Lithium Argentina AG

Hello, everyone, and welcome to Lithium Argentina fourth quarter and full year 2025 earnings conference call. Please note that this call is being recorded. After the prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Kelly O'Brien, Investor Relations. Please go ahead.

Thank you for the introduction. I want to welcome everyone to our conference call this morning. Joining me on the call today to discuss the fourth quarter and full year 2025 results is Sam Pigott, CEO of Lithium Argentina. Alex Shoga, our CFO, will also be available for Q&A. Before we begin, I would like to cover a few items. Our fourth quarter 2025 earnings results were press released earlier this morning, and the corresponding documents are available on our website. I remind you that some of the statements made during this call, including any production guidance, expected company performance, update on development plans, the timing of our project, and market conditions, may be considered forward-looking statements. Please note the cautionary language about forward-looking statements in our presentation, MD&A, and news releases. I now turn the call over to Sam Piggott.

Thanks, Kelly. Good morning, everyone, and thank you for joining us. 2025 marked an important year for lithium Argentina. Kachari-Oloraz demonstrated its ability as a stable, cash-generating operation while we significantly advanced our next phase of growth. Starting with operations, Kachari is performing exceptionally well. For the year, production was over 34,000 tons, reaching the high end of our guidance range and ending the year near capacity with fourth quarter production at 97%. We are now seeing this strong operational performance translated into lower costs fourth quarter operating cash costs around $5,600 per ton. Following year end, the operation distributed $85 million of cash, $42 million for Lithium Argentina's share, and we completed a $130 million six-year loan facility, strengthening our balance sheet and highlighting the financial capacity of our assets. In parallel, we were able to make meaningful progress across our growth pipeline. This included the consolidation of PPG, supporting a more efficient development plan as outlined in this coping study released late last year, as well as the submission of rigging applications for both CPG and Stage 2. Since completion of the chemical plants in late 2023, production has steadily increased. 2024 represented our first full-year production, while in 2025 the focus shifted to consistency, recoveries, and sustaining higher production levels for longer periods of time. During the year, the team made continued improvements across several areas, including brine management, wellfield optimization, process stability in the plant, and reduced reagent usage, which together supported more reliable and consistent operating performance. That progress resulted in the operations achieving close to nameplate capacity in the fourth quarter, with production of approximately 9,700 tons. This operational performance translated into strong financial results, which, Despite the low lithium price environment in 2025, Kachari Olderod has generated $56 million in adjusted EBITDA. I want to spend a moment on cost because I'd argue this is just as important as the production story, if not more so. Since Q1 2024, cash costs have declined 30% from over $8,000 per ton to around $5,600 in Q4. That improvement is broad-based. Reagents, maintenance, camp services overhead, every major cost line moved in the right direction. And this is not just fixed costs at higher volumes. Much of this reduction is in variable costs driven by our efforts to optimize the operation following the ramp up. The best way to show this structural change is from looking at the impact to a revised long-term estimate. Based on the current cost structure at full capacity, we now forecast costs of approximately $5,400 per ton down from 6,500 a year ago. That's a 17% reduction to our own prior estimates. And it's important to note that we're not done. We and our partner, Ganfeng, remain fully focused on driving further efficiencies, both stage one and as we grow. On the next slide is an updated cost curve, which includes actual operating performance at Kachari Old Robs. It's not a feasibility study. It's not a projection. These are actual costs from an operation that has now been running and improving quarter over quarter. This operation is one of the few sources of lithium chemical production to come online outside of China in the past 10 years. We now have the opportunity to scale from 40,000 to over 200,000 tons of lithium chemicals to serve global markets directly from the Americas. Turning briefly to the market, since mid-2025, there has been a significant recovery in lithium prices. supported by strengthening demand across both electric vehicles and increasingly energy storage systems. On ESS specifically, the wide range of forecasts you'll see from global banks and consultants reflects how new and large this demand is becoming. This gap is particularly visible even in 2025, where estimates, especially those outside of Asia, are still adjusting to how material ESS has become as a driver of overall lithium demand. For Lithium Argentina, this rising ESS demand aligns well with our existing operations and growth platform that we've developed in terms of scale, cost, and ability to integrate with a more global customer base. Looking ahead to 2026, we expect production in the range of 35,000 to 40,000 tons of lithium carbonate, reflecting our focus on sustaining stable operations at current levels and long-term optimization. Based on our production targets for 2026, Kachari Ola is expected to support significant EBITDA under a range of listing price scenarios. Using today's market price of about $20,000 per ton, the midpoint of production guidance would imply around $460 million