Pilbara Minerals Limited

Thank you, Maggie. Good morning, and good evening.

Thank you for joining us today. I'd like to begin by acknowledging the traditional owners on the lands on which PLS operates.

Here in Perth, we acknowledge the Whadjuk people of the Noongar Nation. We also recognize the Nyamal and Kariyarra people on whose land our Australian operation is located in the Pilbara region.

We pay our respects to their elders, past and present. Joining me today is Flavio Garofalo, our Interim CFO; and Brett McFadgen, our Chief Operating Officer.

We're also joined by other members of the senior team. This call will run for approximately an hour.

We'll begin with the presentation on our June quarter performance, then move through our FY '26 guidance and market commentary before finishing with Q&A. We will address questions submitted via the webcast at the end of the session.

The June quarter marked a pivotal milestone for PLS as we completed our major capital investment cycle and transitioned into a new phase of operational excellence and performance underpinned by our industry-leading technology. We delivered on several critical objectives with the key achievement being the successful optimization of the Pilgan Plant following the completion of the P1000 expansion, delivering significantly higher production volumes and enabling lower cost performance.

Importantly, we achieved these outcomes while maintaining our fortress balance sheet, closing the quarter with approximately $1 billion in cash, providing us with the strength and flexibility to lead through the cycle as the market rebalances. The June quarter caps off what has been a landmark year for PLS.

FY '25 was truly transformational, and we look forward to sharing more detail on our full year results release this August. Since the quarter closed, we have seen renewed market volatility this time moving in our favor.

I'll speak more to that later in the presentation. Please turn to Slide 2.

PLS is the world's largest independent hard rock lithium producer. Our independence provides agility and responsiveness in a fast-changing global market.

The foundation of our business is the high-quality long-life Pilgangoora operation in Western Australia. The P680 and P1000 expansions have created a leading process platform with increased capacity and lower operating costs, strengthening our position on the global cost curve.

We're also building a globally diversified platform with downstream exposure through our POSCO JV in Korea and early-stage optionality in Brazil through the Colina Project. Importantly, our balance sheet with $1 billion in cash and $655 million in undrawn credit facilities gives us the flexibility to invest and lead through this period of the cycle.

Turning to Slide 3 for the quarter outcomes. Some key highlights from the quarter include record production of 221,000 tonnes produced, up 77%, demonstrating the operational leverage of the optimized Pilgan Plant.

Our unit costs reduced by 10% to $619 per tonne, delivering tangible cost leadership in a low-priced environment. This cost improvement is clear of optimization of the larger operation, which is now complete and Brett will offer some comments on this in a moment.

We had a 28% uplift in revenue and strong cash generation despite soft prevailing pricing with $98 million in operational margin. This improvement is due in part to timing but also our significantly higher sales volumes.

Importantly, we achieved or exceeded all FY '25 guidance metrics. This is a testament to execution discipline and team capability.

We have also released, as I mentioned, our FY '26 guidance today. This result affirms our operational excellence and reinforces our position as a sector benchmark for execution, scale and efficiency.

Now, with that, to offer a bit more detail on the operation. I'll now hand over to Brett.

Thank you, Dale. Moving now to Slide 4.

Starting with safety. I'm pleased to report that the June quarter saw continued strong performance with our 12-month rolling TRIFR improving to 2.79, an excellent result.

This outcome reflects more than just a number. It's a testament to the ongoing work we're doing to build and strengthen our safety culture.

We continue to strengthen our systems, processes and leadership engagement to ensure every team member goes home safely every day. My thanks to the entire operational and projects workforce for their commitment to safety excellence.

Moving now to Slide 5. The June quarter marked a significant operational milestone as we progress the P1000 optimization setting the stage for steady date operations in FY '26.

Production reached 221,300 tonnes for the quarter, a strong result enabled by improved plant throughput supported by the expanded Pilgan Plant. Unit operating costs decreased quarter-on-quarter reflecting early benefits from scale and cost leverage care of the expanding operating platform.

The Ore Sorting facility continues to be a key enabler, allowing greater use of contact ore, increasing lithia units recovered from the pit and lifting overall resource utilization. Lithia recovery averaged 71.6% in the quarter, in line with expectations given the higher proportion of contact ore in the feed blend.

We shipped 216,000 tonnes of product at a 5.1% grade. While the grade was temporarily lower during the quarter due to ongoing commissioning and ramp-up, we expect product grade to return to target specifications in FY '26.

With the completion of both the P680 and the P1000 projects, the Pilgan operation has been fundamentally transformed. We've added 420,000 tonnes of production capacity, improved operational flexibility and delivered a lower cost, scalable platform.

Most importantly, this transformation positions us to capture margin through the cycle, enabled by improved efficiency, stronger resource utilization and a greater adaptability to market conditions. Thank you.

I'll now hand back to Dale.

Thanks, Brett. And I'd also like to just acknowledge the operating team, Projects team and the full team at PLS, it's an absolutely cracking quarter, which marks a huge year, and it was a ramp-up year and ramp-up here is incredibly difficult and it all came together, increased scale, new tech cyclones, building in the Pilbara region, you name it, that we have had it all.

And it all got navigated. So we're just delighted to have facilitated step change in the operating platform, but it's clear of our great people and working through just a see challenges to deliver, as I say, cracking results are well done to the PLS team.

Moving to Slide 6. FY '26 guidance was achieved.

So FY '25, of course -- sorry FY '25 guidance achieved. FY '25, is of course, a very strong year.

And -- we're delighted with what we have achieved or exceeded guidance across each of the key metrics. And it's care of this very robust quarter, we have production volumes of 755,000 tonnes exceeded the top end of market guidance.

Our unit operating costs reduced to $627 per tonne for the year, with further improvements in the final quarter, so P1000 scale and efficiency took hold. As it relates to capital, capital expenditure was well managed, coming in at $569 million, reflecting disciplined execution despite a high activity year.

As I mentioned, I'm proud of what the team has delivered against a very challenging market backdrop during a ramp-up year. And over the year, where, of course, we had a number of very important strategic first including the Latin Resources acquisition and of course, graduating to lithium hydroxide produced at Gwangyang JV in South Korea.

These results represent a standout finish to what has been a transformational year for the company. And now from that, well, PLS is incredibly well positioned.

We're not only a well-run lithium producer, but Cost Smart and technology-enabled operator. We are uniquely positioned to thrive as the cycle ultimately turns.

Now moving to Slide 7. PLS has built a platform of strategic growth options designed to drive long-term value through flexibility, diversification and market responsiveness.

In Australia, construction of the midstream demonstration fund progressed during the June quarter, with completion targeted for the December quarter of 2025. This project remains central to our downstream value strategy.

The Ngungaju processing facility remains in care and maintenance for FY '26 and provides immediate, low capital restart potential, when market conditions improve, a unique optionality advantage. A POSCO JV, or P-PLS, continues to advance.

Train 1 has secured another certified customer, while Train 2 production has temporarily moderated at lower throughput to preserve cash ahead of completion of customer certification. During the quarter, PLS participated in a P-PLS rights issue, contributing approximately $40 million for first equity injection into the JV since its formation in 2022.

In Brazil, drilling activity and technical studies progress to support the Colina project, which, of course, is a key pillar of our future supply diversification strategy. Now together, these initiatives reflect a portfolio approach to growth, combining Tier 1 assets, global reach and optionality across the lithium value chain.

Now, with that, I'll now hand over to Flavio to take us through the financial performance.

Thank you, Dale. Please turn to Slide 9 of the presentation for a summary of the key financial metrics for the June quarter.

The June quarter demonstrated the operational leverage of our optimized Pilgan Plant following the successful completion of the P1000 expansion. Group revenue of $193 million was 28% higher than the prior quarter, driven by a 72% increase in sales volume, partially offset by a 20% decline in the average realized price to USD 599 a tonne for SC5.1 product grade.

Production volume of 221,000 tonnes was 77% higher than the prior quarter, driven by increased output from the optimized Pilgan plant following completion of the P1000 expansion. Unit operating cost, FOB, reduced to $619 a tonne, a 10% improvement quarter-on-quarter.

This reduction reflects the benefits of higher production volume as well as efficiencies delivered through the P850 model and our continued focus on cost discipline. Unit operating cost, CIF, also decreased to $721 a tonne a 9% reduction in line with our lower FOB costs.

Cash balance remained strong at approximately $1 billion as at 30th of June 2025. This underscores our ability to maintain financial strength despite lower pricing and the capital investments in the now completed P1000 expansion.

Turning to Slide 10. Slide 10 shows a cash flow bridge for the June quarter FY '25.

During the June quarter, our cash balance declined by $88 million from $1.1 billion to $1 billion. This reduction was primarily driven by the completion of the P1000 expansion and infrastructure capital expenditure.

Cash margin from operations of $98 million was supported by higher sales volume, lower costs from the P850 operating model and favorable cash timing. Cash margin from operations less mine development and sustaining CapEx was positive at $63 million, reflecting a strong operational performance and reduced capital expenditure in the second half.

Total capital expenditure of $116 million on a cash basis was largely attributable to infrastructure and project investments, including the finalization of the P1000 project. Additionally, we made a $40 million equity contribution to the P-PLS joint venture, reflecting our pro rata 18% interest.

This was the first equity investment since the joint venture formation in 2022 aims at providing additional working capital during the ramp-up phase and navigating the current low lithium pricing environment. Turning to Slide 11.

Slide 11 provides a summary of the group's key financial metrics for the FY '25 period. Production volume of 755,000 tonnes was up 4% year-on-year driven by volume expansions enabled by the P680 and P1000 projects.

Group revenue for FY '25 was $769 million, representing a 39% decline compared to prior year. This was primarily due to a 43% drop in the average realized price, partially offset by a 7% increase in sales volume.

Unit cost FOB of $627 a tonne was 4% lower than the prior year. This reflects higher sales volume and lower operating costs, supported by ongoing operating efficiencies underpinned by the transition of the P850 operating model.

These results demonstrate that our strategic investments in production and process optimization are delivering tangible benefits, keeping us lean, competitive and future-ready. Turning to Slide 12.

Our closing cash balance remains strong at $1 billion despite a challenging price environment. Cash margin from operations of $192 million reflected strong cash generation at a low average realized prices of USD 672 a tonne.

Cash margin from operations less mine development costs and sustaining CapEx remained positive at $28 million. The $653 million in capital expenditure represents the completion of our major investment cycle, positioning us for enhanced returns in FY '26 and beyond.

Turning to Slide 13. Over the last 2 years, we've proactively executed a suite of cost and cash flow reduction initiatives that have delivered measurable benefits and fortified our balance sheet.

These initiatives include the suspension of dividends securing a $1 billion credit facility, reduced capital expenditure, workforce optimization, the implementation of the P850 operating model and launch of our Cost Smart program, an ongoing initiative to build culture of efficiency. With the completion of P1000 and ongoing plant optimization, FY '26 presents a clear opportunity to unlock further value for the business and embed a cost-conscious culture across the business.

We remain highly committed to balance sheet preservation. Our financial position is strong with $1 billion in cash, a $1 billion loan facility, of which $375 million is currently drawn down and total liquidity of $1.6 billion.

This positions the group well to navigate current conditions and capitalize on the market recovery ahead. I will now hand back to Dale.

Dale Robert Henderson Thanks, Flavio. Turning to Slide 15.

As we enter FY '26, our focus sharpens around operational excellence, disciplined cost control and capital efficiency, following several years of investment across the Pilgan Plant and broader Pilgangoora asset base. We can now flex the strength of this new operating platform.

Now, to touch on each of our pillars of our strategy, as it relates to the operation, we're looking to realize the full value of our recent capital investment by driving performance uplift at Pilgangoora. We're looking also to expand and further embed our Cost Smart program for FY '25, Flavio just touched on.

We'll be targeting continuous improvement in cost reduction opportunities across the operations, procurement, maintenance and other support functions. As it relates to growth, we're looking to maintain optionality with targeted investment and studies to position for the next phase of the cycle.

As it relates to chemicals, we were looking to advance the certification of Train 2 of our P-PLS JV, a chemical plant in South Korea, enabling commercial sales while prudently managing ramp-up to pace and to preserve cash. As it relates to diversification, we're looking to continue with measured investment in the Colina project in Brazil, through targeted exploration and study activities, positioning PLS to accelerate development as market conditions improve further.

Together, these priorities reflect a disciplined, resilient and opportunity-ready approach, ensuring PLS remains well positioned to lead through the cycle. Now moving to Slide 16.

Wanted to offer just a little bit of deeper insight into our ore sorting technology. Now because in FY '26, we will be building on the P850 operating model by increasing the application of this ore sorting technology.

Put simply, we are aiming to maximize this lever to achieve lower unit costs. Our core focus will be the progressive utilization of contact ore fee.

This is a blended material from the ore host rock boundary that you can see in the hatched area on the photo. This shift unlocks multiple operational benefits.

Firstly, lowering mining costs by reducing total material movement and increasing the proportion of mined material that is processed. Secondly, improved mine flexibility and resource utilization through reduced dependency on clean ore, enabling more efficient extraction sequencing and longer-term optionality.

Now while these changes deliver meaningful unit cost reductions, they are expected to result in a modest decrease in lithium recovery due to the characteristics of the blended ore feed. For FY '26, we are targeting average recovery of approximately 72%.

This optimization reflects our focus on applying smart technology to unlock greater value, drive down costs and strengthen resilience through the cycle. Now turning to Slide 17.

As it relates to FY '26 guidance, I'm pleased to share that this reflects a step change achieved through several years of investment of the Pilgan Plant and our continued focus on disciplined cost management. As it relates to production, is forecast at 820,000 to 870,000 with a steady quarter-on-quarter volumes as we maintain strong plant utilization.

As it relates to unit costs, FOB is guided at AUD 560 to AUD 600 per tonne, underpinned by increased throughput, ore sorting optimization and improved operational efficiency. As it relates to capital, capital expenditures forecast AUD 300 million to AUD 330 million, following a robust review to prioritize critical spend, optimize timing and preserve balance sheet flexibility.

Lastly, as it relates to Brazil, the cleaner project costs estimated AUD 40 million to AUD 45 million, largely related to targeted exploration to extend resources, progression of project studies and other operational activities, which will be largely expensed, hence not included within the capital guidance. Now moving to Slide 18 to offer some comments on the market and stepping forward to Slide 19.

So there are signs of the lithium winter may be lifting, but it's early in this change. Our volatility remains high and as ever, market fundamentals are difficult to see with clarity.

The lithium market has long been marked by volatility with prices prone to sharp and sometimes counterintuitive swings. Over recent years, at a cycle through periods of unsustainably high pricing followed by corrections to levels well below the cost curve disconnected from long-run fundamentals as witnessed over the past year.

The volatility is not incidental. It reflects a still nascent market with limited liquidity, few futures mechanisms and undeveloped trading infrastructure, pricing remains inefficient.

In this environment, short-term moves are often driven by sentiment, policy signals or speculative flows rather than durable shifts in supply and demand. The pricing pattern over the last 12 months is a clear example.

Spot spodumene prices fell to levels that rendered much of the global LCE production loss-making, a point clearly illustrated in the forthcoming slide. This was not the result of a fundamental oversupply alone, but an immature market that remains in development.

The recent price rally, which began late in the June quarter and accelerated into July follows this pattern, a sentiment-led rebound triggered by perceived supply risks. In this case, Chinese regulatory reviews of brine and lepidolite operations and the suspension of a major project filled renewed price momentum.

Now, we remain cautiously optimistic, but continue to monitor whether the flag supply side adjustments will eventuate. Now, moving to Slide 20.

This graphic shown here underscores a critical reality. Despite the recent rally, spodumene pricing remains well below the levels required to incentivize new investment and fall well short of the long-run price expectations.

From PLS' perspective, several key market dynamics are worth highlighting here. Firstly, pricing remains structurally inefficient and prone to sentiment-driven swings.

Secondly, the recent uplift represents a partial correction only, not a full recovery. And lastly, long-run sustainability will require materially higher prices to support our future supply, as you can see in the graph.

For PLS, our strategy remains unchanged. The business has been built to navigate this volatility, and we are positioned to capitalize as market conditions improve, a low-cost operating platform, strong balance sheet and diversified growth pipeline provides the resilience needed to navigate power conditions and capitalize as the market cycle changes.

Now moving to Slide 21. On near-term pricing is volatile, the long-term demand picture remains robust and continues to strengthen.

Global EV sales reached 5 million units in the June quarter, a 27% year-on-year increase. In China, EV penetration hit 50% in June, while global EV market share reached 25%.

For calendar year '25, EV sales are forecast to grow 23% year-on-year with a CAGR of 14% expected through to 2030. As it relates to energy storage, this is also accelerating global ESS installations at 65 gigawatts in Q2 calendar year '25, up 36% year-on-year, with 116 gigawatt hours installed year-to-date, being a 46% increase.

Forecasts indicate 40% year-on-year growth for ESS in this calendar year alone. Together, EVs and ESS are expected to account for something like 90% of lithium demand by 2030, highlighting a powerful and durable and structural demand trend.

As noted earlier, current pricing does not support investment required to build the next wave of supply. This disconnect, as illustrated in the prior slide, presents a long-term risk to supply security and likely a source of future volatility, but it also creates an opportunity.

PLS is strategically positioned to lead through this cycle as a scale-independent operator with a strong balance sheet and low-cost platform. We offer a rare combination of flexibility, resilience and growth optionality, including the Ngungaju restart, the Colina Project and P2000.

This portfolio approach enables PLS to adapt as conditions evolve and to capture value as demand continues to accelerate across global battery markets. Now, before we move to questions, I'd like to leave you with a few final reflections.

The June quarter marked a defining moment for PLS, with the successful completion of our expansion and a shift into the next phase of our journey, characterized by scale, efficiency and discipline. We delivered against all FY '25 guidance metrics, a clear demonstration of our team's execution capability and our FY '26 targets reflect the strength of the platform we've built cost optimized, capital-efficient and margin resilient with a scalable technology-enabled operating base, a fortress balance sheet, a globally diversified growth portfolio, PLS is uniquely positioned to lead through the cycle and to capture value as market conditions improve.

While near-term pricing remains volatile, the long-term demand story is unchanged. Structural drivers from electric vehicles to ESS continue to grow, yet current pricing does not support the investment needed for future supply, signaling our potential future tightness ahead.

Our confidence is anchored in what we can control, disciplined execution, operational excellence and strategic agility. These are the hallmarks that differentiate PLS, making us a partner of choice in global supply chains and a company well positioned to capitalize on the lithium recovery theme.

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

Good results and strong finish to the year. Just a question on the production plan.

I can see the guidance already, but as you commented, the market is quite volatile, but you remain constructive to the medium to longer term. Just wanted to get your take on the plan of Ngungaju, was the kind of maintenance cost you plan to think in or -- do you see that fund to be off-line for a period of time before restarting?

Austin, thank you for your question. So we've assumed that Ngungaju stayed off for the year.

However, the economic conditions improve well. We can easily bring that back online and we've previously guided that we need a 4-month window from decision to bring that online and ramped up.

So it sits waiting in the wings. But it's -- yes, there's no cost there.

It's just sits in the wings as I say, are ready to be deployed as and when market conditions improve.

Just a quick question from me. What do you see as the key risks in achieving the lower end of cost guidance of next year?

Is it labor strip ratio, feed variability? Just curious on your thoughts there.

I'll offer a quick comment and then this will be good one for Brett to touch on as well. I think in the context of the year, we've just moved through being our construction ramp-up optimization.

Relatively, this is -- we've got a much higher level of confidence stepping into this year, given that we're looking at a steady-state platform. That being said, these large operations, obviously, contained with a whole bunch of variables.

But with an open pit -- with multiple open pits we're relatively derisked there. We've got a very stable consistent operating team and has continued to perfect their know-how as it relates to the plant.

So a lot of the trouble areas you see in many operations on a relative basis, we're in pretty good shape. But Brett, why don't you touch on.

Yes. Thanks, Dale.

And yes, look, the last couple of years have been where we've introduced new capital projects, the P680, the P1000. So always difficult to manage those costs down as you're introducing new variables.

But this year is really around the steady state operation after the optimization phase of P1000 and our Cost Smart program that we've been rolling out into its second year now is really starting to bear some great fruit through the initiatives of our people as we start to see some great cost-saving initiatives and innovation. So I think there's plenty of innovation left in the mine.

And now it's really around that steady-state operation and bedding down some of that new technology in the plant. So I think from a cost viewpoint, I think we're well positioned to manage any of the impacts coming in from other variables like suppliers or supply chains.

So yes, I think FY '26 will be a very good year for PLS.

Two from me, both related to -- well, actually one related to mining, one related to pricing perhaps. So with regards to the mining side, just noted that 5.1% is your product grade this period and recoveries were yet 71.6%, you flagged 72% for next year.

Could we just revisit that one more time, Dale, in terms of why the low recoveries, what the strategy changes? And I also noted in your physicals that the mine volumes are significantly higher at 1.5 million tonnes and you stockpiled a bit of all.

Is that selective processing happening? Or what exactly is happening there?

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

Sure. There's a few parts to that.

So firstly, just in terms of sort of the look back and the quarter which was the grade of 5.1 was a function of the optimization impacts of the quarter. Of course, March quarter was about ramp-up.

June quarter was about optimization. So slightly lower on produced product grade.

However, those levels of returns to sort of the normal levels around 5.2. So certainly, no concerns in that regard.

As it relates to the operating shift that we've described here and the commencement recovery, in fact, just to offer a bit more description around that. What that's all about is capturing a mixed ore feed from the mine.

So not only the clean ore, we used to have a clean ore only strategy historically. We did not have ore sorting capability, which, of course, we do now.

But the ore sorting capability enables us to do is to capture all the ore and right up to the boundary, the host rock boundary. So the host rock boundary, it's a co-mingled combination, of course, the host rock plus the actual ore.

So the opportunity here is to capture all of that and effectively increase the volume coming from the mine. That's essentially the key benefit.

However, the impact which comes with that is you're placing obviously, reliance on the ore sorting capability to clean that ore up. And in the main -- it does clean it up to a significant degree.

But that does entail a very small level of impurities, which carried through into the operation. Hence, small impact to lithium recovery.

Hence, we've guided that being a sort of a target recovery of 72%, which you may recall, historically, we always talked about an average of 75%. So that's really the basis for that.

As it relates to mine volumes, well, nothing peculiar going on there. It's just really a function of where we're at in the mine plan at this time.

Just for the avoidance of doubt, we're certainly not high-grading.

Sure. I understand that.

Just a quick follow-up on that. In terms of the ore sorting strategy, I think that hasn't changed necessarily.

So what is different, I guess, is what's confusing me in terms of why the recoveries are expected lower.

Sure. Sure.

The key impact, Rahul, is we are looking to maximize the proportion of the contact or the boundary to a much higher level for the purpose of lower unit costs. So moving on a volume higher than we had originally set out to do for the ore sorting facility.

Got it. Okay.

That's very clear.

Yes, I think that's the key. This is a step change in the amount of contact ore that we're adding.

So the ore sorters, we've optimized those through the previous quarter. Now, we're actually unleashing them a little bit more, and we're actually adding a lot more of that material coming out of the mine.

And with that comes the higher levels of iron and now the contaminants. So that impacts the recovery.

But we're really optimizing it for the lowest cost right through that value chain.

Got it. Okay.

Look, I've asked a detailed question. I'll make sure the second one is very quick.

Pricing is the question and obviously, the pricing a bit weaker in terms of if I compare it to some of the peers in the market. My understanding was, end of last year, you renegotiated a contract.

You ended deliveries on one of your offtakes. What are we missing?

Is this purely timing? Is it something else that's playing in the pricing you've achieved?

Anything to call out there?

Yes, thanks. On that one, Rahul.

So firstly, as it relates to the March quarter, we did outperform our Australian peers in terms of realized pricing. As it relates to the June quarter, it looks like we might be in the middle some below, some above spot fundamentally, what's behind us is the pricing for the June quarter has become quite volatile again.

We've seen a range from low 600s to mid-800s during the June quarter. So of course, that's going to have an impact across the producer set depending whether they've done spot sales or what are their pricing formulas may be based on.

So I think that's probably the underlying reason for any variances you're seeing across the set at this time. As it relates to our offtake agreements, it's very much business as usual.

And there there's nothing -- there's no interesting activities there. It's just very much BAU.

Dale and team, congrats on completing FY '25 and exceeding guidance. First one for me, just some clarifications around CapEx.

Can you just confirm what the split of sustaining and mine development in the quarter just gone was? And then for the full year CapEx, is that difference between your $569 million versus guidance in the $653 million in your cash flow purely cash versus accrual or some other spends on Colina and studies and other things in that number that we should consider?

Yes. Thanks for the question, Hugo.

In terms of Colina starting with the back end, could we expense our costs on Colina? So there's no capital expenditure there.

We do capitalize acquisition costs only, but the expenditure on Colina is expense. In terms of the split on capital expenditure, it was a split between mine development, P1000 and sustaining CapEx to the tune of around sort of $20 million to $26 million on each part, and that's the sum around those parts.

Got it. That's helpful.

And then just digging more to the POSCO JV and the equity raise there. If I go back to FY '24, the JV had drawn down more debt that we're supposed to see both trains through construction and ramp-up.

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

Sure. Thanks, Hugo, a few pieces here.

And starting with the build. So looking back, the build was as expected.

But, of course, this has been coincident with the price decline of the market. So it's a tough time to be bringing on a new hydroxide facility.

And that really gives rise to the equity injection that we have provided to the team there. But in terms of unit cost, we haven't provided any guidance on that, given that obviously, that facility is still very much in ramp-up mode as indicated by release.

So we're looking to see that prove itself in time, and we're certainly very happy with the progress there. Does that answer your question?

Yes. I guess the kind of implication of the question, should we expect more equity to need to be tipped into that JV?

And when if prices stay where they are?

Yes, it's too early to say on that, Hugo. Obviously, the key variable with all of this is what happens with pricing.

Obviously, the recent appreciation everyone's buoyed by that, and we're all waiting to see how sustained that as per my earlier market sort of comments. So that is really the key variable.

Meanwhile, we are watching and observing that the team get on with the job of ramping up that operation, which we're doing very successfully. And obviously, the recent certifications and the more certifications are getting with Tier 1 customers are fixed to that good progress.

So yes, it's yet to be determined if any requirements are needed in the future, but as I say, pricing is really the key determinant.

Got it. And if I can, one more just while I've got the floor.

Just P2000, no mention of that in the release today, sort of the timing.

Yes. No news on P2000 there, Hugo.

Just quick question with regards to the ore sorting technology and the utilization of that going forward. Within your cost guidance for FY '26, how much of that is sort of amortization of, I guess, you contact on stockpiles and what percentage of these do you think will be contact sign, whether it be from the stockpiles or straight from the pit?

So in terms of the proportion of contact ore, we haven't disclosed that level of detail. So I can't offer you too much insight at that.

But as I mentioned earlier, we are looking to move to volumes above the design criteria that we initially set ourselves, which obviously supports the improved cost performance. As to the amortization, do you want to take that?

Yes, thanks. You will amortize that during the course of the mine plan over the coming FY '26 period and beyond.

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

There will be some slight improvements through blending some of that contact ore, yes.

Okay. Are you able to quantify that at the same time?

Not at this point. No.

I have an exciting accounting question this morning. So you noted that you expect another net loss from the POSCO JV to go through your stat accounts.

Similar to last half. Can you just remind me what that was?

And then secondly, given that you've just come out of that P1000 spend, is there anything you can tell us around depreciation or D&A expenses for the next FY?

Kate, thanks for the question. In terms of POSCO, we equity account our 18% interest in that joint venture, as we've done since inception, and we'll continue to do that for the period for FY '25.

But you flagged a net loss to go through the P&L for this half. What -- and you said that you expect it to be similar to last half.

Can you remind me what that was?

Our last half was approximately $20 million. So we expect similar results for this period of the second half.

Okay. And any comments on depreciation?

I assume there's a step-up now that P1000 finished?

Yes. Depreciation will increase slightly as a result of the capitalization of the P1000 project, and that will be amortized on a unit-of-production basis over the life of mine.

Just on stripping in FY '26. I think through FY '25, we're hovering around 4 to 5.

Can you just remind us of your loan number and I suppose the levers that you have to pull in 2026 and its impact on cost -- on your cost guidance this year?

So let me offer a quick comment there, Al. And then Brett can weigh in on this one.

As it relates to levers to call, obviously, we've talked about the ore-sorting elements, the key one we're looking to maximize outside of that, just stepping back into the mine. We are partway on sort of a multiyear maturity journey there with a continued transition to owner-operate.

So we're partway through that during the course of the year. Just been where we took on drill and blast.

There's more to come in that category, and there's more sort of straightforward productivity improvements to come in that space. As it relates to the processing, the mission will always be further recovery improvements.

So we'll -- obviously, we've got the team working on waves of new programs and around that, which is all about chasing incremental improvements. So we'll do that.

Of course, outside of that, you've got what I'd call the bread butter stuff around bulk procurement and doing trials around spares, longer life longer-lasting materials, et cetera, the guys have got a bunch of programs underway, which fall under the Cost Smart umbrella, which is continuous improvement initiative within the business. Brett, if you go.

Yes, the main issue there is that we can we can reduce the amount of stripping in FY '26, not through high grading, but from really leveraging the ore sorters to take all of the contact ore material, which kind of allows us to limit the amount of time spent in the waste stripping areas to uncover just the clean ore mixture. As we move into future years, we do get into some of the larger cutbacks.

Our strip ratio for FY '26 is basically a function of using all of that contact ore. And then it steps up marginally in FY '27 and thereafter as we get into some of our planned cutbacks in part of the mine plan.

Just another one. The CapEx deferral from Stage 2 of the power priority, are you able to elaborate on the quantum of the savings there and does that have any go-forward impact on OpEx?

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

Yes, I can answer that. So it's approximately about $5 million on deferral.

The market conditions.

The operating benefit was going to be pretty marginal on that one. So we've looked to sort of the mentality we took to FY '26 was one-off just critical CapEx only.

And as such, some of those sort of incremental investments which have got a longer payback. We've deferred that to later.

So -- but I don't have a sort of a macro market price in mind, but we'll bring that back online, but ultimately, we will.

Just wanted to talk a little bit about '26 guidance. You've given us costs, you've given us Brazil.

Just wondering if you could maybe just provide some color around SG&A, any other exploration and study costs on P2000 and then leasing spend as well for the year ahead?

Glyn, I'll touch on studies and Flavio can speak to leasing costs. As it relates to studies, very small dollars being spent in the studies category, but, we are, of course, progressing those required studies for both P2000 and the cleaner project but in the scheme of things, they're not huge dollars.

Flavio.

Yes, Glyn, thanks for the question. On the leasing spend on Slide 12, in terms of the cash flow split of $95 million that we've got there.

The split of leasing there is about $68 million and we expect that to be similar for the next financial year, FY '26 as well.

And then the just SG&A at the head office because I believe that's outside the cost guidance of $560 million to $600 million. So is that running another $70 million outside of the cost guidance?

Yes. We expect that to be slightly less, Glyn.

And through our Cost Smart initiatives we've taken on some reductions there as well. So we expect that to be slightly lower for FY '26.

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

Yes, I think that would capture it quite well.

Thanks, Maggie. So we have some questions on the webcast.

First question, what project will be put into production first P2000 or Colina?

Yes. Thanks for the question on that one.

Yes. As it relates to P2000 or Colina, several variables sort of come together, which inform that decision.

It's about approvals, studies and the actual investment case itself. And each of those projects are in different states of maturity.

So I suspect that when the time comes, it will be quite obvious, which makes most sense to progress first base to one of those variables. James Fuller Okay.

Thanks, Dale. Any update on the Ganfeng joint downstream partner study still slated for CY '25 release.

Yes. As it relates to the Ganfeng study, we're working together on that continues to march forward, and we're -- both parties are very much enjoyed working together and progressing that.

And it's underway and on track. Of course, will we look to be pursuing that in this market, unlikely yet, there's discussions to be had with Ganfeng on that.

But ultimately, in time, we like the idea of continuing to explore this in time. James Fuller Okay.

Next question. How rapidly could you bring Ngungaju back online when prices come back?

How long would it take to ramp?

So we've guided 4 months being from sort of decision points to ramp up. I suspect in practice, there being some optimization to follow that 4-month period to bring it back to full nameplate, but the bulk of the ramp-up would occur in that sort of 4-month period.

James Fuller Okay. Thank you.

Next question. Will the dividend be paid this financial year '25?

So ultimately, that's in the hands of the Board to take a decision on that. I suspect that if pricing remains as we've seen recently, the Board would probably -- will not do a dividend.

But ultimately, that's for the Board to consider in accordance with their capital management framework. James Fuller Okay.

Moving forward, do you think you've made any further acquisitions in Australia or abroad, whilst we're in a cycle -- cyclical low in the lithium cycle?

The core focus for the business is the base operation. And as we've outlined in the call today, we're looking to demonstrate the strength of the new platform we've built and the knowledge, we've had a heavy investment cycle.

That said, of course, our strategy contemplates an organic growth, that's unchanged, but that's not a focus -- that's not a key focus for us at this time.

Okay. Next question.

We've seen some recent low pricing for SC6, but recent news has seen an uptick in prices in the last few weeks. Why?

Yes. Thanks for the pricing question.

And hopefully, my market commentary went some way to answering that. It's principally through the news in China about potential supply of curtailments here of approvals and other reviews by China seems to be the principal reason that's catalyzed this price improvement.

However, as I did mention in the call, pricing has been well below sort of a sustainable level required in the industry. This has catalyzed a part for action, but there's definitely much more to go, I think, in order to achieve a more sustainable market.

Okay. Last question from webcast.

Is the BMX platform now being utilized given the recent uptick in prices?

Not at this stage. Spot sales have been few and far between, given we've pulled the operation back to Pilgan only, which satisfies our core offtake.

So we're not doing a large volume of spot sales. It's the BMX platform itself that we have it there.

It's sitting under the dust covers ready to be utilized if we think that makes sense for the market. Okay.

I think that completes our webcast questions. So lastly for me.

Again, thank you all for dialing in today. It's been a huge quarter capping off an incredible year for the business, and we look forward to updating again at the full year results in a few weeks' time.

Thank you very much.