Igo Ltd

Thanks, Darcy. Hi, everyone. Good morning. Thanks for joining the call. As usual, Kath Berzanich is with me, our CFO. But I'd also like to introduce, I know you can't see her, she's in the room though, Sian Beccarelli, Head of Corporate Affairs and IR. As you know, Richard Glass is taking... a really exciting trip around Australia with his family for the next 12 months or so. And so he's probably sitting in Coral Bay, hopefully not listening to this call. But anyway, we'll meet him. But Sian stepped in and come up to speak very quickly. So you'll get to meet her in due course. We'll cover a few highlights and then get into questions. I mean, look, overall, I think it was a solid quarter. Some big change with expiration, which I'll come to. But, you know, the foundations of the business and some rhythm, which is good. First on safety, the actual lagging results are still sort of flat and similar. There was a period of 60 days that we went without any recordable injury through February to early April, which we're really pleased about. And there's been a lot of focus on this, as you know, from the team over the last 12 months. And we're starting to see some strong progress there. to taking control of my safety. It's getting fantastic feedback and pull from the team at site. That'll be rolled out right across IGO. And that, amongst a number of other areas of focus in safety, I think we're having a real impact. We had a new head of health, safety, environment, heritage and land access join us in February. Strong, very strong pedigree in this space. And he's having a huge impact, which is great to see. I guess more broadly in terms of results, look, Greenbush has had a really solid quarter as well. Yes, production was lower than the prior quarter. That's just, you know, great and mind-playing effectively. There's nothing to see there in terms of actual underlying performance. In fact, and I'll talk more to it, the performance continues to improve. Rob's settled in and he's making tremendous progress there. As you see and you know already, this is a very, very strong... for the FY25 year to date. There's a range of operational improvements that are continuing, recoveries I'll mention, but that's all happening. And then I guess that broader strategic asset review and life and mine optimisation work that's underway. You know, everyone's asked about dividends and there was a dividend paid from Winfield into the joint venture partners, $110 million in the quarter. I was surprised. This business generates a lot of cash. It converts cash. And that's going to flow out, as we said. So even at the bottom of the cycle, even at the most difficult period for lithium businesses out there, this is a business that's still generating dividends. Kwinana, look, it was a tough quarter. The team was challenged with more equipment issues and a shutdown related to some of that work. The highlight, I guess, was the announcement of the train two decision. Of course, I think one of you on the call actually said, you know, when bad news is good news, and it was mixed. You know, of course, growth and, of course, development and more downstream processing of minerals and metals in Australia is attractive. Clearly, we have that view, but it's got to be economic at about at the half. Inova, look, as we know, had a very tough start to the financial year. They had a good quarter and the teams found their feet. We'll come back to more about forward-looking guidance on production, but overall, we're starting to get a better handle on the ore body and the way it behaves in its extremities, how we deal with the lower recoveries when we're in high areas of MGO. And generally speaking, more stable performance there, which is very good to see. And the team's working hard to continue to improve that. And on the financials, look, it's nice not having to share impairments and other challenges. So, you know, simple quarter generated some cash and getting back to basics. So overall, sound quarter and It's good to see some rhythm from the key operations in our portfolio. I'll just dive into Greenbushes in a bit more depth. I can't stress enough what an impressive mine this is. As an ore body, it's very privileged. We know that's world-class. The ability to generate margin in this commodity through the cycle and the cash conversion, I think, puts it in a very unique space. 68% margin through this period is extraordinary and shows you just how capable this asset is. And that's all knowing that there's still a lot of upside. And Rob is building out his team and building that momentum with the organisation. He's making change at a steady and very sensible and very thoughtful pace. There is a lot of challenges to manage as you make those changes. And some of you may have picked up the engagement with the local residents in the community around dust that was played out in some of the media in the last couple of months. That's the kind of thing that Rob's front facing. And we know that he's taking this very seriously. He's thinking about the non-technical risks. He's thinking about the impacts in a very practical way. He lives down in the region and with his team. that in a way that the impacts are managed very thoughtfully and the engagement with the communities and other stakeholders is done, leaving them feeling like this is a significant contributor, which I believe it is to the region and to the local communities, but that their voice is really heard and understood and the team's working through those challenges. So all credit to Rob and the Greenbush's or Taliesin team there and how they're doing that work. Mill recoveries, look, I think I've mentioned before that this obviously is a privileged ore body and that offers up opportunity, but equally the team's doing a great job at continuing to drive recoveries up and CGP1 is well above 80%. It's very impressive what the team's doing there and they're, of course, applying those learnings back into CGP2 and naturally they'll want to carry that into CGP3 when it comes online. But, I mean, this is the benchmark in the world for recoveries. some really strong focus on that, and that includes plant throughput and just asset stability as well, which we all know is a key driver of recoveries and ultimate performance. I mentioned the dividend, which I think is good to see, $110 million on a 100% basis. The broader optimisation work is underway, and I've got a bit more on that in a minute. And then capital expenditure, probably a key point to note is we've revised down our guidance For FY25, we previously said $850 to $950. We brought that back in at $700 to $800. And that's really a focus of, again, the work that Rob's done as he got in and worked through this with his team and the board's influence, of course. Strong focus on capital, being really careful to prioritise capital, spending money on the right things, making sure we get more value for every dollar that is spent. and being very frugal ultimately. We don't want to see the team hurt asset health or not invest in sustaining capital. Of course, that's critical and we want to continue to see this business perform at its very best. But equally, we need to be very thoughtful with how we commit more capital in that space. So great to see that progress. I'm very, very positive about that shift down and I think you'll see that continued pressure and focus maintained. Obviously, it's what you'd expect at the bottom of the cycle. What we need to do is carry it right through the cycle when the market turns and make sure that discipline stays in place. And CGB3, probably last key point on this slide, is it's tracking well on budget as we've signposted first production expected in the back end of this year. So moving on. Put in a quick slide. There's nothing new on this for anyone who's been through these kind of processes. It's not necessarily entirely unique, but it is significant for greenbushes. And Rob's progressing this. It'll take some time to work through all of the elements. But this slide, and I won't go through every dot point, but sets out the first part, which is looking largely top down at what the upside is. What is the full potential? What's the upside? What is it that we need to... prioritise that, and then breaking that down into the bottom up, which is when we say phase two, it's running in parallel. It's not to say that it's all staggered, but getting back into the block model and building up that picture of the mine from the ground up, understanding your characterisation, understanding the assets, understanding the product demand, and understanding how we get the very best value out of this business for the long term. And I think the last blue box is absolutely critical, and and the impacts, a lot of the non-process infrastructure and other non-technical aspects are fundamental. And how we think about growth and the requirements around that non-process infrastructure is absolutely fundamental to get right. So having that done strategically in the long term and being able to look out decades, not just a short period, is really important for us to get the best value from this asset. And so what does all that deliver? And look, This slide's nothing new either. I mean, you can all put this together from the information you've got. But it just visualizes the leverage on this asset. And so, yes, we're generating great amounts of cash at this point in the cycle. But as that lithium price, spodumene price moves, the leverage is extraordinary. And this is a picture of, as is, before CTP3 and before the improvements. And that's really the message I want to leave you with is, contemplate, we will do our best to unpack that as we go on. We work through that with the joint venture partners. You know, what is that potential and what is it that we're pursuing? How can the asset deliver more productivity, more throughput, lower cost? How can we optimise that amazing ore body? How can we grow the resource reserve in a way that drives material value for the business? And that work's underway and I guess the leverage loss curve is very significant. Kwinana, look, a couple of key points. I mean, covered LHB2 or Train 2. I won't go into that further at this point. There may be some questions. The quarter was challenged with some equipment failure and a shutdown. Also dealing with some of the residual work from the October shutdown. Conversion costs trended down and naturally are tied obviously to volumes as well, but there's still some work to do there. And then capital guidance is probably the major takeaway here. We've revised that down for FY25. I think that's important to note that we've got obviously a strong focus on CapEx here. It's not a case of just being an open book by any stretch. to be very, and are very thoughtful about where we allocate cash in this business. And both joint venture partners are equally attentive to this detail, making sure the team are very careful, very well planned, and execute each of their projects with a great degree of care to make sure we get the value for money that we expect. And, you know, you can obviously see in the guidance that that's a fairly material step down from what was anticipated. On to Nova, look, it's nice to see the team, you know, find their feet and have a good quarter. They had some good recoveries. They got some better grade. They got some good rhythm. The team were working really well with Barminco. And, you know, all of that with much better safety as well. It made me smile. I looked back on the quarter and it was just nice to see the team finding their rhythm and delivering. And that's continued into April, which is good. So, you know, I think... got a high ambition right through the organisation to do that, to show the quality of mining capability that IGO has. They did have a very tough first half. And so this was great to see, I think, or credit and give credit and recognition of the very hard work they've done through this financial year in a very difficult period with your body. It hasn't been kind to us. And so in a sense, it's good that we're getting our hands around it. The big takeaway I think on this page is we've put in there some guidance out to the end of life for the asset, for the mine, 15,000 to 18,000 nickel tons through to the end of life, which is pretty much the end of next year. So we've been through the long life of mine now many different ways. We've looked at it through different angles. There is still work going on in our budget cycle at the moment to fine-tune that, but we don't see any scenario where that changes. We think it's got good economics through the cycle, unless there's some major shock to the nickel market, which we can't see. So we've got some real clarity and certainty and confidence around how it can perform, and we just and manage that in that ramp down as we go. So overall, a nice quarter for Nova and well done to the team. On expiration, look, you know, it's been a tough year and IGO has got a long pedigree and a long history of expiration. That's where the company started. It has deep, deep capability in the team and some of the most capable individuals scientist geos that you could find. And we had a strategy which focused on these belt scale tenements, focused on very broad standing across Australia. And we've tested that, as you know, over the last 12 months. We've looked at where we stand, how we want to proceed, what we think will drive economic outcomes. And we've made a major change to the operating model, to the structure of the team, to the size of the team. And we've rationalised that portfolio of tenements heavily or in the process of doing that. That's been a very challenging process to go through. I mean, the team has done exactly what they're asked to do and done it extremely well. They were responding and delivering against the strategy of the business and we've changed that. And that's created impact for individuals, which is why I haven't wanted to talk about it in depth up until this point. I think it's It's just not ideal or respectful to do that until we've been through the work, but that's now complete. So March, well, this quarter was a tough period for the team. Very sad to see very long-term team members leave who've contributed a huge amount to the business, and I want to thank all of them who have been part of the team. Those that stay equally feel that challenge probably more than most, and it's still a difficult time as we get through that. into this personally. We've also had a change for the head of exploration. John Kilrow has been appointed. He's got a very long pedigree in this space and worked right across Australasia and beyond. a very, very capable individual to lead the team. Brett's been personally involved and I think, look, it'll take us a bit of time to find our rhythm again, but we've got conviction, we've got a focus, we've got a very good plan, we've looked at this really hard and we've also, as part of this, got some guidance for you going forward on what we think our expenditure will be in this space and we've indicated, you know, next financial year and onwards effectively is in that sort of you know, good guidance ranges of 30 to 40 million. We've put that out there to sort of say, look, this is where we think the right sort of investment fits based on our understanding of the tenements that we hold, where we think we can make a difference and what's appropriate for the scale of our business. So that's... We're now in a place to look forward with a lot of confidence for exploration. On the financial results, not a lot to cover there. I mean, obviously last quarter was heavily overweighted by the impairments on train two and train one. This is a cleaner quarter where you can kind of see the underlying numbers and cash starting to flow through. I note that some of that's tax return, which is, a function of cash timing from last year, but ultimately, you know, through the cycle, we are generating cash and covering our corporate expiration and other costs. You'll be aware, of course, that we're still carrying real cost for the care and maintenance activities at Forestania and Cosmos. So all of that taken in, we're still in a very strong position and our balance sheet continues to stand well behind us as we look forward and do a lot of really exciting opportunities with Greenbushes, Nova and beyond. So, look, just to wrap up, I mean, I think I was reflecting, you know, this is sort of effectively 12 months of full cycle since I did this, you know, April 2024. That's my first full quarterly and it's been a tough 12 months. There's been a lot of change. There's been a lot of hard decisions that we've had to take as and you work through so much so quickly. And that definitely leaves people feeling challenged and uncertain and anxious and knowing what's the future of the business. But I think what we're starting to see now is a much cleaner view of what is IGO and the capability of IGO and the potential with Greenbushes. We have a fantastic leadership team and fantastic bushes with huge upside and Nova in a stable place to deliver cash right through the end of next year and a reset exploration organisation to go and pursue and help us find some exciting growth. So I'll leave it there and open up for some Q&A.

Thank you. If you wish to ask a question via the phones, you'll 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. Your first question comes from Hugo Nicolacci from Goldman Sachs. Please go ahead.

Morning, Ivan and team. Thanks for the update this morning and the extra detail in the release and particularly just around that Winfield dividend to the partners. Great. First question just on the CapEx reductions at Greenbushes and Kwinana. Now that you've completed those initial spending reviews, can you just elaborate on where those CapEx reductions have come from at Greenbushes and how we should think about that, whether that's more a deferral or reduced spend. And then at Kwinana as well, what you think the ongoing spend at Train 1 now looks like beyond FY25.

OK, thanks, Hugo. Look, I can't give you... It's a list of things for Greenbushes. Rob and the team have basically stepped back, looked at the portfolio and gone through it with a fine-tooth comb and challenged all of the projects. Now, so some of it will be timing. Where does it fit in the pipeline? And some of it will be, we don't need to do this. Now, I don't want to get into specifics. I'll give you an anecdote as an example. there was some plans to pave certain car parks and they decided that wasn't required. There'll be certain facilities that they might have wanted that they've said, look, we don't require. So it is both deferral and it's not a case of, as I said, pushing things that impact asset health. I mean, I'm one of the biggest proponents and I've lived with many assets where that has happened and it is painful and I won't, that's not who I am as a leader. And as a board director, I'm a strong advocate maintaining and putting the right investment into our assets to make sure they're healthy. Rob is that kind of leader as well, because he's also lived through those issues. The other directors are as well. So I have complete confidence that we're not cutting corners here. This is about us just being really disciplined and frugal and thoughtful with our capex. The other lever that he's pulling is he's challenging value for money. He's saying, well, what is the right amount to spend on? that particular requirement and so we're both looking at capex intensity and allocation and I think this will only continue to improve. There's a committee that goes through this very closely with the business and you know it's all the things that you would expect from strong capital governance, strong discipline in the way that they allocate that cash. With regard to Kwinana I can't give you guidance yet. We will next quarter once we update there. I think it's fair to say that we've got a very, very strong focus on any additional capital there. We want to make sure it's extremely clear what difference it will make, why it's being spent, and the engineering and science and thinking behind that. I can't give you numbers at this point. I will as soon as possible. I appreciate you want more. It's certainly there, and we'll give that to you as soon as we can. But I guess be confident that we have got a huge focus on every dollar that's spent on the refinery.

Great. Thanks for that, Ivan. And just segueing across to another one on Kwinana then. If I look at the overall production piece, I appreciate you've still got some repair works to get through in May. But if we look at sort of the discount for non-battery grade hydroxide at the moment, it looks relatively small. Is there an opportunity to ramp up more unqualified material there to try and improve sort of the unit economic piece? And then just as a tack on, can you maybe clarify how much government assistance you got in the quarter there as well?

Yeah, look, the team are trying to move as much because we have got inventory, as you know, and absolutely trying to monetise that and drive our working capital down. So that's happening and we're looking at a range of channels to do that. And I think with TLC's connections and support and guidance in the market, that's really going well. On the second part of your question.

I'll jump in there. We got back paying during the quarter for that impact today, but it was in the order of about $8 million. And we'll see that continuing to come through, but at much lower levels as it just is for the quarter-on-quarter.

Yeah. Thanks, Kath. I was going to say, so that's the numbers I didn't have at hand. But there's sort of a new program, which maybe everyone's not familiar with, the West Australian Government's launched late last year. And we've applied and received that support. It's quite material. I don't have the exact quantum because it's effectively an offset on a number of things like utilities and other costs that we would incur, but it is quite material and very well received and we're really, you know, pleased with that support from the West Australian Government. And so maybe we'll look into that and see if we can give you more clarity on that for the next quarterly. You know, it's from a forward-looking point of view so you have a sense of what's coming.

Got it. Thanks for that, Ivan, and go ahead and pass it on.

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

Hi, morning, Ivan. Kwinana Train 1, this is the first time that you've said in writing about discussions for an acceptable Train 1 pathway have been pulled forward. Sorry, discussions for an acceptable Train 1 pathway have been talked about. CapEx has been pulled back. There's another 80ml Aussie gone into TLA this quarter that won't make its way to IGO shareholders this half. How do we think about the bookend of options here? Is it care and maintenance, continuation, one-party consolidating ownership? Are all of those on the table? And possible timing, if you can say?

Yeah, Kate. Kate, unfortunately, let me deal with the last point first. You know, I don't have any timeframes. I know you'd love that. I'm sorry, I can't be more specific there. Look, I think we, you know, we're working through, and I'd signposted this at the half, but You know, we are talking with TLC about train one. We have concerns about its capacity to perform. And that's both technically its history and also the market it's in. And we are talking about a full range of options of, you know, what might be a solution. I think the important thing to note, though, is as we stand today, it's operating. We have a team there. They're working hard to make it perform and we're all behind that. Both shareholders are supporting the team in that way. But of course, we know we have to look at and think about what's next and where there's differences of view between the two shareholders. We need to work through that in a respectful and thoughtful manner and that's underway. But I would say there's no one option or one answer to this for us or for them. my point of view, naturally, every extra dollar of cash that gets consumed by Kwinana that doesn't drive value is undesirable. So we're extremely impatient and driven to see that change. This business has had enormous investment since we became a joint venture partner. And I think we've been extremely patient and supportive. We remain supportive of the team and the work they're doing. But we cannot continue to just spend money without a clear path of where that takes us economically. So I know that's not been too specific. Fair to say we're working through this, as I said, in a very thoughtful way with our partner. And as soon as we've got some more news or more clarity, we'll give you that. The important takeaway being that we are operating, team's doing a great job, trying hard to to improve that performance, and we're right behind them until we take any other decisions.

Okay, that's helpful. Thank you. I know I ask you this every quarter. And then the Winterfield balance sheet, thanks to the additional disclosures from March quarter, Albemarle said they didn't expect to pay a dividend this calendar year, but we have one. And it looks like net debts increased 70 mil quarter on quarter. And I can see that after the dividend, there was cash generated in that asset. But just a strategy around drawing down debt by another US 360 mil quarter on quarter, if my maths is correct. How do we think about gearing of that asset as the capex then rolls off into next year? And also your JV partners have very differing balance sheet positions to IGO, I guess. Anything you can say around that will be helpful.

Yeah, let me comment broadly, then maybe Catherine can get into some more of the specifics. I mean, there's a debt tax. bundle there and the team will draw on that where they think is appropriate funding, capex and growth, which, and you can see, you know, if you pull all the numbers apart, the company, the business was net cash, put the debt aside. And, you know, I think that's the first takeaway that this business is generating cash. The application and the debt for that growth capex and the timing of it, when you think about Australian dollar, US dollar terms, You know, we're making really thoughtful decisions here. And while the DEX US dollar denominator is not drawn, of course, that does create some opportunity for us. And Luke and Rob are very conscious of that. So, you know, there's no sense here that we want to over-gear this asset. The partners are all very aligned and very cautious on that. We look at these things with a great deal of care. All of our ratios and covenants, we're all well under. So, you know, we're in very good shape. So I would say that this is just being very prudent and thoughtful and actually it's quite value accretive when you think about how we're applying that debt in the business and the timing of the drawdown. Pat, do you want to? on that.

I think you've covered most of it. The one thing I'd say Kate or reiterate is the debt's there to fund the capital and as CGP3 what comes to an end then the capital profile's going to look different. We've got very strict or the joint venture has got very strict capital management there and manages gearing ratios, leverage ratios, liquidity levels very thoughtfully and looks out 18 months. The balance sheet is strong and I don't believe over leveraged at all and our intention is not to be there this is a very important asset for us but it also is you've got to look at the best cost of capital on the way to fund these things and that's no different to any other miner so I wouldn't set expectations that that debt is going to grow significantly it's going to be utilised as Ivan said in a thoughtful way during that process and also keeping very close eye on those various those swim lanes that we work in, in order to that. And, you know, surplus cash gets distributed once you look at that to the joint venture parties, as you have seen in this quarter.

And, you know, if you pull up the 24 accounts which have been posted by Taliesin Winfield recently and you just do the like-for-like, I mean, actual net debt, if you look at the cash balances, the debt, It changed $75 million US, I think, in the quarter. So it's pretty material in real terms when you pull it apart. Your comment on the dividend, look, I'm not sure. I can't comment on Abmal's remarks there. Look, this business generates cash. It's a great asset right through the cycle. If the electric price moves, it just gets even more exciting and even better. And, you know, I don't see any reason why we should expect otherwise. As you know, late this year, we have another huge chunk of production starting to come online. And couldn't be a better time, to be honest, when you think about the run into 2026, where we probably all expect to see the market more in balance and some improvements or, you know, a better set of drivers for spodumene and lithium prices.

Kate, just to add there off the back of that, if you look at Albemarle's most recent earnings calls and both are conference material, they actually earmarked that they would be, it's a more normal kind of dividend return is what they earmarked. So even though they said late last year no dividends, they've actually earmarked in their announcements and public information a softer tone to that.

Okay, that's helpful. Thank you, Ivan and Gav.

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

Good morning. Thanks for your time, Ivan and team. A couple of questions about green bushes, a key value driver for business. Just on this CAPEX, sort of reduced CAPEX, just confirming that there's no deferral of any of the growth plans when it relates to CGP3. And then I saw a headline in your paper over there about some sort of submission for some permitting. Can you confirm that was for Train 4 or anything to do with CRP? Just talk through the growth plans there. I guess that's the piece that's missing from slide 5.

Okay, sure, Levi. Yeah, look, yeah, no changes. And as I said in my opening remarks, CGP3 is tracking well. First production expected back into this year, so that's fine, and I think that's well in train. And yeah, there was a bunch of money spent on it through the quarter, and construction's getting to the end. They'll be into their pre-commissioning and so on soon. So that's fine. And, yeah, there's no back off on plant growth or the things that are already in focus there. And I talked about the efforts on Train 2 and, well, TGP 2 and TGP 1, improving throughput, improving asset health, all of those kind of things continue to get focused. Same in the mine. The approvals in some of the media you've seen, any business and that includes obviously our waste store or waste dumps for for rock waste rock and you know we've got to think about that in the near term and the long term so how we do that there's also work going on around water and I've mentioned that in the last call so we obviously draw no no groundwater, it's all surface and runoff. And so lifting dams and creating more water catchment is all work that they're thinking about. And of course, the third big area is tailings and tailings storage facilities. And we're in good shape now, but we do need to think about the long term as well. So those are examples or areas where the team are going to continue to need to build out their strategy and then have those plans and the specifics and that's part of what's being picked up in the media at the moment. So no surprises, all to plan, tracking well. Rob's got, you know, he's got a full book. There's a lot going on for him. But, yeah, there's no dial back on growth. That's not the cause for the capex. It really is about discipline, focus, timing, and in the sense of if we don't need something now, let's push it out, and also value for money.

Okay, thank you. And so just on CGP3 then, can you remind me what the expected ramp up time is for that?

Oh, look, we haven't given any specific detail there. You could expect it's about 12 months. That's a normal ramp up for those types of plants. The team will give us a more detailed schedule in due course, and we'll share that where we can. Naturally, we want to run hard. For those who've covered IGL or Greenbushes for some time now, you'll remember that CTP2 was interrupted in its ramp up on and off and really didn't have a great start to life, which is very hard for the asset and for the team. We certainly are not anticipating anything like that here. This is about running up hard, maximise, as fast as possible. So I think we've got a very clear goal for the team and they're well resourced, well set up. They've got a great plan and I think they'll deliver extremely well against that.

Okay, yeah, thanks. And on the optimisation, thanks for the extra couple of bits of detail. Will we get some more throughput and some of the other inputs, I guess, and just can you confirm that you're still producing technical grade or no, you don't reference it?

Well, yes to both questions. Yes, we'll give you more detail in due course as that flows through. And yes, we are producing technical grade.

Okay. Thank you.

Thank you. Your next question comes from John Bishop from Jarden. Please go ahead.

Good morning, Kath and Ivan. Thanks for taking the questions. Just to take Kate's question a little bit further, are you able to disclose whether there's any prescribed amortisation profile for the debt and or milestones to trigger principal repayments within Winfield?

It's a revolver facility so it doesn't actually have debt repayments through the course of it and obviously it'll have standard covenants that you would expect but they are so far well within the agreements that there's no risk there.

Okay, so in terms of what you answered previously then, I guess there's a sort of a high-level agreement amongst the joint venture as to how you will treat those gearing ratios going forward in terms of any forecast repayments. I guess what I'm getting to is how should we start to manage our forecast for cash retiring that debt position once CGP3 is finished, for example?

It's got a four-year term, so I would be thinking about that, and we will manage it within our leverage and gearing ratios, and we will consider what that debt refinance potentially may be closer to that four-year term.

Cool. Thank you. And then just regarding some logistics, obviously you had about 80,000 tonnes missed, inverted commas, between your production and sales figures for the December quarter. There was a bit of a catch-up this quarter. How do we sort of think about that production and sales piece going forward? Certainly as you expand production out of green bushes, is there going to be sort of a reasonable amount of volatility or is the port reasonably well set up to manage that increase? And therefore we should expect generally all things being equal, a normalised production and sales moving in lockstep.

It's a fantastic question, John. We would love it to be in lockstep. step as well. The last thing we want is inventory and working capital bills. The challenge is the port, as you've noted, and that's one of Rob's other areas of work. He's been down there and working with our partners in the port. It is difficult. There's congestion and there's a lot going on. So he's working on options to try and just help improve that and smooth out our logistics pathway. Yeah, and as I said in the last conversation we had in the half and the quarterly, you know, there was some concern around sales. It's just timing and logistics. It was just shipments. And particularly with Christmas, you get some of that. It's painful, but there is a very clear intent to just clear the product as quickly as we can. The last thing we want to do is have any mistiming or delays there.

Right. Thanks very much. I'll pass it on.

Thanks, John.

Thank you. Your next question comes from Daniel Morgan from Baron Joey. Please go ahead.

Hi, Ivan and Tim. Just a quick follow-up on Levi's question regarding how CGP3 would be ramped up the pace of it. I just wanted to explore that a little bit more on the market piece. Obviously, we're in a very soft market right now. Putting a lot more volume into the market is not going to be necessarily helpful. Just wondering if your views on ramping it up are IGO views or is there broader alignment within the JV about the ramp up in light of the market?

Thank you. Well, just to pre-state, Daniel, what I said to Levi, ramp it up as fast as we can. I think there's complete alignment. That's what drives value for us. And you've got the lowest cost producer in the world. Every ton is highly value accretive and that's what we'll be chasing. So, yeah, there's no blinking there. We're not someone who's going to be cautious or careful around timing the market here. This is about get the asset online and get it producing because every time it produces is going to generate cash.

Okay, that's clear. And just a second question. It's good to see a life of mine plan. NOVA into end of life. It's obviously not great that it ends its life, but every good thing comes to an end. It has a few more tons in it than I had thought, given that there's been some variable performance in recent times. Just wondering if you could expand on this plan. How robust is it? The risk embedded in it? Or should we expect still quite a bit of volatility in the end of life plan? Thank you.

Yeah, Daniel, good question. Look, I didn't put that out lightly, and I know it was an issue or challenge for you guys, so that's why we wanted to give you some more direction. We'll give you even more next quarter. We've stress tested this really hard. We've gone over it very carefully. Our tech team, who are very capable, have gone through it thoughtfully, looked at your body, looked at the environment, the kind of issues that we've been experiencing and how they'll play out. We have risk-weighted this. So, you know, do I sit here and go, it's absolutely certain, of course. You know, we know in mining that things can happen. But, no, we're putting this out with some confidence. That's why we've given... It's a reasonably wide range, I would say, given the level of work we've done. And that's probably a little bit of me and just caution and cast. It's just on how we do things. We don't want to disappoint. But no, we've done a lot of really good homework and we're comfortable and confident to put that out as a range.

Thank you. And this last question, exploration. I mean, you've guided to what a go forward kind of looks like in that space for 2026 beyond, I presume. Just what are the business outcomes that you're trying to achieve? Like, why is this the right number? And what's the return we're going to get on this capital going forward? Thank you.

Yeah, all right. I mean, maybe we pick that up in more depth. I'm conscious of time in our next quarterly or next opportunity to talk more broadly or even get one of the team in to help support that. But, you know, we've done this work both top down and bottom up. In terms of value, clearly, we want to be putting defining resources and putting them in play, whether they're ones that we develop or not is beside the point. We have got some very prospective ground that we're working on across our portfolio. I think it's a significant change in approach from where we were in terms of how we're prioritising the sort of commercial focus that's being built in across exploration. And for me, I think there's two ways I look at it. Fundamentally, we need to bring more critical minerals to the market, and that isn't about just moving the deck chairs around through asset ownership. It's about actually discovering new air war bodies and getting them out of the ground in a responsible manner as quickly as possible. That's something we're deeply focused on and want to make a difference and demonstrate our capability. I think our team has got absolutely world-class pedigree in this area. We set them up for success. I think give them some runway and they'll deliver. The second part, of course, is the return on investment. We think about this as capital, as an investment, and we've gone through it with a view of what's appropriate for the scale of our business. We've looked at five years and we've said, what does our business look like? What are the scenarios and what's the right envelope? This is the number that we've come to. That's hence the top down and bottom up. I feel like this is an appropriate number. material, don't get me wrong, we recognise that, you know, if we look across that peer group, which we've done, we're a standout for Greenfield and we've got, you know, capability and focus here that we think will drive real value for our shareholders.

Thank you, Ivan, so much.

Thank you. Thank you. Your next question comes from Matthew Friedman from MST. Please go ahead.

Sure, thanks. Morning, Ivan and team. And thanks again for the disclosure and the discussion on the capital management in Winfield and the dividend flow out of that vehicle. I guess if we take that down to the next level and look at TLEA, clearly, as you've called out, the cash burn is still real, but at least perhaps it's a little bit more normalised or stabilised compared to prior quarters. And certainly, you know, as we know, there's no need to build the balance sheet for investing in Train 2 now going forward. So I guess the question is, is there anything in your view that would preclude a resumption of dividends out of TLEA, say, you know, in the first half of FY26? Is there any major shutdowns or remediation works on the horizon or any other need in your view to be building cash on the TLEA balance sheet? Thanks.

Well, the quick answer is no. There's no standout to build cash. We need to make sure we've got liquidity in the cash to support the business and to support forward work. I think you've got enough information that you can sort of sit back and work out what the cash requirement is. And beyond that, there will be no reason to hold cash. So we're not guiding on dividends into the next financial year at this stage. We'll provide more when we can. But no, there's nothing... I guess what I would leave you with is nothing that's unique or special or that you need to be aware of that you should model in that space that's out of the ordinary. It really is just run the business as it is, do the work that we've got indicated, and the rest of the money will flow out to the shareholders.

Okay, thanks for that, Ivan. And then I guess... rather than looking at it from an operational perspective, maybe more from, I guess, like a philosophical or from a sort of capital management framework perspective. Obviously, you've done some work in the Winfield JV to establish a really kind of more firm capital management framework. Does that exist within TLEA? Is there more work to do there? And I guess, is that part of the ongoing discussion that you're having with your JV partner there? You know, is there anything we should think about from that perspective at the TLEA level? Thanks.

Yes, absolutely. yes, that work is underway.

Okay, great. Thanks very much, John.

Thanks, Matt.

Thank you. Your next question comes from Rob Stain from Macquarie. Please go ahead.

Hi, I've been passed. Just pointing, I guess the Greenbush's optimisation slide that you put in the deck was interesting in the sense that where would you be if you had to sort of benchmark yourselves in industry maturity along... the, I guess, scheduling and equipment design and operational management parts of the chain there. Obviously, you're looking at strategic options reviews and you've got the size of the prize that you're looking at, but just interested in how big the next steps are to get that benchmark productivity, specifically around mine planning. Would like to understand that.

Rob, look, good question. I have to think about how we can give you a more substantive answer. I would say, and I think I've indicated, I think the opportunity is significant. Rob is already with the team making good progress on day-to-day improvements on productivity, both in the mine and the mills. But when you stand back and say, you know, what is that potential and how you get at it, it's significant. And some of those changes will take time. The... Optimisation of that ore body, I don't want to try and even signpost because I think we don't know what we don't know. We need to do the work on ore characterisation. You need to do the mine-to-mill optimisation. You need to understand that much better. And I think we've got a fantastic team, technical team in the mills, doing work, pulling coveries up, but I don't even think we've unleashed them yet. I think if you give them more space and more... support through in terms of influence back into the mine i think they can drive huge upside but then translation of how that then unfolds and how you might change your schedule and sequence through the mine you know there's no point in me commenting because you just we just be making it up we just have to do some more of that work before we can indicate i guess what i want to leave you with is i think it's significant the upside and i also think it's going to be all this change, but he's doing the day-to-day work now and I think building out a very good long-term plan to drive a lot more value.

And I guess a subsequent point, just looking through then the quarterly results, seeing the production results down Q on Q, is that just a refocus of mine plan and sequencing to open up the all-body to get access to it's a more fresh feed. As you look then to obviously bring on CGP3, you know, in the coming quarters, then the mine plans actually set up to achieve from the outset. Is that how we should look at that? Given that you, yes, I think 78% of your annual guidance has been achieved, a midpoint of annual guidance has been achieved on production. So you're well sort of ahead there. Is that the way to look at it?

Yeah, we've, I mean, I think we indicated last, quarter and a half as well that we expect to be right at the top of guidance. And I think there was a push of, well, why aren't we going to re-guide above that? Because we looked at the forward plan and we said, look, we think we're just going to land based on what mine plan was. This is just grade variation, which you do get in that old body, as privileged as it is. You will see that up and down through a year, through a couple of years of grades. One of the things that we might obviously see come out of the optimisation is that we want to blend and stabilise that more, and that might drive a lot of value. But at this point, we're still seeing that variability of grade through the mills, and that drives differences in production. So nothing more than that. It's not something you should draw a line up or down off. It really is, at this point, just how the mine's run, and I think that's Signals or signposts are a very likely opportunity, but smoothing that out and having a more consistent feed will drive better outcomes and better value overall. Brilliant. Thank you. Thanks, Rob.

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

I was just following up from the question from Levi. The permitting's been submitted for the waste storage expansion at Greenbushes and it shows that it's going to be impacting Black Cockatoo habitat, which there's been a few issues with your peers at South 32 and Alcoa. What's the timeline for the approval? And given the submission points to this being needed in 2026, Are there contingencies in place to handle the 70-odd percent of material that it points to or waste storage capacity that you need?

Yeah. Thanks, Tim. Look, the approval timelines, I mean, I can't really comment because obviously the agencies will determine that. The team are very aware and attentive and focused on that. They've done a lot of work. They're very well prepared. I think they've engaged extremely well here. So they're set up for success. And we do have some, I guess, contingencies, as you put it all. We've got a plan if there was to be some critical delay. But, you know, the focus is to get through these approvals and manage the impacts professionally, and we'll get the outcome.

Excellent. And perhaps one for you, Cass. At Greenbushes, your account's receivable terms have moved to 180 days and there's some factoring of sales. Is that just a part of that liquidity management that you mentioned or is there something else driving that change and is there any impact on received pricing there?

The simple answer to that is no, there's nothing unusual in that. But what was the second part of that question? I missed it, sorry.

Does it impact the price you receive? Like, is there a factoring of price?

No, it's just, I mean, it's just working capital, but the price is determined on that month one, month minus one lag is the four PRAs, et cetera. Very deterministic. And that's applied regardless.

Okay. Excellent. Excellent. Thank you very much, guys.

Thank you. Your next question comes from Jonathan Sharp from CLSA. Please go ahead.

Yeah, morning, Ivan and team. A lot of questions already asked and coming up to the end of the hour. So just one simple question from me. Can you just share your current view on the lithium market, particularly what you're seeing in terms of customer demand, inventory levels? Any discussions around spodumene and hydroxide? Just interested to hear what IGO is hearing and seeing out there at the moment.

Thanks. Thanks, Jonathan. I don't think I've got much to add that you wouldn't have already. We see strong demand growth and obviously China's doing a fantastic job building storage both for EVs and for vehicles and for Stationary storage, that growth is continuing to track to expectations and obviously there are some other markets in the world which are contributing as well. For us it's really more supply side issue and the market is oversupplied and hence the price pressure we see. In terms of conversion to chemicals, I think that the demand is obviously quite strong for carbonate, less so for hydroxide and again we see that flow through in the pricing. I really don't think there's much we can add to what you probably got through the channels. We see a very consistent view and don't expect much relief or much change this year, probably well into next year. Maybe this time next year we might start to see the market balance come back. But demand, I guess the key is that demand continues to grow at rate. It's not been interrupted or disrupted by any of the other things going on in the world. It seems that... that demand is pulling through and performing extremely well. And I guess with low lithium prices, there's probably a strong correlation there, it translates to a flow through in the value chain that's very interesting for customers.

Yeah, thanks. Interesting to hear your thoughts. I'll leave it there. Thanks, Jonathan.

Thank you. That is all the time we have for questions today. I'll now head back to Mr Vela for closing remarks.

Great. Thanks, Darcy. Yeah, look, we're right on time, so I won't say much other than thanks for joining. As I said at the top of the call, look, it was nice to not be waiting through major challenges and changes and impairments and so on. It's nice to see a quarter focused on the assets, focused on production, focused on safety. And the big news in there, I think, is about exploration and the reset there and Really pleased with the way that the team's gone about it and forward-looking. I've got a lot of confidence in what they'll bring. So we'll leave it there. Thanks for your time. And I look forward to the next update at the end of the financial year.