Allkem Limited

Pauli. Welcome, everybody, and thank you for joining us for Auckland's June quarterly results briefing. As usual, I will be providing an update on our business, and Christian Barbier, Chief Sales and Marketing Officer, will be providing us with a market update. Also joining us for the Q&A is James Connolly, our Chief Project Development Officer, Liam Franklin, Head of Mount Catlin Operations, and Christian Cortez, our Acting CFO. We have concluded the financial year with a very strong performance at both our operations. We have achieved record annual and quarterly production of lithium carbonate at Olaros. At Mount Kathleen, quarterly production increased 50% from the prior quarter, and annual spotting in concentrate exceeded current guidance. Across the portfolio, we have made solid advancements in project execution. In Argentina, we are proud to have successfully achieved the milestone of first web production at Olaro Stage 2, while also advancing construction of Salde Vida Stage 1. At Mount Katling, we confirmed the additional four to five-year mine life via open pit methods. In Canada, we progressed the IBA in relation to the chainsaw project to final stages. And in Japan, Naraha is commencing battery grade qualifications with customers. We continue to be in a very strong financial position. This quarter, we generated group revenue of 334 million, a slight improvement from prior quarter. We also achieved significant group cash operating margins of 82 percent. Group net cash at the end of the quarter was approximately 648 million. we continue to focus on our long-term strategy to deliver scale and product flexibility to customers and remain fully committed to the delivery and execution of our growth pipeline. The proposed merger with Liban helps us accelerate our strategy and the risk our growth profile while driving higher vertical integration into the EV value chain. We have advanced the transaction and we are still targeting completion by the end of calendar year 23. From a sustainability perspective, starting with safety, we recorded a 12-month moving average total recordable injury frequency rate of 1.98 at the end of June, achieving our financial year 23 fund safety target. Financial year 23 TRIFR evidences a 24 improvement year on year, but a 15% increase quarter on quarter of four recordable injuries occurred in Argentina. Investigations have been carried out with corrective actions implemented. The 12-month moving average lost time injury frequency rate target was also achieved, closing financial year 23 with 3.62 incidents per million hours. Community engagement and share value continues across all our projects and regions in which we operate. Some highlights include positive community engagement with increased stakeholders in relation to the GENESER project to agree on local economic benefits and also the installation of eight photovoltaic systems to generate electricity for families residing in the Salar del Hombre Muerto near Sal de Vida. We also recently signed a 130 million project finance facility with the IFC for Sal de Vida stage one. This facility is structured as a sustainably linked grid loan that combines environmental and social targets. these targets and reinforce commitment to support our responsible and sustainable development of lithium for a greener future and economic growth in the province of Catamarca. Moving to our operations at Oloros, we achieved record annual production of 16,700 tons of lithium carbonate and record quarterly production of over 5,000 tons. This is a result of a strong operating performance, excellent plant reliability, low downtime, and improved energy efficiency. Lithium carbonate sales of over 3,400 tons were up 18% quarter-on-quarter and generated revenue of $132 million. Approximately 380 tons slipped into early July due to delayed solar arrivals. Strong production formula of stage one significantly exceeded budget sales forecast and sales for the September quarter are expected to be much really higher. Gross cash margins remained at 85%. Third party sales were completed at $38,062 per tonne FOB and cash cost of goods sold was $5,882 per tonne. Up 19% quarter on quarter. due to elimination of extra incentives coming to effect and the raise of materials, labor, and energy, which have been impacted by inflation. Over time, unit costs will be offset as we progressively increase production volumes at all our stage two, where we will focus on achieving product volumes and quality specification over a 12 to 18-month ramp-up period. At Mount Katling, we produced over 58,000 tons of dry metric tons of spodumene concentrate and achieved a 67% recovery. This demonstrates significant improvement in grade and favorable mineralization as mining has moved into the central zones of the main ore body. We shipped over 46,700 tons of spodumene concentrate and generated revenue of $123 million. shipment of additional 11,700 tons slipped into the July due to severe weather conditions delaying loading at the port. The gross cash margin of 80 percent was based on cost of production of $830 per ton for the quarter, an average pricing of $4,979 per metric ton. At Naraha, we implemented some equipment repairs and improvements during the quarter, and we continue to focus on increasing product quality and volume through design capacity. We sold 464 tons of technical grade lithium hydroxide, and we're also commencing the battery grade hydroxide qualification process with customers. At Sal de Vida, we reached 98% construction completion of the first two strings of ponds. The first nine ponds have been completed and filled with vines. All ponds have now been lined. The engineering for the third string of ponds has also been completed and earthworks have commenced. The detailed engineering of the process plant progress during the quarter. Process plant construction also advanced with mobilization of the EPC contractor and continuation of civil works including delivery and installation of precast foundations and associated concrete works. Engineering at James Bay advanced to 72% completion by the end of the quarter with a process plan package at 81% completion. Procurement of mechanical process equipment and mobile mine equipment are complete to 94% and 88% respectively. Stakeholder and community engagement remains very positive. We've made significant progress on the IBA with the Cree First Nations and reached the last stages of the approval process However, this has been delayed slightly with the evacuation of the local community due to severe forest fires. We will recommend, once the situation returns to normal, and we will continue to support them through this difficult time. I will now hand over to Christian Bravier, who will provide us a market update.

Thank you, Martin, and good morning, everyone. The markets over the last 12 months have been a tale of two halves. from the extremely tight high market conditions in the first half of the fiscal year to the dramatic correction in the second half. This volatility has created a lot of noise in the markets. However, the truth remains that market fundamentals are strong. Decarbonization is still unimperated, and battery storage remains a key enabler. Direct electrification through the use of batteries has been identified as the most efficient, cost-effective, and commercially available route to fully decarbonize road transport. We already observed that the transportation sector is undergoing profound transformation, and we can all agree that electrification is a foregone conclusion when we see penetration rates have reached 34 percent in China, 24 percent in Europe, and now 9 percent in the U.S. EV sales continue to increase at a significant rate, from 3 million in 2020, 10.5 million in 2022, to closer to 14 million in 2023. And according to BNF, 27 million by 2026. We should not and cannot afford to become distracted by short-term volatility. There's been some concern over the recent futures exchange outcomes. Keep in mind that futures markets are not commonly used for markets for lithium product sales. They represent very limited small volumes relative to the lithium chemical market. And as such, price indications are driven by short-term speculative sentiments and are not representative of the underlying physical market. During the June quarter, lithium chemical prices were observed to have rebounded and stabilized. Consensus views suggest a relatively stable pricing environment over the next six months, based on expectations of balance, supply, and demand dynamics. However, I note that the market continues to be regularly surprised on the upside in relation to demand, with being repeatedly surprised on the downside on supply. We believe the market will be at best tightly balanced overall, and prices likely to be responsive to factors that may upset this tight balance. Olkem has delivered, in the last quarter, better than expected production rates, both at Olharoz and Mount Catlin. We expect this to continue. We're fortunate to be in the position to offer more volumes in an improved market. Olkem has demonstrated discipline in withholding from selling at low prices into sluggish markets, And over the coming quarter or two, we expect to monetize at current recovered prices or better. Thank you. I will now hand back to Martin.

Thank you, Christian. And I will now hand back to the operator to commence the Q&A.