Earnings call transcript: IGO’s Q4 2023 sees strong cash flow, stock surges

IGO Limited (IGO) reported a solid financial performance in Q4 2023, despite challenges in the lithium market. With a market capitalization of $1.78 billion and revenue of $425.26 million in the last twelve months, the company maintains a strong market presence. According to InvestingPro analysis, IGO’s robust gross profit margin of 40.52% demonstrates operational efficiency, despite current market headwinds. The company’s stock experienced a significant rise, reflecting investor optimism. IGO revised its capital expenditure guidance and highlighted its focus on capital discipline and operational efficiency.

Key Takeaways

• IGO revised capital expenditure guidance down to AUD 700-800 million.
• The CGP3 project is on track, expected to start production in late 2024.
• IGO’s stock surged by 128.6%, closing at 11.37.
• The lithium market is currently oversupplied, but demand remains strong.
• Exploration spending is guided at AUD 30-40 million annually.

Company Performance

IGO Limited demonstrated resilience in Q4 2023, navigating a challenging lithium market with strong cash generation. The company maintained its position as a low-cost producer, particularly at its Greenbushes site, despite lower production due to grade variations. The Nova operation showed improved performance after a difficult first half, contributing positively to the overall results.

Financial Highlights

• Revenue: Not specified in the provided data.
• Earnings per share: Not specified in the provided data.
• Capital expenditure guidance reduced to AUD 700-800 million.
• EBITDA margin of 68% for FY 2025 year-to-date.

Market Reaction

IGO Limited’s stock currently trades at $2.37, with InvestingPro’s Fair Value analysis indicating the stock is currently undervalued. The stock has moved within a 52-week range of $1.97 to $5.22, showing significant price volatility. This performance comes despite challenging market conditions, with the stock showing a -49.4% return over the past year. The company maintains a conservative debt profile with a debt-to-equity ratio of just 0.02, highlighting its strong balance sheet position.

Outlook & Guidance

Looking ahead, IGO remains focused on capital discipline and operational efficiency. The CGP3 project is progressing well, with production set to begin in late 2024. The company expects a 12-month ramp-up period for the project. IGO’s exploration budget is stabilized at AUD 30-40 million annually, reflecting its strategic focus on sustainable growth. With an Altman Z-Score of 13.2 indicating strong financial health, the company appears well-positioned for its growth initiatives. Discover more detailed analysis and growth projections with InvestingPro’s comprehensive financial health metrics and expert insights.

Executive Commentary

CEO Ivan Beller emphasized the company’s commitment to generating cash, stating, "Every tonne it produces is going to generate cash," in reference to the CGP3 ramp-up. Beller also highlighted the robust demand in the lithium market, noting, "Demand continues to grow at rate. It’s not been interrupted or disrupted."

Risks and Challenges

• Oversupply in the lithium market may pressure prices.
• Equipment failures and shutdowns, as seen at Kwinana, could impact operations.
• Global economic uncertainties could affect demand projections.
• Exploration costs may rise, impacting budgets.
• Potential delays in project timelines could affect production schedules.

Q&A

During the earnings call, analysts focused on IGO’s capital expenditure reductions at Greenbushes and Kwinana. Questions also covered the potential for Train One at Kwinana and the company’s debt management strategy related to the Wynnefield dividend. Executives clarified their exploration strategy and investment rationale, underscoring IGO’s commitment to disciplined growth.

Full transcript - IGO Ltd (IGO) Q3 2025:

Darcy, Conference Operator: I would now like to hand the conference over to Mr. Ivan Beller, Managing Director and CEO.

Please go ahead.

Ivan Beller, Managing Director and CEO, IGO Limited: Thanks, Darcy. Hi, everyone. Good morning. Thanks for joining the call. As usual, Cath Pizanich 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, Sharn Beccarelli, heads up Corporate Affairs and I are. As you know, Richard Glass is taking a really exciting trip around Australia with his family for the next twelve months or so. And so he’s probably sitting in Coral Bay, hopefully not listening to this call. But anyway, we’ll miss him but Sean stepped in and come up to speed 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 solid quarter. Some big change with exploration, which I’ll come to. But the foundations of the business are just starting to find some rhythm, which is good. First on safety, look, the actual lagging results are still sort of flat and similar.

There was a period of sixty 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 twelve months and we’re starting to see some strong progress there. We’ve launched a behavioral safety program called Taking Control of Blank Safety. It’s getting fantastic feedback and pull from the team at site. That will 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, Greenbushes had a really solid quarter as well. I guess production was lower than the prior quarter. That’s just grade and mine plan 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 settled in and he’s making tremendous progress there. As you see and you know already this is a very, very strong ore body that offers up fantastic margins, 68% EBITDA for the FY 2025 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 of mine optimization work that’s underway. As everyone’s asked about dividends and there was a dividend paid from Wynnefield into the joint venture partners, 110,000,000 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. Kunana, look, it was a tough quarter.

Team were challenged with more equipment issues and a shutdown related to some of that work. The highlight, I guess, was the announcement of Train two decision. Of course, I think one of you on the call actually said when bad news is good news and that’s it was mixed. Of course growth and of course development and more downstream processing of minerals and metals in Australia is attractive. Clearly, have that view, but it’s got to be economic, it’s got to be sustainable, it’s got to be something that can deliver through the cycle.

And we didn’t see that pathway for Train two. And so the joint venture partners took that decision, which we’ve talked at length about at the half. On Nova, look, as you know, had a very tough start to the Venture New Year. They had a good quarter and the teams found their feet. We will 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 simple quarter generated some cash and getting back to basics. Overall sound quarter and it’s good to see some rhythm from the key operations in our portfolio. I’ll 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 organization. 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 talking thinking about the impacts a very practical way. He lives down in the region and with his team he’s, I think the perfect leader to help steer through the growth and the development to pursue the opportunity to do 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 their voice is really heard and understood and the team is working through those challenges.

So all credit to Robin, the Greenbushes or Callison team there and how they’re doing that work. Mill recoveries, look, I think I’ve mentioned before that this obviously it’s a privileged ore body and that offers up opportunity, but equally the team is doing a great job at continuing to drive recoveries up and CGP-one is well above 80%. It’s very impressive what the team is doing there and they’re co supplying 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, 110,000,000 on a 100% basis. The broader optimization work is underway and I’ve got a bit more on that in a minute. And then capital expenditure, probably key point to note is we’ve revised down our guidance for FY 2025. We previously said $850,000,000 to $950,000,000 We brought that back in at 700,000,000 to 800,000,000 And that’s really a focus of again the work Rob’s done is 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 prioritize 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 tracking well on budget as we’ve signed post to first production expected in the back end of this year. So, look moving on, put in a quick slide. Look, 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 will take some time to work through all of the elements.

But the slide and I won’t go through every dot point, but sets out the first part which is looking largely top down and what the upside is. What is the potential? What’s the upside? What is it that we need to go and pursue? And how do we prioritize 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 characterization, 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 I’ve talked about engagement with community stakeholders and 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 is 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 CGP3 and before the improvements. And that’s really the message I want to leave you with is contemplate and we will do our best to unpack that as we go and we work through that with the joint venture partners. 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 optimize 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 when you’re sitting so far down on the cost curve is very significant.

Kwinana, look a couple of key points. I mean covered LHV LHP two or Train two. I won’t go into that further at this point. There may be some questions. The quarter was challenged with some equipment failure and shutdown also dealing with some of the residual work from the October shutdown.

Conversion costs trended down and naturally tied obviously to volumes as well. But there’s still some work to do there and capital guidance is probably the major takeaway here. We’ve revised that down for FY 2025. 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.

We need 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 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 can obviously see in the guidance that’s a fairly material step down from what was anticipated. On to Nova, look it’s nice to see the team find a fit and have a good quarter. They had some good recoveries.

They got some better grade. They got some good rhythm. The team are working really well with Darminco and all of that with much better safety as well. Made me smile. I look 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 I think we’ll continue to focus hard and drive obviously that performance and we’ve got a high ambition right through the organization 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 and I think all credit and gives credit and recognition of the very hard work they’ve done through this financial year in a very difficult period with the ore 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 tonnes 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’re just finishing the detailed budget work around that so we can look at the costs and manage that that ramp down as we go. So overall, a nice quarter for Nova and well done to the team. On exploration, look, it’s been a tough year and IGO has got a long pedigree and a long history of exploration. It’s where the company started. It has deep, deep capability in the team and some of the most capable individuals, scientists, geos that you could find.

And we had a strategy which focused on these belt scale sentiments, focused on very broad standing across Australia. And we’ve tested that as you know over the last twelve 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 rationalized 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 just not ideal or respectful to do that until we’ve been through the work, but that’s now complete. So March, while this quarter was a tough period for the team, very sad to see very long term team members leave who have contributed a huge amount to the business and I want to thank all of them who have been part of the team.

Those stay equally feel that challenge probably more than most. And it’s still a difficult time as we get through that. We finish the rationalization, but I have deep conviction here. And Brett has lent into this personally. We’ve also had a change for the Head of Exploration.

John Kilroy 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 will 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 next financial year and onwards effectively is in that sort of good guidance range of 30,000,000 to $40,000,000 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 been a tough process, but it’s good that’s behind us and we’re now in a place to look forward with a lot of confidence for exploration. On the financial results, look not a lot to cover there.

I mean obviously last quarter was heavily over weighted 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 just a function of cash timing from last year. But ultimately, through the cycle, we are generating cash and covering our corporate exploration and other costs. You’ll be aware of course that we’re still carrying real cost for the care and maintenance activities at Forrestania and Kosmos.

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 pursue a lot of really exciting opportunities with Greenbushes, Nova and beyond. So look just to wrap up, I mean I think others reflecting this is sort of effectively twelve months of full cycle since I did this April 2024 as my first full quarterly and it’s been a tough twelve months. There’s been a lot of change. There’s been a lot of hard decisions that we’ve had to take as a team and that’s really difficult when you come in 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 organization, world class asset in Greenbushes with huge upside and Nova in a stable place to deliver cash right through the end of next year and a reset exploration organization to go and pursue and help us find some exciting growth. So I’ll leave it there and open up for some Q and A.

Darcy, Conference Operator: Thank Your first question comes from Hugo Nicolucci from Goldman Sachs. Please go ahead.

Hugo Nicolucci, Analyst, Goldman Sachs: Good morning, Ivan and team. Thanks for the update this morning and the extra detail in the release and particularly just around that wind field dividend to the partners. Great. First question, just on the CapEx reductions at Greenbushes and Kwinana. And 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 one now looks like beyond FY 2025?

Ivan Beller, Managing Director and CEO, IGO Limited: Okay. 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 were 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 but on 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 for us 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 spend on that? What is the right standard? How fast should we go 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 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. So I can’t give you numbers at this point. I will as soon as possible. I appreciate you want more.

Certainly there and we’ll give that to you as soon as we can. But just I guess be confident that we have got a huge focus on every dollar that’s spent on the refinery.

Hugo Nicolucci, Analyst, Goldman Sachs: Great. Thanks, Ivan. I was just segueing across to another one on Kwinana then. If I look at the overall production pace, I appreciate you 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 pace? And then just as a tack on, can you maybe clarify how much government assistance you got in the quarter there as well?

Ivan Beller, Managing Director and CEO, IGO Limited: Yes. Look the team aren’t trying to move as much because we have got inventory as you know and absolutely trying to monetize 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.

Cath Pizanich, CFO, IGO Limited: I’ll jump in there. We got back paying during the quarter so that impacted EBITDA. It was in the order of about $8,000,000 and we’ll see that continuing to come through, but at much lower levels as adjusted for the quarter on quarter.

Ivan Beller, Managing Director and CEO, IGO Limited: Yes. Thanks, Cath. I was going say, so that’s the number that I didn’t have in hand, but there’s sort of a new program, which maybe everyone’s not familiar with the Western 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 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 from a forward looking point of view, so you have a sense of what’s coming.

Hugo Nicolucci, Analyst, Goldman Sachs: Got it. Thanks a lot, Ivan. Okay, I’ll pass it on.

Darcy, Conference Operator: Thank you. Your next question comes from Kate McCutcheon from Citi. Please go ahead.

Kate McCutcheon, Analyst, Citi: Hi, good morning Ivan. Kwinana Train one, this is the first time that you’ve said in writing about discussions for an acceptable Train one pathway have been pulled forward. Sorry, discussions for an acceptable Train one pathway have been talked about. CapEx has been pulled back. There’s another AUD 80,000,000 going 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?

Ivan Beller, Managing Director and CEO, IGO Limited: Yes. Kate, unfortunately, let me deal with the last point first. Don’t have any timeframes. I know you’d love that. I’m sorry I can’t be more specific there.

Look, think we’re working through and I’d signposted this at the half, but 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 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 from 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 being 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, the team is doing a great job trying hard to improve that performance and we’re right behind them until we take any other decision.

Kate McCutcheon, Analyst, Citi: Okay. That’s helpful. Thank you. I know I ask you this every quarter. And then the Wynnfield balance sheet, thanks for the additional disclosures for March.

Albemarle said they didn’t expect to pay a dividend this calendar year, but we have one. And it looks like net debt increased $70,000,000 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 US260 million dollars quarter on quarter, if my math 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, guess, anything you can say around that would be helpful.

Ivan Beller, Managing Director and CEO, IGO Limited: Yes. Let me comment broadly and then maybe Cath can get into some more specifics. I mean there’s debt bundle there and the team will draw on that where they think it’s appropriate funding CapEx and growth, which and you can see if you pull all the numbers apart, the company the business was net cash put the debt aside. And I think that’s the first takeaway that this business is generating cash. The application of debt for that growth CapEx and the timing of it when you think about Australian dollar, U.

S. Dollar terms, we’re making really thoughtful decisions here. And while the debt’s U. S. Dollar denominated, it’s not drawn of course that does create some opportunity for us.

Luke and Rob are very conscious of that. So 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 well, well in play, we’re under.

So 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. Cath, do you want to go on that?

Cath Pizanich, CFO, IGO Limited: I think you’ve covered most of it. The one thing I’d say Kate or reiterate is the debt is there to fund the capital and as CGP3 comes to an end then the capital profile is 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 eighteen 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 got to look at the best cost of capital on the way to fund these things and that’s no different to any other minor. So I wouldn’t set expectations that that debt is going to grow significantly. It’s going to be utilized as Ivan said in a thoughtful way during that process and also keeping very close eye on those various swim lanes that we work in order to that. Surplus cash gets distributed once you look at that to the joint venture parties as you have seen in this quarter.

Ivan Beller, Managing Director and CEO, IGO Limited: And if you pull up the 24 accounts, which have been posted by Talison, Wynfield 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 US75 million dollars 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 Admiral’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 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 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 a better set of drivers for spodumene and lithium price.

Cath Pizanich, CFO, IGO Limited: Kate, just to add there off the back of that, if you look at Albert Mills’ most recent earnings calls and both the conference material, 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 softer time to that.

Kate McCutcheon, Analyst, Citi: Okay. That’s helpful. Thank you, Ivan and Cath.

Darcy, Conference Operator: Thank you. Your next question comes from Levi Spry from UBS. Please go ahead.

Levi Spry, Analyst, UBS: Yes. Good morning. Thanks for your time, Ivan and team. A couple of questions about Greenbushes, 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 four or anything to do with CRP? Just talk through the growth plans there. I guess that’s the piece that’s missing from Slide five.

Ivan Beller, Managing Director and CEO, IGO Limited: Okay. Sure, Levi. Yes, look, yes, no changes. And as I said in my opening remarks, EQP3 is tracking well. But production expected back into this year.

So that’s fine and I think that’s well in train. There was obviously a bunch of money spent on it through the quarter and constructions getting to the end, they’ll be into their pre commissioning and so on soon. So that’s fine. And yes, 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 two and well, CGP two and CGP one, proving throughput, proving asset health, all of those kind of things continue to get focused, same in the mine.

The approvals and some of the media you’ve seen around the EPA submission speaks to some of those not that non process and process infrastructure that you’d expect as you grow any business and that includes obviously our waste store or waste dumps for rock waste rock. And we’ve got to think about that in the near term and the long term and 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 groundwater at 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 specific assets and growth of those assets approved stage by stage. 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 he’s got a full book. There’s a lot going on for him. But yes, 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.

Levi Spry, Analyst, UBS: Okay. Thank you. And so just on CGP3 then, can you remind me what the expected ramp up time is for that?

Ivan Beller, Managing Director and CEO, IGO Limited: Look, we haven’t given any specific detail there. Look, you could expect it’s about twelve months. That’s a normal ramp up for those types of plants. The team will give us 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 Anorf 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, maximize the throughput in production as quickly as possible, get it delivering full value 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.

Levi Spry, Analyst, UBS: Okay. Yes, thanks. And on the optimization, 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

Tim Huff, Analyst, Canaccord: reference it into those quarters?

Ivan Beller, Managing Director and CEO, IGO Limited: Yes. Well, yes to both questions. Yes, will give you more detail in due course as that flows through. And yes, are producing technical grade.

Tim Huff, Analyst, Canaccord: Okay. Thank you.

Darcy, Conference Operator: Thank you. Your next question comes from John Bishop from Jarden. Please go ahead.

John Bishop, Analyst, Jarden: Good morning, Cath 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 amortization profile for the debt and or milestones to trigger principal repayments within Wynnewood?

Cath Pizanich, CFO, IGO Limited: It’s a revolver facility, so it doesn’t actually have debt repayments through the course of it. And obviously, it will have standard covenants that you would expect, but they are so far well within the agreements that there’s no risk there.

John Bishop, Analyst, Jarden: Okay. So in terms of what you answered previously then, I guess there’s a sort of a high level agreement amongst the joint ventures 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?

Cath Pizanich, CFO, IGO Limited: 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.

John Bishop, Analyst, Jarden: 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. There was a bit of a catch up this quarter. How do we sort of think about that production and sales pace going forward?

Certainly, as you expand production out of green bushes, is there going 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 normalized production and sales moving in lockstep?

Ivan Beller, Managing Director and CEO, IGO Limited: A fantastic question, John. We would love it to be in lockstep and our customers would love it to be in lockstep as well. Last thing we want is inventory and working capital builds. It is 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 are 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 path, I’ll call it, because as we grow the volumes that just becomes more challenging. Yes, and as I said in the last conversation we had in the half and the quarterly, 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 just to clear the product as quickly as we can. We doubt the last thing we want to do is have any missed timing or delays there.

John Bishop, Analyst, Jarden: Right. Thanks very much. I’ll pass it on.

Ivan Beller, Managing Director and CEO, IGO Limited: Thanks, John.

Darcy, Conference Operator: Thank you. Your next question comes from Daniel Morgan from Baron Joey. Please go ahead.

Daniel Morgan, Analyst, Baron Joey: Hi, Ivan and Tim. Just a quick follow-up on Levi’s question regarding how CGB3 would be ramped up the pace of it. 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.

Ivan Beller, Managing Director and CEO, IGO Limited: Well, I mean, I’ll just restate Daniel what I said to Levi, ramp it up as fast as we can. I think it’s complete alignment. That’s what drives value for us. And you’ve got the lowest cost producer in the world. Every tonne is highly value accretive and that’s what we’ll be chasing.

So yes, 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 tonne it produces is going to generate cash.

Daniel Morgan, Analyst, Baron Joey: Okay. That’s clear. And just second question. It’s good to see a life of mine plan at Nova into end of life. It’s obviously not great that it ends its life, but everything every good thing comes to an end.

It has a few more tonnes 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.

Ivan Beller, Managing Director and CEO, IGO Limited: Yes, Daniel, good question. Look, we’ve I didn’t put that out lightly. And I know it was an issue or challenge for you guys, that’s why we want to give you some more directional, give you even more next quarter. We’ve stress tested this really hard. We’ve gone over very carefully.

Our tech team who very capable have gone through it thoughtfully looked at your body, looked at the kind of issues that we’ve been experiencing and how they’ll play out. We have risk weighted this. So do I sit here and go, it’s absolutely certain of course. 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 cash. It’s just on how we do things. We don’t want to disappoint. But now we’ve done a lot of really good homework and we’re comfortable and confident to put that out as a range.

Daniel Morgan, Analyst, Baron Joey: Thank you. And just last question on 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 is what’s the return we’re going to get on this capital going forward? Thank you.

Ivan Beller, Managing Director and CEO, IGO Limited: Yes. All right. I mean maybe we pick that up in more depth on constant 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 we’ve done this work both top down and bottom up. In terms of value clearly, we want to be putting for 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 prioritizing sort of commercial focus that’s being built in across exploration. And for me, I think there’s two ways I look at it. One, 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 ore bodies and getting them out of the ground in a responsible manner 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 success, I think give them some runway and they’ll deliver. Second part of course is the return on investment. So 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 out five years and we’ve said what does that business look like, what are the sort of scenarios and what’s the right sort of envelope. And this is the number that we’ve come to. So that’s hence the top down and bottom up. I feel like this is an appropriate number. It’s material, don’t get me wrong.

We recognize that if we look across our peer group, which we’ve done, we’re a standout for Greenfield and we’ve got capability and focus here that we think will drive real value for our shareholders.

Daniel Morgan, Analyst, Baron Joey: Thank you, Ivan so much.

Ivan Beller, Managing Director and CEO, IGO Limited: Thanks, Ian.

Darcy, Conference Operator: Thank you. Your next question comes from Matthew Friedman from MST. Please go ahead.

Matthew Friedman, Analyst, MST: Sure. Thanks. Good morning, Ivan and team, and thanks again for the disclosure and the discussion on the capital management in Wynnfield and the dividend flow out of that vehicle. I guess if we take that down to the next level and look at TLA, clearly, as you’ve called out, the cash burn is still real, but at least perhaps it’s a little bit more normalized or stabilized compared to prior quarters. And certainly, as we know, there’s no need to build the balance sheet for investing in Train two now going forward.

So I guess the question is, is there anything in your view that would preclude a resumption of dividends out of TLA, say, in the first half of FY ’twenty six? 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.

Ivan Beller, Managing Director and CEO, IGO Limited: Well, answer is no. There’s nothing stand out to build cash. I mean we need to make sure we’ve got the liquidity and the cash to support the business and to support the 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.

Matthew Friedman, Analyst, MST: 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 Wynnfield JV to establish a really kind of more firm capital management framework. Does that exist within TLA? 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? Is there anything we should think about from that perspective at the TLEA level? Thanks.

Ivan Beller, Managing Director and CEO, IGO Limited: Yes, absolutely. That’s exactly the focus. And yes, that work is underway.

Matthew Friedman, Analyst, MST: Okay, great. Thanks very much, Simon.

Ivan Beller, Managing Director and CEO, IGO Limited: Thanks, Matt.

Darcy, Conference Operator: Thank you. Your next question comes from Rob Stane from Macquarie. Please go ahead.

Ivan Beller, Managing Director and CEO, IGO Limited0: Ivan and Pat. Just pointing, I guess the Greenbushes optimization 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.

Ivan Beller, Managing Director and CEO, IGO Limited: Rob, look, good question. Well, 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 what is that potential and how you get that, it’s significant.

And some of those changes will take time. The optimization of that ore body, I don’t want to try and even signpost because I just don’t I think we don’t know what we don’t know. We need to do the work on ore characterization. You need to do the mine and mill optimization. You need to understand that much better.

And I think we’ve got a fantastic team, technical team in the mills doing work, pulling recoveries 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 that can drive huge upside. But then translation of how that then unfolds and how you might change your schedule and sequence through the There’s no point in me commenting because we just we’re 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 quite a bit of hard

So I’m not I don’t want to sort of indicate that Rob’s got a couple of tricks up his sleeve and it will suddenly all just 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.

Ivan Beller, Managing Director and CEO, IGO Limited0: And I guess a subsequent point just looking through then the quarterly result saying the production result down Q on Q. Is

Hugo Nicolucci, Analyst, Goldman Sachs: that

Ivan Beller, Managing Director and CEO, IGO Limited0: just a refocus of mine plan and sequencing to open up the ore body to get access to more fresh feed as you look then to obviously bring on CGP3 in the coming quarters, then the mine plan is actually set up to achieve from the outset. Is that how we should look at that given that you’re yes, I think 78% of your annual guidance has been achieved midpoint of annual guidance has been achieved on production. So you’re well sort of ahead there. Is that the way to look at Yes.

Ivan Beller, Managing Director and CEO, IGO Limited: I 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 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 that’s based on what mine plan was. This is just grade variation which you do get in that ore body as privileged as it is. You will see that up and down through a year, through a couple of years of grade. One of the things that we might obviously see come out of the optimization is that we want to blend and stabilize 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 of. It really is at this point just how the mines run and I think that signals or signposts a very likely opportunity that smoothing that out and having a more consistent feed will drive better outcomes and better value overall.

Ivan Beller, Managing Director and CEO, IGO Limited0: Brilliant. Thank you.

Ivan Beller, Managing Director and CEO, IGO Limited: Thanks Rob.

Darcy, Conference Operator: Thank you. Your next question comes from Tim Huff from Canaccord. Please go ahead.

Tim Huff, Analyst, Canaccord: Hi, Tim. Good morning. I was just following up from the question from Levi. The permitting has been submitted for the waste storage expansion at Greenbushes, and it shows that it’s going to be impacting Black Cockatoo habitat, which has been a few issues with your peers at South32 and Alcoa. What’s the time line 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?

Ivan Beller, Managing Director and CEO, IGO Limited: Thanks, Tim. Look, the approval timelines, I mean, 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. The focus is to get through these approvals and manage the impacts professionally and we’ll get the outcome.

Tim Huff, Analyst, Canaccord: Excellent. And perhaps one for you, Cath. At Greenbushes, your accounts receivable terms have moved to one hundred and eighty 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?

Cath Pizanich, CFO, IGO Limited: Yes, 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.

Tim Huff, Analyst, Canaccord: Does it impact the price you receive? Like is there a factoring

Cath Pizanich, CFO, IGO Limited: of price after No, it’s

Ivan Beller, Managing Director and CEO, IGO Limited: just I mean it’s just working capital.

Levi Spry, Analyst, UBS: But

Ivan Beller, Managing Director and CEO, IGO Limited: the price is determined on that month one month minus one lag is the four PRAs etcetera very deterministic and that’s applied regardless.

Tim Huff, Analyst, Canaccord: Okay. Excellent, excellent. Thank you very much guys.

Darcy, Conference Operator: Thank you. Your next question comes from Jonathan Sharpe from CLSA. Please go ahead.

Ivan Beller, Managing Director and CEO, IGO Limited1: Yes. 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.

Ivan Beller, Managing Director and CEO, IGO Limited: Thanks, Jonathan. Look, don’t think I’ve got much to add that you wouldn’t have already. We’d 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 was 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 in chemicals, I think 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 into well into next year.

Maybe this time next year we might start seeing 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 demand is pulling through and performing extremely well. I guess with low lithium prices, there’s probably a strong correlation there that translates to a flow through in the value chain that’s very interesting for customers.

Ivan Beller, Managing Director and CEO, IGO Limited1: Thanks. Interested to hear your thoughts. I’ll leave it there.

Ivan Beller, Managing Director and CEO, IGO Limited: Thanks, Jonathan.

Darcy, Conference Operator: Thank you. That is all the time we have for questions today. I’ll now hand back to Mr. Vella for closing remarks.

Ivan Beller, Managing Director and CEO, IGO Limited: Great. Thanks, Darcy. Yes, 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.

Darcy, Conference Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

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