Good morning, ladies and gentlemen, and welcome to the Neo Performance Materials, Inc. fourth quarter and full year 2023 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, March 15, 2024. I would now like to turn the conference over to Ali Mahdavi. Please go ahead. Thank you, operator, and good morning, everyone. Thank you for joining us this morning. Joining me this morning are Rahim Suleman, Neo's President and Chief Executive Officer, and Jonathan Baksh, Neo's Chief Financial Officer. Please note that some of the information you will hear during today's presentation and discussion will consist of forward-looking statements, including, without limitation, those regarding revenue, EBITDA, Adjusted EBITDA, product volumes, product pricing, other income and expense measures, cash returns, and future business outlook, including potential expansion plans and contracts. Actual results or trends could differ materially from those discussed today. For more information, please refer to the risk factors discussed in Neo's most recent financial filings, which were filed on SEDAR+ earlier today and are also available on our website. Neo assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. Financial amounts presented today will be in U.S. dollars. Non-IFRS financial measures will be used during today's conference call. Let me now turn the call over to Rahim. Thanks, Ali, and good morning, everyone. A special welcome to two of the newest members of our team, our new Senior Vice President of Global Human Resources, Helen Sun, and Neo's new Senior Vice President and General Counsel, Karen Murray. Helen and Karen are two integral members of our leadership team, and we are thrilled to have such immense talent, added diversity, and new energy to help drive the future path for Neo. Neo completed the full year 2023 by taking important steps forward against our technical, commercial, and strategic roadmaps. While the market environment continued to be challenging with persistent declining rare earth prices in a weak magnetic industry, our teams continue to remain focused on our future growth opportunities. For the full year, we reported $572 million in revenue and reported an Adjusted Net Loss of $1 million, or a loss of $0.02 per share. We reported adjusted EBITDA for the full year of $37.2 million, which is just less than half of our reported adjusted EBITDA for the full year 2022. Jonathan will cover these dynamics in more detail. On the rare earth side of the business, we are now about two years into a downward price cycle for rare earths, a combination of increasing supply quotas in China and weaker demand dynamics generally. The long-term growth of rare earth magnetics for automotive and EVs remains very attractive, and this is where Neo is focused on building our long-term roadmap. Yet the largest portion of magnetics demand today is for general-use applications, things like appliances and air conditioners, power tools, elevators, and other electronic applications. The demand for these applications has particularly slowed down within China as housing starts and consumer demands have slowed. The resulting impact on magnetic rare earth prices is clear, as the prices for neodymium have declined from more than $160 per kilogram at its peak in March of 2022 to a recent low last week of below $50 per kilogram. Against the backdrop of declining rare earth prices, it's not surprising to see our full-year results pressured. But we know that these lower financials will not persist in our long-term economic model. Neo is not a mining company, so the absolute value of rare earth prices is less of an issue than the trend of falling prices throughout the year and the impact on lead lag. The scale of the price declines we have seen over the last 18 months simply cannot happen again in the absence of another first significant increase in rare earth prices. Before discussing our operational performance, I'd like to acknowledge and congratulate progress made in expanding rare earth supplies by some of the most significant players in our industry outside of China. Lynas in Australia has progressed with the extension of its separation license in Malaysia and has continued plans of expanding its rare earths brought to market. Lynas recently announced plans to have capacity of 10.5 kilotons of NdPr oxide. MP Materials in North America has begun separating magnetic oxides and announced a plan to increase its mining capacity by 50% over the next four years. Serra Verde in Brazil has commissioned its rare earth mining project and is currently ramping up its production volumes. Others, including Energy Fuels, Hastings, Meteoric, and Aclara, have all made progress in the same vein, progress toward expanding the supply of rare earth materials available outside of China. This progress is a telling indicator of the acknowledged need and growth of rare earth magnetics outside of China. These additional sources are supporting the demand for more material, while Neo will continue its focus on converting these oxides into magnetics in support of the energy transition movement and the electrification of automobiles. Financially, 2023 was a disappointing year for our business and significantly underperformed compared to our expectations. There's no getting around that, and there's no hiding from it. We saw rapid declines in rare earth prices, and we saw low demand for our magnetic materials. This had a significant negative impact on Magnequench and C&O. Meanwhile, our rare metals business, although it reported a lower Q4 driven by some unusual factors, still had a near-record year, repeating a record year in 2023. We don't see 2024 as a continuation of Q4 for rare metals, but rather as a continuation of the full year 2023 results, and we expect to see another record-year type performance in 2024 for rare metals. That said, aside from the lower bottom line figure in 2023, there were many key accomplishments in 2023 for which we are proud, and we will impact our company in the years ahead. In Magnequench, we cut our conversion costs for making magnetic materials by about 20% from the prior year, including executing a significant reduction in headcount. We increased our magnet volumes again this year, now marking a five-times increase from when we acquired the business in 2019. We broke ground on our European magnet plant with great strides on the HR, technical, and construction side. We did not achieve our goals for the year related to program wins, as OEMs have delayed EV launch plans, but we remain extremely confident that EV launches will happen and customers will diversify away from a concentrated China supply. From a technical achievement perspective, we won the next generation of heavy rare earth-free traction motors and locked in supply sources to fulfill this business from outside of China. We executed the purchase of SG Technologies, a magnetic and assembly business in the U.K., expanding our footprint and capabilities outside of China. In C&O, the team has made incredible progress on the NAMCO relocation, staying on budget and essentially on time. They did that with no accidents and no other safety environmental concerns. We made progress on the commercial side with new programs for emission catalysts and new nanomaterials within specialty oxides. Our water treatment business continues to grow as we had a record year of volumes in this small but growing space. In rare metals, despite poor Q4 results, we achieved another near-record result in 2023, driven primarily by the team's flexibility to manage market changes, including changes in hafnium prices and gallium market changes. We announced the change in our Silmet midstream business to focus more on downstream products, and I will elaborate more on this later. As a whole, we continue to have an excellent and industry-leading health and safety record. We published our second sustainability report, making strong progress toward our environmental responsibilities, and we achieved five EcoVadis certifications, including three gold medals. Nothing can mask the difficult financial year, and we're not trying to do so. Instead, we are engaged in working toward a stronger foundation upon which we will build our future growth. To support our future growth, we have under construction two significant capital projects, and we believe will be major contributors to future growth and earnings. First, we made great progress through Q4 last year and quarter to date at the relocation and modernization of our environmental catalyst facility, which we refer to as NAMCO. The main areas of construction and installation are now complete, and we have started commissioning and manufacturing lines for initial production. It will take some time to debug the entire system, but we are within one month of our original timeline, and we are within budget for overall costs. After customer qualifications are complete, we expect to ramp up production, and we will be producing at normal commercial levels in the back half of 2024. We still have a bit of a journey to go here, but we are extremely pleased thus far with the progress and early material we have coming from our production lines. Second, our magnet facility in Europe is in the early stages of construction and purchasing equipment. While we only put shovels in the ground last August, we remain on budget and on schedule, and we are comfortable with the progress made. We believe this project will be a game changer for the rare earth magnetics industry outside of China. This is proving to be even more true given that China enacted further regulations to limit the transfer of magnet-making technology outside of China. Remember that Neo has been making rare earth magnets inside and outside of China for over 25 years. Neo will be able to manage through these export restrictions given our long history and our early start on this project. As many of you will recall, we also laid out a series of targeted short-term achievements on our near-term roadmap over the six-month period to May of 2024. These addressed three targeted goals. First, to secure one to three new sales agreements or MOUs with customers for critical materials and magnetics. Second, to execute one to two new supplier or offtake agreements to support our sourcing strategy. And third, to complete one to three significant improvements in our manufacturing footprint and our operational strategies. We are partway through this timeframe, but we are pleased to announce significant progress in each area. First, we're happy to update that we have been awarded a second contract for specialty magnetic powders for heavy rare earth-free traction motors in automotive. We won the inaugurating platform for this technology a few years ago, and we are thrilled that this proof of concept has now evolved into the next generation of platforms and more vehicles and models. Second, related to new supply arrangements or offtake agreements, we have successfully established a new supply source agreement originating outside of China for magnetic oxides that will be used directly for our new traction motor platform. Third, we have entered into an important sales and tolling contract for a portion of our gallium sales and manufacturing capacity. This new arrangement checks the boxes for all three of our roadmap targets. One, it establishes a new sales agreement for advanced materials. Two, it establishes a new supply arrangement for Neo. And three, it marks a shift to our operating strategy within this business. We've briefly discussed China's enactment of a policy to restrict the sales of primary gallium outside of China. As a reminder, Neo's gallium recycling facility in North America is the only one of its kind that can recycle gallium materials. While this new sales arrangement is modest in terms of deal size, it's an important shift in our operating focus to substantially de-risk our operations. It reduces risks of supply, improves our sales profile, decreases lead lag, and mitigates overall volatility for this business. Finally, we address a significant change to our operating footprint by exiting the midstream hydrometallurgy portion of our tantalum and niobium business within rare metals. This was announced in a press release in December of 2023. It's an important change for our operating strategy at our Estonia rare metals business. In short, by not working on hydrometallurgy or chemically separating tantalum and niobium, it allows us to focus our efforts on metal-making, which is the highest value and strongest return on assets proposition of this business. This change is quite beneficial for a number of reasons. First, it allows us to diversify our material sourcing strategy. Historically, we sourced from a single upstream provider into our midstream process. Now we have expanded our supply base to four midstream suppliers going into our downstream process. Second, we can adjust the procurement balance of niobium and tantalum. This will enable us to focus on our highest value sales opportunities from a value-add perspective rather than having to sell a fixed input of the materials that we purchase. Third, this shift also has a substantial reduction on inventory required as the hydrometallurgical process is by definition a time-consuming process. Excess raw material, both shipped en route, held at the front and back ends of Hydromet to then be fed into metal-making, will go away, and we can reduce inventory by about 10-12 weeks. Once again, this change addresses a couple of our key initiatives, improving our sourcing strategies as well as improving our operating strategies. For the sake of clarity, this change has no impact on our rare earth separation business, which is also located in Estonia. In summary, we have made great progress on the initiatives and targets that we laid out last quarter. We aren't celebrating quite yet, but these are ambitious targets that are creating some early momentum. We fully expect to build upon that momentum quarter after quarter and continue to change and build our business. At a macro level, we are at the beginning edge of an inflection point in the industry, a complete supply chain of rare earth magnetics and critical materials outside of China. I am excited about the progress we've made in 2023, and I look forward to sharing more progress in 2024. I think that we will all see that the future is much brighter, and we certainly expect double-digit Adjusted EBITDA growth in 2024. With that, I'd like to turn the call over to Jonathan. Thanks, Rahim, and good morning, everyone. Our sales during the fourth quarter were $128.7 million with Adjusted EBITDA of $3.1 million. We finished the quarter with an Adjusted Net Loss of $1 million or a diluted loss of $0.02 per share. The financial performance in the quarter fell below our expectations driven by two factors: lower rare earth pricing and lower spot sales volume for hafnium. In addition, we incurred further one-time charges, which impacted operating profits in our rare metals business. On rare earth pricing, after a period of moderate stability, rare earth prices began to drop in the back half of the fourth quarter and have continued to decline in the current year-to-date period. This places excess cost pressure on our C&O separation business and, to a lesser extent, within our MagneQuench business. We continue to take targeted actions to reduce our overall inventory levels. That said, we are holding strategic supplies of excess inventory to support customers through the commissioning stage of our new environmental emission catalyst facility and to support our strong hafnium order book in 2024. As we proceed through the year, we will continue to reduce our inventory levels and further improve our working capital performance. Shifting focus to our business units. Despite challenging market dynamics, Magnequench finished the second half of the year with relatively strong volumes. Given the slower economic environment and lower consumer demand in China, the team has worked hard to maintain a competitive cost structure while continuing to expand market share. Despite this, we have seen volume recoveries in traction motor applications as well as continued growth in our magnet business, which are both favorable signs heading into 2024. Within chemicals and oxides, declining rare earth prices have created lead lag challenges and continue to compress operating margins. For perspective, our relatively small rare separation business produced negative gross margins in 2023 compared to an average of $30 million of gross margins in 2021 and 2022. Financial results in 2021 and 2022 benefited from rising rare earth prices while 2023 was negatively impacted by declining rare earth prices. The steady state for our rare separation business is somewhere in the middle, and this gap in performance bridges a substantial portion of the decline in earnings for the company compared to the prior year. Volumes for our environmental emission catalyst business were lower in the quarter, but on balance, we had a pretty good year. We are currently commissioning our new emissions catalyst control plant, which requires some additional resources and cost as we temporarily run two facilities in preparation for the transition to the new facility later this year. Shifting to rare metals, the storyline throughout 2022 and 2023 has been hafnium, and we expect this to continue in 2024. That said, our fourth quarter volumes for hafnium were subdued. We normally maintain a blend of spot sales at current market prices along with longer-term contracted sales. In the fourth quarter, we had minimal spot sales, and our volumes were primarily tied to lower-priced legacy contracts, which were fulfilled with recent higher-cost inventory from scrap sources purchased in 2023. This dynamic is not expected to continue as our healthy 2024 long-term contracts have already secured physical inventory. With that in mind, we are confident in this business and anticipate that 2024 should again yield favorable results. Related to our strategic decision in rare metals to exit hydrometallurgy operations, we incurred a total expense of $3.4 million in the fourth quarter. This included $2.8 million of non-cash charges related to the impairment of assets and $600,000 in employee restructuring costs. Our rare metal segment reported an adjusted EBITDA figure of -$2.2 million in the quarter. This business has averaged $5 million-$6 million in quarterly adjusted EBITDA throughout 2022 and 2023, which is the level of financial performance we expect from rare metals given the strong hafnium market dynamics and further highlights Q4/2023 as a negative outlier for the business unit. Shifting to our cash position in large capital projects. During the year, we generated $62 million in cash from operations. We invested $42 million in property, plant, and equipment, including $23 million related to our environmental emission catalyst facility and $9 million related to our European magnet facility. We also invested $11.6 million in the acquisition of SG Tech and invested $4.5 million in Neo North Star Resources. In addition, we returned $13.4 million in dividends to shareholders and repurchased $19.9 million of common shares through our NCIB program. We finished the year with $86 million in cash, with significant additional cash availability through our existing debt facilities. We continue to make progress on securing an additional debt facility to partially fund our magnet project in Europe. Within 2024, we anticipate we will complete construction and commissioning of our environmental emission catalyst facility and the majority of our magnet facility. With that, I'd like to open it up for questions. They put me in the wrong meeting. I'll call back in. Don't ever use this firm again. Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift a handset before pressing any keys. Your first question comes from Yuri Lynk with Canaccord Genuity. Please go ahead. Good morning. Thanks for taking my question, guys. Good morning, Yuri. Yeah, Rahim, just on rare metals, was there an inventory write-down in there as well? I'm just trying to make sense of the numbers and. Yeah, there were a couple of inventory write-downs. There was an inventory write-down of some of the historical material associated with Silmet in that we were going to kind of stop the hydrometallurgy process. There was also an inventory write-down with respect to some of the tantalum, that is, at a different facility for a different process. But the largest impact in rare metals was related to our hafnium side of the business, which is really we always have a blend of kind of long-term contracts and spot contracts that we would balance for every business. And for most of our long-term contracts, we physically take inventory on that. But you'll remember earlier this year, rare metals had a tremendous amount of sales, capitalized on the price increase in hafnium. So we sold a lot of our existing inventory on hand at very favorable prices. In the back half of the fourth quarter, anyway, we still had to fulfill our contracted sales for the year 2023. To do that, we had to do that with new inventory that we purchased. There were almost no spot sales in Q4. That, I think, is the biggest flip. When we think of rare metals, we certainly think of it kind of as a full-year basis because I think, honestly, Q2 was really high. We said that at the time. Q4 is really low. I think that the way that we think about the business is to look at it on a full-year 2023 basis. When we do that, we still feel very good about 2024 because all of our contracts, all of our kind of long-term purchase contracts will re-kick in with the 2024 pricing as of January 1st. Right. And the fact that your volumes are down in that business 40%, your ASP is up 60%. So that's an offset there. But is that volume level reflective of the changes that you've made to your processes that you referenced on the call? And is this kind of the run rate going forward? Yes and no. I think the volume levels will be lower because one of the things that we did when we shut down the Silmet portion is we'll no longer sell niobium oxide to the market. And we probably did two different things there. One is we reduced our sales of niobium oxide to the market. And two is we held some. In other words, when we make our transition of only focusing on metal-making, we used to have excess niobium oxide that we would sell into the market. Now we are holding all of that niobium oxide to work through the transition and feed it directly into our metal-making business. So I think that's kind of probably the bigger thing that you're seeing in a volume change, and that volume change will be sustainable going forward. The delta, though, is that material will simply turn into higher-value metal sales. We won't be producing our own niobium oxide for that business. We'll just be buying oxides from others. Not selling that oxide and holding more of the oxide also impacted Silmet. Okay. That's helpful. If I could just squeeze one more in, and it's a bigger picture question. Just on your Magnequench volumes, they're down about 25% since the IPO in 2017. And you've done a few acquisitions during that time as well, implying the organic number might be a little bit worse than that. So where is the weakness? You talked a bit in the MD&A about electronic power steering. I don't know how much of a hard-decline market is left, but what's been dragging on the volumes over the last few years? So those kind of two programs and hard disk drives, electronic power steering, and maybe I'll even throw seat motors into that category, we did about 2,200 tons of business for that in 2016. In 2022, we did about 600 tons. This year, I don't know. I'm going to say we did about 300-400 tons. Next year will be smaller, but it'll be the end of that story. But a 1,500-ton decrease, and comparing in 2023, it's probably an 1,800-ton decrease in that story would account for kind of a 30% volume decline from historical Magnequench. The things that we're focusing on now, the traction motor business, the making of magnets, those things are growing. But this has been a painful period to work through the transition of those historical platforms. Where we are now, I actually don't think our year-over-year decline was so much about those programs. Surely those programs declined, off the top of my head, I'd say like 30%-50% year-over-year. But the quantum is now small. Magnequench volume is not growing in this last year. It's more related to just a general slower economy, slower housing starts. But the five-year trend, I think, is more explained by the legacy programs. The current year trend is probably more explained by current economics. What's displaced your magnetic powder in those legacy programs? Well, on the hard disk drive, it's just the movement from laptops that had hard disk drives to now have solid-state drives. So now that business on the hard disk drives is really only going into server farms, which is a good and stable market. So we don't actually think that's going to go away. But the largest portion of the business used to be on kind of the drives that would go into your laptops. That's all gone with solid state. EPS was electronic power steering, was a change in technology of how that kind of the assembly operation of, honestly, sintered magnets affected our business. And seat motors was about the dramatic increase in price of rare earth magnets relative to ferrite magnets. So that was kind of the each of them were affected somewhat differently. Okay. That's helpful. Thanks for the color. I'll turn it over. Thank you. Your next question comes from David Ocampo with Cormark Securities. Please go ahead. Thanks for taking my questions. Rahim, I appreciate you guys breaking out the gross profit between separation and the rest of the business. But I do want to focus on the rest of the business because it does seem like there's still quite a bit of volatility there. But you guys did call out some buckets that could help reduce it. I'm curious, when you fast-forward, whether it's 12 or 18 months, whatever time horizon you want to apply to that, and you guys do reach maturity on some of your initiatives, how much of a reduction in volatility could we expect from the business ex separation? Yeah. So I think that the RE separation is the key portion because, as you've talked about, it's a separation business that drives us crazy, to be honest, in terms of its level of volatility. And again, I mean, that volatility, nothing can't happen again, but it can't drop from $160-$50 when it's only $50 now. So it can't go to -$110 next year. But nonetheless, in terms of the other businesses, they also exhibit levels of volatility. Magnequench has most of its products on pass-through, but on a quarter-to-quarter basis, you'll see volatility just because of the timing of when we change customer contracts, which tends to be monthly or quarterly, but obviously, our purchases of rare earths are happening daily or monthly. So there is volatility in Magnequench as well. I think last year's Adjusted EBITDA per KG, or at least 2021's and 2022's, were at the high end. I think this year's at the low end. So I do think that that volatility does affect Magnequench as well, but not nearly as extremely as the separation business. I think that the Silmet hydrometallurgy process caused a lot of volatility. And the primary reason for that volatility is the end markets move. Obviously, these metals move in pricing. But our challenge when you're managing volatility like that is when you're managing six months of inventory. So if volatility, if we could shorten that inventory cycle, we would reduce you can't reduce the end market volatility, but you can reduce the impact of the business. And again, that was part of the thesis of why we closed the hydrometallurgy piece in Silmet. I think that was probably the second most volatile area that we saw. The gallium business, which we've also done to reduce volatility for, it's a small part of the overall business. Its volatility probably gets masked by the volatility of the other areas of the business. But internally, it was an area that was volatile, and it was an area that we wanted to resolve. So I don't think we can purge volatility. I think Magnequench will always have one to three month style volatility. We need to purge six-month style volatility. Gotcha. And when I take a look at Magnequench, I mean, it's only sourcing 5%-15% of the rare earth oxides internally. If you think longer term, does it still make sense to have the separation business within Neo Performance, or is it masking kind of the underlying profitability of what you guys determine as your core business? Yeah, I think that's an excellent question. It is worthy of review, and it is under review as all of our businesses. I mentioned in our last call, every business of Neo is under review for whether it is going to have the appropriate return on capital employed, whether it's going to meet other elements like volatility, like exposure to China, like a number of factors like that. So certainly, separation is going to be evaluated across those same dimensions. Okay. Last one from me. I was hoping you could speak on the ban of exports of technology to make rare earth magnets from China, and just really trying to figure out why you believe this won't impact your sintered magnet facility in Europe and potentially a facility in North America if you do ultimately end up opening a facility there? Yeah. So honestly, it will impact us. It's not that we're immune to it. But it is that we're just so much farther ahead because we started this project two years ago, although we only broke ground in August, and we only talked about it a year and a bit ago. It doesn't mean we weren't doing the work. So we had been doing work and the research and building the processes and understanding the differences between that manufacturing process versus our existing manufacturing process. So I would say that we are very far along on half the business; we're already experts in rare earth magnetics, and we already manufacture rare earth magnetics. So that gets us kind of halfway there, let's say. On the other half, the fact that we've been researching, doing the work, preparing, doing R&D, having equipment in our lab in Singapore, all of those things just get us much, much farther ahead than any of the others that are going to try to want to do rare earth magnetics going forward. We know that this is a many multi-billion dollar industry that's going to be moving outside of China, or at least be paralleled supply chain outside of China. Neo is so much farther ahead in its journey to be able to solidify every process. So we have many already. We have work to do on others. But because we've been doing it so much farther ahead than others, the multi-billion dollar market opportunity we see as being hugely attractive and important, it made our road that much harder. But we're up for the challenge, and we're well on our way to get it right. Okay. That's it for me. I'll hop back into queue. Thanks, David. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. Your next question comes from Ian Gillis with Stifel. Please go ahead. Morning, everyone. Morning, Ian. Can you maybe talk a little bit about how you think the margins are going to change for Magnequench and C&O moving forward, given all the structural changes you're making to the business? I mean, I think we all have a view of what they look like historically, but it's probably not a great proxy. Yeah, I think that's look, I think historically is a tough proxy. So I would say that I'll deal with the separation side of the business. We would have said that historically, at call it $60 neodymium, $50-$60 neodymium, you could that's a matter of kind of historical public record between 2017 and 2021, let's say. Our expectations for that business was probably in the range of $12 million-$15 million of gross profit. We thought that was steady state. Rare earth prices today are not terribly dissimilar to the $60 that they're just shy of $50. Obviously, our input costs have gone down as well, but our spread does decrease. So I would say the steady state at these prices is probably lower than that, which is why we need to undertake a review of whether they're getting the appropriate return on assets. So I think that's kind of how we would foresee separation business. Lower prices are challenging, but movement in prices, it is what creates the kind of volatility and the +30% and now the minus margins that we see in 2023. So it's not huge margins in a separation business, and certainly at these price points, again, the big swing in profitability changes in price. Absolute value has a smaller impact, but it still has an impact. From a Magnequench perspective, absolute value of rare earths has less of an impact. In fact, arguably, lower rare earth prices are actually better for Magnequench because it does, there's a little bit of margin that we might make on pass-through kind of spread between what we buy and what we sell and the like. But our customers are paying less for the material. They're more inclined to adopt more rare earth magnets. We can maintain less inventory. So I mean, we're just as happy to have lower rare earth prices in Magnequench as not. But on the separation side, it will squeeze margins. But the key is just this up-and-down trend is what significantly hurts us, helps and hurts us, honestly. No, that's helpful. And then as you think about the customer exposure on the Magnequench side as you shift away from kind of, I guess, auto exposure, I mean, does it provide more flexibility? Are the customers a little easier to deal with, and does it give you more flexibility to try and earn a margin? My customers are the best in the world, so they're super easy to deal with, except when you have to talk about price. So no, certainly, it's important to them that the overall product cost is lower. These things are on pass-through, so you get the good with the bad. But certainly, it helps that the prices are lower. Certainly, it helps with respect to talking about the dynamics of producing more product outside of China. But look, we don't get in the business of forecasting rare earth prices, but when we look at what demand will be like two and a half times over the next X number of years, probably going to put some upward pressure on rare earth prices. But equivalently, what you have is really substantial increases in the supply base, both inside and outside of China for material. Where we need to focus is converting that material into magnets outside of China. Today, already, the numbers are fluid, but I'd say somewhere in the 65% maybe, 65%-70% range of material is mined in China, and 35% is already mined outside of China, and the 35%, I think, is growing. But from a magnet perspective, 92% of the world's magnets are made in China. So we have to have more companies capable of making rare earth magnets outside of China to support our industry, to support the world, to support the EV and electrification and energy transition movements. There's incredibly strong and positive news by folks in the industry having supply. Now we have to kind of continue the next step, which is the downstream also has to become bigger and stronger outside of China, which is why we feel very good about our position in the market. Understood. With respect to the sanctioning of phase two of Silmet, how are you thinking about timing in and around that? Is there anything that needs to happen with respect to customer offtake with phase one? Is there any update there? Not a specific update. I mean, look, clearly, EV launch plans for a number of OEMs have slipped over the last 12 months. I don't think that's a problem for phase one at all. I mean, I think that our phase one is such a small drop in the bucket of overall demand. I think customers do require diversification. I think the industry does require supply bases that are outside of China. So I don't think there's any concern with respect to phase one. With phase two, I think we feel extremely bullish, but I think that we have time to make the decision of when we're going to put the extra capital in place to grow the business. Certainly, we will de-risk the operation by seeing a customer book fill up in phase one and have an overflow that we would then put phase two behind. Okay. That's helpful. I'll turn it back over. Thanks very much. Super. Thank you. Your next question comes from Frédéric Bastien with Raymond James. Please go ahead. Hi. Good morning, guys. In your MDA, you flag three exploration and development projects that are going to help you source rare earths on a go-forward basis: the Neo North Star Resources, the Australian Rare Earths Limited, and as well the agreement with the Hastings. Can you provide an update on how these projects are going, please? Sure. Look, all of those projects, either Neo doesn't own or we have minority stakes in. So I will be tempered in my comment because I think those comments need to come from those companies themselves as opposed to us. But they all continue to make progress. They're all not imminent in terms of supply sources. And as we've talked about, Neo will maintain a balance between internalizing and thinking through upstream supply sources versus just going to midstream supply sources. So I think that we're pleased that they progressed, but we're not dependent upon upstream projects to make the rest of our company successful. I've just talked about the margins and separation are thin. Return on capital is tough. So kind of there's a balanced view on how the economics have to work for a midstream process for us to be continuing on the midstream expansion. But these projects will help our midstream supply base, but we won't become dependent on them because we will always focus on the downstream, and we will always work with other midstream suppliers. Thank you. That's all I have. Thanks. Super. Thanks, Patrick. There are no further questions at this time. I will now hand the conference over to Ali Mahdavi. Thank you. On behalf of the Neo team, I'd like to thank you all for joining us today. Should you have any follow-up questions, as usual, please feel free to reach out to myself. That concludes today's call, and we'll look forward to speaking to you on our first quarter results conference call. Operator. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.