ASM 2021

Sep 29, 2021

Slides

My name is Tony Kin. I am the Chairman of the company. A general meeting is being delivered from the traditional lands of the Whadjuk people and the Noongar nation. I would like to acknowledge them as the traditional owners and pay our respects to their elders, both past, present and emerging. We wish to acknowledge and respect their continuing culture, contribution they make to the life of the city and the region and the area in which we operate in the north of the state. A quorum is present, therefore, I declare the meeting open. With me today at the table, middle here is Alex Eastwood, our company's Secretary General Counsel, Then go to Ken Brinson, the young man there who just put his tie on Steve Scootamore, Sally Ann Lehman and further up the end, Nick Shenota. I'd also like to acknowledge Dale Hems, our Chief Operating Officer, who is here. Our Chief Financial Officer, Brian Lynn is unable to attend today. I'd also like to acknowledge Miriam Stanborough, lady just sitting down in the front here, who will be joining our Board early in October. Also at attendance today's meeting is the company share registry, Computershare, represented by Rod Sams, who's that wonderful young bloke looking up the back. Okay. Look, I need to provide some information on the conduct of the meeting and when I do that, I'll go through the business of the meeting and then Ken will deliberate presentation. Why I need to go through meeting procedures, because this meeting today is what's called a hybrid meeting, which means it's being conducted both physically here at the Melbourne Hotel and online by what's called the Loomi meeting platform. So it's an online meeting as well. All online attendees can watch and listen to a live webcast of the meeting. In addition, shareholders and proxy holders have the ability to ask questions either verbally or in writing and submit their votes online. So the point I'm making is that those which are looking at this online as well as seeing the meeting, they can cast their votes And they can see what's going on and they can ask questions. The notice of meeting for today's meeting includes the live web cast details, which I'm going to have to run through. These outline how shareholders can participate in today's meeting, including instructions on voting and asking questions. The notice of meeting itself can be viewed on the ASX and the Purple Minerals platform as well as the Computershare website. There is also a LUMIE, LUMIE online meeting guide available on the company's website. For those in attendance here today, the persons entitled to vote on the poll are all shareholders and they will be holding a green card, which was given to them on the way through. On the reverse of that green piece of paper is your voting paper, how you vote and also your instructions. Our proxy holders have attached to their admission a summary of the proxy vote, which details their voting instructions. In respect of any open votes, a proxy holder may be entitled to cast. You need to mark the box beside the motion to indicate how you wish to cast your vote. After the final resolution, Computershare will connect collect all the green voting cards. Online attendees and those which are online in the Lumi platform can submit questions at any time. To ask a question, they need to select the messaging tab at the top of the Lumi platform. At the top of the tab, there is a section for that person to type in their question. If your question relates to a particular resolution, please identify the resolution number at the start of your question. And once you have finished typing your question online, Press the arrow symbol and it will send the question through to Alex here. Please note the shareholders online can submit their questions now, But I won't address those questions till we get to the particular resolution. And I should say that if we get multiple questions on a similar subject, We may amalgamate them and answer them that way. For those shareholders who wish to ask a verbal question, as I said, you can do one online, but you can also, a shareholder is online can do it verbally. An audio question facility is available during the meeting. To use the service, you please pause the broadcast on your Loomi platform You click on the link under asking audio questions. A new page will open and then you'll be prompted to enter your details. And notwithstanding when you're doing that, you'll still be able to listen to the meeting. If you have any issues in relation to that, Have a look at the Lumi platform and also instructions on the screen. Finally, due to time constraints, as I said, we may not get to answer all your questions. And if that is the case, we'll just send any outstanding questions, we'll just put it on our website. Voting today will be conducted by way of a poll Excuse me. As opposed to a show of hands, I need you to appreciate that seems to be the method on which most meetings are conducted these days. Shareholders present, as I said, will be given poll papers to complete those and those online can use the online facility. Okay. In order to provide those onlineers with enough time to ask questions on the resolution, What I'll do is I'll declare the business of the meeting open, allowing those questions to be put online. If you experience any difficulties during the meeting, refer to the online meeting guide available on the Pilbara Minerals website. Please appreciate those people online. There is a slight audio delay between what I'm talking about now and they're online. So we'll at times pause for the appropriate time to allow questions to be put to Alex and that sort of stuff. With regard to proxies, these numbers will be displayed on the screen in relation to each resolution. And would you please note, excuse me, In relation to open proxies, which have been given in my favour as Chairman, I will be casting a vote in favour of each of those resolutions. We'll move to the business of the meeting Fairly quickly, but I think there's a number of people in this room who've been shareholders of the company for a number of years. But if you just go back 12 months, even 15 months, The state of the company now is substantially different today than what it was then and that's not just a function of the spodumene price, which is the commodity we sell. But the nature of the operations are different. 15 months ago, 12 or 15 months ago, we were going through what We call it moderated production strategy. Now we're hell bent and full production. Our balance sheet 12 to 15 months ago was a little bit different than what it is today. We've been able to refinance our debt and certainly the balance sheet is in a much better position. So as I said, if you look at where we were 12 months ago, 15 months ago to where we are today, the operations are different and they're far more streamlined. And I'd like to Acknowledge Dale Henderson's contribution on that. He's a Chief Operating Officer over there, plus the guys on-site, people like Simon Coyle and that sort of stuff, who who's our on-site manager. The work and effort been put into our operations by the engineering and technical team have been outstanding. Obviously, one of the areas which was a bit of a struggle for us was our recovery and that is what that's called the concept of when you Pull out your mineable sorry, your saleable minerals like lithium out of each ton of spodumene. We had early on 12, 5 months ago, our recovery rate was running about 50%, probably pushing 60%. It was well short of the feasibility study. Is now up into the mid-70s. It costs you as much to put 1 tonne of ore through when you're only getting 50% recovery as it does to put 1 through at 70%. So you can see that the difference there in that. Also, in the last one of the differences, of course, we acquired The operating plant next to us, Ulchura, Ken will talk about that a bit more in his presentation, but obviously not only does that give us access to further ore bodies, It solves a bit of a boundary issue because the Altura Minerals resource was running up under our boundary. But as you'd appreciate, it gives a lot of synergies in operating So it certainly has been a great acquisition for us. We paid a fair price for it. I'm sure if we bought it today, it would probably cost 3 times as much. The board, as you would know, has made a decision to put the Altura grant into operation. And I think our first Sale of the law, Ken, will be early October. Is that right? So it's been a great effort by our team to get the Altura plant, Knock it into shape. We have had to spend a little bit of your money to do that. Thank the engineers. They always ask them for money. But as I said, we hope to be able to had the first ore on that in relation to early October, which is a terrific effort considering we only settled that transaction in January this year. I now need to go to the formal matters. Look, if you've got any questions, please put your hand up, either whilst I'm talking or when Keane's talking or Even afterwards, we'll have a cup of tea and if you want to stick around and ask questions, please do so. As I mentioned, All resolution to be done by way of a poll. That's not a show of hands, but that doesn't militate against you asking any questions. We need to offer its shareholders the opportunity to ask questions. I mentioned Rod Sain from Computershares agreed to be the returning Today, following confirmation by computer share of the final results of the poll, these will be posted on the ASX platform and also on our website. And online voters, those who are listening, I outline how you to vote. And as I said, the instructions are on the screen. At the conclusion of the formal part of the meeting, Ken will make a presentation instead of the opportunities to ask questions of him and members of the Board which are here. Now moving on further down, the notice of meeting, I propose to take the notice of meeting as read. No objections. If there are, I'm going to read the notice. There will be no objections. I won't read the notice. So I will take the notice as read. I'll now move on to the business of meeting. I confirm that all resolutions are now open for voting so those onlineers can cast their vote. Alex, at this stage, have you got any questions from any of the onliners as to my less than explanation? No, Tony. There is no questions online at this stage. Okay. Thank you. Under Resolution number 1, which in the notice of meeting, it relates to the ratification of the issue of what we call the tranche 1 deferred consideration shares. The votes in relation to that are on the screen, the forwards, discretionary against and the total value and that will tell you the proxies which are received. And as shareholders would remember that or may remember is that when we bought the Altura asset, part of the consideration was deferred for a period of time. And we got the opportunity to settle, I think it's payable in January, I think from memory, January 22, Alex? To satisfy that either in cash or shares. We've negotiated with the bondholders to bring that forward at a discount, So we're paid less. And so trends 1 here relates to the ratification of shares. We've already issued a pile of shares to the note holders As part satisfaction, we are now seeking ratification of that issue that is the object of Resolution 1. So ratification acknowledges that the shares have been issued and that we are now seeking shareholders to ratify that. So the resolution is that pursuant to and in accordance with Listing Rule 7.4 and all other purposes, shareholders ratify the prior issue of 32,670,451,21 deferred consideration shares on the terms and conditions set out in the explanatory memorandum, which sets the detailed explanatory memorandum, of course, was part of the notice of meeting. I'll now invite any shareholder present to ask questions or comment on the resolution. And that question on the resolution, we've got any onlineers there, Alex? No questions, Tony. Okay. All right. Then I will now put the resolution. As I said, it will now go to a poll. I'll now move the next item of business, which is resolution number 2, and that is part of the tranche to deferred consideration shares. We agreed a number of shares with the entity to which the consideration was payable and we had sufficient capacity in what we Call our 15% capacity to issue the 1st tranche of shares, which is tranche 1. We now need shareholder approval to issue tranche 2. Proxies should be displayed on the screen in relation to that. And you'll see that there's 99.12 percent for, Okay. The resolution itself is that pursuant to and according to Listenerable 7.1 and for all other purposes, Shareholders approved the issue of 32,670,451 tranche to deferred consideration shares to the loan note holders on the terms and conditions set out in the explanatory memorandum. I now invite shareholders to comment or ask any questions in relation to that resolution. Alex, anyone there? I'm sure they're there, but there are no questions, Tony. Okay. Thank you. A resolution will now go to a poll. Resolution number 3 It was also part of the Altura acquisition. We issued shares, which is set out in the notice of meeting over the explanatory memorandum to RCF Resource Capital Fund and also to Australian Super, which gave us part consideration to be able to satisfy the transaction. We're now seeking ratification of those should they've already been issued. But what the ratification does is under the Listing Rules, it reinstores our ability to issue further shares. And there's no plan to issue any more further shares at the moment, I can assure you of that. But Resolution 3 is put to you to ratify the easement of the via the issuance of the placement shares. The resolution is that pursuant to and according to Listener Rule 7.4 And for all other purposes, shareholders ratify the issue of 330,268,145 Placement shares on the terms and conditions in the explanatory memorandum. I invite shareholders to comment or ask any questions in relation to the resolution. Anyone there, Mike? No questions. No questions. Okay. Resolution number 4 relates to the adoption of a new constitution for the company. By way of background, the existing constitution was first adopted in 2,009. Since then, there have been a number of changes to the Australian Stock Exchange Listing Rules and also the Corporations Act. The Board has reviewed that in company with our lawyers who are present here and believe that constitution should be updated and renewed and it's appropriate to do so in the best interest of the company and the shareholders. The annexure to the notice of meeting sets out the differences between the old constitution and the new constitution. I should say that in relation to the constitution itself, which allows makes it quite Clear that the company conduct what we call these hybrid meetings, whereby we can have them online or physically as we are doing today. A couple of proxy holders raised with us their concern that we may take the opportunity to exclude all physical meetings and simply have online meetings. So that's not the case. Obviously, we prefer to have physical meetings. So I'd just like to place on record for those that were concerned, it is not the intention of the company at all to simply only have online meetings. And I'm happy for The minutes of this meeting to record that. Alex, is that right? That's correct, Tony. Yes, thank you. So this is a special resolution, and it requires approval of at least 75% of the members who are eligible to vote. Proxies received in relation to the resolution are on the screen. Resolution itself is that pursuant to and in accordance with Section 136 of the Corporations Act and for all other purposes of the company adopt the constitution table at the meeting on the terms and conditions set out in the explanatory memorandum. I invite shareholders to comment or ask any questions in relation to the constitution. No questions, Tony. No one in cyberspace, Alex. Okay. Any other question or any comments at all on the resolution? Alright, well, I'll now put the resolution and as I said before, it will go to a poll. Resolution number 5 relates to an increase in the aggregate pool, not the individual pool, the aggregate pool for non executive directors. Clearly, I'm a non executive director and I have an interest in the resolution. If I will ask Ken if he would put that resolution in. Thanks, Tony. The proxy votes received on this resolution are displayed on the screen. And the resolution is that pursuant to and in accordance with Article 13.8 of the existing constitution, Listing rule 10.17 and for all other purposes, the maximum total fees payable to non executive directors be increased from $750,000 per annum to $1,100,000 per annum on the terms and conditions in the explanatory memorandum. And I would simply make the point that the resolution here is not a reflection of Non executive directors necessarily looking to pay themselves more money. I think you'd all agree that it's modest, the current fee structure. However, it's our intention to continue to grow the pool of non executive directors for and on behalf of Bilborough Minerals. Are there any questions from the floor in the first instance? And Alex, Online? No, Ken. No questions online. If there are no more questions, I put the resolution to the meeting. Please cast your vote if doing that online. And it will be the subject of a poll. So I'll now I hand the Chair back to Tony. Thank you. Thank you, Ken. That concludes the form of business of the meeting. Ken will make a presentation. As I said, I welcome shareholders to ask any questions in relation to that. But I did mention early on that the difference between the company 12 to 15 months ago and where it is today and I did pay a lot of credit to management and the work and effort that they've done. I'd also like to record my appreciation of the efforts of the Board. The board has worked quite closely in relation to that and we had pretty tough times. 12 to 15 months ago, we were on the window ledge. Like that, I'm pleased to say we've actually climbed through the window. We're keeping the window open behind because Things can change. But to my fellow directors, work very well with all management and the like to thank them for their contribution through What was a difficult time to the company, as I said, it's not just been the increase in the spodumene price that has put us in this position, it's been a substantial improvement in the way the company operate certainly at a site level and on a processing. So look, in relation to that and conclusion of that, I'd like to thank you all for attending and appreciate your support. I now formally close the meeting and invite our Managing Director, Ken Brinson to deliver a presentation or hang on, Anything online, Alex? No, Tony, nothing online. What's that ET? Is there anyone there? I thought there would be at least one question, but no, there isn't today. Well, you see John standing from Macquarie, he has just ducked in. He might have a question to ask us. Okay. Thank you very much. Sorry, I forgot to say, if you those that have a poll form, if they could just please cast their votes And Rod Symes here will run around and collect your vote. And as I said, Computershare will tally those up and the results will be published on the ASX platform and also on the Pilbara Minerals site. But as you can see, there's very strong support of each of the 5 resolutions. So don't anyone leave with the green form in their pocket. It needs to go in the box. Thanks, Tony. And thank you, ladies and gentlemen, for your in the room today and a big welcome to those that are participating online, especially those that have persevered into the evening from the Eastern States. We really appreciate the chance to meet with you again and some familiar faces in the room today. So thank you very much for your anticipation Sorry, participation and in anticipation of an update as to the company's activities. We have some presentation materials here to share, some of which I will skip through relatively quickly because I think the really key topics that The topical information that relates to our position is very much about what's happening in our market And in particular, for the purpose of the spodumene sales. And then discussion about our response to what's happening In the market, because there has obviously been substantial changes, and especially over the last 12 months in our market. And I feel like and the team feels like Pilbara Minerals is now really well placed to take advantage of The significant growth that we expect to see in our market, especially over approximately the next 5 years. So in that respect, moving on, it's been a big year for Pilbara Minerals. So I'm assuming I've lost it, Alex. Sorry, Matt. I lost my page. Well done, Geoff. Thank you. Thanks, Paul. All right. Fine, it's on the screen. It's on the screen. Yes, brilliant. Okay, got it. I'm back on track. So yes, very big year for Pilbara Minerals. And so I guess the 2 key events, Tony alluded to them being really important thresholds to build our minerals to have left over. The first related to the refinancing, which we reflected a lot on in the annual general meeting last year. The only reason that we could Refinance our facilities was because the operating platform at Pilgangora had improved to the point where We're really well positioned with a competitive cost base and a product that was eminently saleable in the market. So that was the first of the thresholds. The second was The potential in the aggregation of the asset base at Bill Gangaura. And obviously, that's something that we'd had our eye on for quite some time. So of course, in the circumstance where Altura fell into receivership, We were well placed to be able to respond. And by well placed, I mean, understanding the physical assets Because of course, we're neighbors. So we're mining in essence the same or a very similar ore body. We understand the way it processes And we understood the way to recover it. The last of the missing links was having the investor base back Pilbara Minerals in achieving the acquisition. Now, one of the reasons why that all worked for us and some might say worked Quickly, in the circumstance where Altura fell over was because we'd already been working with financiers around the support for our business more broadly, The growth of our Pilgangoora project, the refinancing event to deal with the debt, in which case Financiers were lined up understanding our assets and it really didn't take much to convince them That it was a worthwhile acquisition for the aggregation of the asset base at Pilgangora. And I'm pleased to say that That aggregation is now well underway. And the last of the key threshold questions was the market itself. And It's a little bit embarrassing discussing it in this context, but COVID has been good for Pilbara Minerals because it's had the effect of Forward demand for lithium raw materials. And the link is that as governments globally have stimulated They're local economies. A lot of it has been targeting new energy, the new energy economy. So that means decarbonizing their economies. It means the application of renewables. It means electrifying their transport fleet. And batteries are a key co commitment to that outcome. And that has meant that demand has come forward. And it's created a pretty Refinancing, operating performance, acquisition of Altura And now the market working in our favor with a global demand base It is much more material than would have been the case even just 3 or 4 years ago when it was really about China. So I feel like we're about as well placed as we could ever be. Moving on to the next slide. We have An amazing asset base now at Pilgangoora, some of which is already on show. We've joined the resource space and we've Our resource at Pilgangoora inclusive of the Altura acquisition has been a material uplift in the resource now plus 300,000,000 tonnes. And we're soon to publish a new reserve. Reserve will take into account the effect of the aggregation of the assets, The opening up of the tenement boundary that Tony referred to in his comments and then Also the effect of recent exploration programs, all of which bodes well for future growth in the reserve base at Pilgangoora. So with that, we have the opportunity to expand. And that's one of the things that I'll reflect on during our presentation materials today. And moving forward to the next slide. The change And Australia is a it's not a great place to be reflecting on this change from because here in Australia, the truth is we are behind the rest of the world. The rest of the world is probably moving faster as it relates to the adoption of electric vehicles And at least in part, depending on where you are in Australia, the application of renewables. It turns out that here in Perth, we're one of the world leaders with respect to the application of Solar and especially in the domestic environment. But the rest of the world is doing a lot in renewables as well, a combination of wind farms, Wind and solar, wind, solar and batteries. And all of that is now playing in the favor of Significant global demand growth. So more lithium raw materials are required. And it's turning out to be quite a challenge for the industry. And that's why we're now seeing a material uplift in price. And I'm going to come back to price and explain The market dynamic there in a little bit more detail. So big change in the growth in lithium raw materials. The demand growth is accelerating. And as it stands today, our industry is having a bit of trouble responding, at least not at the right pace. That's leading to an acceleration in price. So moving on to the next slide. And the other thing is when you start to drill down into the detail, The cathodes or the technology that's required to support the application of the lithium ion batteries is resulting in this growth that is just extraordinary. It's off the charts. So on the right hand side Of the this particular slide, we're reflecting on the growth that's required in lithium markets between today, 2,030,050. And the European Commission has estimated that our market will have to grow approximately 10 times over less than the next decade and then up to about 25 times by 2,050. Now based on historical precedent, you'd probably say they're still underestimating the growth that's required. The reason why I'm reflecting on that Is that there's not many industries where this sort of growth happens, not that many paths to follow. And what it speaks to is a huge amount of investment that's still required in lithium raw materials. But Pilbara Minerals has the benefit of being a first mover having a first mover advantage And as a result, being able to play to a market that is short in the raw materials and achieving a healthy price outcome. The detail inside the battery technology, well, it's a lot about high nickel cathode materials, which is Where a lot of the EVs are headed, especially those that require long range. And then in lithium ion Phosphate batteries, iron, I r o n, lithium ion phosphate batteries being a cheaper lithium ion battery alternative And especially for low range vehicles or heavy vehicles with low range and also Energy storage that relates to renewables. For example, a battery pack on your house with solar On your roof. So these areas are growing at an incredible pace measured in 100 of percent, Not just tens of percent, but 100 of percent annually in growth. So we're at the front end of what is a pretty significant change globally, Combination of distribution of power, the way we generate the power, the way we distribute the power and the way that we store the power And they're all key drivers to the application of the battery technology. And as the demand has come on, we've done our best to respond. And Dale and the site team have done a fantastic job Getting the site back up to its full capacity, actually even to the point where today it's probably running a bit harder than the original design. And we're obviously working incredibly hard to bring back the Naga Chu plant, the former Altura lithium operations and we'll be doing that as soon as we possibly can. So that's all very, very active. I'm not going to reflect Too much on results. There will be a bit more discussion about that during the AGM. If I could go to Slide 28, which is our production or growth outlook. Keep going. One more. That's it. Thank you. So here we've laid out what we expect to happen with respect to our expansion in production capacity At Pilgangoora. And it all starts with the Pilgang facility. That's our old Pilgangoora facility, running at Nameplate capacity and including what we call the plant improvement projects. So a debottlenecking exercise For the purpose of expanding interim production at Pilgan plant, it's taking the nameplate design From 330,000 spodumene concentrate tonnes up to 380,000 spodumene concentrate tonnes. That project is now well, well advanced. Its commissioning is imminent, in which case we'll start to see that additional capacity kicking in during the December quarter. The team has done a great job delivering that project in light of the pressure that exists here in Western at the moment in accessing project resources, people, that type of thing. So a really fantastic effort and we're very pleased with the progress of That project. The next one shown in green, that's the Ngadjou restart. Commissioning during the December quarter with a view to achieving the approximately 200,000 tonnes capacity by June next year. Now I've often been asked in respect of the restart at the Ngadjuk plant, are we confident About our ability to see that plant perform, one of the reasons why Altura struggled with their facility or sorry, in total And ultimately fell into receivership also because they never got the plant to perform. But based on the team's track record at the Pilgrim plant And what we've learned there and is now proven, we're confident in our capacity to overlay that operating regime 2, the Ngadjou facility. It does include a few changes as we restart that facility, but nonetheless, we're confident in being able See the flotation plant perform there and ultimately achieve its 200,000 tonnes in relatively short order over about approximately 6 months' worth of commissioning and ramp up. So we expect to be at 580,000 tonnes by the middle of calendar year 2022. A little bit further down the track is the next steps. And the next steps relate to coming back to considering expansion at our Pilgan plant. And we're going to be guided by our views around how the market performs over approximately the next 12 months. It's a critical time for the industry. And today, you'd say that the market is probably wanting every single tonne it can. But in the intervening period, we're also going to be expanding our facilities in any case. So we're keen to see how the market responds as we make more production available, but in particular, How it goes over the next 12 months so that we can start to make critical decisions about the timing of the well, the potential in subsequent expansion at the Pilgang plant. Suffice to say Pilgang Gora can be a huge mine over time. At 1,000,000 tonnes per annum plus of spodumene concentrate, today That would make it pretty close to one of the largest operations globally. Greenbushes probably comes close. So it's a significant mine and a very important mine, One that we're pleased to be looking after as we consider its expansion capacity. Moving on, next slide. Let's talk about the market and a bit of innovation that Pilbara Minerals has deployed. So an observation that we've made of the market Historically was that even though conditions were tough during the period Sort of late 2018 through to mid to late 2020. It hadn't stopped the world's push into lithium ion battery making capacity. And in particular, the important role that China has played in the build out of chemical capacity or value added chemical capacity supporting Lithium ion battery manufacturing capacity. And a lot of new players had entered the market. And our experience was that they would come knocking on our door. Can you help us with spodumene supply? And I guess we'd say, well, maybe, tell us what you're up to. And they'd lay out a plan that in some respects look grandiose as to where they might with respect to expansion capacity. But actually, the truth has turned out to be something even stranger because now There is easily 25 buyers of spodumene who can or would like to access more spodumene But historically, either not locked in offtake or actually in some respects, not even considered the potential in lithium raw material Supply in support of their chemical capacity. So after lots of discussion at Pilbara Minerals, we were thinking about how we could Since this market, if there's more buyers and they don't have supply, how can we create competitive channels for access to our spodumene as and when it's available. And this gets to the heart of what we saw in the opportunity about The Altura Lithium Operations acquisition. Because the capacity is being bought out of receivership, there was no offtake in place, In which case you could buy the asset, sit on it, wait for the market to turn around and then sell the product to the open market rather than making it available in offtake. And it's turned out to be, I'm pleased to say, so far a very effective strategy. We've now run 2 very competitive auctions, both of which have Created record precedent in spodumene markets. And based on our observations as to where the industry is headed, It's reasonable to expect that that competitive tension is going to be there for a while yet. So we're very pleased with the outcome so far, albeit early days. And the net effect of it, moving on to the next slide, has been to win More margin for the spodumene. Because of the competitive tension to access the raw materials, The industry downstream is giving more margin to the miner. So if I could just get you to step through to the next slide. The net effect of this is to create people might perceive it to be a little bit unusual outcomes in respect Of the auctions, but from our point of view, logical outcomes because the chemical conversion industry is so desperate to secure lithium raw material supply, They are prepared to give away their margin to the miner to access the raw material and it's creating some pretty incredible pricing outcomes. Just bear in mind, The previous high watermark from late 2017 was approximately US950 dollars a tonne delivered to China. In the last 2 weeks, we sold a cargo for 2 the equivalent of approximately $2,500 a tonne. So there's your evidence to indicate that there is a major shortage in the China market And Pilbara Minerals is incredibly well placed to access that opportunity. New production and expanded production coming from the Ngadjuk plant available in the competitive marketplace via our BMX sales platform. It's a really amazing initiative And one that I feel is going to work well for the company into the future, including as we grow. It's perversely creating, if I can move on to the next slide, thank you. It's creating a push In international lithium markets, it's now the reverse of where the market was historically spodumene pricing achieving Very high prices is now forcing lithium chemicals higher all the way around the world, but especially in China, To the point where today they're also now looking like they're going to break historical records. In fact, I think that might have already happened. The previous high water market mark for lithium chemicals in China was about $24,500 the equivalent of $24,500 a tonne. And I think it's probably getting close to cracking $25,000 a tonne today. So we're moving back into record territory. It's an amazing outcome and happened in a relatively short period of time. Where do we go in the future? We believe in leveraging Pilgangora's resource base into additional value added products. And what we would like to do is sell multiple products into multiple markets. So today, it's all about spodumene principally going to China, a little bit goes into South And our expectation is more will go there over time. But we'd also like to sell value added chemicals, A midstream product, something that represents a value added spodumene, again, selling for a higher price and creating a more A cleaner solution in the supply chain, something that has a much lower carbon footprint and we're working very closely with Calix Here in Australia to see that happen. And then of course, there's the potential in downstream chemicals. So fully value added lithium chemicals in this case. The example we'd highlight is the relationship with POSCO where we expect over time to be producing Lithium hydroxide in partnership with them going to high end lithium ion batteries and especially for the emerging Korean market Who are the next big mover after China in respect to battery making capacity. So there's big opportunities for Pilgangoora, yes. And the team is working really hard on achieving these aims in the relatively short term. Moving on to the next slide, We have the potential in a joint venture with Calix to build out our midstream product strategy. So that's value adding the spodumene at Pilgangoora itself into a new lithium salt Or sorry, a value added lithium salt. It's not a fine chemical. And the advantage in doing that is lesser CapEx, Lesser technical inputs to achieve a very fine or high grade chemical, but perhaps most important of all, Materially lowering the carbon footprint in the supply chain, which we know is such an important part of, for example, getting into the European market So getting into the U. S. Market over time where we know they're going to become, if not already, Major consumers of lithium raw materials and value added lithium products. So that's an important part of our future as well. Well, in summary, thank you everyone for your participation today. I'll open up Two questions shortly, but a big thanks to the team at Pilbara Minerals. The executives work incredibly hard. Thank you to Alex, Dale and Brian for all the efforts that's gone into continuing To put Pilbara Minerals at the head of the queue and the balance of the team at Pilbara Minerals that are making a great Australian company. Thank you to Tony and the Board. Amazing to be working with such a fully integrated Board and management team. I really do appreciate everybody's inputs. Fantastic. And on that note, for those that are online, encourage you to fire away with your questions now. We'll come So Alex shortly, but are there any questions from the floor here in the room at the Melbourne Hotel? Yes. Okay. So the question for those online is, what is the cost of producing a tonne of spodumene? Now there's probably 3 phases that I would like to describe. There is the phase that we've been through where we had moderated production. We slowed down our mining activity. We slowed down our plant production And we ran at less than full speed. Costs were approximately $350 to about $400 a tonne. In our most recent guidance For FY 'twenty two, we've guided to costs just a bit higher than that, approximately $390 to about $430 a tonne, principally driven by additional waste Movements in mining. And that represents a catch up from the slower period when we weren't running the mine at full speed and we weren't moving the waste. However, the good news is that once we get Through that hump, we expect our cost base to migrate back down towards approximately US350 dollars a tonne. That's a landed cost in China. Well, it's pretty incredible today for those tonnes that are sold into the spot market. Off take pricing is less than spot pricing. I think I can safely say that. Albeit, we have an expectation that there will be improvement as the chemical price continues to appreciate, which is obviously what's happening today. Just wondering on the BNX, what percentage of overall sales? Is that represented? Yes, yes. No, really good question. That's from Kevin, Australian Shareholders Association. What proportion of our production is represented by spot sales. Now today, it's not much because we're still waiting for the restart At the Noguchi operation, which is where the tonnes come from for the BMX sales platform. But on the assumption that our ramp up occurs as planned between now June next year, we'll have taken The sales on the spot platform to approximately 200,000 tonnes of 580,000 tonnes. So let's say, broadly speaking, that represents about 30% of our sales. Any other questions from the floor? What you all said, there is the overall forces of supply in the arm, which affects the mining, which will need to have A certain fixed window before supply responds. But aren't you This being too conservative in not adopting plans to expand early? Yes, Yes. Now look, they're both logical questions here and I agree I broadly agree with the premise that you're suggesting. So two parts to the question. The first relates to the laws of supply and demand. If pricing is very high, then of course, supply will respond. And yes, of course, we understand that. The good news is that there is limited capacity between now and Approximately the end of next year before there'll be any material spodumene supply other than what we bring to market in the spodumene category. Now, it's possible that there is more supply. In fact, the South America's continuing investment and expansion, I would simply make the point that historically they're typically And they haven't been as successful in expanding as much as they might have said they would. So we're reasonably optimistic that pricing will still be strong for the foreseeable future. In the medium and the long term, our response is much more sophisticated. Hence, the discussion about multiple products For multiple markets. That's really the future for Pilgangora, selling higher value products than merchant spodumene and in particular, Diversifying our sales so that we can participate in lots of different markets, Europe and the U. S. And North Asia, ex China being key examples. They're all very important markets in places where we would like to play over time. To do it, you need probably something that looks more like a value added product. That's the benefit in the midstream and downstream product strategy. The second part to your question, it's just escaped me. The timing for expansion. Expansion, sorry, of course. Yes. Okay. So yes, the potential in being a bit too conservative. Well, I'd like to think that we're hedging our We are continuing with projects that support the expansion capacity, but without actually having triggered it, in which case today we're running about as hard and as fast as we can with decisions yet to be made about what we do next in expansion capacity. The last point I'd make there is that the first Steps beyond those already committed, so plant improvement projects and the Ngarridgee restart is a relatively quick one And a relatively cheap one to continue to expand capacity. So that's not a bad place to start. All right, Alex, anything On the interweb. Thanks, Ken. I'm feeling a bit redundant today. There's no questions online. That's hard to believe. I've just been told there is one who has just come through. So here we go. This is from a shareholder. How often is the bidding done on the BMX platform? Okay. Another good So how often is the bidding done on the BMX platform? Well, in the very short term, it's subject to what capacity we can spring Albeit with Ngadjou Expansion capacity coming soon. Once we're in much more something that looks a lot more like regular business At Nogadju, we'd be expecting auctions approximately every 2 to 3 weeks. Now at the moment, we've been trying to run them frequently as we can, albeit with lesser capacity. So we've been running them approximately 4 or 5 weeks apart. But they should get more frequent over time. Is dominated by Chinese interests, albeit the good news from our point of view is that by far the majority of them are users of spodumene. So there's very little in the way of traders' Participation or traders' interest, they are end users and those that appear the most Aggressive in their buying behavior to secure spodumene. So why China? Well, China By far has the majority of the chemical conversion capacity that can handle the spodumene. We sell some spodumene into South Korea, but that relates It's 2 relatively small facilities that are owned by POSCO as part of the development of their larger scale projects. So they run a demonstration plant that we support with our spodumate. In the medium term, it's not unreasonable to expect that there will be more chemical conversion capacity Built around the world and there's plenty of moves afoot to make that happen sooner rather than later. Okay. Okay. We have one more question online here, Ken. Any approaches from OMEs all big battery players to take equity positions in WA spodumene plays to secure long term raw material positions. Yes. Well, it's fair to say that there's interest across the board. I'm also pleased To say that I think the car manufacturers have got more interested over time. An observation I would make about their behaviour Historically, they've been very weak with a couple of notable exceptions, but very weak in understanding the upstream Part of the supply chain and in particular by the time you get to a mine, which might sound strange and to be honest is a bit strange to me given their alliance on the raw material Fly base, but I think it's fair to say it's been relatively weak historically, albeit improving over time. Without specific reference to Pilgangora or Pilbara Minerals, in a circumstance where People are going to have to pay more and more for either spodumene and or lithium chemicals. It's not unreasonable to expect them to get more interested in what's happening upstream so that they don't have to pay more money. I think that's a logical conclusion to draw. All right. We're all done, I think. Done. Okay. Thank you, ladies and gentlemen. I think we're done for the meeting, Tony. Yes. So thank you everyone for your participation. Really appreciate you making the time And thanks to those joining online. If there's any more questions, please don't hesitate to follow-up via the website And or our shareholder email address. Thank you.