Thank you for standing by, and welcome to the Pilbara Minerals June 2021 quarterly investor conference call and webcast. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask your question by the telephone, you will need to press the star key, followed by the number one on your telephone keypad. I'd now like to hand the conference over to Mr. Ken Brinsden. Please go ahead. Thank you, Cam, and welcome everybody. To those that are joining via the teleconference and those participating on the webcast, it is nice to be with you this morning for the presentation of our June quarterly report. For those of you participating on the webcast, we have opened up the Ask a Question tab. If you are interested in pursuing an inquiry of the management of Pilbara Minerals, please do so, and we will do our best to engage in those questions towards the end of the call. Joining me this morning here in the Pilbara boardroom is Dale Henderson, our Chief Operating Officer, Brian Lomas, our Chief Financial Officer, both of whom will be participating directly in the call. We are also here with Alex Eastwood, our Company Secretary and General Counsel, and David Hann, Investor Relations Specialist. We'll do our best to deal with the Q&A as it arises towards the end of the call. It's another strong quarter, is the best way to describe the situation in the market today. We believe that we are very well-positioned in terms of our participation in the spodumene market. In fact, for the very reason that life was difficult during the course of the last couple of years, being a merchant seller of spodumene, it's ideal today because there's a fundamental shortage of spodumene emerging in the Chinese conversion market, and that's playing very well to price. I'm going to come back and describe the situation in the market in a bit more detail a bit later in the call. Nonetheless, our team is doing everything that they can to continue to respond to that increase in demand. That has resulted in strong production, very good utilization, and availability across the Pilgan facility. We're obviously working hard now on the Ngungaju restart, with a view to first production coming online there during the December quarter. That's all in response to that increase in demand conditions. Of course, now that's also being well represented in the price that we receive for our product. Dale will explain what's happening at the mine level, but it's fair to say that we're obviously undertaking a lot more work in support of production growth. Some of that translates to mining, and that's one of the items that's resulted in some increase to cost. Dale will explain the situation there in more detail during his comments. It's fair to say that if we could produce more today, we would inevitably be selling more. It's very much a seller's market today, and the shoe is definitely on the other foot as it relates to spodumene sales. It's resulting in some interesting dynamics in the spodumene market and what I would describe as a disconnect between longer-dated offtake pricing and what might be available in the spodumene, or the emerging spodumene spot market. I'm going to explain that dynamic in a lot more detail because it is very relevant to the direction that the market takes from here. I'll discuss that in more detail a little bit later on the call. Anyway, as a result of all that demand, and we are pleased with respect to the direction in price, as I alluded to earlier, that has motivated us to restart the Ngungaju plant or the former Altura operations. We're well into that project now. Again, Dale will explain what's happening there in more detail. On that note, I'm going to hand over to Dale, who will subsequently hand on to Brian for some further discussion about finance and cash flow. Then we'll close out the call with a much more detailed discussion about the current state of the market. Dale, over to you. Thank you. Thanks, Ken, good morning, everyone. I'll speak to three parts. I'll give a quick update on the operations and performance we've had there. I'll move to an update on the projects and expansion works. To finish, I will talk about the Ngungaju recommencement that we're well in the thick of at the moment. Starting with operations, as Ken said, really good quarter. Safety, first and foremost, going well. No reportable injuries in that space, always good to see. From a production standpoint, strong volumes through the plant in terms of produced tons. That's going well. Good recoveries as well, averaging 72% for the quarter. All going well in terms of those production KPIs. In the mining space, activities are really starting to pick up as a function of the mine plan. We're starting to move a lot more material in the quarter we had, and looking ahead, we'll be looking to move more material. That's a function of two drivers. One, it's about essentially making up for the very low strip ratio that we had through the downturn of the market. Now that the market's turned and picking up, we're looking to move that waste. The second driver is around just building out a larger operational throughput with both the step-up in production with our improvement projects coming into play in the December quarter and the recommencement of the Ngungaju operation, where we have to ready the mine for that higher throughput of ore tons coming from the mine to the two respective plants. All part of the mine plan in that regard. In terms of challenges for the operation, probably the main challenge, which is an industry challenge, remains the tight labor market, and specifically around the staffing for operations for the mining space, truck operators, excavator drivers, that type of thing. For us, it hasn't been a problem to date, but we're just acutely aware of the heat in the market, and particularly as we think about ramping up that mining production that I just described. That really is a wrap on the operations piece. Moving now to projects. We've got our improvement projects package, which is a de-bottlenecking project. That's deep into construction mode at the moment. What that's all about is principally around providing an incremental step-up to our existing Pilgan plant. That should give us in the order of 10%-15% step-up. That piece of construction's on track. It's going well. A credit to the construction contractor, the IronMerge SIMPEC joint venture, going well. Notable that the IronMerge Group is actually a Nyamal business, with Nyamal being our traditional landowner. Great to see that joint venture working successfully and to have Nyamal involved there. That's all going well. Credit to the group. Kickoff and completion of that piece of work, we're expecting at the back of the September quarter, bringing that incremental step-up in tons in the December quarter. All going well there. Beyond that step-up and beyond the Ngungaju recommencement, we are doing study work on that next step of incremental expansion. What that would look like would be another 100,000 tons of produced product coming from that Pilgan operation. We're in study mode right now, and those studies are due for completion at the end of the year. Any FID decision will be contemplated closer to the time, the function of market and customer demand. In the project space, we've got a midstream product strategy. What that's about is the production of green lithium salts. Where we're at with that is during the quarter, the MoU was signed with Calix, our R&D partner from the East Coast. The team's working through the scoping study for our pilot plant. That scoping study is on track as well, due to completion before the end of the calendar year. All going well. We like the idea of moving as quickly as we can to a demonstration plant at the site. We'll wait and see what that scoping study guides us. All on track on the project front, so great to see. Last section for me, the Ngungaju recommencement, which is, of course, the former Altura plant. The update here is the board-approved FID to recommence that operation on the 25th of June. That happened during the quarter. The team is now very much in the thick of the business around getting engineering done, long leads, negotiating on construction contracts and the like, all to be deployed in short order in the coming weeks. We're targeting tons to occur before Christmas and ramping up total throughput to be essentially achieving nameplate by June next year. That ramp up obviously will be gradual, be a function of the works we're doing. As I say, targeting full nameplate by June next year, which is 180,000-200,000 tons per annum. Great to be kicking that operation back into life. The other piece around the Ngungaju operation to report on is the work we've done around exploration. Of course, this is the key synergy we pursued as part of the investment case and the transaction to acquire the Altura assets. During the quarter, 49 drill holes, more than 8,000 meters of drilling occurred down the boundary of what was that former tenement boundary between Altura and Pilbara. Really pleased to see the results coming through there. We've had some good hits for lithium grade and seeing thickness. Great to see. It certainly has been more than we expected. We're looking forward to bringing that into the combined resource and reporting on that, which will be due September quarter this year. Yeah, great. Another feather in our cap on that one. Really happy to report on those drilling results. Yeah, that's a wrap from me across operations, projects, and the Ngungaju recommencement. At this point, I'll hand over to Brian. Great. Thanks, Dale, and good morning, everyone. I just really want to cover off on the costs that we incurred during the quarter, and then just also some discussions around cash balance and the major movements of our cash balance. Probably the first part to start is just to reflect on the physicals that we achieved for the quarter, because obviously those drive cost and cash outcomes. We produced just over 77,000 tons of spodumene concentrate. We're able to draw down about just shy of 19,000 tonnes of stock that had been established at the 31st of March. Total shipped tonnes for the quarter were just under 96,000 tonnes. If you remember last quarter, we had some tonnes that were loaded on the ship, but the ship hadn't yet sailed of about 30,000 tonnes. If you add those to the 96,000 tonnes shipped this month, we achieved sailed tonnes for the quarter of 109,000 dry metric tonnes. With respect to cost per tonne, because that's an important metric that we measure our business on. I thought it's probably just worth reminding everyone, when we talk about a unit cost per tonne, what we are actually including. When we define unit operating costs, we're including mining costs, processing costs, transport costs, royalty costs, native title, port, shipping, and freight costs. Some general administration costs at the site, and we also credit any by-product from tantalum sales. That's what we effectively capture in our cost per tonne. The whole idea of that, is that if you then take that cost per tonne, you take off the price you achieved, that's really the margin that you're making at your operation. Our cost per tonne for the quarter was higher than the March quarter. It's US $441 per dry metric tonne, compared to the March quarter, $383. That's an increase of $58. On first blush, that looks like quite a significant increase. If you look behind the reasons, a large part of that increase is around what's happening in the freight market at the moment. About $24 of that relates to an increase in freight rates that we've experienced during the quarter. There is significant tightness of suitable vessels out there at the moment. Very strong demand across multiple commodity groups, and we're also finding a lot of vessels are now destined for the Atlantic basin. There's a limit of vessels that are actually available for the Far East trade route, which is obviously important to us. The combination of all that has meant that we've had to live with higher freight rates during the quarter. Those freight rates are still elevated. Today, if we're trying to book a vessel, we're paying around about US $65 a tonne, whereas traditionally, we're paying freight in the order of US$20-US$25 a tonne. We've also had higher mining costs during the quarter, some of that is related to, we highlighted in the March quarter that we would have to increase the amount of waste that we have to mine to increase our strip ratio, largely because if you recall, we're in our moderated production phase, and we're very much limited how many tonnes we wanted to mine. There is some catch-up that needs to be done. Some of the effects of that catch-up have meant that we've had to mine more waste during the June quarter. I think the other important point to point out with our mining costs is that we did incur costs during the June quarter, which is actually setting us up for the higher production levels that we are expecting from the September quarter. I think everyone hopefully is aware that we're spending some money on our Pilgan plant. We're trying to increase that plant's production to about 380,000 tonnes of concentrate per year. That requires us to increase the amount of throughput to 2.3 million tonnes. Obviously, we need to present more tonnes to the front end of the plant. That requires us to do a lot more mining. We were actually doing a lot of work during the June quarter in preparation for being able to present more tonnes to the plant. There's more cost in terms of equipment mobilization, in terms of drill and blast activity and other ancillary infrastructure as well. Lastly, the overall unit cost was also impacted by a higher royalty cost. Obviously, we've been achieving a higher price for our product. That clearly means that you incur higher royalty costs, and that flows through into a higher cost per tonne. We've also given guidance on what we expect unit cost to be for FY 2022. We're talking about a range of US$395 to US$430. Again, that is slightly elevated, but largely around the restart of the Ngungaju plant. With that, there is going to be some high costs being incurred because as you ramp up the operation, you're not quite as efficient on a cost per tonne basis. We are going to have an elevated strip ratio, so we've been quite open about that. That clearly has an impact on unit cost for next year. We do expect the freight costs to be elevated next year. What we're hearing is that we've probably got higher freight rates for at least the next six months, and then the expectation is over the second half of FY 2022, that freight rates will start coming back to what would be a normal level of sort of that $25 a tonne. As far as the cash balance. At the end of June, we sat with just shy of $116 million of cash and letters of credit for product that had sailed. That's about a $4 million increase compared to where we were at the end of March, where we had $ 112 million. We break down the major components of the movements in the cash balance. It's largely around generating a positive cash flow from our operations. We generated, in terms of the tons for the quarter, just shy of about $20 million of positive cash flows from operations, which was great. We also received another about $7.5 million from provisional pricing adjustments for product that we sold during the March quarter. We did highlight that in the March quarterly report, but we have subsequently received the benefit of that cash into our bank accounts. In terms of major spends, it was really around capital. We spent about $40 million on capital. That was largely around the plant improvements that we're doing on the Pilgan plant. Again, as I mentioned, the expectation is from the end of the September quarter, that we should be able to have throughput of about 2.3 million tons to produce about 380,000 tons. We're spending, or have been spending, just over $20 million to enable that to happen. A large part of what we spent during the quarter was to achieve that. Some of the capital was also doing some TMF uplifts as well. There's a little bit of money spent just finishing up the acquisition of the Altura, so about $2.5 million. The other costs were really around care and maintenance costs on the Ngungaju plant, whilst we worked through the plan for the restart. Bit of spend on exploration studies and, obviously, interest on our debt. Pleasingly, $116 million cash in the bank at quarter end. Probably also worth noting, I think we mentioned at the last quarter that we changed some of the pricing mechanisms with customers, whereby we priced cargoes on a provisional basis, and then we had a true-up based on the pricing at the time of shipment. Our expectation is that during the September quarter, we would expect to receive about just under $2 million of positive provision pricing adjustments. That money should come into our bank accounts during the September quarter. Probably worth highlighting, in terms of guidance, we've obviously guided on unit cost. We will be releasing our full year FY 2021 results towards the back end of August. At the same time, our expectation that we give guidance on both production, sales, and CapEx as well. Look forward to that towards the back end of August. I think that's everything I wanted to cover off on. I might just hand back to Ken for some commentary around the market. Yeah. Thanks, Brian. Right. It's worthwhile talking to the market in a little bit more detail because there is some really interesting dynamics in play. To understand the current position, it's worthwhile reflecting on the effect of supply and demand in the last couple of years. In the period of time that the chemicals pricing and spodumene pricing was down, there was an element of consolidation on the mining side, and in fact, a couple of mines went broke. Obviously, very tough conditions for the miners. In parallel, chemical conversion capacity was still being built at a pace in China, and that is now reflected in a significant installed capacity figure within China. These are already commissioned, being commissioned shortly, or during the course of this year and next year. The effect of that means that today, there is a lot more chemical conversion capacity than can be filled by merchant spodumene supply. Stated plainly, that means that there is a spodumene shortage. As a result, you have a very interesting dynamic starting to emerge. For the first time that I can recall in the industry, there is now a fundamental disconnect between the pricing that would've typically prevailed in the spodumene world, as defined by most pricing mechanisms, including the ones that we deploy in our offtake agreements, as compared to what might be achieved in the emerging spot market. Now that there is multiple buyers or many more buyers than there has been historically in the market, a spot market is starting to emerge in a way that it hadn't been operating previously. Let me paint a very stark contrast for you to explain the current dynamic. As defined by Platts, who we are aware are pricing against what they believe to be a spot price in the market. They're suggesting today that that price is $925 a ton FOB Australia. The last time that pricing was in that realm was approximately late 2017, early 2018, and the headline chemicals price was $22,000-$24,000 a ton. Today's headline chemical price is approximately $12,000-$14,000 a ton. They are salient facts to describe the effect that's happening in the market today. Spodumene is fundamentally short, and as a result, chemical converters are foregoing some of their margin and, in essence, paying that away for the purpose of obtaining a spot cargo. It's a very interesting dynamic and represents an important change in the market. Now, with a view to this effect happening, perhaps not quite as fast as it seems to have unfolded, we have been determined to increase our participation in the spot market. As a result, we've been developing the Battery Material Exchange, the BMX platform, in concert with GLX Digital here in Perth. The BMX platform is deliberately targeted to provide an important sales channel for increasing production from Pilgangoora with a view to accessing those multiple buyers that exist in the spot market in China. I'm pleased to say that it looks like it's both formative for Pilbara Minerals, and an important development for the market as a whole. The BMX platform is now live. We've screened approximately 30 potential buyers. Again, that's a pretty extraordinary number in comparison to when we commenced in the industry back in 2015. That's orders of magnitude higher than the buying group that was available back at that time. Our first auction is imminent, and obviously we'll come back to the market, in the event that there's developments there to share. A really interesting position that the spodumene market finds itself in. In summary, we think Pilbara Minerals is incredibly well-placed to be able to participate in this next phase of growth that's going on in the industry. We would like to think that we have the right combination of productive plant capacity, the skills amongst the team to maximize the performance of those facilities. That shouldn't be underestimated because that is very, very hard-won in the lithium industry and dealing with spodumene, especially flotation. Of course, now there's a backdrop of significant growth in demand, but in particular for the merchant supply of spodumene. As a result, we think we're in a very strong position. The last thing that I would like to share relates to the relationship with POSCO, for which we are still optimistic in both the value in that relationship and the skills of the POSCO team and their participation in the Korean market and our ability to participate there, alongside POSCO. We have been frustrated by progress. Some of that had been a lot more complex during the months of the latter part of June and July due to some serious illness amongst the lithium team in South Korea. Nonetheless, we're optimistic about the progress of that deal and its relevance to the growth of Pilbara Minerals. We expect to see that progress during the course of this month. Sorry, next month, I should say. We're not quite there yet. Looking forward to progress there. That's about all we have to share in the way of commentary. We would ask that everyone gets set for questions. Just a quick reminder to those of you that are on the podcast, sorry, the webcast, you can hit the tab, ask a question, and we'll be doing our best to come back to you. Apologies in advance if we don't get through all those questions. We'll explain how you can engage with us, post the call as well. Cam, if I could hand back to you for the purpose of the teleconference Q&A. Thank you. Thank you, sir. A reminder, if you do wish to ask a question via telephone, you can press star then one on your keypad to register. If you wish to cancel that request, star then two to cancel. If you are on a speakerphone, please do pick up your handset before you ask your question. Our first phone question comes from Jack Gab at Bank of America. Please go ahead. Thank you. Good morning. Just a couple from me. Can you point it out, I guess the current disconnect between spot pricing and offtake pricing? Can you just give us a little bit more color as to the scale of that discount currently? I guess as part of that, just how much of your existing offtake you think you'll be able to renegotiate to deliver a closer approximation of spot going forward? Yeah. Good question, Jack. If we were to be executing a provisionally priced contract today, depending on the customer, you would be talking about a range of approximately $650 a ton, maybe a fraction higher. As it relates to what we're now calling the spot market, that again, I'd make the point that it's only a relatively new development in the industry. If you were to believe Platts, it's plus $900 a ton. The other price reporting agencies like Fastmarkets, Asian Metals, are lower. It's not immediately clear to us what they are trying to report against. In fact, one of the reasons why I'm highlighting this issue is to explain that as the market evolves, and by the way, it is moving very quickly as well, it's difficult to be definitive about what's happening in respect of price. There is both price acceleration, that is a relatively recent phenomenon. Even in terms of contracted pricing, that went from approximately $500 a ton in April to, as I said, probably north of $650 a ton. That's all happened within the space of three months. In that same period of time, we've now started to see the spot price accelerate because of this fundamental shortage I'm describing. With respect to the more direct question about our customers, well, we have mechanisms for the purpose of review. We are, of course, going to launch into those conversations. It's difficult to be definitive with respect to timing, but our expectation is that as a function of contractual terms, there will be some flexibility there. Perfect. Thank you. Just one more from me, just turning to cost, can you be a little bit more specific, I guess, about the stripping profile going forward? I guess I think your life of mine's around four to one, so just how that sort of looks in FY 2022 and beyond. I guess as part of that, are you factoring in some of this good exploration success you're having around the South pit in terms of the ability to bring that strip ratio down? Thanks. Yeah. Jack, again, a really good question. The strip ratio in the June quarter was approximately three, or just under three to one. Life of mine is actually closer to five to one, Jack, as the reserve has grown. Based on the 106 million tons reserve, strip ratio is just a fraction under five to one. We peaked dial at about 6.5 to one in this next phase of catch up, if you like, on waste movements. Yeah, about that. Yeah, about 6.2. Yeah. Yeah, Jack, to your query on are we reconsidering the new ore? Absolutely, we are. We are just very much in the throes of bringing that into the resource models at the moment. In short order after that, we will be running those mining scenarios to see if there is a smarter approach in the near term, and if there is, we will pursue that. Great. Thanks a lot. I'll park it on. Thank you. Your next question comes from Hayden Bairstow at Macquarie. Please go ahead. Yeah, morning, guys. Just a couple from me. Just firstly on the market, Ken, just interested to understand, Pilgan sort of running at, I guess with the expanded rate, 360-380, and you'll get a bit out of the old Altura stuff this year. Just what sort of volume do you think you can free up to take advantage of spot sales in the next sort of 12 months? Thanks, Hayden. Good question. The entire capacity at the Ngungaju plant is available for the BMX platform. Of course, that's ramping up in the same period that you're asking. We go from relatively modest tons in the December quarter, let's say nominally 15,000 tons, up to a run rate of between 180,000-200,000 tons by June 2022. In the meantime, there is, again, very modest additional tons coming out of the Pilgan plant. In fact, that's where some of the extra capacity comes from as a result of this first auction. It's not a huge number either. That's sort of in the order of 10,000-20,000 tons. Again, we'll provide more detailed guidance come the August timeframe for the results. Backfilling capacity into the BMX platform, let's say 100,000-120,000 tons, sort of that order. Yeah. About AUD 100,000 for this fiscal year is the sort of number you'll have available. Yeah. Yeah. Okay. Have you actually accelerated from the site sort of the restart plan now with Ngungaju? Is that still the end of December is sort of what I had anyway? That hasn't changed? No, it hasn't changed. We haven't finished the engineering work that relates to the acceleration. Our hope is that we can do it quicker, Hayden, but we're not prepared to book that yet. Yeah. Okay. No problems. Just your offtake agreements, Ken, at what point have you got a repricing option where if we're sitting at 8%-10% of the hydroxide price on spot going forward, then you can actually decouple yourself from those old contract pricing methodologies? Is that possible in the next couple of years? Broadly speaking, the contracts rely on the premise that if a disconnect starts to emerge in the market, we have the opportunity to open up a discussion about pricing. We planted those seeds in the original contracts in the knowledge that it was still a relatively immature market, and that there would be pricing developments over time. We're pleased to say that some of that development looks like it's starting to happen. Firstly, there's a little bit more transparency about the number of people that are following the market and printing price references. Developments like our BMX platform that are a bit more definitive about trades and pricing on trades, price discovery. All those things contribute to a discussion with our customers about the pricing mechanisms themselves. As I said to Jack, we can't be definitive about any changes at this stage because obviously it's going to be subject to more discussion. Okay. Just one final one on this oversight that has caused the trading halt and the suspension. Are we expecting that just to be resolved Friday afternoon our time? Yes, Hayden, that's our expectation. Okay. Thanks, Ken. Thank you. A reminder, if you do wish to ask your question via telephone, you can register by pressing star and then one. Your next question comes from Al Harvey at JP Morgan. Please go ahead. Hi. Good day, Ken and team. A couple from me. Just with the restart CapEx spend at Ngungaju. What's been spent out of the AUD 39 million already? I only got FID approval at the end of June, but how much came out in June and, well, when do we expect that other AUD 39 or the rest of the AUD 39 million to come out? Yeah. Hi, Al. It's Brian here. Look, off that AUD 39, approximately AUD 5 or AUD 6 have been spent up to 30 June. The remainder will be spent really between July and February of next year. Great. With the incremental expansion of Pilgan, so the studies coming through in December quarter, is this mainly a refresh of the previous studies and what sort of updates are you looking at adding in? Maybe, are you looking at the later phases that you hadn't mentioned in those previous studies? When could they possibly be brought into the plan? Yeah, sure. The study we're targeting for the end of the calendar year is focused on what we used to call stage 2, phase 1. Yes, it is a refresh of the thinking we'd done previously. The study we'll be producing takes it to a deeper level of design and quantities, such that it could ultimately support an FID case. As to the further expansion case, that would also likely follow in what we'd originally contemplated with that incremental expansion. We're obviously focused on the first phase at this stage. Yeah. Thanks, Dale. Just a final one from me. Just the deferred consideration for Altura, 69 million shares or cash equivalent. What timeframe is that share price set over to work out that cash equivalent? Yeah. Al, it harks back to the original, in effect, the original share price at the settlement of the deal. That's going back to late October last year. Great. Thanks, Ken and team. That's all from me. All right. Thank you. Thanks, Al. Thanks, Aidan. Thanks, Jack, for your questions. Cam, I think, well, I'll hand back to you, but I think we're right to go with the webcast questions. Thank you, sir. Confirming no further phone questions at this time. Okay. Thank you, Cam. Handing over to you, Nicholas, if you could just let us know the questions on the webcast. Thank you. Thanks very much, Ken. Good morning, everyone. We do have a number of online questions that have come through. A number of shareholders have asked about the current suspension of the shares. Just to summarize the questions, when will the stock actually be relisted? I know you did touch on that. Does the suspension have any impact on the business and its growth plans in any shape or form? Yeah, if you can just perhaps comment a bit more about that. Okay. Thanks, Nick. Well, to be clear, the nature of the trading halt is that it was technical in nature, relating to the presentation of a required prior cleansing notice. It harks back to the conversion of options to shares and then a subsequent sale in late June. The company's view is that, of course, we were cleansed at the time. We take all that very, very seriously and would like to think that we have a very strong track record in respect of our continuous disclosure and all those things that are required. As I said, the fact that the cleansing notice wasn't issued at the time means that there is a technical breach that can only be resolved by an order of the court, in which case we've done everything that we can to accelerate the court hearing, and we're pleased to say that that will occur on Friday afternoon. The company's expectation is that, given that the administrative nature of that breach implies that the courts will deal with the issue quickly. We can't be definitive about trading as of Monday morning, but it's fair to say that that would be our expectation. Okay. Thanks very much, Ken. I'm gonna now move to a couple of questions from Tim Hoff from Canaccord. Firstly, are all the waste tons being expensed next year, or is there an element that has been capitalized? Secondly, can you provide some guidance on sustaining capital next year, please? Perhaps one for you, Brian. Yeah, sure. Thanks. Thanks, Tim. Yeah, some of that waste movement for next year will be capitalized. The way we treat waste is that any waste up to the strip ratio of 5: 1 is expensed, but anything beyond 5: 1 gets capitalized. Essentially the rule is that where you're mining waste in excess of your strip ratio, you get to capitalize that portion of it. Sorry, Nick, what was the second part? Some guidance on sustaining capital next year. Yeah. Look, we'll put some guidance out at the end of August. The way we tend to view sustaining capital is sort of as a percentage of what the original capital spend on the plant. If you run with those percentages and the spend on those plants, you're probably looking at sustaining capital across the two plants of somewhere in the order of AUD 8 million-AUD 10 million. We'll be more definitive on that when we put out guidance in August. Thanks, Brian. Another one from Timothy, perhaps for you, Ken. Given that historical offtake has the SC6 pricing mechanism linked to chemical prices, do you have enough power to start pushing for higher prices to capture additional margins, i.e., to change the SC6 pricing formula? Yeah. Thanks for your question, Tim, and it is a logical one. Yep. Historically, the objective had been to peg the value in the spodumene to the headline chemicals price, but in particular, where most of your customers play, and that means principally within the Chinese domestic market, although not typically exclusively. That has been a fair and reasonable assessment of price historically. By the way, that still results in some reasonably significant price appreciation that we are taking advantage of now. This recent phenomenon and the run in the emerging spot market is very new. As I said, this is only a phenomenon that's emerged in quite literally the last, hazard a guess, the last six weeks, six to eight weeks, in which case, it's a very new phenomenon, that means that we have to open up a new round of conversation. As I alluded to earlier in the call, we had deliberately set up contracts for the purpose such that there was the purpose of review. In fact, almost to deal with events like this one that we're describing. Our view is that we can have a reasonable conversation with our customers, but I'm not going to be definitive about what that means in time. Obviously, we'll get into that conversation, and we'll look for whatever points of value that we can to ensure that we achieve the right price for our spodumene. Thanks, Ken. I'll now move to a question from Reg Spencer from Canaccord. How much volume do you think you will sell on the BMX platform as a percentage of total production? Is there any update on the Calix joint venture, please? Yep. Well, as it relates to the BMX platform, it will largely carry the Ngungaju production as that comes back on. In which case, over time, it will be up to 200,000 tons per annum, as compared to approximately 580,000 tons per annum of total production from Pilgangoora. Over time, while the BMX platform, we hope that the world is our oyster, as it relates to contracts rolling off or what we might do with additional products like, for example, a midstream product or a value-added lithium chemical. The engineering and the lab work that relates to the midstream project, which obviously includes the Calix relationship, is continuing. We're still very, very pleased with progress there, and ultimately, our objective is to get to a decision around the progress of a demonstration plant by late this year. Is there anything else you'd like to add to fill in detail, Dale? No. It's going well. Yep. We'll leave it at that. Yep. Thanks, guys. I'll jump to a question now from John Rawlings. Other than freight costs, do you anticipate production costs to reduce, taking into consideration economies of scale? Yeah, look, that is our expectation. Certainly, once the Ngungaju plant and that operation is up and running, you'd expect to have efficiencies at that particular plant, but also across both operations. It's our expectation, again, we'll give some guidance on this in August, but our expectation is once that operation's up and running and has reached nameplate capacity, then your unit operating costs should reduce accordingly. Thanks, Brian. Another follow-up question from Tim Hoff from Canaccord. Back solving for mills grades, it appears that there is a high level or that there is a level of high grading occurring. Is this the case, and does it mean that you have a low-grade stockpile being built, and how do we think about the timing of feeding this material? Okay. Yep, Tim, it's always been the case that we were going to mine a higher grade in the first approximately three to four years of the project's life. That's a function of the geology, not necessarily Pilbara doing anything that relates to a subset of high grading. That's just because the ore grade is higher in the central pit, in the areas that have been opened up adjacent to the plant. We've been pretty clear about that over the last couple of years. There is transitional and contaminated material, again, as envisaged as a function of the reserve development. They do get processed over time, but they're not, at least by proportion of the total reserve, they're not a huge proportion of the reserve. To be clear, yes, higher grade mined as a function of the geology and the presentation of the ore as we commence mining. Yes, there is some stockpiled material that represents an opportunity for the purpose of processing at a future date. As I said, by proportion of the total reserve, it's not a huge number. Thanks, Ken. We'll just do a couple more online questions, and then I think we've got one more person who's registered for a phone question. This question is from Robert Griffiths. He says, "With regard to value-adding, is the company considering any downstream processing opportunities for lithium in Australia in joint venture with other producers, potentially?" He says, "I assume that Australia would do better with just one additional processing plant and therefore a joint venture taking lithium closer to battery-ready. No, thanks for the question, Rob. I think the answer is yes, there's an opportunity to do more to value-add spodumene before it leaves Australian shores. Our strategy, as envisaged by the midstream discussion and the work that's ongoing with Calix, is with a view to value-adding a product that's not necessarily battery-grade. The reason that you would go down that path is because really, Australian miners are not well set up to create a battery-grade product. That's meant for people that are wearing lab coats and in sterile, pristine environments, and unfortunately, the Pilbara and mining operations are typically not like that. A level of value-adding, with a view to maximizing the revenue per ton, but without the combination of capital and operating environment/expertise that's required to create a battery-ready product. Partnerships. Well, I think we've already demonstrated that we value key partnerships and of course, we put POSCO in that category. The commercial arrangements around a final midstream product solution are yet to be developed. Of course, partnerships could very well be one of the important solutions to penetrate international markets, and in particular, Europe and North America. Anything else you want to add, Dale Henderson? No. No? No, I think you covered it well. I think, yeah, the only thing I could add, the lens we take is how do we create the most value as quickly as we can. With that in mind, an Australian project isn't off the cards. It's just maybe there's a better option. Thanks, guys. Just one final. We've had a lot of questions, fairly broad questions, about growth strategy, so I'll just try and summarize them. In essence, people are asking, given the scale of the opportunity in lithium and the battery metal space, are there any longer-term, big-picture growth aspirations or plans beyond what you're currently focusing on with the existing plants that could potentially position Pilbara to capture that opportunity in the future? Yeah, thanks, Nick. Yeah, we firmly believe that Pilgangoora is a pretty amazing position for lithium raw materials. The scale in the resource and the combination of its location and proximity to key markets is very powerful, in our view. We like the idea that we can position or more deeply vertically integrate Pilgangoora production to other facilities. You see that in the relationship that we've established with POSCO and what we're trying to achieve to interconnect the production to a joint chemical facility in South Korea. Those sorts of models are still very much of value to Pilbara Minerals, and ultimately to maximize the value in the resource in the ground and, of course, the value in the company. We do still work very hard on our participation in international markets, and we do think that that's a really important part of the future of the company and our ability to continue to keep growing. All right. Moving back to Cam. Any more questions on the phone line? Thanks, mate. Yes, we have one further question from Mitch Ryan at Jefferies. Please go ahead. Good morning, all, and thank you for your time. My question is, you've touched on the provision in your offtake agreement to renegotiate in your favor in a rising price environment. Whilst no one's forecasting a fall in spodumene prices anytime in the near future, is that available to both parties in a falling price environment? Should we think that there's also downside risks? Yes, Mitch. The answer, in short, is yes. The pricing mechanism has the ability to be triggered and discussed in both directions. Arguably, we've been through that phase, Mitch, because clearly we had a tough time in 2019 and 2020. Nonetheless, have become a stronger organization for it. Yeah, the answer is yes, it works in both directions. A key development from our point of view is that there's the emergence of the spot market, and even now the disconnect between a genuine spot sale and a contract sale does represent a new phenomenon. That hasn't happened before, at least not to the extent that it's disconnected now. Hence the logic in launching into a conversation with our customers. Yes. Definitely. Okay. Thank you very much. Thanks, Mitch. Thank you. No further phone questions at this time. Okay. Thank you, Cam. Thanks to everyone participating on the teleconference and those participating online. If you missed a question and/or have further questions, we encourage you to touch base with our email service, shareholderservices@pilbaraminerals.com.au. That's shareholderservices@pilbaraminerals.com.au, and we'll do our best to respond as quickly as we can. Thanks, everyone, for your participation this morning. Thanks to the team here in Perth, and we look forward to catching up with you next time. Good morning, all. Thank you. Bye. Thank you, everyone. That does conclude our conference call today. You may now disconnect your lines.