In regards to AMG critical materials during the fourth quarter, all of our commodity prices within our portfolio started to stabilize and turn around. As an example, during the fourth quarter 2020, the federal vanadium price rose from $10.23 per pound at the end of September to $11.2. per pound at the end of December. As of February 17, 2021, this year, the ferrovenadium price stands at 15.25 per pound, a 45% increase compared to the average Q4 2020 price. Regarding spodumene, the average price in Q4 2020 cost $393 per ton, and as of February 17, it was $430 per ton, an increase of 9%. That trails the rise in lithium carbonate prices, which are up 69%. It should be noted, of course, that vanadium and lithium are our key investment areas. AMG Technologies benefited from its market diversification but is recovering at a slower pace as a result of dramatic impacts of the pandemic on the aerospace industry. It is important to note that AMG Engineering's order intake in 2020 exceeded $200 million for the year due to significant orders in market segments outside aerospace, including strong orders of induction melting and remelting furnaces for specialty steel producers and higher demand as a result of the rapidly recovering automotive sector. Our strategic investments have been actively progressing in 2020 and year-to-date despite the challenging market environment. The construction of the recycling plant in Sainsville, Ohio, which will essentially double our recycling capacity for refinery residues, is proceeding as planned, utilizing the funds from our municipal bond issue. To date, we have spent $110 million and committed $206 million, and we believe commissioning will start in the first quarter of 2020, 2022. The focus of the activities of Shell AMG Recycling BVE includes large recycling projects for refinery waste in the Kingdom of Saudi Arabia and in China, as previously announced. AMG's spodumene plant in Brazil is operating at full capacity and the production is sold under long-term contracts. As previously announced, AMG Brazil has entered into an exclusive cooperation agreement with one of its major customers for lithium concentrates. This agreement provides for AMG Brazil to supply 200,000 tons over a five-year supply term, which will be obtained from an expansion targeting 40,000 tons per annum of AMG Brazil's existing spodumene plant. The agreement also includes an advance payment for spodumene deliverers, which will fund AMG's Brazil investment in the expansion in full. In regard to AMG lithium CMBH, AMG's supervisory board approved moving ahead with the detailed engineering contract as well as the purchase of the long-term lead items and the purchase of the site in Bitterfeld in Sachsen-Anhalt, Germany. I would now like to pass the floor to Jackson Dunkel, AMG's Chief Financial Officer. Jackson?