Igo Ltd

Thank you, Ashley. Good morning, everyone. Welcome to our March cooling results call. Kath has unleashed our CFOs joining me again for this call, and it was important to step here through our results for the quarter. Obviously, being a challenging quarter with a number of issues in the nickel and lithium businesses. Before I get into that, though, I wanted to talk a little bit on safety and reflect on our safety performance through this period. And while we are seeing some positive trends in our leading indicators and very good engagement from our leaders across the business, greater injuries and incidents continues and remains about as stable as the prior quarter, but is far from acceptable or the level that we're all aiming for. And this is, of course, both mine and the broader leadership team's highest priority, something we're focusing heavily on. I'm confident that the work program that we've got underway is and will make a difference. And... clearly reducing harm to our people is the most important work we've got to do. That really takes us through a strong engagement with our teams right across the operations. And in the quarter, we actually took some time out with some safety resets, safety stops, to talk about that and everyone's role in identifying and controlling the hazards that are across our business. As I noted in our half-year results call in February, we had very serious incidents We're a contract exploration crew at Forestania. We're involved in a vehicle rollout. One of the individuals involved in that was seriously injured and is continuing his recovery. Quite a challenging road ahead, and I think that is a start that might be right across our business of just how safe he is and the work that we need to do every day and every shift to keep improving. Moving on to the team business, and I'll start there. Look, there's a well signposted for IGO, our balance sheet remains in a great position. And, you know, that's despite recording our first quarterly loss for a long time, many years now since that happened. And that result was driven predominantly on the performance of the listening business, reflecting both the roll-through of the lower prices that we saw through the quarter, but also the sales volumes that we signposted. with the lower nominations from the joint venture partners. On a positive note, though, I'm very pleased to announce that we've just confirmed agreement with Winfield Joint Venture to sell 200,000 tonnes of Spodumene SE6 from stockpiles at Greenbushes to our partner TLC. And that volume is over and above their off-take volume, and that sale will be booked through the June quarter. That will largely clear the imagery of the site and will give us a good runway to make sure that Greenbush is operating in full production through the rest of this calendar year. Being in Greenbush a bit further, you know, we announced obviously production for the marsh quarter was going to be lower than the mine's capacity as the Taliesin team worked to manage their imagery build against the production demand from the JV partners. when it was 280,000 tonnes, was 22% lower than the prior quarter, and sales were reduced even more than that. As a result, the lower production, cash production costs were marginally higher at 386 Australian per tonne, and our sales revenue of 286 million, obviously substantially lower than the previous quarter, which would be both in part to the volumes, but more significantly lower real-life prices, which dropped to around $1,000 a tonne in the US as compared to $3,000 in the prior quarter. As you also know, the new monthly pricing mechanism took effect through this quarter. The other point I wanted to mention around greenhouses was our capital program. Work continues on the bill of CTP3. I was down there a few weeks ago with Matt, having a look at that, and while that had delays with some of the piling early on. It's progressing well now. We saw the steel coming out of the ground and they've really got to rig them up. So I'm pleased to see that's getting full attention from the team there. We went through the mine services area. That's the complete commission and they're just finding out the bugs, but they're all up and running using that for the mine. And the completion of the first couple of hundred rooms the accommodation is done, there's more work coming, and we expect that facility to be done around the mid-year. Turning to Kwinana, I was also down there a couple of weeks ago, and it was great to sit down with the team and look at their detailed plans for the rest of 2024. What we did see, though, was a continued ramp-up improvement of the performance. Obviously, still we're below main plate and our expectations, They are producing, very consistently now, the right factory-grade product. 96% of the product is hitting that target. Very low levels of impurity in the material as well, which is well sought after by our customers. So the quality of the product is hitting the mark, and that's very important. It is obviously all about the right compartment volumes now. And we spent some time looking at their plans, and I was very encouraged by both the level of thought and work that had gone into that, but also the team. I mean, the leadership team there were well aligned, were teaming well, really thinking through how they need to support each other through what's going to be a challenging year, but I expect will deliver a step change in their production output. Moving on to our vehicle business. I'll start with COSMOS, and as we announced in January, we transitioned COSMOS into care and maintenance. That's been a difficult process for our people. You can imagine the significant impacts of the people who had signed up there to be part of a new mind with a new future. And so we managed to have a lot of care and attention, and I give a lot of credit to the leadership team and the way that they've gone about that work. They've really been very sensitive and thoughtful about the impact on individuals. They've also put a lot of focus onto the assets, of course, and, you know, brought the mine to effectively to a stop, ramping down the assets and putting those in storage on site and on site as needed to make sure that everything's kept in good shape. And obviously we're in the process of milling the available ore and producing concentrate. We produced or processed 127 millilitres in April. There's a further 161,000 tonnes of ore available to be processed at the end of March and we expect that as that's produced to be sold, certainly mostly by the end of June this year. The total cost that Coles was for the quarter was $61 million, some of which has been capitalised in the industry but much of it is now being expensed going forward. We expect the June quarter to benefit from that revenue that's flowing through from our product sales and offset some of the remaining costs as we rank down in the caravans. Setting aside aid and moving into NOAA, the quality of result there was impacted by a number of challenges. The weather, which I think we saw right across that part of Western Australia, impacted our operation as well. But more significantly, there are enough operational issues coming out of the scheduled shutdown in March we saw a big impact on mill availability. And, of course, that flowed through into our copper nickel production and, of course, indirectly to our costs. Copper and nickel production were 10% and 16% lower, respectively, quarter on quarter, and rather than cash costs, up 21% to start at $5 a pound. No revenue was managed by due to the production of sales. and the average realized price was in line with the private quarter of around $25,000 a tonne. Donors' free cash was lower quarter of a quarter, again, attributable to the lower sales and signing. And despite the continued weakness in the nickel market and obviously lower production, we're still generating positive cash flows, and year-to-date total, it's just over $200 billion. Move on to Forrestania. And as you know, that mine is coming to its end of life. We're starting to see more and more of that variability and those challenges with your body as we get through the final sections of it. We achieved marginally lower quarter-on-quarter production and cash costs were also lower, which was good to see. They did experience some challenges with their trucking product to get it out to our customers. That was by the function of the weather that we saw, but also some road access constraints. That impacted revenues through the quarter, but we expect that to improve through the June quarter coming up as we clear much of that backlog in the industry. Importantly, Forestania continues to generate some free cash through the quarter, thanks to our hedge position, which is priced at $32,000 a tonne. Recognising, obviously, we've got a fairly short line of life left at Forestania, we're well into our work on planning and starting that breakdown into care and maintenance and thinking through the rehabilitation plans that will follow that so that we can have an orderly and responsible transition for that operation. Moving on to slide 10 and exploration, I don't want to go into the detail of the individual work programs. We've got some more of that in our quarterly report. But I do want to mention that we are, our work committees, are comprehensive working through that closely with the team to help us prioritise our project exposure and portfolio capital employment in this space. We've got absolutely stellar capability in this space, amazing technical skills, and I think real capability right through the pipeline and lifecycle of exploration. It's a unique capability in the industry in Australia, and we have an amazing portfolio of some real value. respective grounds to come through. So we need to make the very best of that, realise, or not wasting the opportunity, but equally look hard at how we're translating that to value through our business. And so that review is progressing and we'll provide an update the next quarterly on that work and the outcomes. I'll come back and wrap up with a few summary comments in a little bit. But first of all, let me hand over to Kath to run through some of the financial highlights of the report.

Thanks, Ivan. We'll turn to slide 13, where we summarise our financial results for the quarter. Of note, we've seen a decline in IGO share of profit from the OEA, which was a loss of 10 million for the quarter. This reflects lower lithium prices and sales volume at Greenbushes and an EBITDA loss at Kwinana as expected for an asset in Redpath. The EBITDA loss at Kwinana of $63 million in the March quarter was significantly lower than the loss recorded in the December quarter, primarily due to materially lower non-cash in-upday adjustments, as well as higher revenue generated by hydroxides. Non-cash adjustments accounted for just over one quarter of the quarter's results. The group recorded an underlying EBITDA loss of 15 mil for the quarter, meaning the loss recorded by our business excluding lithium was 5 mil. The predominant driver here was the loss impact from COSMOS. The group underlying free cash flow was 79 mil for the quarter, and we referenced our cash position on the next slide. You'll note our cash balance stayed steady over the quarter at $276 million, despite several notable movements, including the interim dividend payment of $83 million and a $72 million cash outflow related to COSMOS. Key inflows included a $106 million income tax refund, a $25 million dividend received from TLEA, and a $52 million received from our operating people business. Importantly, and NOMA and forestry operations continue to generate underlying free cash flow despite challenging market conditions and the sector. Our balance sheet remains strong with liquidity just under a billion. It not only provides us optionality, but also provides a strong platform for growth and to expand our market experience. To you, Ivan.

Okay, thanks, Kat. Maybe just a quick sort of wrap up in summary, and then we'll open up for some questions. First thing on safety, and I mean, the five priorities I've set out here, I've talked about really since my first quarterly call back in January. Safety is clearly the highest priority for us. We've made some progress, but there's plenty more to do. I'm confident we've got the right work environments, the right program, and the right engagement from our leaders, but there is still plenty to do. In terms of our results, it was a challenging period for ADO on multiple fronts, but the most significant of course for that was that we hit prices and lower production compounded in the same period. With that said, the additional 200,000 tonnes of sale I just mentioned will definitely unconstraint the production team and allow them to focus on poor production rates. I think that's a very healthy outcome for the rest of the year. We are focusing on working closely with Agenda Partners to optimise the Green Wiltshire asset. I've talked about that previously as well. There's plenty to do. It's a fantastic body. It's got a very long life. Lots of opportunity, and I think bringing out collective strengths will help unlock that. Kwinana, look, you know, that's been a real challenge for this business for some time. I was very encouraged coming in on our last visit and discussions, working through their new start plans. Their agenda and their plan for 2024 is hard. I want to make light of it, and I think as I've learned more about this industry, I see that across the industry, anyone working in the lithium hydroxide refining process has got plenty to think about. What I see, though, is it's very clear on those challenges. They've got the right actions in place. They know where they need to focus on their risks, and they're managing NASA better and better each month, which is great to see it. Notwithstanding some of the operational difficulties that Nova and Frost are in, some out of their control, some in, the businesses are generating cash and we've got plans to manage those and optimise their cash flow safely and sustainably through to the end of the month for each asset. And I've talked a bit about exploration. Look, you know, I don't want to state It's the first investment that we've made so far, but this is not something that we want to shy away from. We want to make sure it's targeted and managed very thoughtfully, but don't underestimate the capability and the dedication that our team has and, you know, I'm convinced, their work programs are going to lead to some great success. It's a key part of our strategy and as we work through our refresh, that'll come through. I'll share more of that in the coming months. once we can complete that through the next quarter. Moving on to slide 17, look, I think there's a lot to be excited about IGL at the moment. We're coming out of a difficult quarter, but if I look at the level of commitment and dedication to our purpose and the focus across the broader business, living our values, fantastic to see the energy from the team. IGL has been a great position. We have a fantastic platform and our financial strength and a balance sheet of cash generation, exposure to the world's best lithium asset, and our Nikolaev business remains cash-positive. Our people and culture, which I've talked about previously, continues to shine through. And then, most importantly, our purpose and clarity of where we're taking the business as we refresh the strategy stands as our iterative setting. So, lots to be positive about, to build on. Thanks for listening so far. I'll head back to the operator now to walk through your questions.

Thank you. If you wish to ask a question via the phones, you will need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the ask a question box. In the interest of time, we ask today that you please limit yourself to one question and one follow-up question per person. Your first question comes from Hugo Nicolasi with Goldman Sachs. Please go ahead.

Morning, Ivan and Kat. Thanks for the update this morning. Just a couple of questions on the lithium business, please. Firstly, on greenbushes, for the additional sales volume, any indication from Tianqi whether that's for the ramp-up of their own Anju plants or more of a reflection of broader market conditions and how they're seeing the market? And then just to clarify... Is the 180-day payment terms on that volume subject to any provisional pricing? Thanks.

Yeah, hi, Hugo. Thanks. Look, I can't really comment on TLC's intention for the product. Specifically, it's probably a question for them. So, look, just great news that they're pulling that product through, and I'm sure they've probably got a number of different pathways there. In terms of the pricing, the 180-day payment terms are sort of recognising the value of getting those tons out and obviously the reduced storage costs and so on. So, you know, it's a one-off in terms of that sale. Otherwise, the pricing mechanism from Talos and remains the same.

Thanks, Adam. And just as a follow-up on Kwinana for Train 1 and then the shut in September, any colour there on what's being rectified or, you know, equipment costs and how meaningful of an uplift you're expecting in utilisation as a result?

Yeah, I don't want to give numbers. I don't want to jinx the team. And I said that when I first started this role. Until I can see that the physical model of the physical asset in a digital sense where we've got basis to do that kind of forecast work, I don't want to start putting numbers out. They have got a great plan. It's aggressive. I'm sure they're going to push themselves to the limit. I think what's encouraging is, you know, step back from the numbers per se is the depth of understanding of what's bottlenecking or holding up production in that continuous flow and the actions they're taking to remediate that. And what I saw was a really deep understanding in the behaviour of particularly the back end of the plant where we've had the problems. The improvement will come in two parts. There will be initially improvement that comes through the big shutdown that's planned in September, just through better asset reliability and better operating control of the asset. And they've got, again, very specific work programs in place to improve there, and that should deliver step-by-step improvement month on month. We've seen that, obviously, in the last quarter, and the April result was an improvement again. any of the asset's behaviour is better. And then, of course, we have this one significant shutdown where they have a number of big pieces of work planned to install changes to the asset to remove some of the things the bottlenecks are holding it up. All in all, so I'm not prepared to give you specific numbers at this point. We're in a difficult position. They are working well on that digital model as well. That's coming together. They've got a SISCAD plant model built up. They're busy connecting that into the underlying systems. And my next visit, I'm hoping to actually see some of that working in progress. But I'll have to come back to you once I've gone through that and then get to some specific numbers.

Great, thanks for that, Ivan. And maybe just one quick follow-up, if I could. Train 2, just confirming that the installed equipment there is already in place. Have you had issues with any of the corresponding same equipment in Train 1 that have been significant, or not expecting any issues with the previously installed Train 2 equipment?

Well, most of it's the front end that's been installed, and I think the issues they did have with normal conditioning issues, nothing material and nothing that would give us concern with what's been put in place. the bulk of the issues have been in the back end of the plant, which was not built. That said, of course, the study that's underway and the work that's underway is taking the learnings from Frame 1 and contemplating what's the best path for that, should we decide to make that extra capital investment. Thanks, Ivan. I'll pass it on. Thanks, Hugo.

Your next question comes from Raoul Anand with Morgan Stanley. Please go ahead.

Good day, Eamonn and team. Thanks for the call. Look, I've got two on the lithium business as well to follow up from Hugo's questions. Look, first one is on Kwinana. You've talked about the major shutdown in September. I guess you're saying you don't want to talk around numbers, but the time we had attended the side trip, there was still a target in place to achieve capacity utilization in line with the nameplate eventually. Can I perhaps test you on whether that remains your target still, post however long it takes for these rectification works to happen? And then secondly, on Kwinana, in terms of Train 2, is it fair that despite the feed study continuing, you probably want to wait to see Train 1 completely ironed out and running at a decent run rate before you give the green light for train two. That's my question on Kwinana. I'll come back with a question on Greenbushes, thanks.

Okay, thanks for all. You know, the nominal nameplate from an engineering point of view stands. Until we've done that work on that model to really understand it, simulate it, I think it's difficult to be making up a number. So we're going to clearly chase that engineering outcome. And then once we know more, we can adjust it if need be. I think I mentioned in a previous call that there's, of course, a scenario where it may be that you need the two trains together and some buffer or some redundancy between the two of them to actually get the optimum outcome. And that would then imply some reduction from the total main plate of both trains to achieve that. Again, I'm speculating because it's too early to tell. Those things that the team are looking through in their engineering and feasibility study currently. The target this year is not impacted by other of those things. They're working through the current bottlenecks and where the performance is impacted. And remember, of course, the time to be produced through the year is a cumulative view and we expect see a good step after that shutdown in September. So the last quarter is where we're going to see then obviously a more material output based on the success of those changes. The second part of your question around confidence and the trigger for anything on train two, Yeah, clearly we need to know that we've got a pathway to an economic and valuable asset before we invest further capital. We need to understand what the return will be accordingly. You know, how far you've got to be along the way to prove that, I think, again, is open to some debate still. That's why I'm so hesitant to put out numbers at this point until we've seen that digital model, until we can see a level of confidence in our ability to forecast performance month on month. I just don't think it's worth getting into what that line looks like. But you're quite right that there will be a close link between the performance of train one and any decision on train two. So that stands as questioning what that threshold looks like, but I still can't tell you.

Oh, okay. That's fair enough. Look, second one's on greenbushes. Obviously pleasing to see the mine return to full production for the rest of the calendar year. I wanted to check whether there's been any, you know, further color that you can add in terms of, you know, the mine plan and sort of the TNG plan for the medium term that we were talking about last quarter as well. And we were somewhat expecting an update this quarter. It may still come in June, but all I wanted to test was perhaps, you know, future expansions beyond CGP3. Is it fair to say that the mine's footprint and capital requirements could be constraining factors and you probably want to look at the underground options and, you know, it might be, you know, a cost or a capital light strategy over a capital heavy higher operating cost strategy in the medium term? especially given strip ratios and where they need to be if you're going to mine on those sorts of rates.

That's a lot in that question. I'm sorry about that. Yeah, you've got something else to say. Look, first of all, that's about expansion. So the TQP3 is progressing. That's moving on well. It'll be done, you know, next year, Q3 next year, so... That's step one. There's been no sort of change to that schedule or delay or slow or anything. I mean, it's just run at full pace. It's incredibly valuable and creative and that's what I'll send. Behind that is CGP4 and what we said last quarter is look, that still remains in study mode. Once we see that, we can look at that. Clearly that needs to be done in a way that's cognizant of the mine's ability to support it and how that's optimised, and then that brings you obviously to how you expand LLBODY over time. And I think we've again signalled that it's likely that underground mining methods will be appropriate to supplement the surface mining that we've been doing so far. Exactly how and when is not determined yet, it's not something I can get into, but that's the work we need to do. Having a plant built without having thought through the mine and its capacity to feed that, tailings management, et cetera, just doesn't make sense. All of that's going to come into that decision as we look forward. And I'm sure you take all that for granted. I think I'd stand back, though, and say that while we both know that every mine has got some sweet spot at the rate it can run at, equally, when you have the cost position and the ore quality or material quality that we get from green bushes, we want to we want to maximize that we want to maximize production and we want to meet the significant growing demand we see in this market so there's a clear incentive to bring the very best and highest margin talents into the world as quickly as possible ahead of other other investments that might be out there in the industry that's certainly the way i look at it but we need to make but also mine and related infrastructure as well.

Understood. Look, that's all my questions. Thank you very much. I'll pass it on. Thanks, Rob.

Your next question comes from John Bishop with Jarden Group Australia. Please go ahead.

Thanks for taking my questions. I'll try and keep it to two. Just around your nickel strategy, obviously you've taken, obviously, a big haircut on the Western Area's acquisitions. and you've had to put Cosmos on care and maintenance. I did notice a nickel junior the other day announcing a joint venture partnership with a Japanese consortium on a nickel ladder ride, admittedly. But I guess I'm interested to understand, given that sort of geopolitical bent, are you seeing any emergence of ex-China interest in those assets?

John, yeah, good question. I'm not. I can't really comment more broadly, but I guess my reflection on the nickel industry, if I could just broaden out your question, is that China obviously has got an interest because of their stainless steel production, and that's significant in terms of demand. They've continued to pursue the lowest cost of nickel units they can get, and they've got lots of expansion opportunities in their other locations around the world. I'm not sure, you know, if you think about incentives to operate here, it's hard to imagine that we'd see a big shift from their other options.

Yeah, OK. I guess I was just fleshing out to see whether you'd started any sort of sale process, but I'll park that there. Probably the other question I have for you is just around the reserves and resources at Taliesin that you announced with your December quarterly results, and then obviously Albemarle have announced independently. There was some disparity between those numbers. I guess it probably ties into Raoul's question around underground and CGP4 decision-making. I think the market had an understanding that CGP4 was predicated on a continuation of open pit, and then obviously underground would be part of a longer-term strategy. Is that something you're able to sort of definitively call out at this point, or is it still part of your optimisation work?

No, that's still work to do. I mean, I think when the underground comes in, it should be optimised on the cost of the course. And we don't build a plant for five years. Obviously, they're going to run for all the time, so we've got to think about it in the near term and what will be on that. And the difference between the other model report and, of course, what we release from TALIS is just different reporting standards, which I'm sure markets, you know, across other businesses as well, the difference between JORC and SEC regulations in terms of how reserves and resources are reported.

Right. Thank you very much for taking my questions.

Your next question comes from Tim Hoff with Canaccord. Please go ahead.

I might dive straight into that one. I guess, you know, the differences between Albemarle and your reporting, you know, you've noted that it was a conservative differential between the two and that's why we see what we see in terms of that mine plan that was put out. Can you dive into what specifically is conservative about it? I mean, obviously we have no TRP. there's no underground, but you're not advising to an underground either. Can you dig a little bit more into what those differences are?

Tim, I couldn't hear you super well on that, but it sounds like we're looking to break down or reconcile the differences between the two reports, which is not something I think is a great plan to do at all now. We can catch up and go through that if you like, but there are different standards of reporting in terms of certainty around the resource. There's difference in price assumptions, there's difference in cost, there's a number of different factors that ultimately roll back into those two different outcomes, which are my reported to versus what Taliesin reported to. So I don't know, what are you chasing with that question?

I just, if you can outline what the differences is between the conservative nature, but we'll move on. Just looking at the Wingfield account, There's a large differential of about $3.5 billion between the non-current assets of the TE, the Chauncey Lithium Energy Australia JV and Winfield. Can you give a bit of information about what that might be? Is it just the cost of Kornana that's on the balance sheet or is it additional assets or goodwill being held on the balance sheet of the Chauncey Lithium Energy Australia JV?

Look, honestly, I couldn't tell you off the top of my head because I don't have two sets of accounts in front of me. It might be better if we do that one offline. I don't want to mislead you with some incorrect information on that one.

OK, well, we didn't have too many hits on those ones.

Sorry. I wish I could.

No, that's all right. We'll follow up. And then perhaps lastly, if I may... The sprint rate of logistics at Greenbushes, obviously 200,000 tonnes is a great outcome for the operation. What's likely to be cleared out within a quarter?

We'd like to get all of it on the ship. I can't speak to the shipping and port constraints, but if you could do one big shipload, that's what's happening. We could bring in BK. So it's not like there's any delay or it's purely as fast as we can do this in an hour.

Excellent. Thanks very much, guys. I'll hand it on. Thanks, Tim.

Your next question comes from Levi Spry with UBS. Please go ahead.

Yeah. G'day, Ivan and team. Maybe just following on there a little bit. So stockpiles and sales for this quarter. Can you confirm what the stockpile was at the end of the quarter? And I think previously you've said sales would be 20% below production. Is that still what we work on for this quarter?

We're doing stockpile March 2.30, roughly, if that's in my mind, 2.31, something like that. So we're largely clear that, you know, give or take a bit of working imagery. And the sales were... 180, if I'm remembering. No, I'm sorry.

Oh, I think you've seen it. It's going to be... You just meant to add the... Nominations for this quarter. Yeah. So nominations for this quarter were fairly full.

So you actually... Oh, fairly full for this quarter. Yeah. No, we saw nominations, obviously, across the half. being lower, which is about 20%, but the bulk of that was effectively impacting the first quarter of this calendar year. And so when you think about the off-take that was booked for ready for this second quarter or the June quarter, plus 200,000 tonnes, that's been ready to play out.

OK, thanks. I'll follow that up. And then just on the 200,000 tonnes, can you explain to us a little bit around the nomination process for that? And I guess, you know, the 180-day payment terms, you talked about recognising the value of getting that out, but also, I guess, in the money option on the pricing mechanism. So, you know, spot price is $1,200. I assume this is going to be sold at the March average price. Yeah, how do we think about that in the cycles of prices going forward, up and down?

Yeah, so look, this is our type of nominations. Both JV partners put them in for the half earlier this year, and they stand, and they will nominate for Q3 in a little while. So that process is unchanged at this point. This is 200,000 tonnes in addition to that, so go down and give them free, which obviously has a lot of benefits. You're right in terms of pricing, they'll draw at that much, also M-1 price in terms of the order that they place. And if you go to this, look, is that attractive for them in a different sort of spot price today? I also am not sure that it's necessarily comparable on that basis.

Yep. Okay. Thank you. And maybe a sneak one in just on CPG3. So you confirmed the timing, September 25, I think. The capex is going a little bit slower there than maybe... How is the rate of spend, I guess, going on the project?

Yeah, it's moving, and you've got to separate out long-lead purchases and different rates of activity when you're doing piling versus all of the build that's underway now. So it's difficult to say, well, based on the spending frames, how we're tracking, I'm looking at actual progress, and while it has some delays in the piling, they're definitely moving in pace now, and I think running too scheduled will be taking into account that delay. We're still not accepting this as a claim to a significant overall delay in the project, though, which is why we're still talking about that third quarter next year.

Okay. Thank you. Thanks, Ivan.

Your next question comes from Robert Stain with Macquarie. Please go ahead.

Hi, team. Thanks for the opportunity. Just a quick one on the Kwinana profitability. So obviously with the negative EBITDA result impacted by the NRV, can you give us an indication of what that would have been without that NRV? And then secondly, can you talk to potential utilisation rates? I know that you said that you don't want to comment on absolute production, but can you just talk to how you're expecting the sort of utilization rate to grow post that, post that shot that you're going to have in the September quarter, are we expecting a pretty sharp increase or are we going to expect it to be very long and protracted? Thanks.

I'll answer the first part of that, Robert. The profitability there is about a quarter of that or just over a quarter of that is in an NID adjustment. So that will enable you to calculate how much was the run rate for the quarter. That's where that answers your question.

And then, Robyn, on the utilisation, yeah, we expect a decent step after that start of September. I'm not getting into specifics, but you can look at the run rates and average it on the production you've seen the last few months. They were sitting just over 20% through April, which is great. Having less of those zero days when they have outages, which is promising. And as I said, we'll continue through, plans to continue through that shutdown with steady operational and reliability improvements and then have, obviously, a step up based on the asset changes coming out of the shutdown.

So, Ivan, just a follow-up there. So, we're expecting this to be an availability, utilisation or rate improvement following the September shut, or all three?

It is both. I'll try and give you some specifics just to try and make it a bit more tangible. One of the uses they identified was the amount of liquor hydroxide that's recirculating effectively. So producing hydroxide, but not extracting it, crystallizing it, pulling it out. And so that's affecting the rates, which they've identified some of the issues. They can reduce that issue. They're also gonna do things which will affect availability or improve availability. In other words, reduce the band outages that they've seen through the asset. So it's definitely a combination of both. I'm sorry. Sorry to jump in again. And, you know, I'm still learning as I go on these assets and the refining process. But no surprises, and I think this is the case for any sort of activity processing, the stability of the plant is also key in production and overhaul. And when they have a lot of outages, you never actually get your rhythm up. And what we saw through Threaten was they started to get extended periods without those outages, and that in itself the overall stability of the plant and the production rate as well. And so that's a huge part of the focus now up until the shutdown, because the learning that they're doing through that and the stability that they achieve will obviously then be amplified when they make some of the asset mediations or modifications in the shutdown.

Thank you very much for that added colour.

Your next question comes from Khan Picker with RBC. Please go ahead.

Okay, Anne, Kath. Two questions for me. The first one's on green bushes. Can you maybe provide some further detail on that approvals process for TLC, how that works, and why April 29? And given that prices have increased this quarter and TLC has taken up beyond the allocation, does that mean that they won't take up allocation next quarter and maybe some timing around that? Thanks.

Okay, maybe to head off the last thing, but first to look at this unrelated to the normal nominations process, they'll go through that normal exercise and we certainly don't expect, I'm not going to give you the details, but we certainly don't expect there to be then a short nomination in Q3 to offset that. This is above and beyond, it's clearly in three and up you go. you know, great signal from TLC pulling that through. It's been welcomed by all three JVN partners. The decision-making process ultimately goes through the Wingfield board. So the TLC made the request. That was then considered by the two JVN partners, TLEA and Alamal. And we went through quite a bit of analysis and process and ultimately a decision to accept that order on those terms, that it's well received, and making sure that this is lined up with the rest of the plans for the business.

Sure, thanks. And maybe the second one is on NOVA. Can you provide a bit more detail around NOVA? It just seems like, you know, we've pushed out sort of that high-grade stove for the last few quarters, and now there's like an additional mill shutdown. You know, when should we see Nova grades get back in sort of the operation throughput, get back to what it was doing sometime early last year?

Thanks, Carl. Good question. And we'll just talk about people for a minute. So you're very close to the detail and they are basically moving into some of those high-grade sites, as we speak. They had an issue with a borough that was in the wrong spot. They had to move a few days ago. And that opened up a new sequence. So we're looking forward to seeing that come through from this, through this quarter.

There's likely 2025.

No, we will see, we'll see that right start now, basically. So from the beginning of May, that is going to start feeding into the mill.

And the mill's up and running.

Yeah. Yeah. The mill's running. In fact, it's running at high rates. You know, the thing is, Certainly they had a bunch of challenges last quarter and they were frustrated and I think, you know, it's never easy. For us, we're sitting back here looking for the distance and you go, can we go faster? But they had a lot of challenges to work through and I give them a lot of credit for the way they managed that work. Frustrating that they're now in a place where they've set themselves up for what will be a very strong quarter. That's certainly their plan and it all comes down to pushing that bill So there's a higher rates than it would use to be run.

Sure, thank you.

Your next question comes from Mitch Ryan with Jefferies. Please go ahead.

Morning, Ivan and Kath. So dividends from the TLEA were paused in the December quarter, ending finalisation of calendar year 24 budget and operating plan. Given the $25 million dividend during the quarter, can we assume that that Budget and Operating Plan have been finalised and can we get any colour on what that looks like?

Just to clarify, you're asking about what potential dividends could look like going forward?

No, the current Year 24 Budget and Operating Plan is sitting inside TLEA.

Okay. It's been continuing to be reviewed and it should be signed off in the coming weeks, is my understanding.

Okay, so the dividend resumed prior to that being finalised?

Yes, it did.

Okay. And then just with the election from GLEA to take the additional $20,000, are there any logistic constraints in trucking that to port, you know, given that will be a sort of a step up relative to prior operating rates?

It's a great question, Mitch. I'm not sure the specifics. I mean, Look, obviously, they've moved the volumes at Scarborough 4. You know, I can't comment on the exact constraints and the rate fracking to get into it. We're pushing to get those toned down as soon as possible. Everyone's got that common motivation. I guess we can get you some more specifics if that's helpful, but our aim is to have all those tons cleared at this point. Okay. Thank you for taking my questions.

Your next question comes from Daniel Morgan with Darren Joey. Please go ahead.

Hi, Ivan and Tim. Sorry to come back to this, but it just seems incredibly opportunistic that it was decided yesterday that TLEA can take 200,000 tonnes of spodumene at March prices and with 180-day payment terms. You do have a great asset, but there is market concern that under your ownership structure, Tianqi can shave revenue or cash flow from UN good times and bad. How do you comfort shareholders about this structure and that it will work for IGO shareholders through the cycle? Thank you.

Well, I think, you know, we had a lot of comments about how the JV functions over the last few months, which we've been trying to work through to provide more transparency in the capital structure and in decision-making. I see this as a tremendous positive. I mean, they had a fairly sombre and negative view looking into 2024 and putting a long-run nation. Obviously, that had an impact on production, and we had a long conversation about that. We won't go over that ground again. They've taken a view now that the policy's timed out. Again, I can't comment on the specific decision-making, but I think that's healthy. The timing, of course, is favourable in the sense that We are seeing some rise in price, and they'll be taking these that are at that low end. But I sense the suspicion around them, around CLC's decisions. I don't know that that's fair and reasonable. Alpamilk's obviously a party to this as well, and they equally stand back. They own half of the asset and are part of these decisions, and they're encouraging and welcoming this sale on the theory of these times. You know, if I look at your question from another perspective, the opportunity that I see is, of course, thinking about the nominations process when we're in a slow period of market demand, because what we don't want to do is impact the way we run the mine. We want to optimise that, optimise its costs and its performance. And that's the sort of thing that I'm interested in spending more time talking about with the partners, trying to solve for that, improve the way that we then plan to optimise that operation. But beyond that, I think we're talking about the swings of normal supply and demand through a pretty difficult change in the market environment. The price came off massively over the last nine months and there's been a bunch of adjustments through the whole industry because of that.

Thank you. And maybe further to this, just on the operational plan. I mean, if I'm reading correctly from the presentation releases, this will enable greenbushes to return to full production. Is that what you'd envisage at the exit of the June 24 quarter? Thank you.

Yeah, yeah, that's right. And, you know, obviously it gives us some real flexibility there. I'm running at right now, but, you know, we can't crystal ball what the back end of the year looks like. The point is we don't have a full inventory stockpile at this point once this is cleared. And so the worst case, We've still got that buffer if we needed it, but we're not seeing any indications that we're going to need that right now. It's about getting that mine ready in full rate and driving the boss back down.

Okay, thank you so much for your perspectives. Thanks, Debbie.

Your next question comes from Kate McCutcheon with Citi. Please go ahead.

Hi, good morning, Ivan and Kath. Just following on from Mitch's question, the resumption of TLE dividends From the last lot of disclosures, I think there was still a few hundred million of cash sitting in the TLEA accounts. You've got 25 million as a dividend this quarter. Does that resumption mean that, did you say that you're still working through the budgeting process or is there more clarity on QANANA? And do we assume dividends resume from here out, interim dividend?

Well, let me comment back to you on Google. I mean, look, yeah, without being specific on the numbers, we shared it at half the cash condition at both the DLEA and so at Taliesin. And the cash at Taliesin has grown into before you could calculate. I won't mention numbers, but it's material from the cash there. The budgets are done with the final sign-offs, and I think we've got a view of what the year looks like. In terms of the dividend flow, that's still a decision to come, but there is still a considerable amount of cash that's accrued in both entities, and as much as we want to have confidence that we can cover any expenses in both places, we also don't want to leave cash sitting there. So the sort of process that we're used to, I expect, will be able to really be instituted in due course.

Yeah, I've got nothing to add to that. just as indicated, the cash has grown at Greenbushes, Sunrock, and in terms of the debt profile, it's remained fairly consistent.

Yeah, got it. Yes, my question was on the TLEA accounts, though. I mean, you can back out how much cash is sitting in there, isn't it?

Yeah, sorry to tell you. Yeah. They're kind of linked, right? So, you know, the cash generation is obviously coming from Greenbushes. Kwinana is still obviously a cash draw at this point, and... you know, as long as we've got cover for that based on our production plans for Kwanama, that obviously gives us a view of what we can then release as it flows out of Towson.

Okay, thank you. And then Cosmos, I haven't quite appreciated the cash still to go into that, both the quarter past, well, the March quarter and the quarter to come. Is the end of this FY the end of that chunky spend on COSMOS and how should we think about any care and maintenance expenditure going forward?

So we made the decision on COSMOS at the end of January. So if you think about the cash that we paid, it was actually paying for December and January and we went into a period of random debt. It was an organised situation. So that's a reflection of the tail of that move. In respect to the next quarter, you need to think about we continue to mine and finish mining this month. We'll still continue to process until end of May in order to realise the value from the stockpiles, as well as there'll be some redundancy that's happening there. So that's the tail that we've got while we move into care and maintenance. We've guided that care and maintenance will be between $12 and $15 million per annum. going forward, I think it's safe that that'll come in somewhere in the June month, so you could forecast that from the next quarter, into the next quarter.

Okay, thank you, Car. The next question comes from Matthew Freidman with MSP Financial. Please go ahead.

Sure, thanks. Morning, Ivan and team. I had a question on Cronana, and you cited in the release the ongoing qualification processes and contract discussions. I'm just interested to understand what's driving that. I mean, Cronana's been producing battery grade for two years now. My understanding was that you had long-term off-state customers in place. So, yeah, just trying to understand what qualification is still taking place. Is that seeking new customers, new contracts? and just trying to understand, I guess, what the JV is seeking in terms of those new contracts. Is it additional volumes, new geographies? Yeah, what's driving that ongoing process? Thanks.

Matthew, thanks. Good question. So there's just new customers. We've had a couple that I think TFC mentioned in their results call, which have been taking products already. We're qualifying more customers, and that just gives us more pathways and more options as the production grows.

Okay, thanks. Have any of the pre-existing off-tech contracts that you guys have previously cited, have any of them expired or been terminated for any reason? It's clearly just trying to build out the customer base on top of some of those that you've already highlighted.

No, just building it out. Yeah, just building it out on top of those. They're still current, albeit, you know, probably delayed in terms of the expected on-take, but they're still there and they're taking product now.

I understand. And if I could just ask another quick follow-up in terms of the process around the additional 200 kiloton sale. Obviously, we've covered a lot of ground there, but TLC were the ones that requested the volumes and obviously have been given the sale. Does that imply that IGO could also unilaterally request to take an additional cargo above any nominations in the quarter in the future? You know, is that something you would ever look to do, I guess, particularly, you know, if you see similarly favourable pricing terms or you know, if you were interested in picking up a shortfall in the allocations, would that be a possible outcome?

Yeah, not under the current agreement. So, at a Winfield level, the way that's structured, the talisman is it sells to those two or take partners of MARL and TLEA, and that flows on back to back to TLC. So, yeah, not under the current terms.

OK, I understand. And, sorry, can you also remind me, under the terms of those sort of sale agreements, Is the buyer, does the buyer have to use that material internally or are they allowed to toll treat it or sell it externally to a third party? Is that within the scope of the agreement?

They can and do toll treat it. The process for their needs, I guess, is effectively what the agreement requires. Okay. And we see both Marley and CLC doing that.

Okay. Thanks for that clarity, Alvin. Cheers. Thanks, Matt.

The next question comes from Lyndon Fagan with JP Morgan. Please go ahead.

Good morning, everyone. Ivan, just going back to that technical report, are you able to bridge the gap as to why the strip ratio has gone up and the grades have gone down relative to the previous technical reports? Just trying to understand that.

The overall mine or just current performance?

No, this is the total mine plan at Greenbushes that was released to market, just trying to reconcile why there was such a big change.

I can't stop my head. I'm happy to get back to you on that. That's helpful. Okay, done. That's it, that's it.

No worries. And then just to be crystal clear, so Greenbushes is now back at running at nameplate. There's no intention to throttle back sales relative to production. That's how we need to frame it going forward. Is that right?

Correct.

Great. That was all I had. Thanks.

Brilliant.

Thanks, Landon.

That concludes our question and answer session. I'll now hand back to Mr Vela for closing remarks.

Great, thanks, Ashley. Look, we're right on time, so I wanted to say to you as well, thanks for your time, great questions. Obviously, some new news around the start of the out-of-the-times. I think that's fabulous for the business and a great sign for Greenwich for the rest of the year. There's plenty of work to do there, as you've all noted, as we look to grow and optimise that business. And the other key highlight, I guess, worth talking about is the forward plan on our Kwinana refinery. It's really great to see the clarity of the team, Scott, the way they're looking at that. Thanks again. I look forward to talking to you all again the next quarterly, if not before. Thanks for joining.