Operator: Good day and thank you for standing by. Welcome to Pilbara Minerals December Quarterly Conference Call. At this time all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Pilbara Minerals Managing Director and CEO, Dale Henderson. Please go ahead.

Dale Henderson: Thank you, Maggie, and thank you and good morning everyone for joining the call. I'd like to begin by acknowledging the traditional owners on the lands in which our businesses operates, the Whadjuk people of the Noongar Nation here in Perth, we are undertaking a call from today, and the Nyamal and Kariyarra people where our operations are located in the Pilbara. We pay our respects to the elders past and present.

I'd also like to extent by best wishes to those celebrating the New Lunar Year which starts today and particular our partners in China and South Korea. I'm moving to Slide 2. The December quarter has been a period of solid performance for the Group, delivering across each pillar of our strategy. Joining me today to walk us through the details is Luke Bortoli, our CFO, and Brett McFadgen, our Executive General Manager of Operations, whom is calling from site today. We're also supported by the wider team who are with us in the room today.

The call will run for an hour. We'll begin with a brief presentation before opening the floor for Q and A for the remaining time, as outlined by Maggie. There will be some time for questions from the webcast which we hope to address at the back end of the call. Turning now to Slide 3. Let me begin with the reminder of our strategy.

Our strategy is underpinned by a clear vision to create rapid and sustainable value for our shareholders whilst growing our leadership position in the lithium sector. As many are aware, the lithium market has been dynamic, driven by rapid growth to meet strong underlying demand for lithium products. For Pilbara Minerals, this has meant balancing a disciplined approach to capital preservation during market highs, whilst then reinvesting strategically into our operation to scale lower costs and position ourselves for inorganic growth when the right opportunities arise. FY 2025-to-date has been a strong demonstration of our ability to execute on this strategy. The key highlight has been the build out of our operational base at Pilgangoora, particularly with the development of the larger lower operating cost P1000 facility.

The integration of this facility is a critical focus requiring tie-ins and ramp-up activities. Some of this work commenced in the December quarter and will remain a key feature of the March quarter as we progress towards exiting the June quarter at nameplate capacity. With that context in mind, let's now move to the highlights for the December quarter. Turning to Slide 4. During the quarter we announced and implemented the P850 operating model which is expected to deliver a cash flow improvement of approximately $200 million in FY 2025.

As part of this initiative, the Ngungaju processing plant was placed into care and maintenance. I'm pleased to report that that transition was executed smoothly and efficiently by the team. Well done team. Thank you. For the December quarter, production volumes remained on track with this plan with 188,000 tonnes produced for the period.

Sales volumes exceeded production totaling 204,000, unit operating costs of $621 per tonne FOB reflecting the lower mining and processing costs. However, unit costs were slightly impacted by reduced sales volumes from the prior quarter. Revenue came in at AUD $216 million marking a slight increase from the prior quarter supported by marginal price improvements. In terms of projects, the P1000 project reached a significant milestone with construction largely complete and tie-ins underway in the quarter. The project has progressed on budget and on schedule with wet commissioning currently in progress up on site.

The acquisition of Latin Resources was also nearing completion following the approval of both the share scheme and option scheme by security holders earlier this month. Further details will be shared later in the presentation on this. Regarding the half year results, we will provide a full review alongside half year accounts. However, we have included the half on half financial comparisons which Luke will elaborate on shortly. A key highlight is the positive cash margin from operations of $41 million for the half.

This demonstrates the strong cash generating capability of the business pre-capital expenditure, even at the low average realized price of $688 per tonne during the half and amid higher operating costs cure of the ramp-up year. Our continued focus on cost reduction remains a priority. This is a key muscle within the business and one we've trained over our eight years of operating experience today. We are confident in delivering improved unit cost performance next year as we enjoy the benefits of expanded operations, processing capability here of the P1000 project. Now with that for a deeper unpacking of the operations, I'll now hand to Brett for a review.

Over to you Brett.

Brett McFadgen: Thank you, Dale. If we move on to Slide 5, starting with safety, as you can see on Slide 5, the December quarter delivered a strong safety performance with our total recordable injury frequency rate dropping from 4.03 in the prior quarter to 3.58. Pleasingly, no recordable injuries were reported in the December quarter, which is our best quarterly performance over the last three years and something to be proud of. Our enduring focus on safety and the safety program initiatives continue to gain traction, empowering employees to actively participate in creating a safe work environment.

Moving on to Slide 6, the transition to the P850 operating model was successfully implemented with our Ngungaju plant moving into care and maintenance during the quarter. I am pleased to note this was done safely and with no operational disruptions. As a result, we had a solid operational quarter with production and costs in line with expectations. In the mining, the moderated mining strategy in line with P850 resulted in an achieved total material movement for the December quarter of 6.9 million tonnes, which is down on both the September quarter and same quarter in FY 2024 of 9.4 and 9.5 million tonnes respectively. I'm pleased to advise good progress was made with our ongoing transition to an owner-operator mining model to realize improved operating efficiency and cost improvements.

In the December quarter the Group progressed the migration to owner managed drilling and blasting, including the commissioning of eight new drill rigs and we look forward to the additional operational efficiencies and cost improvement this will provide over time. In the processing, Lithium recovery exceeded internal forecasts with an average lithium recovery of 72.1%. However, in line with the plan, lithium recovery for the Pilgan processing plant was impacted during the period due to P680 crushing and sorting ramp-up and optimizations. However, these impacts were partially offset by a series of processing improvements including further optimization of the P680 primary rejection facility. Specifically, all sorting optimizations improvement has continued to track to plan and has supported lithium recovery exceeding target in December.

On the production for the quarter of 188,214 dry metric tonnes was broadly in line with expectation while being lower than the prior quarter of 220,000 tonnes, due to primarily the implementation of the P850 operating model. P680 project including both primary rejects and the crushing and sorting continues to show positive results, which coupled with the P1000 project will deliver an expanded production capacity, lower levels of mineral contamination and allow for the use of contaminated ore supply not able to be utilized. Thank you and I will now hand back to Dale.

Dale Henderson: Thanks Brett. Moving to Slide 7.

The P1000 project remains on schedule and on budget and was 95% construction complete as at the end of the quarter. Post the quarter end a major shutdown was completed onsite for the tie-in of the P1000 infrastructure. It was our largest shutdown in the history of the business and well done to all the team and our constructor and shutdown partners for their work on that successful shutdown. Commissioning is currently being undertaken following that planned shutdown in January. Outside of the P1000 the P2000 feasibility study remains on schedule with that study outcome due for completion December quarter at the end of the year.

Moving to Slide 8. The downstream JV with POSCO continues to progress well. Ramp-up of Train 1 continued producing 2,418 tonnes of lithium hydroxide monohydrate in the month of October. Production certification was achieved in late November from a South Korean cell manufacturing enabling first sales of certified product. Train 2 completed commissioning in November with the production of 404 tonnes of lithium hydroxide are produced in the quarter.

So well done to the POSCO team moving forward, well done. Now moving to Slide 9, the acquisition for Latin Resources progressed in the quarter with the scheme receiving shareholder approval this month. The transaction is expected to complete on the 4th of February next week and we aim to optimize the Salinas Project development studies and progress further exploration and infill existing mineral resource obviously post that acquisition. So, more to come in this space post transaction completed. Now with that I'll now hand over to Luke to take us through the financials.

Luke Bortoli: Thanks Dale, and good morning to those on the call. Please turn to Slide 11 of the presentation for a summary of the Group's key financial metrics for the December quarter FY 2025. Group revenue in the December quarter was $216 million, a 3% increase from the September quarter. This was driven by a 3% increase in the average realized price, partially offset by lower sales volume. The average realized price increased from US$682 per tonne in the September quarter to US$700 per tonne in the December quarter.

Production volume of 188,000 tonnes in the December quarter was 14% lower than the prior quarter. As has been mentioned, lower production volume corresponded to the transition to the P850 operating model. This included placing Ngungaju into care and maintenance and planned downtime for the integration and ramp-up of the P680 crushing and ore sorting facility. Sales volume of 204,000 tonnes in the December quarter was 5% lower than the prior quarter, driven by lower production volume and shipment timing. Looking at unit costs, unit operating costs on an FOB basis increased marginally by 2% in the December quarter to $621 per tonne.

This marginal unit operating cost increase reflected a mix of reduced costs in dollar terms offset by lower sales volume due to the planned downtime for ramp-up of the P680 crushing and ore sorting facility. Pleasingly, the benefits of lower costs from the P850 operating model began to accrue late in the December quarter following the decommissioning of Ngungaju in line with plan. On a CIF basis, unit operating costs were $731 per tonne in the December quarter, 2% increase compared to the prior period, in line with FOB costs. Finally, the Group's cash balance at 31 December was $1.2 billion and remains strong. Turning to Slide 12.

Slide 12 provides a summary of the Group's key financial metrics for the H1 FY 2025 period. Group revenues in H1 FY 2025 were $426 million, a 44% reduction on H1 FY 2024, driven almost entirely by a 58% lower average realized price. The average realized price decreased from US $1,645 per tonne in H1 FY 2024 to US $688 per tonne in H1 FY 2025 and almost $1,000 decrease. Production volume of 408,000 tonnes in H1 FY 2025 was approximately 88,000 tonnes, or almost 30% higher than the prior corresponding period. This was achieved through the production volume expansion enabled by the P680 project and recovery improvements across both parts.

Importantly, H1 FY 2025 was underpinned by a full period of operating with the P680 primary rejection facility. At the unit cost level, unit operating costs on an FOB basis reduced by 11% on the pcp to $614 per tonne, reflecting the benefit of higher sales volumes enabled by P680 against broadly flat production costs in total dollar terms On a CIF basis, unit operating costs were $724 per tonne in H1 FY 2025, a 20% reduction on the pcp. This was driven by lower royalty costs from lower revenue and the aforementioned increase in sales volume. Turning now to Slide 13. Slide 13 shows a cash flow bridge for the December quarter FY 2025.

As mentioned earlier, the Group's ending cash balance at 31 December 2024 was $1.2 billion. This represents a decline of $182 million from the prior quarter. The $182 million reduction in cash during the period was primarily due to capital expenditure including growth CapEx for the P1000 project, partially offset by a net tax refund of $100 million. Focusing on cash margin, our cash margin from operations, defined as receipts from customers less payments for operating costs, was negative $8 million in the quarter. December quarter cash margin, however, was unusually impacted by the timing of cash flows.

More specifically, December quarter cash margin was reduced by $40 million of final price adjustments on sales made largely in the September quarter. Adjusting for this $40 million impact, cash margin from operations would have been positive $32 million. Looking at CapEx, total CapEx spend was $222 million in December quarter on a cash basis and $149 million on an accrual basis. CapEx spend of $149 million included growth CapEx related to the continued development of the P1000 expansion project of $60 million, infrastructure and projects of $38 million, capitalized mine development costs of $40 million and sustaining CapEx of $11 million. Turning now to Slide 14.

Slide 14 shows a cash flow bridge for the H1 FY 2025 period. In H1 FY 2025, cash declined by $455 million to $1.2 billion as at 31 December 2024. The $455 million reduction in cash during the half was primarily driven by capital expenditure spend. Focusing on cash margin. Our cash margin from operations, defined as receipts from customers less payments for operating costs was positive $41 million in the half.

This reflects the strong cash generation of the business pre-capital expenditure even at the low average realized price of US $688 per tonne for the half year period. Importantly, the final price adjustments impacting the December quarter effect into the half year period with cash margin from operations remaining strongly positive. Turning to CapEx, total CapEx spend was $436 million on a cash basis and $358 million on an accrual basis. CapEx spend of $358 million included growth CapEx related to the completion of P680 and the continuation of the P1000 expansion project of $136 million, infrastructure and projects of $92 million, capitalized mine development costs of $84 million and sustaining CapEx of $18 million. For the FY 2025 period, CapEx spend is weighted to the first half with all of the P680 and the majority of P1000 CapEx now largely spent with greenfield construction complete.

I'll now hand it back to Dale.

Dale Henderson: Thank you, Luke. Moving to Slide 16 for an update on the market. The lithium market continues to take shape rapidly, care of technology improvements, government interventions and energy transition drivers. 2024 was a year of many milestones for the lithium market, including global lithium demand total over 1 million tonnes LCE for the first time growing by 30% year-on-year.

CARE [ph] benchmark. Global EV sales reached more than 17 million units growing by 23% year-on-year or 3.4 million units on the prior year, the data care of promotion. EVs themselves moved through a key inflection cost point within the China market. China EVs offering a more cost competitive alternative to their internal combustion engine equivalent. China's EV market penetration in the second half of 2024 increased to roughly 50% of total sales, resulting in 11 million EV sales or 64% of the global EV sales, so a remarkable step up there in China.

As it relates to mass energy storage or ESS, demand grew by an incredible 53% year-on-year with 205GWh of global storage deployments. This data back here very much. What's behind this? Well, significant disruption is underway due to these rapid advancements in technology. Every day more headlines are emerging for auto company mergers, breakthroughs in autonomous driving, ESS and developments in electric vertical take-off and landing or eVTOL vehicles as they're called, to name but a few. At the core of this disruption is a technology revolution where digital intelligence and electrification are intersecting, combining and self-reinforcing.

Jensen Huang: Now moving to a more practical example is the incredible progress BYD has been making. BYD sold over 4.25 million passenger cars last year, positioning itself as the second largest EV manufacturer globally, just behind Tesla. BYD surpassed Toyota's EV sales in the Japanese market in 2024 most marking a significant milestone. And BYD officially entered the South Korean market this month, a bold move that brings it into direct competition with the domestic EV manufacturers here in South Korea. So we continue to closely monitor BYD's advancements as it challenges established suppliers in key markets worldwide.

CATL.: So as you can see from these brief examples, much change is underway and all of these changes are growth markets, which of course the lithium market serves as a key subset. So moving to pricing, the lithium market has been rebalancing following the highs of calendar year 2020 and 2021. Following recent supply curtailments over the past year across the industry, we note that spodumene concentrate pricing has lifted off the lows of US $750 per tonne that we saw in October last year and now moving into the range of between mid-850s to low 900s. Pilbara Minerals continues to see inbound interest from downstream industry participants, both in relation to near-term off-take and long-term opportunities surrounding expansion optionality that Pilbara holds. And while volatility is expected to continue as the industry continues to take shape, we remain focused on the incredibly strong long-term fundamentals this exciting market presents for our shareholders and all our stakeholders connected with the business.

Now, before we move to questions, I'd like to leave you with a few closing remarks. FY 2025 sets the stage for a stronger operational platform with increased scale and improved processing capability as we integrate both the P680 and P1000 projects. As noted earlier, ramp-up years naturally impact runtime and lithium recoveries as new circuits are integrated. These factors have been carefully considered and accounted for in our guidance. The December quarter that we've just walked through represents another solid operating performance quarter, delivering in line with our plan for the year being this ramp-up year.

Now looking ahead to FY 2026, we're excited to showcase the improvements in unit cost outcomes driven by the enhanced scale and efficiency of our expanded processing capabilities. Now the Group remains focused on executing on our strategy, navigating through these cycles while strengthening our leadership position in lithium. This is anchored by our ongoing improvements in long-term cost performance, maintaining a strong balance sheet and our disciplined market aligned approach to capacity growth. Thank you for your time and attention today. We, we remain confident in our strategy and our ability to adapt and thrive in this evolving market.

Now with that I'll hand back to Maggie to proceed to Q&A. Thank you very much. Maggie?

Operator: Thank you, Dale. [Operator Instructions] Our first question comes from Levi Spry from UBS. Please go ahead.

Levi Spry: Yes, good morning Dale and team. Thanks, thanks for your time and Happy New Year. Maybe just to push you a little further on the market, there were reports that SQM had realized $920 on a recent auction. Can you talk to how real that price is and then give us a bit more insight into what you're seeing currently?

Dale Henderson: Yes. Good day Levi and Happy New Year.

Yes, as it relates to the market, it's obviously always really hard to understand the supply-demand, balance. We do think that that's tightened. As it relates to spot sales being above the average and specifically the SQM advantages, I don't have any particular insight, but it doesn't surprise me that on a spot basis they would realize a premium and it does obviously signal a potential tightening in the market. So we'll wait and see to see how things evolve. In contrast to our realized pricing, we've been focused on our off-take deliveries based the production volumes from site.

It's all largely committed under off-take. So our long dated off-take is of course tied to the average market references as compared to the smaller volume spot sales. So yes, that's sort of the landscape at this moment in time Levi.

Levi Spry: Yes, thanks Dale. And the chemical price hasn't really done much as of yet, but just thinking about the optionality you now have within your portfolio, particularly with Salinas also in there.

Can you talk us through how you're thinking about stepping through those projects? So P850 now becoming a P1000 again with the Ngungaju coming back on how you think about weighing up Latin versus the P2000 with the study out later this year?

Dale Henderson: Yes, thanks Levi. Yes, the key word is options there. So at our disposal, yes we've now got a suite of capacity options which you sort of listed off there. We've got of course the Ngungaju operation which could be brought back to life fairly rapidly we think within sort of a four months period and then we've got the larger growth plans relating to Salinas and P2000 of the Pilgangora asset. In terms of how we're thinking about it, well it's all market dependent.

Now if it was to eventuate that there's a rapid price rise, well, obviously we could respond to that quickly, care of the Ngungaju facility. That would be an obvious lever to pull. If things are more mooted, well we'd probably continue with the current operating platform, so that would be probably the two bookends. In parallel, what we need to do is progress these studies for both the P2000 and the Salinas Project, so we will push those along in due course and progress those to maturity and ultimately there's obviously a longer lead in time with each of those growth steps. And we like the idea of preparing those and being ready to bring them to market as the market is ready for it and as the market grows.

So that would be sort of at a high level, the way we think about those capacity increases Levi.

Levi Spry: Thank you. Thanks, Dale, thanks for your time.

Dale Henderson: Thank you.

Operator: Thank you.

Just a moment for our next question, please. Next we have Kaan Peker from RBC. Please go ahead with your question.

Kaan Peker: Hi, Dale, Luke and Brett, Happy New Year. Two questions.

One, the first one is on the negotiated offtake agreements. Maybe if you can give us an understanding of what proportion of sales volumes they impact? Pardon me, and how do they better align with market pricing? Are they still based off Chinese chemical prices and do they have offtakes tied to longer provisional pricing? I'll follow up with a second one, thanks.

Dale Henderson: Yes, good day, Kaan. So, as it relates to the two offtakes we have referenced in the quarterly activities report, one is the completion of an offtake, which came to an end there and as part of coming to an end that retires that offtake inclusive of the pricing formulas which were intrinsic to that pricing formula was, had come a bit out of step with the market, so happy to see that one come to conclusion. The other offtake reference there is a renewal and we took the opportunity to, as you would expect, to reset that appropriately in alignment with our other offtakes.

So where we stand today is the full suite of offtakes are in close alignment at this point in time in terms of what we believe is the ability to achieve the market pricing for spodumene, so we're happy about that. So, the question of what proportion did those offtakes speak to? Well, yes, as of last year, it'd be something less than 20% for last year, but moving forward, it's a different makeup of customer volumes which we haven't disclosed, so it's probably as much as I can speak to there without getting into contract specifics. As it relates to provisional pricing, we've got broadly speaking the same approach across each of those offtake agreements. The product is priced provisionally based on typically sort of a one month up to two months look back and then it's settled in the future, typically, M+1 typically, but there is some variation around that. Hopefully that helps Kaan?

Kaan Peker: Yes, sure.

Thank you. And also Train 1 and Train 2 with the POSCO JV appear to be doing well and obviously ramping up. However, there was a comment in the quarterly about further funding for the JV due to depressed prices. Can you maybe give a ballpark estimate on current ramp-up expectations and pricing?

Dale Henderson: Yes, Kaan. So, if you, firstly, as you say, the PLS team are doing a great job not only with the ramp-up, but pre that with construction.

So, we're really happy to see the progress they're making bringing those trains to life, the certification progress they're making, the quality. There's a lot to like about the progress there and well done to them and all of the detailed preparation work they've put into creating the success we've seen thus far. But yes, we're only partway through the journey and as spoken to in the quarterly. Train 2 is very much in the thick of it. As to the reference around funding, yes we're not in any sort of position to understand if there is a need there.

The POSCO team, the JV team is working through the potential forecasts and outlooks et cetera, et cetera and depending on what happens with the market of course that flows through to the bottom line and obviously that's ultimately going to be a key factor as to if there's a funding need or not. Now importantly, Pilbara is an 18% equity participant, so we're very much a minority participant in that joint venture. So, if there were to be a capital requirement, well obviously we're quite a small percentage of that at 18%, so that's the lay of the land there Kaan.

Kaan Peker: Sure. Thank you.

I'll pass it on. I appreciate it.

Dale Henderson: Thank you.

Operator: Thank you. Our next question comes from Hugo Nicolaci from Goldman Sachs.

Please go ahead with your question.

Hugo Nicolaci: Good morning Dale and team. Happy New Year and thanks for the update. I just wanted to firstly follow on from Kaan's question there on the POSCO JV and the commentary around needing to tip capital into that. If I go back to your proportional reporting of where that balance sheet for the JV was at in June, it looks like that JV should be able to reasonably fund itself for the immediate future.

So, if you're able to maybe talk to what the remaining capital spend needs are for Train 2, or maybe how the operating cost outlook has shifted, or maybe how big the discount on uncertified material is that you're expecting to get that would drive you needing to potentially tip into that JV?

Dale Henderson: Yes, sure. Good day, Hugo. Yes, firstly, yes, the JV is in good financial standing, as you've heard highlighted. That's correct. As to our ability to provide any sort of expectation around future needs, unfortunately, no, we're not in position to that at this moment in time.

The POSCO team is deep into forecasting and budgets at the moment and we'll of course be party to that when they've progressed their thinking and once that's done, we'll be in a more informed position to look at the outlook. But as you've sort of stated, we're in good financial health there at this moment in time.

Hugo Nicolaci: Got it. I might follow that one up later then. But then, second question also, just kind of following up from Kaan's, can you just, on the realizing pricing phase, can you firstly just confirm that the auction cargo you agreed last March that was slated for the December quarter did kind of improve that realized pricing in the quarter? And then to the point around the offtake pricing changes, how does that shift your overall portfolio exposure now? I think historically we'd kind of talk to two-thirds to spodumene, one-third to chemicals with a preference for hydroxide.

Does that now move more to sort of 75% weighted to spodumene pricing or how should we start to think about that now going forward?

Dale Henderson: Yes, there are a few questions buried in that one, Hugo, thanks. As it relates to the spot, so by proportion, that was pretty small and yes, I can't recall what we realized there, but it doesn't really move the average as a function of smaller volume. As to the makeup of the portfolio and general terms across the off-tax week, they're all weighted to spodumene PRAs at this moment in time. But importantly, I would stress that a key foundational principle across all of our offtakes is that the pricing mechanism will realize the underlying value for the spodumene concentrate. Now, if that means to achieve that aim, we have to review and evolve those pricing mechanisms, potentially swinging back to chemical references or other references.

Well, that is contemplated and historically that's what we've done as we've seen dislocations emerge between the different headline references, so just would like to highlight that. But at this slice of time, we've aligned by weight of proportion to spodumene PRAs. Does that answer your question?

Hugo Nicolaci: Yes, I guess. Just in terms of what that weighting is, do we think about that being kind of more than two-thirds weighted though overall now?

Dale Henderson: You could make that assumption, yes.

Hugo Nicolaci: Got it.

And then just lastly if I could squeeze one in for Luke, just are you able to comment on or just clarify the amount of debt you repaid in the quarter and I guess what your closing debt balance is post drawing the new facility to repay the old debt piece?

Luke Bortoli: Yes, thanks for the question, Hugo. So, the debt balance currently is approximately $375 million. The debt refinance was approximately $370 million.

Hugo Nicolaci: Got it and so that's repaid all debts. You don't have any government loans or anything still on there that you've kept?

Luke Bortoli: No.

The previous project style government and corporate loan facilities have been fully repaid and the $375 million of debt on the balance sheet today has been drawn down from the new RCF facility. So it was a refinancing of the previous debt.

Hugo Nicolaci: Got it. That's helpful. Thanks team.

I'll pass it on.

Operator: Thank you. Just a moment for our next question. Next, we have Rahul Anand from Morgan Stanley. Please go ahead.

Rahul Anand: Hi team, good morning. Thanks for the call. Look, I just wanted to touch upon firstly in terms of the future growth options. I think various questions have kind of talked about several of them, but if you were to think about your future options now and you do see the markets start to improve, is it fair that you're going to be focused more on perhaps the Pilbara first followed by the LATAM [ph] Resource and then also in terms of the POSCO plant obviously going quite well there, can you remind us, is it the call option expiry is that in 2026 and in terms of your payable sums there that would be basically cost-plus inflation, is that right? It would be good to get some clarity on that. That's the first one, thanks.

Dale Henderson: Yes, thanks Rahul. As it relates to the growth options, both the Salinas project and the Pilgangoora expansion are two very different growth prospects. Given that, we think it's likely there's probably different approval timelines will emerge. Certainly, different scale of capital requirement between the two and the commensurate tonnage which flows from each of those is obviously quite different. So yes, they're quite different expansion options to weigh up and potentially depending where we ultimately take prospective developments, how we think through the interconnected supply chain solution is the key factor us whether that's offtake or whether it's a strategic partner.

All of the above is yet to be thought through. But as we think about that integrated supply chain solution, depending on that counterparty, there are certain preferences for certain geographic locations. So that's another factor which will ultimately need to go into the pot as we weigh up timing as we progress each of those. So, yes, it's not so much a simplistic sort of commercial evaluation case. There are quite a few factors to think through on that one.

But just to stress, in all cases, we will not be bringing any growth into market if we do not think that market is ready for it. However, we like the idea of preparing for that situation given we think the underlying growth is very impressive. As it relates to the POSCO joint venture question, yes we have time for that call option for Pilbara. First window we have relates to the certification of the two trains and that is some way off on the distance. As to the quantum, that is based on our proportion of equity plus a small escalation factor which is something in the order of 3.6% per annum.

So we have option A, as we can elect to do it in that first window and we have a second option B which is post that window. There is another window that we can elect to step up post those certification if we did make the decision that we wanted to take more time to evaluate. So, yes, we've got a few different pathways there we can choose. Thanks, Rahul. Does that answer it?

Operator: Thank you.

I’ll move on for the next question. Next question comes from Jonathan Sharp from CLSA. Please go ahead with your question.

Jonathan Sharp: Yes. Good morning, Dale and team.

Thanks for taking my questions. So, it sounds like you're a little bit more positive for prices in FY 2025. I'm just interested in your thoughts. How are you thinking about capital allocation moving forward? Has anything changed there? Should investors expect a more aggressive approach in dividends or M&A or is it still your focus on organic growth?

Dale Henderson: Good day, Jonathan. Yes, as it relates to capital allocation, no change our outlook, although in terms of the outlook for the market, look, it's great that we've seen a small price increase from the December quarter.

However, it's a small increase and we're not long into it. And fundamentally there is a level of uncertainty in the market, so it's too early to take any view of market correction. So, with that in mind, no change to the way we think about balance sheet management. We're very focused on balance sheet strength. So this is about preserving capital if you ever can, preserving cash if we ever can, and continuing to drive cost out of the operating base everywhere we can, so more of the same in that regard.

Luke Bortoli: Just to add to that, the focus really remains FY 2025, bedding down the P850 operating model and the cash flow improvement that will result from that model, so no change to our capital investment approach over FY 2025.

Jonathan Sharp: Okay, great. And just another question, just with continued investment from others in lower cost South American brine projects, how do you see Pilbara's hard rock spodumene strategy and how do you see yourself competing in potentially a lower price environment over the next period if it does stay lower?

Dale Henderson: Yes, no change in the way we think about that area, Jonathan. So we've always sort of taken the view that the left-hand side of the cost curve sits the best assets, which is inclusive of the best brine assets and the best hard rock assets and the work we've done. And certainly, where we're heading with our asset and our processing capability, we're comfortable about directionally where that takes us, so no change to that outlook.

And yes, we know the enthusiasm around some of the brines. So we'll watch that with interest as we watch the other areas of the market development with interest. The other thing I'd probably just add is, and the major brine producers can attest to this, a bit like hard-rock, producing low-cost brine is not easy. And I think the cost curve in that space with some of these new brines, there's plenty to play out there in time, would be my suggestion.

Jonathan Sharp: Yes, I agree with that and thank you.

I'll leave it there.

Dale Henderson: Thank you.

Operator: Thank you. Our next question comes from Kate McCutcheon from Citi. Thank you.

Kate McCutcheon: Hi. Good morning Dale and Luke. Good to see pricing improve versus benchmark NPS. So when the P1000 was FID-ed, you gave us an expectation of how to think about operating costs. We've got economies of scale, but now you've transitioned through that owner operated fleet, the power solution, I guess.

How do we think about medium-term operating costs or when can we expect to get an update either some quantitative or qualitative comments?

Dale Henderson: Yes. Good question, Kate. We'll have to come back to you on an update on when we plan to update that longer term outlook. And you're correct that the last time we did a longer dated outlook on unit cost was that P1000 FID. Probably the full year results are probably the next time we can give a sort of a better outlook for you on unit costs, so yes, look forward to that.

Kate McCutcheon: Perfect, thank you. And then a quick one for Luke just heading into the financials. Are there any one-offs to think about with LATAM? And secondly, would it be fair to think about a modest tax shield there from D&A with that acquisition as well?

Luke Bortoli: So yes, there will be one-off costs that are associated with LATAM, which we're still working through as part of a holistic budget process. So those one-off costs will include, for example, transaction costs for the acquisition and we will work through that and then update the market when there's clarity on it. Just to sort of clarify, we haven't actually formally acquired the asset yet, so there hasn't been a lot of dialogue between the two companies in respect of how we would consider operating that business, what our plan is versus their existing plans, et cetera, et cetera.

Does that help then?

Kate McCutcheon: Yes. So there'll be nothing to impact this half essentially.

Luke Bortoli: Not the half that we're reporting on? No, not H1 FY 2025.

Kate McCutcheon: Yes, thanks Luke.

Operator: Thank you.

Just a moment for our next question, please. Next, we have Glyn Lawcock from Barrenjoey. Please go ahead.

Glyn Lawcock: Good morning, Dale. Look, I just want to talk a little bit about cash flow and the transition to owner-operator model for both your mining fleet and drill and blast.

How are you approaching that? Are you purchasing the gear or are you leasing it? I'm just trying to understand where the cash is. Whether that $80 million lease expense or cash out the door flow in 2024 fiscal year is going to step up as a result. Thanks.

Luke Bortoli: Thanks for the question, Glyn. So it's a combination of purchased equipment and leased equipment and we would expect that our annual lease costs to increase over the next several years as we continue to transition to an owner-operator mining model.

Glyn Lawcock: So, $80 million, I mean that's sitting outside of what you call is your cash margin you make that lease of $80 million last fiscal year. So, are we thinking that steps up to what double or 50% increase? I mean, that's quite a material amount of cash that's excluded from any all-in sustaining cost guidance or cost guidance that you provide?

Luke Bortoli: Yes, we're not providing guidance on the FY 2026 period in respect of really any item on the P&L or the cash flow statement, but there will be an increase. If you think logically that we're going to expand our owner operator mining model, we'll provide more clarity around what the next year looks like at the full year 2025 results presentation.

Glyn Lawcock: I appreciate that, I mean, but what about when you gave the guidance for 2025 you gave everything CapEx OpEx production for 2025. What's the sort of lease cash outflow for 2025 at least?

Luke Bortoli: For this period, it will be around about a 20% increase on the prior period.

Glyn Lawcock: It's about $20 million bucks, so call it $100 million for the year, give or take of that.

Luke Bortoli: Yes.

Glyn Lawcock: All right, that's great. Thanks very much.

Dale Henderson: Thank you, Glyn.

Operator:
Thank you.:

Robert Stein: Hi, Dale and team. Quick one on recoveries, I noticed they went down in the quarter. Some of that's due to tie-in impacts, I'm sure. Can you just give us an indication of material that was and we expect recovery to trends after those one off impacts have been absorbed, because Ngungaju went offline obviously, and that would have had a dilutive impact to recoveries?

Dale Henderson: Yes, good day, Rob. Yes, it's a good one for Brett to speak to.

Brett, if you're online, why don't you mic off and speak to that?

Brett McFadgen: Yes, thanks, Dale. Thanks, Rob, for the question. Yes, the recoveries, they were, although lower than the prior quarter, they were in line with plan mainly around the impacts from our ore sorting tie-ins and then the ramp-up and commissioning of the ore sorters, which went actually reasonably pretty well and we were quite pleased with them. So, the recoveries did take a hit, but as we'd expected and called out, previously with those P680 tie-ins, it was pleasing to say that the December month came back to, mid-70s. So definitely, the tie-ins and the integration of the circuits is the big call out there.

We'll see that a little bit in this March quarter as well. As we've said, this year is an integration year and we commissioning the P1000 again, we'll have some stop starts, we'll bring equipment in and the stability is a huge impact on the recovery. So, we'll see them probably in line with the previous quarter. And then the June quarter is when we're planning to hit our straps with the P1000 and have everything settled down as we move into FY 2026.

Robert Stein: Thanks for that color.

That was really helpful. And then just put a question on unit costs. So, I'm just picking up where others have sort of talked to. We've seen Ngungaju can obviously come offline. There would have been a whole host of one-off costs associated with that.

Can you give us an indication of how material they were or what the quantum of those one off costs were and whether they hit you see one?

Luke Bortoli: I could start here, Brett, and then you can add any detail you think is useful. So, we are still incurring those one-off costs. I can't give you an aggregate figure today, but just to give you sort of indication of the buckets of those costs. There are ongoing demobilization costs for both equipment and also for service providers. There are redundancy costs.

There are other costs related to putting NLO into a position to be able to restart fairly quickly. We will have a sort of better sense for the aggregate one-off costs by the end of this month. It's worth noting that we announced the P850 operating model with the September quarterly, but we really only implemented that model late in the quarter. So, it's only really sort of less than eight weeks since we started to implement that model. So it's still coming together.

Anything you wanted to add, Brett?

Brett McFadgen: No, I think you covered it well. Look, and the bonus out of some of the unhidden costs that we didn't see with the recruitment as we moved our around talented workforce across to Pilgan from Ngungaju, but they covered it well.

Robert Stein: Thank you.

Dale Henderson: Thanks, Rob.

Operator: Thank you.

Just a moment for our next question, please. Next, we have Matthew Frydman from MST Financial. Please go ahead.

Matthew Frydman: Sure, thanks. Good morning Dale and team.

I've just got a really quick one potentially for Luke. Just wondering why the decision to draw down on the revolving credit facility at all? I mean, why not just use your cash balance to repay the old facilities and let the RCF just sit there potentially avoiding some interest expenses and establishment fees, et cetera? Was there sort of a use it or lose it provision there or is there anything else we should be thinking about there in terms of your balance sheet and that decision? Thanks.

Luke Bortoli: Yes, thank you. That is a good question. So the decision was made that given that we put the new facility in place and that facility was at significantly improved terms both across insurance covenants but also pricing, that we would utilize that facility and maintain a higher cash balance for liquidity.

We think that our business, with the size of its market capitalization and the size of its assets, that holding a small amount of debt is probably appropriate in terms of net impact relative to where we were under the previous government led loan facilities. We have actually a net improvement in our interest as a consequence of it being priced at materially better terms.

Matthew Frydman: Okay, thanks Luke.

Operator: Thank you. We will now go to the web questions.

I'll Pass myself to James.

James Fuller: Okay, thank you. We have a few questions online. The first question is regarding supply and demand dynamics and noting our charts. Today on Slide 16, one comment is regarding potentially, I guess a leveling out of the demand deficit, sorry, the supply deficit in 2030.

Dale, could you comment on what you think is going to be happening over the next five years and pass that point?

Dale Henderson: Yes, great question. I think it's the one everyone struggles with is what is the growth rate and demand of these new markets? That's incredibly hard to predict, particularly given the disruption that I mentioned as part of the script earlier, but also the fact that some of the demand cases are whole new areas. In particular for example the low altitude economy being drones and carriers of even people, that's a whole new subset of potential growth which is doesn't exist today. So trying to forecast that is incredibly difficult. And this is part of the reason that we rely on the people like Benchmark where we've quoted the data in terms of their outlook, where they've done some deeper levels of analysis trying to understand where the future might be heading.

So really tough to predict where we might be even two years, let alone five years, let alone 10 years and beyond.

James Fuller:
Mid-Stream:

Dale Henderson:
Mid-Stream: Fast forward to January, we were successful in receiving a level of grant funding support care of the West Australian government which we announced via a media release the other day, so incredibly grateful to the WA Government, the Cook Government, for that award. So that's $15 million additional grant funding. Where we're at is now considering that. So the respective boards, both Calix and Pilbara Minerals, are considering that and we look forward to updating on where we take that project and we will update most likely as part of the next quarterly update.

James Fuller: Sorry, the second part was any threats to EVs you can foresee?

Dale Henderson: I think the EV freight train is off and running and it's just a question of different adoption rates in different markets. Care of enabling infrastructure principally. I think the China market has been a very live demonstration of that sort of disruption and change underway and given the what appears to be the superior product being the EV, it's naturally being picked up more given its cost point the intelligence that comes with that new product type, et cetera, et cetera. So, it seems -- almost seems inevitable that there's nothing really standing its way. It's just a question of growing pains to move and grow in different markets.

So, there's no obvious threat from what I can see. Okay, thank you very much for those webcast questions and thank you all for dialing-in today. As was said at the start December quarter a really solid quarterly performance across the board and what has been -- what is a challenging ramp-up year, so incredibly well managed by the team we look forward to updating again in the future. Thank you all for your time.

Operator: Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.