Earnings call transcript: Liontown Resources' Q1 2025 reveals revenue drop, stock falls

Liontown Resources Ltd reported a decline in revenue for the first quarter of 2025, revealing a 29% drop quarter-on-quarter to $68 million. Despite operational achievements, such as increased ore production and a robust cash balance, the company's stock fell by 11.57%, reflecting investor concerns over rising costs and logistical challenges. According to InvestingPro data, the company's financial health score stands at 2.96 (GOOD), though it currently faces challenges with weak gross profit margins.

Key Takeaways

• Revenue fell by 29% quarter-on-quarter to $68 million.
• Stock price dropped by 11.57% following the earnings report.
• Cash balance remains strong at $420 million.
• Significant increases in mined ore from both open pit and underground operations.
• Renewable power usage reached an average of 79%.

Company Performance

Liontown Resources faced a challenging first quarter with a significant decline in revenue. The company attributes this downturn to lower shipping volumes and port congestion. Despite these setbacks, Liontown achieved notable operational milestones, including a substantial increase in mined ore and the commissioning of equipment to optimize lithium recovery.

Financial Highlights

• Revenue: $68 million, down 29% quarter-on-quarter.
• Cash balance: $420 million.
• Unit operating costs: $1,093 per dry metric tonne, a 22% increase.
• All-in sustaining costs: $1,354 per tonne, a 10% increase.

Market Reaction

The market responded negatively to Liontown's earnings report, with the stock price falling by 11.57%. This decline reflects investor concerns over the company's revenue drop and rising costs, despite a strong cash position and operational improvements. InvestingPro data shows the company's current ratio at 0.48, indicating potential liquidity challenges, while maintaining a relatively stable beta of 0.73.

Outlook & Guidance

Liontown is targeting an increase in production to 1.5 million tonnes per annum by March 2026, with expectations of progressive cost reductions. The company maintains a recovery target of 70% and is considering a potential expansion to 4 million tonnes.

Executive Commentary

• Ryan Hair, COO, noted, "Q1 represented the planned low point, and every subsequent quarter improves from here."
• CEO Tony Ottaviano emphasized, "We continue to deliver on our strategy."
• Chief Commercial Officer Grant Donald highlighted, "EV sales in China now exceed total auto sales in North America."

Risks and Challenges

• Continued port congestion could further impact shipping volumes.
• Rising operational costs may pressure margins if not managed effectively.
• The competitive landscape in the lithium market could affect pricing and demand.
• Dependence on EV market growth, which is subject to global economic conditions.
• Potential delays in achieving targeted recovery rates could affect future profitability.

Full transcript - Liontown Resources Ltd (LTR) Q1 2026:

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Good morning and thanks for joining us at Liontown's September quarter results. My name is Tony Ottaviano. Joining me today is Ryan Hair, our Chief Operating Officer, Graeme Pettit, our Interim Chief Financial Officer, and Grant Donald, our Chief Commercial Officer. If we can move to slide one, please. It's the typical disclaimer. Now we move to our highlight slide. I'd like to provide some context today. This quarter was one of execution, and we delivered exactly what we said we would. We advanced the underground ramp up on schedule, maintained a strong and consistent plant performance, and strengthened our balance sheet with more than $420 million of cash following the August capital raise and also the restructuring of our debt facility with Ford Motor Company. Importantly, this quarter represents the low point in our planned transition year, and it sets out the improvement story that unfolds from here.

The plan is clear and unchanged. We continue to ramp up the underground production towards 1.5 million tonnes per annum by March 2026, lift recoveries towards our target 70%, and once we process the cleaner underground ore, it becomes the dominant feed, and drive costs down progressively each quarter as we complete the open pit and move to full underground operations at the desired steady-state run rate. The key messages for investors today are first, execution and delivery. We achieved every operational milestone to plan. During the quarter, we executed the scheduled maintenance as we highlighted in the previous results. We're executing our OSP strategy to manage our contact ore, achieved a 105% increase in underground production, reaching our 1 million tonnes per annum rate by September.

We also advanced the open pit towards completion, with the final clean ore bench reached in September and full completion planned for the December quarter as stated. These outcomes demonstrate once again the strong delivery against plan and the continued validation of both the ore body and the process flow sheet. Second, our financial strength. Our balance sheet is in excellent shape, providing full flexibility through our transition year. We closed the quarter with $420 million in cash, as I mentioned just earlier, supported by a successful $316 million equity raise and the Ford Motor Company facility amendment to help us with the debt repayments in the course of the next 12 months. Thirdly, our operational leverage ahead at each quarter from here improves the benefits as we get scale and defray our operating costs, but also our ore quality improves.

With the underground volumes ramping up, open pit completion imminent, and recovery uplift underway, production grows, recovery strengthens, and cash generation accelerates. The operational leverage is built on, visible in the trajectory ahead. Finally, the long-term fundamentals. Lithium demand remains robust, underpinned by strong EV and the accelerating expansion of the battery, sorry, the stationary batteries. Liontown's high-quality asset, Tier 1 partners, and the fortified balance sheet help us capture the full benefit as the market turns. In summary, the context for today's results: disciplined execution through the trough, a clear path of improving margins and cash flow, and a business built on sustainable performance. I'll now move to the next slide, please, which is our highlights. The production for the quarter was 87,000 tonnes at a weighted average grade of 5%, and this is in line with us processing the contact ore being the OSP.

Contract sales were 77,000 tonnes. Concentrate on hand is 20,000 or nearly 21,000. Our recovery was 59%, again as planned, and this will improve as we get the better quality ore. Planned availability, notwithstanding the planned shutdown, was 92%. On the financial side, I've already mentioned the cash imbalance. The revenue was $68 million, but it was impacted by the lower sales due to port congestion in September and the backward-looking pricing. We'll talk about this a little bit later in the presentation. A realized price on a noisy basis, plus our unit operating costs, were exactly as planned given that we had lower recoveries due to the OSP stockpiles. If we move to the next slide, I'll now move on to and introduce Ryan Hair, who will go through the slide for us.

Ryan Hair, Chief Operating Officer, Liontown Resources: Yeah, thanks, Tony. Safety, our lost time injury frequency rate is roughly in line with the previous quarter. The total recordable injury frequency rate is up slightly on the last quarter, and as we've noted in the lead-in to this slide, we are focused very heavily at the moment on a back-to-basic safety drive, both on physical and mental wellbeing. Importantly, our leading indicator safety observations are still in line with our previous quarter, which is in line with our plans. On ESG, renewable power averaged 79% for the quarter, and notably in September peaked at 83%. Female workforce participation is up slightly at 23%. Thank you. I think we'll move to the next slide. Now talking to operational performance and starting with open pit. Performance remained strong in the open pit and continued to deliver to plan.

We mined 292,000 tonnes of ore at 1.3% lithium, which is 77% up on last quarter. The final clean ore zone was reached in September, and completion remains on schedule for the end of the calendar year. The focus this quarter is on completion of the pit and preparation for contractor demobilization as we transition to full underground operation, which we'll now turn to the next slide on underground. The underground operation, we continue to perform exceptionally well here, and it does remain one of the most important indicators of our progress towards steady-state operation. During the quarter, ore mined just over doubled to 225,000 tonnes, reaching a 1 million tonnes per annum run rate in September, which is in line with plan. The pastefill and primary vent systems are now fully commissioned and performing to design, supporting delivery of the plan and improving operational efficiency.

Dewatering, power reticulation, and materials handling infrastructure are working well, providing strong operating reliability across all levels in the mine. We've mobilized a third jumbo and a fourth production drill, which increases development and production capacity and supports continued ramp up towards 1.5 million tonnes per annum by Q3 of 2026. The ore body continues to perform well against expectations. Volumes and grades reconcile closely with the mine plan. Fragmentation, overbreak, and dilution remain well within design parameters. A total of just over 1,800 meters of development was completed for the quarter, up 8% on the prior period. To date, 18 stopes have been mined, including 14 in the September quarter, with an average stope size circa 15,000 tonnes. Work fronts are expanding across multiple levels, providing flexibility as we scale up production.

Our key priorities now are to optimize stope turnover, continuing to increase the rate of development, and refine pastefill scheduling to sustain continuous production. In short, the underground is behaving exactly as designed. Infrastructure's in place, performance is consistent, and the pathway to 1.5 million tonnes per annum and beyond is clear and achievable. I want to move to the next slide on the process plant. The plant continued to perform well and, most importantly, exactly in line with the plan we outlined earlier this year, with lower recoveries in production when feeding OSP material or our contact material during the early underground transition. We said we'd take this approach to manage ore feed during the ramp-up phase, and it's exactly what we did. Plant reliability remains strong, with 580,000 tonnes processed at 92% availability.

Recoveries behaved as expected, with a range of feed types processed during the quarter, averaging 59% lithium recovery, producing a 5% lithium concentrate meeting all customer specifications. This confirms the plant is performing reliably and to expectations. The current recovery is simply a reflection of the range of feed types processed this quarter. The transition to cleaner underground ore is underway, and as that proportion increases through FY26, recoveries will lift progressively. Our FY26 recovery target remains unchanged, with around 70% recovery expected by March 2026 as underground ore becomes the dominant feed. At the same time, recovery improvement initiatives continue to advance. The tails regrind vertimill has been commissioned, and optimization work is ongoing across grind size, reagent dosing, and water quality to support incremental recovery gains.

In short, the plant is running to design, the recovery curve is following the planned trajectory, and the improvement from here is baked into our guidance. With that, I'll hand over to Graeme.

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Thank you, Ryan. Next slide, please.

Ryan Hair, Chief Operating Officer, Liontown Resources: All right. The results for the quarter were consistent with company expectations, reflecting the planned impacts of maintenance and the OSP strategy foreshadowed in the previous quarter presentation. Revenue was $68 million, down 29% quarter on quarter as a result of lower shipping volumes, probably due to port congestion and backward-looking pricing mechanisms. Backward-looking pricing for shipments during this quarter resulted in pricing lows of May and June, impacting realized prices for the majority of the quarter. We've got a closing cash balance of $420 million that we can look at in more detail on the following slide. Unit operating costs increased 22% on the prior quarter to $1,093 per dry metric tonne sold due to the drawdown of OSP stockpiles. This increase in unit operating costs was anticipated and formed part of our full-year guidance.

What you'll see going forward is that unit costs will trend lower as volumes ramp up and clean underground ore becomes the dominant plant feed. All-in sustaining costs increased 10% from last quarter to $1,354 per tonne, reflecting the higher unit operating costs. This was partly offset by lower sustaining capital spend. As with unit operating costs, expect to see AISC trend lower through the year. Next slide, please. Our cash position strengthened significantly, finishing the quarter at $420 million with 21,000 tonnes of sellable concentrate on hand. This excludes $20 million of the Zenith cashback guarantee, which we anticipate to receive in the coming quarters. Cash flow operating activities for the quarter was a negative $44 million and was mainly attributable to a $53 million reduction in cash receipts from customers compared to June's quarter.

Cash receipts were impacted by lower sales volumes and working capital movements, including an increase in the value of trade receivables and concentrates on hand. Additionally, final pricing adjustments from the prior quarter's sales of $8 million further reduced cash receipts. Capital expenditure of $44 million was primarily underground development and the completion of the TSF construction. Given the completion of the TSF construction and the completion of open pit mining in the December quarter, you should expect to see capital expenditure reduce in the coming quarters. Finally, on financing cash flows, inflows of $363 million represent the net proceeds of the August capital raise. The closing cash balance was also supported by the deferral of the commencement of principal and interest payments under the Ford Motor Company facility, which has now been deferred for 12 months.

Overall, we have a strong liquidity position and expect to see improved quarterly cash performance as we ramp up the underground and increase production volumes. Next slide, please. All right. Our debt profile remains low-cost, long-dated, and highly flexible. This slide is an update of our debt position following the Ford Motor Company amendment completed in August. The effect of the amendment has pushed the first repayment under this facility out to September 2026. Just looking at the maturity profile, again, it's important to note that while the LG Energy Solution convertible notes are shown in the maturity schedule as a repayment of $414 million, cash repayment can only occur if the facility is not converted into equity before the maturity date of July 2029. Subsequent to the recent equity raise, the conversion price of the LG Energy Solution notes has been amended from $1.80 to $1.62 per share.

In summary, our debt structure provides a very low cost of capital with no near-term maturities, and this allows us to continue to focus on delivering the ramp-up of the underground mine and deliver the full potential of Kathleen Valley. I'll now pass to Tony.

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Thanks, Graeme. If we move to the next slide, please. When we announced our Ford Motor Company debt restructuring and contract arrangements, we did make some mention around our volume profile going into the future. We've just simply graphed this for the market now so that you can see it visually. There's no new information here, but it just provides that little bit of extra clarity on the contract profile for tonnes. We are delivering into some of these already. That's really what the slide's designed to provide. If we move to the next one, please. Business optimization. Last year, we made $112 million worth of savings either directly in recurring or some in deferred capital. That pursuit becomes relentless. We need to continue with the business optimization because price is still where it is, and we can't lose sight of that fact.

This next exercise, this next phase, is going to be a broad engagement, an assessment of priorities across everything. There will be team-led initiatives. There will be challenge in everything we do. As I said in this slide, we will challenge the status quo, and we will focus on our purchasing and contracts. We've already started this, and we will continue to optimize our cost structure in the current environment. Next one, please. I'll now hand back onto Ryan for this last next slide.

Ryan Hair, Chief Operating Officer, Liontown Resources: Yeah, thanks, Tony. This slide, which I think we've presented a couple of times now, recaps how FY26 is unfolding quarter by quarter. In quarter one, we deliberately executed planned maintenance activities and early technical improvements while implementing the OSP feed strategy to manage transitional ore during this ramp-up phase. That strategy delivered exactly as guided. Lower production and recoveries were expected, and those outcomes were fully reflected in our prior guidance. Moving into Q2 this quarter, the focus shifts to completing open pit mining and increasing the proportion of clean underground ore through the plant. Recoveries are already improving month on month, and as underground volumes continue to ramp up, throughput and grade consistency will lift. We also expect operating costs to trend lower as we shut down the open pit operation and those costs fall away, and we get productivities through increasing the scale of the underground operation.

By Q4, in the June quarter, we transition fully into steady-state operations. The process plant will be operating at design throughput. Recoveries will stabilize at or above 70%, and costs will be materially lower than in the first half. That is the point where the business begins to demonstrate sustained cash flow and margin that underpins our long-term investment case. Q1 represented the planned low point, and every subsequent quarter improves from here: higher underground production, stronger recoveries, lower costs, and greater cash generation, all consistent with the plan we set out at the start of the year.

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Next slide, please. Recap on our FY26 guidance. FY26 remains a transition with the open pit operations, as we've already mentioned, will conclude in December and the underground ramping up. In the first half, we continue to leverage the investment already made in the ROM stockpiles, processing the remaining OSP material, which we have always said would temporarily impact recoveries and production and therefore our flow. As we move into Q2, production and recovery performance are expected to improve as the proportion of clean ore in the mill feed increases and the influence of OSP material declines. This uplift will be driven by higher clean ore production from the open pit and the growing contribution from the underground. Sustaining capital remains on plan, focused on underground development, maintenance, and equipment replacement to support the ramp-up.

Importantly, there is no change to our recovery target of around 70% by Q3 FY26, and we remain on track for 100% underground production by Q3 FY26. In summary, the transition is unfolding exactly as we planned, with Q2 marking the start of a steady-state improvement across production and recoveries. We now move to the next slide, please, and I'll ask Grant to lead us through that.

Grant Donald, Chief Commercial Officer, Liontown Resources: Thanks, Tony. I think it's important to highlight that there are two fundamental growth factors driving lithium demand. The first is EV sales, and the second is battery energy stationary storage. I'll start with EV demand. As you can see here from the chart on the left, EV sales continue apace. Global sales grew 26% year on year from January to September. Importantly, September was also the first month we've seen more than 2 million EV sales in a single month. This translated so far this year into over 3 million extra EVs sold versus 2024. As you can see on the chart on the right-hand side, expectations are for that to continue with a very solid CAGR growth rate of 14% according to Bloomberg New Energy Finance.

I think, importantly, it's also very interesting to see the growth of the rest of the world that continues to grow at very, very aggressive rates, off a small base. We are probably about a quarter away from the rest of the world's sales equaling total North American sales. One of the points highlighted to me by Bloomberg just yesterday was that EV sales in China now exceed total auto sales in North America. If we go on to the next slide, battery energy storage systems have really come from nowhere and have been a strong driver of demand in the last year plus. I think for the last two or three years, they have exceeded expectations from forecasters.

What this slide is demonstrating is that not only is it accounting for one unit in every four units of growth over the next five years, there are also a wide range of views on how fast this market is growing. You can see in the chart on the right there from S&P Insights that there's a large spread between Investment Bank on the left, S&P Insights in the middle, and CATL's prospectus on the right-hand side. I think it's important to note the spread between the high and the low point is over 765,000 tonnes of lithium carbonate equivalent, and that is around half the total size of the lithium market today.

Large-scale grid investments are continuing to accelerate, and these are driven by the rise of data centers to support the shift towards AI, as well as making sure that grids remain reliable with a larger share of renewable power penetration. With that, I'll hand back to Tony.

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Thank you, Grant. We then go to our final slide, please. We end where we started. We continue to deliver on our strategy. I won't repeat things, but effectively, we're executing the plan. We're delivering on the underground ramp-up. The open pit will come to a conclusion at the end of the year as we planned. We've strengthened our balance sheet, both with the equity raise in August and also restructuring the Ford Motor Company debt facility to give us that further strengthening of that balance sheet in the next 12 months as we see the market recovering. With that, I'll open it up for Q&A.

Moderator/Operator: Thanks, Tony. Participants can ask both text and live audio questions during today's call. To ask a text question, select the messaging icon, type your question in the box towards the top of the screen, and press the Send button. To ask a live audio question, press the Request to Speak button at the top of the broadcast window. The broadcast will be replaced by the audio questions interface. Press Join Queue, and if prompted, select Allow in the pop-up to grant access to your microphone. If you have any issues asking a question via the web, a backup phone line is available. Dial-in details can be found on the Request to Speak page or on the homepage under Asking Audio Questions. If you have not yet submitted your text question or joined the live audio queue, please do so now.

We kindly ask that today's questions are limited to two per person. I will introduce each caller by name and ask you to go ahead. You will then hear a beep indicating your microphone is live. Our first question comes from Hugo Nicolaci from Goldman Sachs. Hugo, please go ahead.

Grant Donald, Chief Commercial Officer, Liontown Resources: Morning, Tony and team. Thanks for the update this morning. The first one from me just on realised pricing. You called out the impact of the pricing lags through the contract in the quarter impacting that realised price. Now that you've recut some of those offtake agreements after September 30, does that mean that we shouldn't expect a catch-up on the pricing bounce we saw through the September quarter now if you just realise closer to spot spodumene prices?

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Go ahead, Grant.

Grant Donald, Chief Commercial Officer, Liontown Resources: Thanks, Hugo. I think anytime you've got a large delta from month to month, as we saw in May and June, which was the lows of the year in the 600s versus where we're trading now in the 900s, you have this impact. It's just a question of when that impact flows through your revenue line. With queue lagging, it just means it's a little bit delayed. If you go back to last quarter, we actually had the benefit of that where we outperformed the index. We had a 105% realisation compared to Fast Market Spodumene Index in the last quarter. Unfortunately, you have to pay the piper, and that came through the sales this quarter. I don't think you're going to necessarily completely avoid any of those impacts because those kind of QP impacts are always there in your portfolio of contracts.

I don't think you should necessarily think that we did a one-time switch where we moved queue lag and we skip out the impact of that in the future. That's not the case. Thanks for that clarity. Maybe just another one on the cost breakdown here. Just give you a bit more colour in terms of maybe on a cash basis, the magnitude of spend at, say, the open pit and underground in the quarter.

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Go ahead, Graeme.

Ryan Hair, Chief Operating Officer, Liontown Resources: During the quarter, they were roughly even, Hugo, so between $10 million and $15 million per month.

Moderator/Operator: Thank you. Our next question is from Adam Baker from Macquarie. Please go ahead.

Port congestion. Hi, Tony. Thanks for the question. Port congestion was called out as an issue, which contributed to the delayed shipment during the quarter. Is this something that you're still seeing at port, and could this resurface during the December quarter? Thanks.

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Adam, the Geraldton Port has an issue that they call surge. As a result, during the quarter, we had a number of surge events, which then built up the number of ships on lake hand. We had to wait our turn in the queue for those ships to come in and be loaded. The government is putting money in to resolve this issue in the Geraldton Port. I think we potentially will see the back of it in the next quarter. It's really what nature puts in.

Grant Donald, Chief Commercial Officer, Liontown Resources: Yeah, Adam, just for further context, it's Grant here. It's a bit seasonal. You know that last quarter tends to be the seasonal high spot where you see more swell events and surge events in Geraldton. It did form quite a lot of queuing, and we weren't the only ones impacted. In fact, everyone who ships out of the berth that we ship out of was impacted. I'd say that going forward, we shouldn't expect that. There's always the quarter-end chase that's on where everyone's trying to get a shipment away before the quarter end, and that would continue. This one was particularly bad just because of those surge events.

Okay, thanks for that. Just secondly, spodumene concentrate grades 5% for the sales in the September quarter. I'm just wondering, is this a proactive decision that was taken by the team, or was this just a flow-through as a result of the higher proponent of Gabbro going through the mill? I'm just wondering what the timeline would be to get that concentrate back to 5.2%. Thank you.

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Yes, I think your summary is correct, Adam. It is the latter, which is it's a result of the high Gabbro percentage, which we showed in the graph. We expect that to unwind in the next two or three quarters once we get into 100% underground mill feed, underground ore for the mill.

Moderator/Operator: The next question is from Levi Spry from UBS. Please go ahead.

Ryan Hair, Chief Operating Officer, Liontown Resources: Yeah, g'day, Tony and team. Thanks for your time. Maybe just following up on that. I mean, this quarter, could it be a bit lower than 5? Just confirming your guidance is at 5.2 in terms of lithium units.

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Yeah, firstly, the latter, our guidance is confirmed at 5.2. As I said, once we get into more or the dominant feed being underground, we will see that improve. Sorry, your first part of your question?

Ryan Hair, Chief Operating Officer, Liontown Resources: Could it go lower in the short term, I guess? What are the offsets for you?

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Yeah, no, we don't anticipate it going lower in the foreseeable future. Our contracts specify a certain amount, so we're conforming to our contracts.

Ryan Hair, Chief Operating Officer, Liontown Resources: Just a little bit more color.

Tony Ottaviano, CEO/Managing Director, Liontown Resources: Yeah, Levi, sorry. The chart that we included on the process plant, we were endeavoring to then provide a little bit of color on with high Gabbro. We will, to try and maximize recovery and still keep within customer specs, as grade will naturally kind of trend a little bit lower. What you'll also see on that chart is with the lower Gabbro content, grade naturally drifts up. As we've stated, as both the amount of OSP material, but also the amount of open pit starts to fall away, and we get the cleaner, higher grade material out of the underground, naturally grade will drift up, which is why we're maintaining guidance on both recovery and grade through the course of FY26 with you on. Yeah, and it's a blending exercise. There is an excursion where it does drop.

We will blend it with higher grade material when we do have those better days. It's all about managing it within the contractor specifications.

Ryan Hair, Chief Operating Officer, Liontown Resources: Yep, cool. Okay, thank you. Just on the price piece, as we're seeing spodumene prices improve here, can you help us with how we're modelling that now? I think one of the previous questions was pointing to it, but in terms of you re-selling your contracts, how do we think about the read-through on this grade concentrate to the spot price effectively?

Grant Donald, Chief Commercial Officer, Liontown Resources: Sure, it's Grant here. Look, the contracts' pricing reference is all disclosed, right? Now we've got one contract on spodumene index, one contract continues to be on carbonate, at least until the end of 2026 when that deal expires, and the other contract is on hydroxide.

Moderator/Operator: Thank you. The next question is from Glyn Lawcock from Barrenjoey. Please go ahead.

Morning, Tony. Just a couple of quick ones. Firstly, you talk about the cost and CapEx out program under phase two. Do you have any thoughts on the quantum that could yield, or is it too early?

Tony Ottaviano, CEO/Managing Director, Liontown Resources: It is a bit too early. We've kicked it off in the last quarter. We're still trying to assemble all the initiatives, so no, I can't give you a figure just now.

Okay, no worries. Any orders of magnitude, do you think, similar, like half of last year?

It's still too early, Glyn. We will come out.

Fair enough. Okay. I know it's very early days in the markets where it is, but it may be starting to show some signs of turn on the back of BESS, etc. The 4 million tonne case, you know, the expanded option, it says in the report you're still doing a little bit of studies towards it. Maybe just an update on where you are on that, timing, costs associated with if you do, if the market turns enough, you'd exercise that option?

The way it works and the way we're thinking about it is as we get more real-time operational understanding of our plant, we want to make sure that the expansion option is up to date with those learnings. There's work that's always ongoing as to how do we, how does that process flow sheet look like as we get more information from the existing operation. That's one aspect of it. The second one is, I think until we see a sustained improvement in the market, the board will be live to this option, but you know, it won't be a commitment yet.

Moderator/Operator: We next have a text question from a private investor who asks, what do Cadmax look to benefit from their recent capital raise investment?

Ryan Hair, Chief Operating Officer, Liontown Resources: I think they've already made some very good money given that everyone who supported us on the raise at $0.73 is now looking at a share price of over $1.00. Mr. Pay came to site and was impressed by the operations that we've built, and he wanted to invest. It's a financial investment.

Moderator/Operator: Another text question from a private investor who asks, is there any clarity regarding the large tenements recently pegged near Sandstone?

Tony Ottaviano, CEO/Managing Director, Liontown Resources: It's an ongoing process. As we look at our long-term, as part of that previous question around future expansion, we want to secure access to good water sources. We continually look more broadly as to where we can potentially look for the future long-term expansion requirements for water and other key infrastructure. That's part of that process.

Moderator/Operator: Thank you. Another text question. In your lithium demand forecast chart, which of the BESS growth scenarios have you assumed?

Grant Donald, Chief Commercial Officer, Liontown Resources: Thanks for the question. Look, with any company, I'm always wary of single-point expectations or forecasts. We look at a range of scenarios. You can imagine that in our forward planning, we're thinking about what would the world look like at the low end and what would the world look like at the top end. We try and make sure that the decisions we make are robust against either scenario.

Moderator/Operator: Another question from a private investor. Did you have an update on the downstream feasibility studies with LG Energy Solution and Sumitomo?

Grant Donald, Chief Commercial Officer, Liontown Resources: Yeah, we continue to progress work with both Sumitomo and LG Energy Solution on the potential to go downstream. I think it's no secret that some of our peers are having challenges in that space. The capital involved is significant, and in the current market environment, margins are squeezed. For us, we continue to do the work to be auction-ready, but it's not something that we plan to make a decision on in the near term.

Moderator/Operator: Thank you. That's all the questions we have today. Please reach out to the Liontown team if you have any follow-up questions. We thank you all for your time and have a great day. You may now log out.

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