Recording in progress. 2024. My name's Peter Gadsdon. Joining me is Bruce Griffin, the Executive Chair, and Mr. Mark Di Silvio, the CFO of Sheffield. Bruce will run us through a brief presentation in relation to the quarterly results, and then we'll follow that up with a Q&A. Please do feel free to submit your questions via the Q&A. Just be mindful it will be time-sensitive, and nothing should be submitted that would be constraining the company from an ASX listing rule. But other than that, please do fire away your questions. Bruce, over to you. Thanks, Peter, and thanks everyone for joining today. So, as Peter said, I'll focus mainly on the quarterly results. Just before we start, a recap for those who, if you're on the call, you probably know, but I'll recap anyway. So, Mineral Sands focused very much on our half interest in the Kimberley Mineral Sands, the Thunderbird project in the northwest of WA. We do also have an option on a project in Brazil, and we do have an interest in Eastern Minerals, who own a project in Sri Lanka. Just before we sort of rip into the quarterly charts, etc., talk about the performance, just a couple of pictures to orientate everyone again. So, left-hand side, as usual, mine. So, DMU, sort of probably halfway through that block. You can see the dry mining unit in the center of the block, and then the dozers pushing in. Bit of water around because we're in the wet season. And then just worth pointing out, if we look at this area up here, that's the drill pattern from the first drill and blast area. This was taken in late December, and we've, in fact, now commenced blasting, drill and blast activities in the overburden. And so far, I'm pleased with what it's doing for the diggability of the ore. It'll be a bit of time and a few trials required to perfect the exact design of the blast, but there's no question that blasting is significantly improved the diggability of the material for our waste mining. Right-hand side, process plant, loading ilmenite. Process plant in the background, zircon stockpile. Then in the front is the very extensive ilmenite stockpiles. We use fingers to dry the material, and then we're loading Rotainers in the front there before they're taken to Broome. In terms of the production itself over the quarter, again, we're very much mining in the two and a half to three million tonne range for the quarter. We were just on the two and a half for the December quarter. We had some mechanical failures in the DMU, mostly related to exciter bolts. We have seen those reduce again, and we continue to work with Piacentini on design modifications to improve the reliability of that equipment. And we are seeing progress there. And while it doesn't necessarily show up here, we are seeing increased hourly push rates as well. So, we are eliminating the mechanical failures over time. And so, we would expect over time to be able to push progressively closer to the three million tonne a quarter with the current setup. In terms of the, what does that look like in terms of ore production, etc.? So, this is rougher head feed, which is post-removal of oversize presentation to the first spiral in the process plant. Again, we continue to see this is our actual production against the design. We are converging on basis for design. However, we still have the gap that relates to the oversize, and we are getting much closer to having a view on what the final solution is for us to close that gap. And the rougher head feed grade, so the grade of the material we're presenting to the roughers is consistently higher than expected from the block model. We're very much of the view that that is because we're removing a lower grade material as we remove oversize, so we're pleased with that. We have continued to be doing the work on updating the block model and the mine plan as part of our updated plan moving forward. We don't expect to see any significant change in the actual resources as a result of that work. Process plant continues to perform very well, so this is looking at it from zircon. Recoveries above or at design. Design was for a slow ramp-up over an extended period, so expectations stepped up a little bit of variation and recovery in this quarter, but ultimately continues to perform very well, and we are seeing progressively improved grades as well, so process plant, certainly from a zircon perspective, and we'll talk about ilmenite in a minute, continues to perform very well. We are getting better than design performance for grade and recovery. So, similar for ilmenite, actuals above design. There's a bit of optimization going on. We've had, you do see a little bit of variation in TiO2 content. However, again, consistently making a good quality product at above design recoveries. So, overall, what does that look like in terms of where we are versus the DFS or BFS? In terms of total ore production, we closed out 2024 still above design. So, even though we had the ramp-up occurring progressively throughout the year, we still produced more in the year in terms of what we'd expected as ore mined. I'll come back and talk about what we're doing in terms of reducing oversize and so on when I talk about the business improvement. But overall, continue to track or have continued to track ahead of BFS for ore mined. In terms of product volume, a little bit behind in terms of combined now. That's because the ramp-up assumed more, and this really relates to the presenting less than design rougher head feed rather than less than design ore. And that, so we've recovered more concentrate than we would have expected given the amount of rougher head feed we had. But overall, we're now slightly behind where we would have been, and hence the focus on ultimately addressing the oversize. In terms of ilmenite production and sales here, so this is a quarterly view. Very good quarter in the Q4 for both production and sales. We had record production, record shipments. We're forecasting production around that. We've got a range here, but we're effectively forecasting the same again on production and potentially a little bit more, and then sales in a similar range again, so we're very comfortable with maintaining that sort of rate of production and shipment of ilmenite, certainly through the first quarter and probably through this financial year and on, based on current configuration before we make any changes as part of our overall business improvement. The zircon, so obviously pleasing for the December quarter, production was strong, but more importantly, we resumed sales. We were at the bottom end of our guidance with one shipment tipping over from December to January, but we certainly have seen a significant improvement in our customer base. This is 10, actually, it's 11. We've received, we now have what's called an MEP, so a mineral export permit in place for 11 different customers, which broadens our customer base. Most of them in China, but we do have at least one customer outside of China, and what that means is that if we face a situation where a particular customer is under pressure in terms of taking his shipment, we have the opportunity to switch sales to someone else, whereas we didn't have that flexibility in Q3, which is really what constrained our ability to sell. We are forecasting a significant increase in sales year-on-quarter-on-quarter for zircon in the current quarter. We have already made a shipment. We have a number of shipments coming up over the next month or two, and so I'm very confident around the guidance. The reason for the whip on the guidance is always that there can be timing issues here. So, we certainly are seeing very strong interest in our product from our customers, the new customers and existing. I think people are understanding better how to process and what to use it for. And we do represent probably the largest single source. I don't think probably, actually, we are the largest single source of zircon concentrate that contains our non-magnetic concentrate, so containing all of the zircon. So, irrespective of the final product quality that can be recovered from it, there are markets in China for that product. It's obviously a very large market with a number of different offtake, a greater range of offtake uses than other markets. And the ability to contract with someone who can supply large volumes regularly in bulk is a point of differentiation. And so, I think we're seeing that interest come through from customers. Now, that doesn't change the overall market, which has been reported by others as being quite soft. We've seen it in pricing, although we are seeing interest from our customers to take that product at a similar price level to the last quarter of last year. So, unlike some others, we're not expecting significant change in price quarter on quarter. So, I think this is a perhaps we didn't see it in the fourth quarter, but this is a significant change for the business. From when, I guess we were doing this update in early October, we have got a lot more customers in place. We're seeing good interest from those customers and have a clearer outlook for we can see who's going to take the product and so on. Certainly feeling a lot more confident about our ability to consistently place zircon into the market. In terms of overall cash flow for the quarter, we were cash flow negative. Again, predominantly, it's partly timing of some payments for costs, but also still, we only sold half, or around half the zircon we produced. And that's insufficient cash to cover costs, basically, in simple terms. Certainly, if we are selling what we're producing, I know I sound a bit like a broken record on this, but if we're selling what we produce, we are cash flow positive. Therefore, based on our current guidance, we would expect to be operating cash flow positive in the current quarter. Probably the other significant feature on the cash flow is the offtake prepay. Our partner, Yansteel, made two prepayments in the quarter. The payment we spoke about at the start of the quarter was about $14 million. We received a second prepayment of $8 million in December. That really bridged that working capital gap for us. Those prepayments, it's a prepayment for ilmenite. We expect to unwind both of those in the first half of this year. Effectively, that's the way they're designed. They're designed to be six-month facilities. You draw them down, you have about three months, and then you unwind them. We do have the ability to put them back in place again. But certainly, the current expectation is that we'll have the ability to unwind these ones. Very pleasing support from our partner, both in terms of a JV partner and offtake partner. They continue to be very supportive of the business and doing what they can to ensure that we manage through this transition. We did defer the interest payment again. So, we made the December payment. We're making it in January or have made it in January. And that's, again, our lender group is we talk to our lender group all the time. Effectively, debt remains in good standing. And we, again, have a very constructive relationship with both of our lenders. In terms of the business improvement initiative, so recap, the context for this hasn't changed. We do have the lower than expected rougher head feed for a given tonne of ore, given the higher than expected oversize. Costs higher, particularly around mining and the zircon market weakness. Now, obviously, we've seen an improvement in shipments, so that's good. Our process plant recoveries continue to knock it out of the park. The basic context for the business improvement hasn't dramatically changed. What we've been doing, have done, big focus on costs, not surprisingly, as we announced in the update in December. As a result of that, we did reduce the headcount at KMS itself by about 20%. Never a pleasant thing to have to do, but ultimately about putting the business on the best possible footing. With the transition to drill and blast, as I said earlier on the photograph, we have undertaken the first blast. We do see that as making a significant change in the diggability. We are in the process of changing the overburden contractor. As a result of that, we do expect to see cost savings once we've implemented drill and blast and transitioned the contractor to a new contract, which is occurring now. That's probably the first significant change in that sort of operations. The overall objective is to increase mine production so the process plant is full. Process plant's operating very well. If it's full, you would expect that we're seeing better than design recovery. There's an opportunity to, if the plant is full, to produce in excess of original design volumes of concentrates. We have continued to review ore mining method and input processing. We're starting to, I guess, converge on a view on what that looks like, with an expectation that we'll be making a decision around that during the current quarter. Overall, we certainly see an ability to, given, I think, the way to think about that as we sort of progressed our thinking, is that overall, the thinking is that we know the oversize is preferentially lower grade. Therefore, taking it through the DMU or deep into the process doesn't make sense. And so, a lot of what we're looking at is how do we remove oversize earlier in the process. So, the DMU is mostly seeing material that has a reasonable chance of becoming rougher head feed, and we remove the oversize that won't early, and that would allow us to increase the effective capacity of the DMU. Continue to review mining method around, is this the best, is it the best way to free the material up, etc. And as I say, we are converging on a view around that. And also, given the extensive drilling we did last year is looking at, as always, knowing what we've learned and what we can see from that, the potential to optimize the mine plan as well. So, that's all coming together. That will be combined into an implementation plan is still on track to be finalized in the current quarter. Exactly when we communicate that with the market will depend on when we have that finalized and so on. But we're certainly on track to have the plan in place, which I think will provide a clearer basis for what our business will look like on a go-forward basis in terms of production cost and ultimate production and cost. There's a lot of small, I shouldn't say little process improvements here and there. In some cases, production-related, we've been able to make relatively low-cost modifications to the odd piece of plant equipment, largely self-executed, so very low cost, and they have made a difference in terms of reducing mineral loss and those sorts of things. There is also an ongoing sort of lower-level business improvement initiatives, and we do keep making those changes as we go along. I think overall, I personally feel much more confident that we'll have a good, clear plan that will show, I'd say, I guess I'll put it as a future that looks quite different to the last few quarters. I think that's probably a good place to end, Peter. Awesome. Thanks, Bruce. We'll go to audience Q&A. There's quite a few coming through now. Just to start off with, on my side, though, obviously, it's Chinese New Year today here in the U.K. Yeah, it's Chinese New Year. What are you sort of hearing from? Obviously, you're talking there about you've increased your customers over the last few months quite substantially. I think it's gone from four to 11, right? Is that a sign that there is a bit of something coming in China? Are people feeling optimistic over there? What's your take on it all? Yeah. Look, it's interesting. There's probably a couple of observations I've made. We certainly saw a lot of interest post TZMI Congress. And we've had people interested, but it's taken a while to get MEPs in place. It was interesting. We had a number of customers who were seeking supply, either loading just before or around Chinese New Year. Hence, we've been shipping a bit in January. And you do see this each year. It's a typical behavior in China sort of generically is a bit of a run-off in stock at the back end of the prior year, whether that's calendar year or Chinese year. It depends a little bit on the state of the market. There tends to be a bit of a buying activity to restock around it. There's always a little bit of a, it's a new year, it'll be better, and then you sort of have to see what happens, but I think certainly there has been some very, there are some specific measures in the stimulus that are interesting for mineral sand, so one of the most recent packages, I think most people will be familiar with, there are government programs for the classic sort of scrappage schemes, replace your refrigerator, replace your air conditioner type things. One of them was redecorate your house, redecorate your flat. Obviously, redecoration, classic demand for paint and tiles and so on. So, there are things there that are encouraging. Certainly, the other phenomenon I'd say is, and I think we see this in other commodities, is that in China in particular, the behavior is that when the market is soft, so prices are low and demand's weak and so on, what you see is we always sort of assume generally in the West that that's a good time to buy high-quality product cheap. Different philosophy. How do I can afford to buy lower quality, lower grade, keep my plant full, minimize my cost? And so, for example, anecdotally, someone said to me that the strongest selling grade of zircon in China when we were at TZMI Congress in November was 50% ZrO2 because it was cheap and you could blend it with other things and so on. So, I think there's some behaviors like that going on as well where there's really a desire to take volumes of what would be large volumes, probably slightly lower grade material, and that allows them to sort of optimize their plants. So, I think it is too early to tell, but certainly there is an indication from the customers that they're expecting a good start to 2025. Well, how long that lasts is always the question, but certainly we're very encouraged by what we've seen so far. And as I said before, we're probably now a little bit unique value proposition in terms of the ability to supply consistently large volumes of a concentrate that contains the full zircon suite with it. That's why we haven't removed any of the zircon, so they know they're going to get all of it. Good. Question here from Chris Baker, Bruce. Zircon sales obviously a big change from zero in September to maybe even 60,000 in the current quarter that we're in. Is that down to more customers or is that more demand from your core customers or a bit of both? It would be, I would say, half and half. So, half of it's our existing customers resuming their ability to, in terms of that overall outlook. I'm not being specific about any given quarter there, but overall, it'll be a combination of existing customers able to come back, process the material, want more, as well as signing up some of the new customers already taking product. I would be very clear. We haven't shipped product to 11 zircon customers, but we now have 11 customers we can ship to. So, it's a combination of both. Okay. Brilliant. Another one here, so inventories are high. What would you consider normal levels for zircon and ilmenite? Yeah. With mineral sands, it's always a little bit tricky because it depends on the timing of the last shipment in the quarter. I think for us, typically, we would expect to have overall inventory of around one shipment would be the, when you make a shipment, you have another shipment in inventory, not necessarily at port, but in the system. So, I would sort of think about a normalized inventory for zircon is probably around the 15,000-ton mark. Now, it could be a bit less if you've just made a shipment, and it could be a bit more if you're waiting to make the next one. On ilmenite, probably around that 40,000-ton mark would be. We typically ship between 30,000 and 40,000-ton vessels, so we would expect to have around about 40,000 tons. It does give a flavor of how much we could have a quarter or two here where we ship above production as we bring inventories back down to normal levels. Okay. Good. An observation from Luke Matthews. It sounds like this from Luke. It sounds like the business from Luke. It sounds like the business improvement plan will focus more on screening out the low VHM portion of the oversize rather than a second DMU, therefore modifications rather than new equipment. Is that right? And would that therefore suggest low CapEx requirement for the business improvement plan? Yeah. I mean, I think we're still working through that. That does appear to be the most likely scenario at the moment. Depending on what we decide to do with the mining method as well, that could have CapEx implications if we had to modify the way the ore is being presented to the DMU, for example. So, I still think it's too early to tell. Overall, though, I think it feels like plant modifications plus potentially you can have some working capital implications if you make a change like that. But while we continue to have today a plan, there always was the plan that you would need a second DMU at some stage. That feels less likely to be the solution today. But overall, right now, today, I'm reflecting what we're seeing, but we haven't made a final determination on what the changes are. Until you know what they are, it's pretty hard to say definitively what they're going to cost. I don't see. It's certainly not going to be a whole new plant, a whole new sort of input processing equipment and so on. I just don't think that's likely. Okay. Good. Would you mind talking a little bit about zircon pricing? Obviously, since the BFS, it seems like a while ago now, but obviously, the price has dropped off quite a bit. Would you be able to talk about sort of where you see that at the moment? Yeah. I mean, so obviously, you've got the general sense of what market price is combined with we sell a concentrate. So, most of the people on the call have heard me talk about it before. What you get paid for concentrate is a combination of recovery, quality. There's cost to process, etc., and then ultimately, the market price. Now, for those, a number of our customers are looking at doing acid wash on at least some of the streams, but if you're not acid washing our product, the zircon is predominantly going to be sold as standard type grade for non-ceramic applications. That will determine, which means our customers are generally not going to get premium price for ours. They're going to get standard. That's where we are today. Recoveries, they now understand how to process the material better. I think you're getting reasonable recoveries. In terms of the overall market price, zircon prices have come down quite a lot from the sort of previous peaks. I think, certainly from when the DFS was done, prices are down from over $2,000 a ton zircon to now in China for premium, probably $1,800 roughly. So there has been a reasonable shift in that market. The zircon market is balanced because those producers that had the ability to do so, particularly Rio and Iluka and Tronox, continue to match supply to demand. So if everybody was running flat out, the market would be oversupplied. Not everybody's running flat out. So the market's broadly balanced, but it's not a. People People aren't. It's not a. It's a balanced market. It's not one where people are falling over themselves to buy product either. And there is a significant amount of concentrate that flows into China from places like Mozambique, which is largely being mined and shipped by Chinese-owned companies. So there is a significant supply chain in China that has nothing to do with any of the Western miners of any description, small or large. That was a little bit disrupted with, I think most people know, there was and continues to be a little bit of unrest in China, in Mozambique. But that overall market feels reasonably balanced at the moment. But that's what's, I think, ultimately pricing is sort of the consensus forecast seems to be sort of reasonably flat with a slow recovery, sort of 2025, 2026, that it's not till 2027 when we start to see significant supply drop away from current mines that we would expect to see prices go up significantly. I think for us, one thing we would expect to see, and I think we've probably seen it already, having more customers allows us to create a bit more competitive tension for our own offtake, and so we probably had a bit of discounting early on, new product, limited customer base. Probably one of the reasons why we're holding prices in the current quarter is that we're probably a little bit ahead of the market and the market's catching up to where we are. Okay. Perfect. Another question come through from the audience. Just a quick question on the oversize. Will the drill and blast, obviously, you'll use that mostly for the waste mining and the stripping, right, but will that help at all with the oversize, do you think? So the drill and blast and the overburden won't because the person's asking because we've quite rightly said we're blasting the overburden. We almost certainly will do a production trial. So given we've got the ability to drill and blast on site at some stage, not immediately, but at some stage, we are likely to do a trial blast in the ore to see if that is that a better way to prep the ore than, say, ripping and rolling with the D11s. It's possible that the blasting only needs to be done. Potentially, you're targeting whether or particularly indurated layers. So I think there's an open question there about whether I think mining method, we're doing dozer push. We could do drill and blast and still push with dozers. I guess ultimately, we could do drill and blast and move to a truck and shovel type mining method as well. But I'm not at this stage, we'll trial it, but it isn't clear that drill and blast is required for the ore or not required. It's not required, but would be an improvement over just mechanical ore preparation. Okay. Perfect. Right. We've just got a few more questions coming through now, and I was actually just about to ask about the wet season, so that's good. One's just come in. Obviously, last year, I don't believe there was much disruption from the wet season at all, really, which was obviously your first year into production or first year into production. How are you finding the wet season this year? Is the weather being as kind? Yeah. Yeah, you're quite right that last year, we didn't really have any cyclonic events. This year, there's only been one actual cyclone in Western Australia. Two systems merged about 10 days ago. And when it was a cyclone, it was mostly off the coast of the Pilbara and went south and west. So we got a lot of rain off the back of that system, but not cyclonic conditions. It would be fair to say this wet season has been wetter. We do routinely get. We're getting a lot. You get rain every day almost, sort of thing, or patches of rain. What we count as really heavy rain in lots of places is just rain up there. So we've only had, I think we've had one so far. We had one weather system where it was wet enough that we actually suspended operations for a couple of days just to really for safety of people and equipment. It becomes very difficult to operate in extreme events. But we haven't had a cyclone, touch wood, yet this season. So I think we always expect the wet season is a fact of life. We're prepared for it. We can generally manage through. You can imagine with drill and blast, it does make drill and blast in the wet seasons trickier. Not drilling, but blasting. When we have weather, we tend to have lightning and lightning and explosives don't mix very well together. So that is probably one of the longer-term things is thinking about even do you take more of a seasonal approach to the blasting type activities. Overall, we're managing well. We're learning more about how to manage through the wet season. It is a different set of challenges, but we haven't seen any material impact. Okay. Good. Bruce, I think we're running low on questions, although yeah, I think we're running pretty low. Bruce, perhaps you can sort of maybe just do a quick couple of minutes just on sort of any final thoughts that you might have, and we can. Y eah. Look, I think while perhaps it doesn't, what I think about it is Q4 was a good quarter from production, even though we were at the bottom end of our mining. That shows that there's scope for us to produce more material even with what we're currently doing. We're getting closer to having a clear view on how we increase mine production to completely fill the plant. We're definitely in that there's momentum there from a production perspective, and we expect that to continue. Then really, probably the big change for me, if I look at where we are market-wise compared to coming out of the September quarter, no sales for zircon, limited customer base, it's transformational. We've got a lot more customers. We've got both new and existing customers performing. It's much, much easier to market into 10 or 11 people than it is to market into three. I certainly feel a lot more confident around the volumes from a market perspective. That's ultimately what we can control. I mean, we don't control the market price. I think we are seeing the market price, and that's what we would expect. But I'm feeling like certainly the current quarter, the quarter we're in now, the March quarter, would certainly expect that we should start to see that translate into the actual sales performance and so on. And we expect to see very strong shipments in the current quarter for both ilmenite and zircon concentrate. Good. All right, Bruce. Really appreciate your time. And thank you, everyone, for joining. Contact details on the screen on the website as well. Any other questions, get in touch with the team. Bruce, thank you very much. Thanks, everyone. Thank you.