Earnings call transcript: Syona Resources Q4 2024 sees revenue boost amid lithium market challenges

Syona Resources reported a strong performance in Q4 2024, with a 33% increase in revenue to AUD 70 million, despite facing low lithium market prices. The company’s operational improvements and strategic initiatives, such as the upcoming merger with Piedmont Lithium, are positioning it for future growth. The market response remains cautious due to ongoing challenges in the lithium sector.

Key Takeaways

• Revenue increased by 33% quarter-on-quarter, reaching AUD 70 million.
• Spodumene sales rose by 35%, despite a slight decline in selling prices.
• Operational efficiencies led to a 6% reduction in unit operating costs.
• The company is preparing for a merger with Piedmont Lithium, aiming for a stronger market position.

Company Performance

Syona Resources delivered notable growth in Q4 2024, driven by increased spodumene sales and operational efficiencies. The company improved its throughput and reduced mining dilution, enhancing its production capabilities. Despite a challenging lithium market, Syona’s strategic initiatives and technological advancements have bolstered its competitive stance.

Financial Highlights

• Revenue: AUD 70 million, up 33% from the previous quarter.
• Spodumene sales: 66,000 tonnes, a 35% increase quarter-on-quarter.
• Average realized selling price: AUD 1,054 per tonne, a 1% decline.
• Unit operating costs: AUD 1,258 per tonne, a 6% reduction.
• Cash balance: AUD 110 million, a 6% increase from the previous quarter.

Outlook & Guidance

Syona Resources projects 2025 production guidance of 190,000 to 110,000 tonnes of spodumene, with unit operating costs between AUD 1,150 and AUD 1,300 per tonne. The company plans a Mineral Resource Estimate (MRE) update and potential brownfield expansion at North American Lithium. The merger with Piedmont Lithium is expected to enhance operational synergies and market positioning.

Executive Commentary

"We’re very close to being cash flow breakeven at NAL and be able to effectively get through this storm when the market turns," stated Lucas Dow, CEO. He emphasized the merger’s transformative potential, describing it as a "game-changing transaction and milestone" that will establish Syona as a leading lithium producer.

Q&A

Analysts inquired about the company’s exploration activities, which are expected to slow down over the next 18 months. Executives highlighted ongoing efforts to improve lithium recovery and evaluate mining services contracts. The potential impact of US tariffs on Canadian lithium exports was also discussed.

Risks and Challenges

• Lithium Market Volatility: Persistent low prices could impact profitability.
• Merger Integration: Successfully merging with Piedmont Lithium poses operational challenges.
• Regulatory Risks: Potential US tariffs on Canadian lithium exports may affect sales.
• Supply Chain Disruptions: Global supply chain issues could hinder production.
• Market Oversupply: Excess supply in the lithium market may pressure prices further.

Syona Resources remains focused on enhancing its operational efficiencies and strategic growth initiatives to navigate the current market landscape and capitalize on future opportunities.

Full transcript - Symetra Financial Corp (SYA) Q2 2025:

Conference Operator: I would now like to hand the conference over to Mr. Lucas Dow, Managing Director and Chief Executive Officer.

Please go ahead.

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Thank you. Good morning, everyone. I’d also like to welcome Dougal Elder, our CFO Andrew Barber, our Director of Investor Relations and Sylvain Collard, our President and COO of Canadian Operations to the call. Today, I’ll provide an initial overview of our December 2024 quarterly report covering operational performance and exploration activity before then moving on to provide financial and strategic updates. Following that, I’ll discuss the latest drilling results from North American Lithium, NIL and Moatland in more detail, results which continue to demonstrate strong lithium potential.

Before turning it over to questions, I’ll then ask Sylvain Collard, our COO and President of Canadian Operations to review progress at NIL since the restart of operations nearly two years ago and also provide some insight into the further work we have underway. To start with, on the operational performance at NIL in the last quarter, on the safety front, we saw an increase in our injury frequency rate in the quarter due primarily to exploration activities at Mobile Ant. However, in comparison with FY 2024, we’re continuing to trend down in relation to total recordable injury frequency rate and improve our overall safety performance. From operational perspective, Sylvain and the NIL team have had another strong quarter with key points to note being ore mined was up nearly 54% quarter on quarter just over 370000 tonnes of ore mined, reflecting increased mining activity and also improvements in terms of productivity within the pit. Bill utilization was again strong at 90%, despite there being a planned maintenance shutdown in Oct.

0. Importantly, the crushed ore down continues to provide improved plant stability and allowing continued production even during maintenance periods. Also pleased to report that lithium recovery improved up 1% to 68% indicating continued process stability and the excellent work by Lynn Gerard and her team. As a consequence of the underlying utilization or mill run time and recovery performance, spodumene concentrate production was just under 51000 tonnes for the quarter at 50922 dry metric tonnes, an average grade of 5.3. That said, production was slightly down 2% quarter on quarter, mainly due to the planned maintenance shutdown in Oct.

0 and weather related crusher disruptions. Moving then on to sales and revenue performance. The Dec. 0 quarter represented a sales record for Ciona with 66000 tonnes of spodumene sold, a 35% increase quarter on quarter. As a consequence, revenue was up 33% to AUD 70,000,000, reflecting the higher sales volumes.

Average realized selling price on an FOB basis for the quarter was AUD1054, a 1% decline quarter on quarter due primarily to the pricing formula lags and extensively QP adjustments. 2 shipments of 25000 tonne and 27000 tonnes in order to take advantage of freight savings were realized in that period. As we’ve flagged in previous quarters, we had a concerted effort with our joint venture partner, Piedmont, to be able to club those cargos together in the largest shipment volumes in order to be able to realize those freight savings. The remaining 14000 tonnes sold at Piedmont was stockpiled at the Quebec Port. Then moving on to costs.

Cost performance highlighted and continue to demonstrate improvement. Specifically, unit operating costs on a tonnes sold basis was A1258 dollars a 6% decline quarter on quarter. And if we compare from where we were in of financial we’ve reduced our unit operating costs by over 16% on a tonne sold basis. Importantly, if we look at our unit operating costs excluding inventory movements on a tonnes produced basis rather than tonnes sold basis, were at $10.88 dollars for the quarter, demonstrating the narrowing gap between our cost of production and our realized price of $10.54 dollars Cost improvements were driven by and underpinned by continued strong concentrate production volumes, higher concentrate sales volumes, optimization of mining activities, reduced logistics and processing costs and the consequence of discontinued cost improvement being that Nao is now closing in at being operating cash flow breakeven or better setting a strong base for future performance. Now looking at capital expenditure, as we flagged capital expenditure for NIL is very much loaded to the first half of the year, we saw expenditure for the quarter at $7,000,000 with the bulk of the expenditure focused on completing expansion of the tailing storage capacity and an additional site improvements and process optimization projects, which Sylvain will be able to comment on.

As a consequence, we reiterate our capital guidance for FY 2025 and it remains unchanged. Now for an overview exploration and development activities. Drilling at NIL and Movaland has been the primary exploration drilling focus for Syona this quarter. More specifically, extensive drilling was completed across both NIL and Movaland using remaining flow through share funding. As a reminder, the flow through share funding could only be used for exploration activities and it was a case of use it or lose it by December 2024.

So we were striving to ensure that we got value for money in this regard and we’re confident on the back of the results that we’ve released today, this has been achieved. Final invoices related to the drilling completion of approximately AUD7 million will be settled in coming months. However, the drilling work has been completed. Results from the most recent drilling continue to indicate strong potential for resource expansion. And I have some further comments later in the call in relation to NIL and Moberland.

Moving now to exploration activities in Western Australia. In relation to Mount Eden, which forms part of our Marella joint venture exploration activities, we identified significant pegmatite zones with rubidium and lithium mineralization. This will be the subject of further work. West Wodgina, we saw 5 new lithium targets zones identified and Tabatabra, unfortunately, wet weather delayed drilling, but field work enhanced geological understanding and identified new outcropping pegmatites. Exploration in Western Australia will continue across these projects in 2025, albeit with modest expenditure.

Obviously, the December was an important quarter for us in terms of corporate strategic developments, specifically in relation to the announced merger with Piedmont. Just as a recap, a definitive merger of equals agreement was signed in November 2024, creating the platform for a leading lithium business with an approximately fifty-fifty equity split. As part of the merger, say owner raised $38,000,000 after costs at announcement with these proceeds flowing to say owner in the December and reflected in our cash balance. An additional AUD69 million will be placed with resource capital fund and that will occur upon merger completion, which is targeted to complete in the year 2025. Just to reiterate, a number of the key benefits of the merger include strengthening Cionis position as a top tier lithium producer, increasing market access and operational and corporate synergies and strengthen a robust balance sheet for the merged entity.

More specifically, Mergeco will have a strong balance sheet to be able to work through a low price environment whilst also being able to drive development projects forward in a meaningful way. In relation to financial position and cash flow, we closed the quarter with a cash balance of AUD110 million to 6% increase from the last quarter. Key drivers underpinning this increase relate to the inflow related to the receipt of capital raised funds, which was AUD38 million. We saw expenditure related to flow through share funding and activities in West Australia totaled AUD15 million as an outflow. Now capital expenditure, as I described earlier, would come to 7,000,000.

Merger transaction costs through the December ran to AUD 5,000,000 and there were some movements in corporate working capital in the order of around $3,000,000 Having said all of that, we think we’re in a strong position with the cash balance and particularly as we move forward with the merger with Piedmont and that further injection from RCF. As a consequence, our ’20 ’20 05/00 production and cost guidance remains unchanged with our production target in the range of 190000 to 110000 tonnes of spodumene, unit operating costs of a range of AUD1150 to AUD1300 And our focus in the near term aside from obviously integration planning activities with Piedmont are very much focused around optimizing operations for efficiency, enhancing and driving cost competitiveness and maximizing value through the merger with Piedmont. Now I just want to spend a few moments taking a deeper dive into the NIL and MoBLAN drilling results. During the course of calendar year 2024, the NIL drilling program resulted in a total of 153 holes being drilled, totaling 53444 meters. The program was ostensibly focused on extending mineralization beyond current pit shells, upgrading inferred to indicated resources and target North, North West, Southeast and Northeast extensions.

And for those of you familiar with NIL, it’s essentially extension along strike on North West and South Easterly direction. Importantly, some key high grade drill intercepts of note in relation to new pegmatites with intercept of nearly 40 meters or 1.778% were achieved on the Northwest extension and importantly within the resource area of the existing mineral resource estimate shells, we saw intercepts in excess of 20 meters with grades ranging between 1.51.8%. These elements obviously all point towards high grade lithium mineralization being confirmed beyond existing MRE estimates, supports potential brownfield expansion at NIL and enhances project value amid the Syona Piedmont Merger. Moving to Moebland, the Moebland program contemplated two eighty one holes being drilled during the course of calendar year 2024, which resulted in over 76202 meters being drilled. Key areas of focus for us were infill drilling to improve resource classification and also to see resource expansion to increase mineral inventory.

Similar to NIL, Moglan also saw some key high grade drill intercepts, including the New South area, we saw intercepts at 37.5 meters at grade to 1.53% and then the Interzone and Molyon areas we saw intercepts in excess of 40 meters with grades ranging between 1.591.74%. Again, key takeaways reflecting from this drill program include that new results confirm Moeb Land’s resource growth potential and further drill results are expected in coming months. As I’ve said previously, Moeb Land continues to surprise me upside and we’re very excited about seeing and incorporating those additional drill results. I’m now going to pass to Sylvain, who’s going to provide you with an overview of the work that’s been undertaken at NAL over the last two years during the restart and the ramp up and I think importantly also provide you some insight into the activities that we’re focused on to be able to continue to drive productivity improvements and also cost reductions. Sylvain, over to you.

Sylvain Collard, President and COO of Canadian Operations, Syona Resources: Thanks Lucas. As you’re going to see a lot has evolved since the restart of operations compared to the period. We’ve seen some significant improvements and developments on the mine and the mill. So let’s take a step back and highlight these key investments. So first for the mine operation.

So if you look at the highlights in the they were facing high diluted material plus 25%. They were facing difficulty with the mining contractor management related to the bulk mining. Improper geological impact management in terms of controlling the dilution and also challenge related to material segregation or continuous feed to the mill. If we look at what we have been able to achieve today with our team, now dilution is below 10%. Mining contractor management, we have some specific geological training for each operator coming to site, a specific training for at least 4 just to make sure our operators understand how to control dilution and making sure we extract the ore properly.

Selective mining, so when we have some smaller dykes around 2.5 meters, we’re using some smaller equipment of 80 tonne excavators instead of using the high production excavator at 150 tons. Geological and pit management, so to make sure we protect the ore, we have the presence of technician and geologists seven days a week, twenty four hours per day to make sure we protect the ore. Material segregation for continuous feed to the mill. So under ramp pad, we have 6 bins to making sure we provide the proper feed grade to the mill. And this is also providing flexibility for the grade management when necessary.

We are also the use of technology for better or traceability in terms of planning, three d scanning for the underground stopes and also for the surface. We’re using some different also software for the blasting and or movement. Switching directly to the mill upgrades. So just a step back, the project upgrades from 2021 to February 2023, excuse me, what we did exactly for the crushing area. So we upgrade the apron theater for the Jaw Crusher C125.

We upgrade the HP (NYSE:HPQ) 400, the metal crusher. We put some heating in the building. We added some additional sorters to make sure we protect the ore and minimize dilution from the feed. And we started the installation of the crushed ore dome, which is very significant in terms of militarization. At the mill, we added 2 additional packsizer.

We add also LIMS, which is called low intensity magnetic separation, removing iron from the ore. Additional wins also, which is wet high intensity magnetic separation, protecting also the concentrates from the iron. We added some conditioning, Tank 50 7 and Tank 50 9, and we doubled the filter belt capacity for higher throughput as a processing plant. So where we are today in terms of improvement. Let’s start with the throughput improvement.

2017, ’20 ’19, they were at 139 tons per hour. Now we’re reaching 175 tons per hour, which is an increase of plus 25%. What are the improvements related to that? What we have been able to optimize? The Stack Sizer screen size, we modified that.

We have been able to optimize the rod and the ball mill charge optimization just to making sure we’re using all the energy available and increase the throughput. We have also some bottlenecking initiatives since the beginning of the operation. 1 of the example is optimizing the tailing line routes at the TSF number 1 to minimize pressure. And we have also a live monitoring and system to see our optimization process. In terms of recovery, 2019, ’60 was the average recovery I think.

Now we’re around 68%, sixty nine %. And what is super important to understand, it’s plus 9.6%, but with a higher throughput. So what we did at site is collector type optimization. So we’re testing continuously with Lendier and Charles Brousseau different type of collectors to improve recovery. We’re working on the water quality to making sure the recovery is related to this 1.

Scavenger high density conditioner, the TK57 and TK59 was very warranted for us to increase the recovery. And we have been working also on flotation with the distribution of the air. Number 4, mill utilization, excuse me, from ’20 ’17, ’20 ’19, now we’re averaging 90%, which is a huge increase of plus 36%. What are the main key factors to achieve that? Crush ore dome is giving us flexibility to maintain our crushing area properly.

Crush ore dome has a capacity of 6000 tonnes, so we can stockpile material and do the proper shutdown as planned. We added also the new C150 pre crushing crusher jaw crusher on the ramp pad, feeding material more adequate to the C125 jaw crusher in the crushing area building. We did also some modification in the crushing area, shoot, conveyors to sufficient proper cleaning and maintain our equipment. And we created also some bypasses to make sure we can bypass if we have some mechanical issues. Finally, concentrate quality, we have been working.

This is our main focus. So with higher throughput, with material coming from Phase II and Phase III with a little bit higher iron content, we can provide higher quality concentrate at 5.3% and with the spec with the iron market. So it’s going very well on this aspect. So the key drivers are extensive test work in real time just to make sure we have a proper blending to feed the mill, reagent optimization and also water coagulant to make sure the quality of the concentrate is adequate. So lots of smaller project is ongoing outside right now.

The last year has been focusing on stabilizing the operation, which we did. Now we’re focusing on optimization costs and increasing recovery. So lots of smaller projects on the table for the coming years. So I will now hand back to you Lucas.

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Thanks, Sylvain. So in conclusion, the December showcased strong operational and improving financial performance with NIL nearing operating cash breakeven. Drilling results at both NIL and Modeland confirmed significant resource expansion potential and the Siona and Piedmont merger is a game changing transaction and milestone, positioning us as a leading lithium producer. We look forward to further resource updates and ongoing development in 2025 and continue to deliver upon our commitments and importantly be able to drive value for shareholders. Thank you.

And I’ll now hand over to the operator for any questions. Thank

Conference Operator: you. Your first question comes from Austin Yuan with Macquarie.

Austin Yuan, Analyst, Macquarie: Good morning, Lucas and team. Good results. Good to see the shipment also strong and the unit cost is coming down. Just 2 questions from me, please. The first one is on the exploration.

Given that you have finished this flow through shares, should we expect the work on the exploration to slow down a bit, which means going to be more supportive of your cash flow in the near term? You come back to the second one.

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Good morning, Austin. Thanks for the question. Yes, in short, we’ve worked through with Sylvain and the team in Quebec. Really the next eighteen months, we won’t see any additional exploration activity from Moglan or NIL. We obviously want to digest that, those drilling results and importantly get those into an MRE update, which we’ll be releasing later in the year.

And as we’ve indicated previously, we also want to get busy with studies for the potential for brownfield expansion in AL and also revisit the DFS at Moglan.

Austin Yuan, Analyst, Macquarie: Thank you. The second one is on the cost. I saw that the mining activity cost increased a bit compared to the prior quarter. Just wanted to get some update. I believe your mining through the Phase III, which has some historical underground working.

How is that condition compared to your original mine plan? Do you expect to see a further increase of mining costs in the next six to twelve months? Thank you.

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes. So Austin, the last quarter was punctuated with increased mining activity. That was reinstituting some NPD inventory and also ROM stocks to be able to effectively align with the plant production. Importantly, we’ve also had to do quite a bit of pioneering work on the top of those phases. That’s now being worked down.

And so in short, Sylvain and the team have now got some much more productive and better operating areas in the mine. So whilst we’ll see activity in terms of a volume basis continue to increase, we expect productivity improvements to flow through as we move forward.

Austin Yuan, Analyst, Macquarie: Okay. Thank you. Sorry, just a 1 quick follow-up just in terms of seasonality. In the near term, it’s kind of a winter in the Northern Hemisphere. Is the have the biggest weather impact in terms of low temperature?

Should we expect a continuation of that in or we owe that already? Any color will be appreciated. Thank you.

Noel Parks, Analyst, Tuohy Brothers Investment Research: Yes.

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Thanks. I will pass to Sylvain in a moment, but just as a bit of color. I was with Sylvain and the team in Quebec two weeks ago and it hit minus 40 degrees Celsius on-site. So we’re still in the grips of some pretty cold weather there and even the locals were saying it was cold. I think Austin, by and large, Suwad and the team have done a great job on in the mining area and sort of been out of the winterize the pit if you like and that’s performing well.

Where we have seen some impact has been in relation to the crushing area. And Sylvain, might just describe some of the challenges that we’ve seen with some of the unseasonal warmer weather and then followed by the flash freezes over you Sylvain?

Sylvain Collard, President and COO of Canadian Operations, Syona Resources: Yes, for sure. Thanks, Lucas. So what we saw at the beginning of the year in Jan. 0, we saw some very warm temperature, very unusual temperature, rain and bad forecast for something like five days. So when you add some major difference in terms of, let’s say, 5 degrees going down to minus 30 degrees.

That has a huge impact because you can have water and muddy material going directly in the crushing area. So we’re still working on that right now to manage that. But there is no risk associated with the open pit operation. But when we have some huge fluctuation in terms of temperature like that, the biggest impact is on the crushing area. But for the last week, it’s minus twenty, twenty five degrees and the temperature is quite stable.

But for the beginning of the month, it was quite difficult and Lucas has been exposed to this.

Austin Yuan, Analyst, Macquarie: Thank you, Sumit. Thank you, Lucas, El Pasto.

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Thanks, Austin.

Conference Operator: Your next question comes from Noel Parks with Tuohy Brothers Investment Research.

Noel Parks, Analyst, Tuohy Brothers Investment Research: Hello. Just had a question talking about resource expansion, especially thinking about NAL. So from what you know so far, the potential for expansion, is it fair to assume that we will be looking at similar costs, unit costs to the live production at NAL? Or are there any deltas there either efficiencies you predict would lower costs or any other logistical changes that might give you cost pressure?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Thanks, Noel. Great question. So if I understood correctly, you’re asking about what a potential expansion might mean for the cost base at NIL, have I got that right?

Sylvain Collard, President and COO of Canadian Operations, Syona Resources: Exactly.

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes. So I think in short, any additional volume that we’re able to produce at NIL, whether that be without the expansion or with an expansion, obviously helps to dilute our fixed cost basis. I mean, if you were to assume that say 50% of our costs are fixed, then you would have doubled NIL’s volume, essentially you’d see a 25% reduction in our unit costs just through dilution of the fixed component. I think the other element to highlight as well is that we’re currently mining with the mining sequence through remnant underground stopes. We’ve got another sort of two, two point five, maybe three years to go.

Once we’re through that, that will see additional costs that we’ve got currently deployed in relation to safety safeguards and also it has an impact on mining productivity in terms of having to put excavators on remote operation and so forth. So, the short answer would be irrespective of the expansion, you’d expect to see a reduction in our mining unit costs as we move forward once we get through those underground remnant stopes. But importantly with the expansion, any volume there would certainly dilute that fixed cost basis and push us further down the cost curve.

Noel Parks, Analyst, Tuohy Brothers Investment Research: Got it. Thanks. And just a general question, I know I’d be a little bit early, but as you look to the completion of the Piedmont transaction, and I’m thinking in particular about the regulatory environment and whether you have started engaging with some of the parties that would have a say on the various Piedmont projects. And if you at this point have any thoughts about the way forward on those?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes. So we’re certainly working through our integration planning. In fact, we just got off a call early this morning with the Piedmont team, myself and Sylvain and James Brown spent some time in North Carolina at Belmont with Keith and the team a couple of weeks back as well, just going through the projects and we’ve had some engagement with Atlantic Lithium, Piedmont’s joint venture on the Awoia project as well. So we’re certainly not putting the car before the horse, but doing the preparatory work so that people can expect that at completion and we expect to complete the first half of this calendar year that we’ll be hitting the ground running as a merged entity in relation to our project portfolio and obviously Silvana will continue to drive NAL forward.

Noel Parks, Analyst, Tuohy Brothers Investment Research: Okay, thanks. Thanks a lot.

Conference Operator: Your next question comes from Reg Spencer with Canaccord.

Reg Spencer, Analyst, Canaccord: Thank you. Good morning. Lucas, just echoing Austin, congrats on a great quarter. I just had a few questions I was hoping you can help me with. Firstly, recovery, it’s good to see that continue to tick up.

But can you just remind me of the design or targeted recovery rate at NAL? And do you see potential for any further incremental improvements there?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes. Morning, Reg. I’ll look across to Sylvain because we actually spent quite a bit of time with Lynn Gerard, who is our mill manager and Shahl, who is our Chief Medalist actually working through this. And so there’s a few elements around like courier rights and so forth, some projects we’ve got coming online, Rich. So Sylvain, over to you.

Sylvain Collard, President and COO of Canadian Operations, Syona Resources: Thank you, Lucas. So yes, the recovery is well aligned with the numbers we have in the DFS, maybe 1% or 2% below, but we’re stabilizing the process with the Phase II and the Phase III. So what we have right now in terms of projects to increase our, let’s say, recovery and real time management is the online analyzer called COLE 8. So this project will be completed in this quarter and we’ll be able to see the outcome and the result of it in the financial year 2025. So that 1 is it’s going to be a huge going to have a huge impact.

So we’re going to have some analysis in the real time. I’m talking about fifteen minutes reading instead of every six hours. So for sure that will have a positive impact on recovery. And we have also lots of projects related to our metallurgical team in terms of testing different collectors, more adapted to the Canada and Quebec, let’s say weather. So all major suppliers are working with us and Charles Borusto on a weekly basis to improve the different collectors and go to the next generation.

So this is, let’s say, the 2 biggest item we’re working on it. There is some smaller projects, but these 2 are the most important 1.

Reg Spencer, Analyst, Canaccord: Thanks Sylvain. And following on from that, subject to the expansion studies and maybe Lucas can jump in here as well, but are there opportunities for those recoveries to be improved through any expansion beyond just the small incremental projects that you’re working on at the moment?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes, Reg, I think there’s a number of areas that the goals are just for example, some work being done around granularity and how we might be able to improve flotation recovery for larger grain size and so forth. So some of that works in train. So short answer is, as part of any expansion study, we’ll look at where those enhancements might be made. And just as a reminder, NIL is flotation only operation, so there’s no DMS in there. So and you’d be well versed in this, but probably for the benefit of other folks on the call, the levels of performance in relation to recovery that Sylvain and the team are achieving, they’re certainly pushing up their benchmark, but we’re certainly not resting on our laurels and there’s more work to be done there.

Reg Spencer, Analyst, Canaccord: No, if they go and have a look at the other flotation projects or both projects around the place, the ramp up and increasing recoveries is probably the best if I’m not mistaken. Anyway, I digress. Thanks for that, guys. Next (LON:NXT) 1 is just on pricing. To me, it feels like pricing has bottomed and depending upon what benchmark you look at it, it’s even been grinding a little higher in the last month or two.

Can I ask what feedback has been like with your existing customers and what they’re willing and able to tell you from their customers? And have you guys got a view on e term pricing direction over the or through the course of the rest of the year?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: So Reg, look, we’ve had great market acceptance. We’ve engaged with a trading partner as we described last quarter. That’s going exceptionally well. Having you’re not having any trouble getting cargos away in fact, the improvements in relativity on realized price. And in fact, we had a couple of customers also reach out and want to take additional volume.

So I think we’re in a pretty good space. I think the other component, we often get a question, particularly from our retail investors around offtake. With the Piedmont or prior to the announcement of the merger, with the Piedmont offtake agreement, it was quite difficult for us to lock in any additional long term volume. With the merger and then subject to completion obviously in that the Piedmont offtake arrangement falling away, that’s going to provide us with a number of options to engage and we’ve already had people start approaching us on the back of the announcement for the merger around potential offtakes. So that space is certainly going to liven up for say owner, which we’re obviously excited about.

But I think the nice thing as well, if it looks to look across the field and given that we do have a freight disadvantage to China coming out of Quebec, we’re certainly holding our own on pricing and maybe even a little better than some of our peers in this space. I think in terms of pricing outlook, I think similar to most other folks, we don’t think these current prices are sustainable, so we expect it to trend up. The great question is when. We do note that the forward curve still remains in contango and in the order sort of 25% above spot. So I guess the future as I say indicate there will be some recovery, but I think there’s a bit of wait and see, but I think importantly our strategy is, I’ve said it a thousand times, people are getting sick of hearing it, but it’s very much a case of grinding through getting ourselves into a position where we’re cash flow breakeven at NAL and we’re very close to that now and be able to effectively get through this storm when the market turns and merge call be exceptionally placed to leverage the price recovery.

Reg Spencer, Analyst, Canaccord: Yes, thanks Lucas. Merge will certainly help in all of that. That’s great. Thanks very much for your help guys. I’ll pass it on.

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Thanks, Reg.

Conference Operator: There are no further audio questions. I will hand over to Andrew Barber for questions from the webcast.

Andrew Barber, Director of Investor Relations, Syona Resources: Thanks, Haley. Lucas, a couple of questions that we’ve received. In previous quarters, we’ve provided updates on impit and ROM inventories. Is it possible to provide that information in future quarterly reports? Yes, great question.

Look, I think a couple

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: of things. When we were through that ramp up period, things like pit inventories and ROM inventories were probably more important and helpful for shareholders to determine how the ramp up was going. Now that we’re effectively well past the ramp up and really nearing full production, those metrics are less useful and particularly inventories that can be a little deceiving as they’re only a snapshot in time and depending upon whether Sylvain may prioritized off for the last couple of weeks of a quarter or waste, it can be somewhat deceiving. So we think the metrics we’ve included in the quarterly now are appropriate reflection of operational performance and are probably more aligned to be able to shareholders a clear view on how we’re performing.

Andrew Barber, Director of Investor Relations, Syona Resources: Thank you. The next question is, previously the company had a stated goal of increasing production up to 4800 tonnes per day. Is that still the current company’s objective? Yes. And I can tell you Sylvain spends every waiting moment around making sure that we’re operating safely, meeting our environmental obligations and working out how we ring more out of the existing facility.

So we’re certainly not sitting there waiting for

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: an expansion to be able to push things forward as Sylvain described as a number of projects that are ongoing to be able to drive that volume forward. So we certainly want to continue to see volume pushed out of NIL, but we want to do it in sustainable and repeatable fashion.

Andrew Barber, Director of Investor Relations, Syona Resources: All right. Thank you. Our guidance is for operating cost is AUD $11.50 to AUD 1,300 per tonne. Considering the cost performance in and of this financial year, could you discuss what that means for and costs?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes. So we flagged in previous quarters that that there was an element of the back end as we got through the ramp up and some of that higher inventory build worked through. We’re now seeing that level out and as demonstrated in the most recent quarter, we’ve seen a 6% reduction unit operating costs. We expect that to continue to drift down in subsequent quarters. So we certainly reaffirm that guidance and we’re striving to be at the low end as best we can.

Thank you. With regards

Andrew Barber, Director of Investor Relations, Syona Resources: to NIL and MoBLAN and the drilling results released, when can we expect to see an updated MRE and additionally an updated DFS on MoBLAN?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: So Sylvain’s team is obviously busy receiving the remainder of those drilling results, so we haven’t had all the assays back and so so forth. Once we’ve got that, it will go into the model and then we’ll be out with an MRE update during the course of calendar year 2025, but more realistic around probably our annual reporting suite at this point, given the merger and everything else we’ve got going. And then in terms of sort of DFS, we’re just looking about what the best approach is whether we fast track a DFS or we effectively step through a PFS at NIL. And then Movaland given there’s an existing DFS is how we update that on the back of the expanded MRE and also a desire to be able to increase the production volume beyond 300000 tonnes as was originally contemplated.

Andrew Barber, Director of Investor Relations, Syona Resources: Thank you. You’ve previously commented that the mining services contract is being renegotiated. What’s the latest update on that process?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes, Sylvain is leading this, so I’m going to throw it to him. But I think we’re just at the outset, Fournier, the incumbent, I think in recent times we’ve seen an uptick in terms of their performance, which has obviously been reflected in relation to our mining output for last quarter. Sylvain is engaged with that. We’ve also brought in some tension with pricing from another provider as well. But Sylvain, you might just sort of describe some of the improvements that we’re seeing on-site.

But suffice to say, we’re still really sort of we’re still evaluating our position there. But Sylvain, you might want to add some color around Pournier’s performance and how you see things flying out?

Sylvain Collard, President and COO of Canadian Operations, Syona Resources: Yes, Lucas, you’re absolutely right. So we had some bids and we’re looking for different options. But as we speak right now, Phase II and Phase III, let’s say, the topography is mostly behind us. So we see a very good performance in terms of productivity and decrease in cost. So what we’re doing right now, we’re doing the analysis.

But what was costing us a little bit more was the, let’s say, the cost plus related to starting some new phases. So yes, the process is ongoing to analyze what is the good approach and we’ll give an update for the next quarter.

Andrew Barber, Director of Investor Relations, Syona Resources: Thanks, Sylvain. Thank you, Sylvain. When we consider the most recent MRE for NAL and compare that back to the MRE that was considered in the DFS, it’s a nearly threefold increase excluding recent drill results. So this suggests there’s several options maintaining mine life and increasing production threefold, keeping production steady and extending mine life or a combination of both. What’s the current thinking of board and management regarding those options?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes. So you’re absolutely right. In relation to the question, given that the significant increase in the MRE has brought up some nice options for us. With the increased MRE, like you put mine loss of plus thirty years at current production levels, that’s obviously not going to realize a great deal of value. So we’re very keen to see expansion brought on, but obviously it needs to be timed appropriately and it’s got to be cost efficient.

We certainly can be very capital efficient given that there’ll be a brownfield expansion. You’ve got all the infrastructure and so forth there. So we’d expect to see, we’re going to work through that study phase, but get through the expansion case and really understand what that sweet spot is in terms of annual output and then what the consequences of mine life. But certainly NIO is pointing towards, but not support a significant increase in the production basis.

Andrew Barber, Director of Investor Relations, Syona Resources: Thank you. The next question is, when is the company going to commit to a long term offtake agreement?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes. So as I described earlier, the existing offtake arrangement with Piedmont was contractually a bit of a challenge there. I think it’s fair to say and if we just look at some of the results of our competitors, the current

Austin Yuan, Analyst, Macquarie: in

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: the current environment, the spot market and our trading partners are probably doing a little better than we had been in offtake arrangements. So it’s I think it’s a watch this space piece, but I think importantly an offtake is no guaranteed of success in terms of either the counterparty performing on volume nor pricing. So we’re taking a very commercial and astute approach to offtake arrangements.

Andrew Barber, Director of Investor Relations, Syona Resources: Thank you. The next question is with regard to the Acuity standby share facility. Why was that terminated and was the decision to do that do so mutual?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes. So the short answer was, it was our decision to be able to terminate the facility. In short, it was no longer required. We thought it was an effective way of, well, on the back of the rises at merger announcement and then with subsequent rise coming with us, yes, we thought that was an appropriate time to end the facility. And I think probably just 1 thing though I did want to point out is that whilst those shares effectively transferred across for the likes of key management personnel, KNP awards, they’re all subject to our remuneration report.

So I just want to dispel any misconceptions that might exist that those are going to be used to award shares to or options to NEDs or anything like that. The answer is absolutely not. It was most efficient way then I’ll establish those shares to align with our remuneration report and be able to execute with key management personnel and employee share programs, but certainly not for NEDs.

Andrew Barber, Director of Investor Relations, Syona Resources: Great. Thank you. What are our thoughts on the threatened 25% tariff by President Trump, specifically with regards to Canada and its critical resources sector?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Yes, it’s probably fair to say it’s pretty fluid at the moment. So I would probably be able to give you a sense of how the Canadians are sort of feeling about it. But look, I think it’s probably fairly early days to understand what that looks like. By and large, the vast majority outside of Tesla (NASDAQ:TSLA) with Piedmont’s offtake is destined outside of North America. So probably not a material impact.

But Sylvain, I don’t know if you’ve got any comments from a Canadian perspective around potential tariff threat.

Sylvain Collard, President and COO of Canadian Operations, Syona Resources: Yes, I know it’s a very good question. So we’re just waiting for, let’s say, this week, what’s going to be the update on the COSMALLIST, which is the Canada, United States and Mexico agreement. Because as we speak right now, spodumene is a duty free item. So we’re just waiting to see what’s going to be the updated list in the coming weeks. So as we speak right now, it’s hard to say if it is a risk or not.

We’re just waiting to see what’s going to be the update list. And soon as we have that, we’ll be able to reply to this 1. So right now, let’s just wait and see.

Andrew Barber, Director of Investor Relations, Syona Resources: Thanks, Sylvain. Could we comment on the political risk within Canada? How are our relations with the Canadian governments and the processes regarding government grants? Yes. So just a couple of headline comments before I pass over Sylvain and give you

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: a sense of on the ground. We’ve tapped into a number of grants and that exist within the Canadian infrastructure and that’s all performing well, in fact, Sylvain’s got someone that’s dedicated to that. Obviously, there’s an impending election, which we’ll see depending on whether conservatives take power or not. So there’s probably a little bit of wait and see. What I can say is Sylvain and the team from everything I’ve seen and experienced great relationships with the Quebec government and be able to reach in there and also with the federal government as it relates to regulators and so forth.

But Sylvain, you’re living and breathing that every day. So any comments you might have?

Sylvain Collard, President and COO of Canadian Operations, Syona Resources: Yes. We don’t see so many difference as we speak since Monsieur Trudeau resigned. So we’re going to wait until we have a new Prime Minister in March ’9. And after that, we’ll see if there is some they want to start a new election in March 20, 2024, excuse me. But with Quebec government, it’s business as usual.

We still had some great discussions with IQ and the government in place to Lacac. So there is no issues as we speak, but we’re just waiting what’s going to be the next steps on the federal side.

Andrew Barber, Director of Investor Relations, Syona Resources: Great. Thank you, Sylvain.

Sylvain Collard, President and COO of Canadian Operations, Syona Resources: So

Andrew Barber, Director of Investor Relations, Syona Resources: considering offtake agreements post merger and so this is specifically about the existing Piedmont offtake agreements with LG and Cam and Tesla, would we consider further partnerships and renewing those contracts?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: The short answer is yes. As always, we want to be able to drive the best possible bargain that we can for shareholders. So ultimately, we’d be evaluating an extension of those offtake arrangements versus what we might have available with these other offtake arrangements through the spot market. The short answer is we’re certainly open to extending those relationships.

Noel Parks, Analyst, Tuohy Brothers Investment Research: Thank

Andrew Barber, Director of Investor Relations, Syona Resources: you. A further question is with regards to the merger integration costs, are those split fifty-fifty with Piedmont?

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: Short answer is yes. Probably just a couple of comments and there’s no sort of hiding from it. Transaction (JO:TCPJ) costs on this deal are a little high. A large part of that is the multi jurisdictional nature of it. Given that Piedmont are listed in The U.

S, we’re here in the ASX and then effectively secondary listing on the NASDAQ requires SEC submission of F-four forms and so forth. And then on top of that, we’ve obviously got NIL in Quebec. So that multi jurisdictional piece is right for lawyers, not so great for costs. And then obviously there’s some 1 off transaction costs as well that are contractual obligations around changing the trial provisions and so on. So I can certainly sure show as we’re doing everything we can to minimize those, but unfortunately just a part of getting this transaction done, but we’re absolutely confident about it being able to realize significant value on the back of the transaction.

Andrew Barber, Director of Investor Relations, Syona Resources: Thanks, Lucas. It’s Kaylee. That’s all the questions I have.

Conference Operator: Thank you. That does conclude our question and answer session. I will hand it back to Mr. Dow for closing remarks.

Noel Parks, Analyst, Tuohy Brothers Investment Research: I just

Lucas Dow, Managing Director and Chief Executive Officer, Syona Resources: want to say thanks everyone for the time. For those who might not be aware, this is the first quarterly update we’ve done in this format. You can look forward to more of these. So we’re committing to these. I just want to again thank everyone for their support and we look forward to being able to deliver on the merger and also our results as we move forward.

So thank you and have a great day.

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

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