Earnings call transcript: Pilbara Minerals Q4 2025 sees revenue rise 28%

Pilbara Minerals Ltd (PLS) reported a strong fourth quarter for 2025, with group revenue climbing 28% quarter-on-quarter to $193 million. The company also achieved a significant increase in production volume, reaching 221,000 tonnes, a 77% rise from the previous quarter. Despite these gains, the stock price remained unchanged in the latest trading session, closing at $1.675. According to InvestingPro data, the company maintains a "GOOD" overall financial health score of 2.61 out of 5, though the stock has seen a significant -28.11% return over the past six months.

Key Takeaways

• Revenue increased by 28% quarter-on-quarter to $193 million.
• Production volume surged 77% to 221,000 tonnes.
• Full year revenue saw a 39% decline compared to the previous year.
• Pilbara Minerals maintains a strong cash balance of $1 billion.
• The company achieved all FY25 guidance metrics.

Company Performance

Pilbara Minerals demonstrated robust performance in Q4 2025, with a notable rise in both revenue and production. The company reported a 4% year-on-year increase in full-year production, totaling 755,000 tonnes. However, full-year revenue decreased by 39% compared to the previous year, highlighting challenges in the market despite operational improvements.

Financial Highlights

• Revenue: $193 million, up 28% quarter-on-quarter.
• Production volume: 221,000 tonnes, a 77% increase.
• Unit operating cost: Reduced by 10% to $619 per tonne.
• Cash balance: $1 billion.
• Cash margin from operations: $98 million for the quarter, $192 million for the full year.

Outlook & Guidance

Looking ahead, Pilbara Minerals provided guidance for FY26, projecting production between 820,000 and 870,000 tonnes. The company expects unit costs to range from A$560 to A$600 per tonne. Capital expenditure is forecasted at A$303 to A$330 million, with exploration costs for the Kalina project estimated at A$40 to A$45 million. InvestingPro data indicates analysts anticipate a sales decline in the current year, with revenue growth forecast at -39%. Get access to 12 additional exclusive ProTips and comprehensive analysis through InvestingPro’s detailed research reports.

Executive Commentary

CEO Dale Henderson emphasized Pilbara Minerals’ strategic positioning, stating, "We are uniquely positioned to lead through the cycle and to capture value as market conditions improve." He also noted the impact of market sentiment on pricing, commenting, "The recent price rally follows a pattern of sentiment-led rebound triggered by perceived supply risks."

Risks and Challenges

• Market volatility: Fluctuations in lithium prices could impact revenue.
• Supply chain disruptions: Potential delays in production or distribution.
• Economic conditions: Global economic downturns may affect demand for lithium.
• Regulatory changes: Shifts in environmental or mining regulations could pose challenges.
• Competition: Increasing competition in the lithium market may pressure margins.

Q&A

During the earnings call, analysts inquired about the impact of ore sorting technology on recovery rates and the potential for future investments. The company also addressed pricing volatility and clarified the equity injection for the POSCO JV.

Full transcript - Pilbara Minerals Ltd (PLS) Q4 2025:

Maggie, Conference Operator: Good day, and thank you for standing by. Welcome to PLS June 2025 Quarterly Activities Report. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you’ll need to press star one one on your telephone keypad.

Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, PLS Managing Director and CEO, Del Henderson. Please go ahead.

Dale Henderson, Managing Director and CEO, PLS: Thank you, Maggie. Good morning, and good evening. Thank you for joining us today. I’d like to begin by acknowledging the traditional owners on the lands on which PLS operates. Here in Perth, we acknowledge the Whadjuk people of the Noongar nation.

We also recognize the Nyamel and Garriarra peoples on whose land our Australian operation is located in the Pilbara region. We pay our respects to their elders past and present. Joining me today is Flavio Garofolo, Arrington CFO, and Brett McVadgen, our chief operating officer. We’re also joined by other members of the senior team. This call will run for approximately an hour.

We’ll begin with a presentation on our June performance, then move through our FY ’twenty six guidance and market commentary before finishing with Q and A. We will address questions submitted via the webcast at the end of the session. The June marked a pivotal milestone for PLS as we completed our major capital investment cycle and transitioned into a new phase of operational excellence and performance underpinned by our industry leading technology. We delivered on several critical objectives with the key achievement being the successful optimization of the Pilgan plant following the completion of the P1000 expansion, delivering significantly higher production volumes and enabling lower cost performance. Importantly, we achieved these outcomes while maintaining our fortress balance sheet, closing the quarter with approximately £1,000,000,000 in cash, providing us with the strength and flexibility to lead through the cycle as the market rebalances.

The June caps off what has been a landmark year for PLS. FY ’twenty five was truly transformational, and we look forward to sharing more detail in our full year results release this August. Since the quarter’s closed, we’ve seen renewed market volatility, this time moving in our favor. I’ll speak more to that later in the presentation. Please turn to slide two.

PLS is the world’s largest independent hard rock lithium producer. Our independence provides agility and responsiveness in a fast changing global market. The foundation of our business is the high quality long life Pilgangoora operation in Western Australia. The P680 and P1000 expansions have created a leading process platform with increased capacity and lower operating costs, strengthening our position on the global cost curve. We’re also building a globally diversified platform with downstream exposure through our POSCO JV in Korea and early stage optionality in Brazil through the Kalina project.

Importantly, our balance sheet with $1,000,000,000 in cash and $655,000,000 in undrawn credit facilities gives us the flexibility to invest and lead through this period of the cycle. Turning to Slide three for the quarter outcomes. Some key highlights from the quarter include record production of 221,000 tonnes produced, up 77%, demonstrating the operational leverage of the optimized Pilgan plant. Unit costs reduced by 10% to $619 per tonne, delivering tangible cost leadership in a low priced environment. This cost improvement is clear of optimization of the larger operation, which is now complete, and Brett will offer some comments on this in a moment.

We had a 28% uplift in revenue and strong cash generation despite soft prevailing pricing with £98,000,000 in operational margin. This improvement is due in part to timing but also our significantly higher sales volumes. Importantly, we achieved or exceeded all FY twenty five guidance metrics. This is a testament to execution discipline and team capability. We have also released, as I mentioned, our FY twenty six guidance today.

This result affirms our operational excellence and reinforces our position as a sector benchmark for execution, scale and efficiency. Now with that, to offer a bit more detail on the operation, I’ll now hand

Brett McVadgen, Chief Operating Officer, PLS: over to Brett. Thank you, Dale. Moving now to slide four. Starting with safety, I’m pleased to report that the June saw continued strong performance with a twelve month rolling TRIFR improving to 2.79, an excellent result. This outcome reflects more than just a number.

It’s a testament to the ongoing work we’re doing to build and strengthen our safety culture. We continue to strengthen our systems, processes, and leadership engagement to ensure every team member goes home safely every day. My thanks to the entire operational and projects workforce for their commitment to safety excellence. Moving now to slide five. The June marked a significant operational milestone as we progressed the P1000 optimization, setting the stage for steady date operations in FY ’twenty six.

Production reached 221,300 tonnes for the quarter, a strong result enabled by improved plant throughput supported by the expanded Pilgan plant. Unit operating costs decreased quarter on quarter, reflecting early benefits from scale and cost leverage care of the expanding operating platform. The ore sorting facility continues to be a key enabler, allowing greater use of contact ore, increasing lithium units recovered from the pit and lifting overall resource utilization. Lithia recovery averaged 71.6 in the quarter, in line with expectations given the higher proportion of contact ore in the feed blend. We shipped 216,000 tonnes of product at a 5.1% grade.

While the grade was temporarily lower during the quarter due to ongoing commissioning and ramp up, we expect product grade to return to target specifications in FY ’twenty six. With the completion of both the P680 and the P1000 projects, the Pilgan operation has been fundamentally transformed. We’ve added 420,000 tonnes of production capacity, improved operational flexibility and delivered a lower cost scalable platform. Most importantly, this transformation positions us to capture margin through the cycle, enabled by improved efficiency, stronger resource utilization and a greater adaptability to market conditions. Thank you.

I’ll now hand back to Dale.

Dale Henderson, Managing Director and CEO, PLS: Thanks, Brett. And, you know, I’d also like to just acknowledge the operating team, projects team and the full team at PLS. It’s an absolutely cracking quarter, which marks a huge year, and it was a ramp up year. And ramp up years are incredibly difficult. It all came together, increased scale, new tech, cyclones, building in the in the Pilbara region.

You name it. It had it all, and it all got navigated. So we’re just delighted to have facilitated a step change in the operating platform, but it’s clear of our great people and and and working through just a sea of challenges to deliver, as I say, a cracking result. So well done to the PLS team. Moving to slide six.

FY ’twenty six guidance was achieved. So FY ’twenty five, of course sorry. FY ’twenty five, our guidance achieved. FY ’twenty five, of course, very strong year, and we’re delighted with to have achieved or exceeded guidance across each of the key metrics. And at the care of this very robust quarter, where production volumes of 755,000 exceeded the top end of market guidance.

Unit operating costs reduced to $627 per tonne for the year, with further improvements in the final quarter as the P1000 scale and efficiency took hold. As it relates to capital, capital expenditure was well managed coming in at 569,000,000, reflecting disciplined execution despite a high activity year. As I mentioned, I’m proud of what the team has delivered against a very challenging market backdrop during a ramp up year. And it was a year where, of course, we had a number of very important strategic firsts, including the Latin Resources acquisition and, of course, graduating to a lithium hydroxide producer at Carabao JV in South Korea. These results represent a standout finish to what has been a transformational year for the company.

And now from that, well, PLS is incredibly well positioned. We’re not only a well run lithium producer, but a cost smart and technology enabled operator. We are uniquely positioned to thrive as the cycle ultimately turns. Now moving to slide seven. PLS has built a platform of strategic growth options designed to drive long term value through flexibility, diversification, and market responsiveness.

In Australia, construction of the midstream demonstration fund progressed during the June with completion targeted for the December 2025. This project remains central to our downstream value strategy. The Nugaji processing facility remains in care and maintenance for FY ’26 and provides immediate low capital restart potential when market conditions improve, a unique optionality advantage. At POSCO JV or PPLS continues to advance, train one has secured another certified customer, while train two production has temporarily moderated at lower throughput to preserve cash ahead of completion of customer certification. During the quarter, PLS participated in a PPLS rights issue contributing approximately $40,000,000 for first equity injection into the JV since its formation in 2022.

In Brazil, drilling activity and technical studies progressed to support the Kalina project, which, of course, are the key pillar of our future supply diversification strategy. Now together, these initiatives reflect a portfolio approach to growth, combining Tier one assets, global reach and optionality across the lithium value chain. Now with that, I’ll now hand over to Flavio to take us through the financial performance. Thank you, Dale. Please turn to Slide nine of

Flavio Garofolo, CFO, PLS: the presentation for a summary of the key financial metrics for the June. The June demonstrated the operational leverage of our optimized Pilgan plant following the successful completion of the P1000 expansion. Group revenue of 193,000,000 was 28% higher than the prior quarter, driven by a 72% increase in sales volume, partially offset by a 20% decline in the average realized price to US $599 a tonne for SC 5.1 product grade. Production volume of 221,000 tonnes was 77% higher than the prior quarter, driven by increased output from the optimized Pilgan plant following completion of the P 1000 expansion. Unit operating cost, FOB, reduced to $619 a tonne, a 10% improvement quarter on quarter.

This reduction reflects the benefits of higher production volume as well as efficiencies delivered through the p eight fifty model and our continued focus on cost discipline. Unit operating cost CIF also decreased to $721 a tonne, a 9% reduction in line with our lower FOB cost. Cash balance remained strong at approximately $1,000,000,000 as at 06/01/2025. This underscores our ability to maintain financial strength despite lower pricing and the capital investments in the now completed P1000 expansion. Turning to Slide 10.

Slide 10 shows a cash flow bridge for the June FY ’twenty five. During the June, our cash balance declined by £88,000,000 from £1,100,000,000 to $1,000,000,000 This reduction was primarily driven by the completion of the P1000 expansion and infrastructure capital expenditure. Cash margin from operations of $98,000,000 was supported by higher sales volume, lower costs from the P850 operating model and favorable cash timing. Cash margin from operations less mine development and sustaining CapEx was positive at $63,000,000 reflecting a strong operational performance and reduced capital expenditure in the second half. Total capital expenditure of £116,000,000 on a cash basis was largely attributable to infrastructure and project investments, including the finalization of the P1000 project.

Additionally, we made a $40,000,000 equity contribution to the PPLS joint venture reflecting our pro rata 18% interest. This was the first equity investment since the joint venture formation in 2022 aimed at providing additional working capital during the ramp up phase and navigating the current low lithium pricing environment. Turning to slide 11. Slide 11 provides a summary of the group’s key financial metrics for the FY ’25 period. Production volume of 755,000 tonnes was up 4% year on year, driven by volume expansions enabled by the P680 and P1000 projects.

Group revenue for FY 2025 was $769,000,000 representing a 39% decline compared to prior year. This was primarily due to a 43% drop in the average realized price, partially offset by a 7% increase in sales volume. Unit cost FOB of $627 a tonne was 4% lower than the prior year. This reflects higher sales volumes and lower operating costs supported by ongoing operating efficiencies underpinned by the transition of the p eight fifty operating model. These results demonstrate that our strategic investments in production and process optimization are delivering tangible benefits, keeping us lean, competitive and future ready.

Turning to slide 12. Our closing cash balance remains strong at $1,000,000,000 despite a challenging price environment. Cash margin from operations of $192,000,000 reflected strong cash generation at a low average realized prices of US $672 a tonne. Cash margin from operations less mine development costs and sustaining CapEx remained positive at AUD28 million. The AUD653 million in capital expenditure represents the completion of our major investment cycle, positioning us for enhanced returns in FY ’twenty six and beyond.

Turning to slide 13. Over the last two years, we’ve proactively executed a suite of cost and cash flow reduction initiatives that have delivered measurable benefits and fortified our balance sheet. These initiatives include the suspension of dividends, securing a $1,000,000,000 credit facility, reduced capital expenditure, workforce optimization, the implementation of the p eight fifty operating model, and launch of our cost smart program, an ongoing initiative to build culture of efficiency. With the completion of p 1,000 and ongoing plant optimization, FY twenty six presents a clear opportunity to unlock further value for the business and embed a cost conscious culture across the business. We remain highly committed to balance sheet preservation.

Our financial position is strong with £1,000,000,000 in cash, a billion dollar loan facility of which £375,000,000 is currently drawn down, and total liquidity of £1,600,000,000 This positions the group well to navigate current conditions and capitalize on the market recovery ahead. I will now hand back to Dale.

Dale Henderson, Managing Director and CEO, PLS: Thanks, Flavio. Turning to Slide 15. As we enter FY ’twenty six, our focus sharpens around operational excellence, disciplined cost control and capital efficiency following several years of investment across the Pilgan plant and broader Pilgangoora asset base. We can now flex the strength of this new operating platform. Now to touch on each of our pillars of our strategy, as it relates to the operation, we’re looking to realize the full value of our recent capital investment by driving performance uplift at Pilbara.

We’re looking also to expand and further embed our cost smart program for FY ’25 that Flavio just touched on. We’ll be targeting continuous improvement and cost reduction opportunities across the operations, procurement, maintenance, and other support functions. As it relates to growth, we’re looking to maintain optionality with targeted investment and studies to position for the next phase of the cycle. As it relates to chemicals, we were looking to advance the certification of train two of our PPLS JV, a chemical plant in South Korea, enabling commercial sales while prudently managing ramp up to pace and to preserve cash. As it relates to diversification, we’re looking to continue with measured investment in the Galena project in Brazil through targeted exploration and study activities, positioning PLS to accelerate development as market conditions improve further.

Together, these priorities reflect a disciplined, resilient, and opportunity ready approach, ensuring PLS remains well positioned to lead through the cycle. Now moving to slide 16. Wanted to offer just a little bit of deeper insight into our ore sorting technology. Because in FY ’26, we will be building on the p eight fifty operating model by increasing the application of this ore sorting technology. Put simply, we are aiming to maximize this lever to achieve lower unit costs.

Our core focus will be the progressive utilization of contact ore feed. This is a blended material from the ore host rock boundary that you can see in the hatched area on the photo. This shift unlocks multiple operational benefits. Firstly, lowering mining costs by reducing total material movement and increasing the proportion of mined material that is processed. Secondly, improved mine flexibility and resource utilization through reduced dependency on clean ore, enabling more efficient extraction sequencing and longer term optionality.

Now while these changes deliver meaningful unit cost reductions, they are expected to result in a modest decrease in lithium recovery due to the characteristics of the blended ore feed. For FY ’26, we are targeting an average recovery of approximately 72%. This optimization reflects our focus on applying smart technology to unlock greater value, drive down costs, and strengthen resilience through the cycle. Now turning to slide 17. As it relates to FY ’twenty six guidance, I’m pleased to share that this reflects a step change achieved through several years investment of the Pilgan plant and a continued focus on disciplined cost management.

As it relates to production, the forecast at 820,000 to 870,000 with a steady quarter on quarter volumes as we maintain strong plant utilization. As it relates to unit costs, FOB is guided at Aussie $5.60 to 600 per tonne, underpinned by increased throughput, ore sorting optimization, and improved operational efficiency. As it relates to capital, capital expenditures forecast, Aussie $303,100,000,000 to $330,000,000, following a robust review to prioritize critical spend, optimize timing, and preserve balance sheet flexibility. Lastly, as it relates to Brazil, the cleaner project costs are estimated Aussie 40,000,000 to 45,000,000, largely related to targeted exploration to extend resources, progression of project studies and other operational activities, which will be largely expensed, hence, NOK included within the capital guidance. Now moving to slide 18 to offer some comments on the market.

And stepping forward to slide 19. So there are signs the lithium winter may be lifting, but it’s early in this change. Volatility remains high, and as ever, market fundamentals are difficult to see with clarity. The lithium market has long been marked by volatility with prices prone to sharp and sometimes counterintuitive swings. Over recent years, has cycled through periods of unsustainably high pricing followed by corrections to levels well below the cost curve, disconnected from long run fundamentals as witnessed over the past year.

The volatility is not incidental. It reflects a still nascent market with limited liquidity, few futures mechanisms, and undeveloped trading infrastructure. Pricing remains inefficient. In this environment, short term moves are often driven by sentiment, policy signals, or speculative flows rather than durable shifts in supply and demand. The pricing pattern over the last twelve months is a clear example.

Spot spodumene prices fell to levels that rendered much of the global LCE production loss making, a point clearly illustrated in the forthcoming slide. This was not the result of a fundamental oversupply alone, but an immature market that remains in development. The recent price value excuse me. The recent price rally, which began late in the June and accelerated into July, follows this pattern. A sentiment led rebound triggered by perceived supply risks.

In this case, Chinese regulatory reviews of brine and lepidolite operations and the suspension of a major project fueled renewed price momentum. Now we remain cautiously optimistic but continue to monitor whether the flag supply side adjustments will eventuate. Now moving to slide 20. This graphic show shown here underscores a critical reality. Despite the recent rally, spodumene pricing remains well below the levels required to incentivize new investment and fall well short of the long run price expectations.

From PLS’s perspective, several key market dynamics are worth highlighting here. Firstly, pricing remains structurally inefficient and prone to sentiment driven swings. Secondly, the recent uplift represents a partial correction only, not a full recovery. And lastly, long run sustainability will require materially higher prices to support our future supply, as you can see in the graph. For PLS, our strategy remains unchanged.

The business has been built to navigate this volatility, and we are positioned to capitalize as market conditions improve. A low cost operating platform, strong balance sheet, and diversified growth pipeline provide the resilience needed to navigate current conditions and capitalize as the market cycle changes. Now moving to slide 21. While near term pricing is volatile, the long term demand picture remains robust and continues to strengthen. Global EV sales reached 5,000,000 units in the June, a 27% year on year increase.

In China, EV penetration hit 50% in June, while global EV market share reached 25%. For calendar year ’twenty five, EV sales are forecast to grow 23% year on year with a CAGR of 14% expected through to 02/1930. As it relates to energy storage, this is also accelerating. Global ESS installations at 65 gigawatts in q two calendar ’25, up thirty thirty six percent year on year with a 116 gigawatt hours installed year to date, being a 46% increase. Forecasts indicate 40% year on year growth for ESS in this calendar year alone.

Together, EVs and ESS are expected to account for something like 90 of lithium demand by 02/1930, highlighting a powerful and durable and structural demand trend. As noted earlier, current pricing does not support investment required to build the next wave of supply. This disconnect, as illustrated in the prior slide, presents a long term risk to supply security and likely a source of future volatility, but it also creates an opportunity. PLS is strategically positioned to lead through this cycle as a scale independent operator with a strong balance sheet and low cost platform. We offer a rare combination of flexibility, resilience, and growth optionality, including the WG restart, the Kalina project, and P 2,000.

This portfolio approach enables PLS to to adapt as conditions evolve and to capture value as demand continues to accelerate across global battery markets. Now before we move to questions, I’d like to leave you with a few final reflections. The June marked a defining moment for PLS with the successful completion of our expansion and the shift into the next phase of our journey characterized by scale, efficiency, and discipline. We delivered against all FY twenty five guidance metrics, a clear demonstration of our team’s execution capability. And our FY ’26 targets reflect the strength of the platform we’ve built, cost optimised, capital efficient, and margin resilient.

With a scalable, technology enabled operating base, a fortress balance sheet, a globally diversified growth portfolio, PLS is uniquely positioned to lead through the cycle and to capture value as market conditions improve. While near term pricing remains volatile, the long term demand story is unchanged. Structural drivers from electric vehicles to ESS continue to grow, yet current pricing does not support the investment needed for future supply, signalling our potential future tightness ahead. Our confidence is anchored in what we can control. Disciplined execution, operational excellence, and strategic agility, these are the hallmarks that differentiate PLS, making us a partner of choice in global supply chains and a company well positioned to capitalize on the lithium recovery theme.

Now with that, I’ll now hand back to Maggie to open the floor for questions. Thank you, Maggie.

Maggie, Conference Operator: Thank you, Dale. We will now conduct a question and answer session. As a reminder, to ask a question, please press star one and one on your telephone keypad, and wait for your name to be announced. A. Our first question comes from Austin Yun from Macquarie.

Austin Yun, Analyst, Macquarie: Morning, Darren team. Great results and strong finish to the year. Just a question on the production plan. Can see the guidance already, but as you commented, the market is quite volatile, but you remain constructive to the medium to longer term. Just wanted to get your take on the plan of Nagaju.

What kind of maintenance cost you plan to sink in? Or do you see that plan to be offline for a period of time before restarting? Thank you.

Dale Henderson, Managing Director and CEO, PLS: Yeah. Good day, Austin. Thank you for your your question. So we’ve we’ve assumed that stays off for the year. However, yeah, if market conditions improve well, we can easily bring that back online, and we’ve previously guided that we need a four month window from decision to bring that online and ramped up.

So it sits waiting in the wings, but it’s yeah. There’s no no cost there. It’s just sits in the wings, as I say, ready to deploy deployed as and when market conditions improve.

Austin Yun, Analyst, Macquarie: Thank you, Austin.

Dale Henderson, Managing Director and CEO, PLS: Thanks, Austin.

Maggie, Conference Operator: Thank you. Just a moment for our next question, please. Next, we have John Sharp from CLSA. Your line is now open.

John Sharp, Analyst, CLSA: Yeah. Hi, Dale and team. Just a quick question from me. What do you see as the key risks in achieving the lower end of cost guidance of next year? Is it, you know, labor strip ratio, feed variability?

Just curious on on your thoughts there. Thanks.

Dale Henderson, Managing Director and CEO, PLS: Yeah. I’ll offer a quick comment and then speaker one for Brett to touch on as well. I think in the context of the year, we’ve just moved through being around construction ramp up optimization. Relatively, this is we’ve got much higher level of confidence stepping into to this year given that we’re looking at a steady state platform. That that being said, these large operations obviously contend with a whole a whole bunch of variables, but with an open an open pit with multiple open pits, we’re we’re relatively derisked there.

We’ve got a very stable, consistent operating team who has continued to to perfect their know how as it relates to the plant. So a lot of the trouble areas you see in many operations on a relative basis, we’re in pretty good shape. Fred, why don’t

Brett McVadgen, Chief Operating Officer, PLS: you touch on Yeah. Thanks, Al. And, yeah, look, the last couple of years have been, you know, where we’ve introduced new capital projects, the P680, the P1000. So always difficult to manage those costs down as you’re introducing new variables. But this year is really around the steady state operation after the optimization phase of P1000.

And our cost smart program that we’ve been rolling out until its second year now is really starting to bear some great fruit through the initiatives of our people as we start to see some great cost saving initiatives and innovation. So I think there’s plenty of innovation left in the mine. And now it’s really around that steady state operation and bedding down some of that new technology in the plant. So I think from a unit cost viewpoint, I think we’re well positioned to manage any of the impacts coming in from other variables like suppliers or supply chains. So yes, I think FY ’twenty six will be a very good year for

Maggie, Conference Operator: Our next question comes from the line of Rahul Anand from Morgan Stanley.

Rahul Anand, Analyst, Morgan Stanley: Hi. Morning, team. Thanks for the call. Two from me, both related to well, actually, one related to mining, one related to pricing perhaps. So with regards to the mining side, just noted that 5.1% is your product grade this period, and recoveries were yet 71.6%.

You flagged 72% for next year. Could we just revisit that one more time, Dale, in terms of why the lower recoveries, what the strategy change is? And I also noted in your physicals that the mine volumes are significantly higher at 1,500,000 tonnes, and you stockpiled a bit of ore. Is that selective processing happening? Or what exactly is happening there?

That’s the mining question. I’ll come back with one on pricing. Sure.

Dale Henderson, Managing Director and CEO, PLS: Thanks, Rahul. There’s a few parts to that. So firstly, just in terms of sort of look back in the quarter, which was the grade of of 5.1 was a function of the optimization impacts of the quarter. Of course, March was about ramp up. June was about optimization, So slightly lower on on on produced product grade.

However, those levels have returned to sort of the normal levels around 5.2. So certainly, concerns in that regard. As it relates to the operating shift that we’ve described here and the commencement recovery impact, just to offer a bit more description around that, what that’s all about is capturing a mixed ore feed from the mine. So so not only the clean ore. We used to have a clean ore only strategy historically because we did not have ore sorting capability, which, of course, we do now.

What the ore sorting capability enables us to do is to capture all the ore right up to the boundary, the host rock boundary. So the host rock boundary, it’s a commingled combination, of course, the host rock plus the actual ore. So the opportunity here is to capture all of that and and effectively increase the the volume coming from the mine. That’s essentially the key benefit. However, the impact which comes with that is you’re placing, obviously, reliance on the ore sorting capability to to clean that ore up.

And in the main, it it it does clean it up to a significant degree, but it does it does entail a very small level of impurities which carry through into the operation. Hence, small impacts to to lithium recovery. Hence, we’ve we’ve guided that being a sort of a target recovery of 20 72%, which you may recall historically, we’ve always talked about an average of 75%. So that’s really the basis for that. As it relates to mine volumes, well, nothing peculiar going on there.

It’s just really a function of where we’re at in in the mine plan at this time. Saddal, just to follow-up on that. Sorry. Just for the avoidance, Saddal, we’re we’re certainly not high grading.

Rahul Anand, Analyst, Morgan Stanley: Sure. No. I understand that. Thanks for the color. Just a quick follow-up on that.

In terms of the ore sorting strategy, I think that hasn’t changed necessarily. So what is different, I guess, is what’s confusing me in terms of why the recoveries are expected lower.

Dale Henderson, Managing Director and CEO, PLS: Sure. Sure. The key the key impact, Rahul, is we are looking to to maximize the proportion of the contact or the boundary to a much higher level for the purpose of of lower unit cost. So moving to a volume higher than we had originally set out to do for the all sorting facility. Brad, anything

Rahul Anand, Analyst, Morgan Stanley: Got it. Okay. That’s very clear.

Brett McVadgen, Chief Operating Officer, PLS: Yeah. I think that that’s the key is is this is a step change in the amount of contact door that we’re adding. So the allsort is yeah. We’ve we’ve optimized those through the previous quarter. Now we’re actually unleashing them a little bit more, and we’re actually adding a lot more of that material coming out of the mine.

And with that comes the higher levels of iron and other contaminants, so that impacts the recovery. But we’re really optimizing it for the lowest cost right through that value chain.

Rahul Anand, Analyst, Morgan Stanley: Got it. Okay. Look, I’ve asked a detailed question. I’ll make sure the second one’s very quick. Pricing is the question.

And obviously, the pricing a bit weaker in terms of if I compare it to some of the peers in the market. My understanding was end of last year, you renegotiated a contract. You ended deliveries on one of your offtakes. What are we missing? Is this purely timing?

Is it something else that’s playing in the pricing you’ve achieved? Anything to call out there?

Dale Henderson, Managing Director and CEO, PLS: Yes. Thanks on that one, Rahul. So firstly, as it relates to the March, we did outperform our Australian peers in terms of realized pricing. As it relates to the June, looks like we might be in the middle, some below, some above our spot. Fundamentally, what’s behind that is the pricing for the June has become quite volatile again.

You know, we’ve seen a range from low 600s to mid 800s during the June. So, of course, that’s going to have an impact across the producer set depending whether they’ve done spot sales or what are their pricing formulas may be based on. So I think that’s probably the underlying reason for any variances you’re seeing across the set at this time. As it relates to our our offtake agreements, it’s very much business as usual. There there’s nothing there’s no no recent interesting activities there.

It’s just very much BAU.

Rahul Anand, Analyst, Morgan Stanley: Got it. Okay. Thank you. That’s all from me. I’ll pass it on.

Brett McVadgen, Chief Operating Officer, PLS: Thanks.

Maggie, Conference Operator: Thank you. Our next question comes from Hugo Nikolaji from Goldman Sachs. Your line is now open.

Hugo Nikolaji, Analyst, Goldman Sachs: Morning, Dale and team. Congrats on completing FY 2025 and exceeding guidance. First one for me, just some clarifications around CapEx. Can you just confirm what the split of sustaining and mine development in the quarter just gone was? And then for the full year CapEx, is that difference between your $569,000,000 versus guidance and the $663,000,000 and your cash flow purely cash versus accrual?

Or are some other spends on Kalina and studies and other things in that number that we should consider?

Flavio Garofolo, CFO, PLS: Yes. Thanks for the question, Hugo. In terms of CALINA, starting with the back end, could we expense our costs on CALINA? So there’s no capital expenditure there. We do capitalise acquisition costs only, but expenditure on CALINA is expense.

In terms of the split on capital expenditure, it was a split between mine development and P1000 and sustaining CapEx to the tune of around sort of 20,000,000 to AUD 26,000,000 on each part. And that’s the summary on those parts.

Hugo Nikolaji, Analyst, Goldman Sachs: Got it. Thanks. That’s helpful. And then just digging more into the POSCO JV and the equity raise there. If I go back to FY ’24, the JV had drawn down more debt that was supposed to save both trains through construction and ramp up.

Your raise implies that the JVs had to tip in another $220,000,000 give or take. Now are you able to just give us a bit more color in terms of what the unit costs are running at there and what the CapEx requirements are so we can better understand what that JV cash flow outlook looks like? And as a flow on impact, what the value of your option to buy more of that stake is?

Dale Henderson, Managing Director and CEO, PLS: Sure. Thanks, Hugo. So a few pieces there. And starting with the build. So looking back, the build was as expected, but, of course, this has been coincident with with the price decline of the market.

So it’s a it’s a tough time to be bringing on a new hydroxide facility, And that really gives rise to the equity injection that we’ve provided to the team there. But in terms of unit cost, we haven’t provided any guidance on that given that, obviously, that facility is still very much in ramp up mode as indicated by releases. So we’re looking to see that prove itself in time and we’re certainly very happy with the progress there. Does that answer your question?

Hugo Nikolaji, Analyst, Goldman Sachs: Yeah. I guess the kind of implication of the question, should we expect more equity to need to be tipped into that JV? And when if prices stay where they are?

Dale Henderson, Managing Director and CEO, PLS: Yeah. It’s too early to say on that. Hugo, obviously, the the key variable with all of this is is what happens with pricing. Obviously, the recent appreciation, everyone’s buoyed by that, and and we’re all waiting to see how sustained that is as per my earlier market sort of comments. So that is really the key variable.

Meanwhile, we are, you know, watching and observing that the team get on with the job of of ramping up that operation, which is doing very successfully. And and, obviously, the recent certifications and the more certifications they’re getting with tier one customers speaks to to that good progress. So, yeah, it’s it’s yet to be determined if if any requirements are needed in the future. But as I say, pricing’s really the key the key determinant.

Hugo Nikolaji, Analyst, Goldman Sachs: Got it. And if I can, one more just well, I’ve got the floor. Just P 2000. No no mention of that in the release today. It’s sort of steady timing.

Maggie, Conference Operator: Sorry, Hugo. This is the operator. Please, re queue for that for your next question.

Dale Henderson, Managing Director and CEO, PLS: Yeah. No news on P 2000 there, Hugo. Thanks, mate.

Maggie, Conference Operator: Thank you. Just a moment for our next question. Next, we have Mitch Ryan from Jefferies. Your line is now open.

Mitch Ryan, Analyst, Jefferies: Thanks, Darwin. And just quick question with regards to the ore sorting technology and and the utilization of that going forward. Within your cost guidance for FY ’26, how much of that is amortization of, I guess, your contact zone stockpiles? And what percentage of the feed do you think will be contact zone, whether it be from the stockpiles or straight from the pit?

Dale Henderson, Managing Director and CEO, PLS: So in terms of the proportion of con contactor, we we haven’t disclosed that that level of detail. So I can’t offer you too much insight at that. But as I mentioned earlier, we are looking to move to volumes above the design criteria that we’ve initially set ourselves, which obviously supports the improved cost performance. As to the amortization, do

Flavio Garofolo, CFO, PLS: you wanna take that? Yeah. Thanks. Yeah. We’ll amortize that during the course of the mine plan over the coming FY ’26 period and beyond.

Mitch Ryan, Analyst, Jefferies: But will there be a component of that sitting inside the unit operating costs? So, like, I I guess, will will will your cash your cash flows be slightly improved by that?

Flavio Garofolo, CFO, PLS: There will be some slight improvements through blending some of that contact door. Yes.

Mitch Ryan, Analyst, Jefferies: Okay. But you’re able to quantify that at this point in time?

Flavio Garofolo, CFO, PLS: Not at this point. No.

Mitch Ryan, Analyst, Jefferies: That’s it for me. I’ll pass it on. Thank you. Thanks, Mitch.

Maggie, Conference Operator: Thank you. Next, we have Kate McCartney from Citi. Your line is now open.

Kate McCartney, Analyst, Citi: Hi. Good morning, Dale and team. I have an exciting accounting question this morning. So you’ve noted that you expect another net loss from the POSCO JV to go through your stat accounts. Similar to last half, could you just remind me what that was?

And then secondly, given that you’ve just come out of that p 1,000 spend, is there anything you can tell us around depreciation or D and A expenses for the next FY?

Flavio Garofolo, CFO, PLS: Yeah. Hi, Kate. Thanks for the question. In terms of POSCO, we equity account our 18% interest in that joint venture as we’ve done since inception, and we’ll continue to do that for the period for FY ’25.

Kate McCartney, Analyst, Citi: But you flagged a net loss to go through the p and l for this half. What and you said that you expect it to be similar to last half. Can you remind me what that was?

Flavio Garofolo, CFO, PLS: Last half was approximately 20,000,000, so we expect a similar result for this period of the second half.

Kate McCartney, Analyst, Citi: Cool. Okay. And any comments on depreciation? I assume there’s a step up now that p 1,000 is finished.

Flavio Garofolo, CFO, PLS: Yeah. Depreciation will increase slightly as a result of the capitalization of the p 1,000 project, and that will also be amortized on on a units of production basis over the life of mine.

Kate McCartney, Analyst, Citi: Okay. Thank you.

Maggie, Conference Operator: Thank you. Next, we have Al Harvey from JPMorgan. Your line is now open.

Dale Henderson, Managing Director and CEO, PLS0: Yes. Morning, team. Just on stripping in FY 2026. I think for FY ’twenty five, we’re hovering around 4% to 5%. Can you just remind us of your long number and, I suppose, the levers that you have to pull in 2026 and its impact on costs on your cost guidance this year?

Dale Henderson, Managing Director and CEO, PLS: So let me offer a quick comment there, Alan, and then Brett can Brett can weigh in on this one. As it relates to levers to pull, obviously, we’ve talked about the all sorting elements, the key one we’re looking to maximize. Outside of that, just stepping back into the mine, we are partway on sort of a multiyear maturity journey there with a continued transition to owner operate. So we’re partway through that. And during the course of the year, just being where we took on drill and blast, there’s more to come in that category, and there’s more sort of straightforward productivity improvements to come in that space.

As it relates to the processing, the mission will always be further recovery improvements. So we’ll obviously, we’ve got the team working on waves of of new programs around that, which is all about chasing incremental improvements, so we’ll do that. Because outside of that, you’ve got what I’d call the bread and butter stuff around bulk procurement and doing trials around spares, longer la longer longer lasting materials, etcetera. The guys have got a bunch of programs underway, which fall under the cost smart umbrella, which is a continuous improvement initiative within the business. Brett, if you go.

Brett McVadgen, Chief Operating Officer, PLS: Yeah. Al, the main issue there is that, you know, we can can reduce the amount of stripping in FY ’twenty six, not through high grading, but from really leveraging the allsorters to take all of the contact ore material, which kind of allows us to limit the amount of time spent in the waste stripping areas to uncover just the clean ore mixture. As we move into future years, we do get into some of the larger cutbacks. Our strip ratio for FY ’twenty six is basically a function of using all of that contact ore. And then it steps up marginally in FY ’twenty seven and thereafter as we get into some of our planned cutbacks out of the mine plan.

Dale Henderson, Managing Director and CEO, PLS0: Yes. Thanks, gents. Just another one. The CapEx deferral from Stage two of the power strategy, you’re if able to elaborate on the quantum of the saving there? And does that have any go forward impact on OpEx?

And maybe just how you think about what kind of market conditions you’d be looking for to bring that back into the plan?

Flavio Garofolo, CFO, PLS: Yeah. I can answer that. So it’s approximately about $5,000,000 on on deferral.

Brett McVadgen, Chief Operating Officer, PLS: The market conditions?

Dale Henderson, Managing Director and CEO, PLS: You know, the yeah. The the benefit was was gonna be pretty marginal on on that one. So we’ve looked to sort of the the mentality we took to to FY ’26 was one of just critical CapEx only. And as such, some of those sorts of incremental investments, which we’ve got a longer payback, we’ve we’ve deferred that to a later. So but but don’t have a sort of a sort of a macro market price in mind, but we’ll bring that one back online.

But, ultimately, we will.

Dale Henderson, Managing Director and CEO, PLS0: Our

Maggie, Conference Operator: last question from Glen Lawcock from Barron Joey.

Dale Henderson, Managing Director and CEO, PLS1: Just

Austin Yun, Analyst, Macquarie: wanted to talk a little

Dale Henderson, Managing Director and CEO, PLS1: bit more about ’26 guidance. You’ve given us cost. You’ve given us Brazil. Just wondering if you could maybe just provide some color around SG and A, any other exploration and study costs on P2000 and then leasing spend as well for the year ahead?

Dale Henderson, Managing Director and CEO, PLS: Yeah. I’ll touch on good day, Glenn. I’ll touch on studies, and Flavia can speak to leasing costs. As relates to studies, very small dollars being spent in the studies category, but we are we are, of course, progressing those required studies for both p 2,000 and and the cleaner project. But in the scheme of things, they’re not not they’re not huge dollars.

Clive here. Yeah. Good day, Glenn.

Flavio Garofolo, CFO, PLS: Thanks for the question. On the leasing spend on Slide 12 in terms of the cash flow split of $95,000,000 that we’ve got there, the split of leasing there is about $68,000,000 and we expect that to be similar for the next financial year of FY ’26 as well.

Austin Yun, Analyst, Macquarie: And then then just SG and

Dale Henderson, Managing Director and CEO, PLS1: A at the head office because I believe that’s outside the cost guidance of $5.60 to 600. So is that running another 70,000,000 outside of the cost guidance?

Flavio Garofolo, CFO, PLS: Yeah. We expect that to be slightly less, Glyn. And through our Cost Smart initiatives, we’ve taken on some reductions there as well, so we expect that to be slightly lower for FY ’twenty six.

Dale Henderson, Managing Director and CEO, PLS1: So if we sort of said 70 on leasing, 60 on SG and A, and another, what, 10 to 20 on exploration and studies outside of the Brazil guidance would probably capture everything, you think?

Flavio Garofolo, CFO, PLS: Yeah. I think that would capture it quite well.

Dale Henderson, Managing Director and CEO, PLS1: Alright. Thanks very much. Appreciate it.

Dale Henderson, Managing Director and CEO, PLS: Thanks, Glenn.

Maggie, Conference Operator: Thank you. Now we will move on to the web questions. I will pass the line to James Fuller.

Dale Henderson, Managing Director and CEO, PLS2: Okay. Thanks, Mig. So we have some questions on the webcast. First question, what project will be put into production first, P2000 or Kalina?

Dale Henderson, Managing Director and CEO, PLS: Yeah. Thanks for the question on that one. Yeah. As it relates to P2000 or Kalina, several variables sort of come together which inform that decision. It’s about approvals, studies, and the actual investment case itself.

And each of those projects are in different states of of maturity. So I suspect that when the time comes, it will be quite obvious which which which makes most sense to to progress first based on one of those variables.

Dale Henderson, Managing Director and CEO, PLS2: Okay. Thanks, Kyle. Any update on the Ganfeng joint downstream partner study still slated for CY twenty five release?

Dale Henderson, Managing Director and CEO, PLS: Yeah. Yeah. As it relates to the Ganfeng study, we’re working together on that continues to march forward. Both parties are, very much enjoying working together and progressing that. And it’s, yeah, underway and on track.

Of course, will we look to be pursuing that in this market? Unlikely yet. There’s discussions to be had with Ganfeng on that. But ultimately in time, yeah, we like the idea of continue to explore this in time.

Dale Henderson, Managing Director and CEO, PLS2: Okay. Next question. How rapidly could you bring Nobodu back online when prices come back? How long would it take to ramp?

Dale Henderson, Managing Director and CEO, PLS: So we’ve guided four months being from sort of decision point to to ramp up. I suspect in practice there’d be some optimization to follow that four month period to bring it back to full nameplate, but the bulk of the ramp up would occur in that sort of four month period.

Dale Henderson, Managing Director and CEO, PLS2: Okay. Thank you. Next question. Will a dividend be paid this financial year 2520?

Dale Henderson, Managing Director and CEO, PLS: So ultimately, that’s in the hands of the board to take a decision on that. I suspect that if pricing remains, as we’ve seen recently, the board would probably will not do a dividend. But ultimately, that’s for the board to consider in accordance with our capital management framework.

Dale Henderson, Managing Director and CEO, PLS2: Okay. Moving forward, do you think you’d make any further acquisitions in Australia or abroad whilst we’re in

Dale Henderson, Managing Director and CEO, PLS: a cyclical low in the lithium cycle? Yeah. The core focus for the business is the base operation. And as we’ve outlined in the call today, we’re looking to demonstrate the strength of the new platform we’ve built and the knowledge we’ve had a heavy investment cycle. That said, of course, our strategy contemplates an organic growth.

That’s unchanged, but it’s not a focus. That’s not a key focus for us at this time.

Dale Henderson, Managing Director and CEO, PLS2: Okay. Next question. We’ve seen some recent low pricing for SC6, but recent news has seen an uptick in prices in the last few weeks. Why?

Dale Henderson, Managing Director and CEO, PLS: Yeah. Thanks for the pricing question, and and hopefully my market commentary went some way to to answering that. It’s principally through the the news in China about potential supply of curtailment care of approvals and other reviews by by China. It seems to be the the principal reason that’s catalyzed this price improvement. However, as I did mention in the call, pricing has been well below a sort of a sustainable level required for the industry.

This has catalyzed a park direction, but there’s definitely much more to go, I think, in order to achieve a more sustainable market.

Dale Henderson, Managing Director and CEO, PLS2: Okay. Last question from webcast. Is the BMX platform now being utilised given the recent uptick in prices?

Dale Henderson, Managing Director and CEO, PLS: No. Not at this stage. Yeah. Spot sales have been few and far between given we’ve pulled the operation back to Pilgan only, which satisfies our core offtake. So we’re not doing a large volume of of spot sales.

It’s the BMX platform itself. We have it there. It’s it’s it’s sitting under the dust covers, ready to be utilized if we think that makes sense for the market. Okay.

Rahul Anand, Analyst, Morgan Stanley: And I

Dale Henderson, Managing Director and CEO, PLS: think that completes our webcast questions. So lastly for me, again, thank you all for dialing in today. It’s been a huge quarter capping off an incredible year for the business, and we look forward to updating again, at the full year results, a few weeks’ time. Thank you very much.

Maggie, Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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