Good afternoon, everyone. Thanks for sticking with us for TD Cowen Sustainability Week. I'm joined in this session by Ryan Corbett, the CFO of MP Materials, the only active rare earth producer in the United States, with several growth projects on the horizon right now to get to NdPr oxide separation and ultimately bringing the downstream magnet-making capabilities to the United States with their Stage three project in Fort Worth. Ryan, I appreciate you joining us today. Looking forward to our conversation. Yeah. Hey, David, thanks for having me. Happy to be here. I appreciate it. For those of you on the line that would like to ask questions, feel free to drop any in the dashboard, and I will filter them in their appropriateness to Ryan. For those maybe unfamiliar with the MP story, Ryan, why don't you give us, like, an elevator pitch on how much of the rare earths supply chain MP contributes to globally and some of the growth projects that you have in front of us, 'cause you guys certainly have a full plate right now. Sure. Yeah. happy to do it. Maybe I'll just kind of step back for those that need that introduction, maybe they also need a little bit of an introduction to kind of why rares are important. The way we think about our industry is, as the world electrifies and automates, you know, the focus to the raw materials that are required to power that revolution has come to the forefront, certainly for a lot of investors. Think EVs, wind turbines, drones, robots, all of those items rely on some form of electrified motion, which generally, therefore, are relying on lightweight and powerful rare earth permanent magnets to translate stored energy into motion. The key building block to those magnets is neodymium praseodymium, which you referenced, NdPr, are our core products. With the use cases that I mentioned, you know, EVs, et cetera, the demand growth in the industry is pretty self-evident, we are building capabilities certainly into a growing market. On the supply side, I think the thing that's interesting and to some of the stuff you and I were talking about before we started, David, is rare earths are a very different story, a different beast than I think, you know, what garners a lot of investors' attention, which is the lithium and battery mineral space. Today, 90% of the world's rare earth permanent magnets are made in China. Most of the source material and refining and metallization is there. As you said, MP stands as really the only source of these materials at scale in the Western world. Our foundational asset is that we own and operate Mountain Pass, which is one of the world's preeminent rare earth ore bodies globally. It's been mined in some form since the fifties. With, you know, very conservative SK1300 compliant, of course, assumptions, there's another, you know, 34+ year mine life left. Over $2 billion of capital has been invested in the site, in the last 10 years to build, really the world's only fully co-located, state-of-the-art mining and processing facility made to, you know, California environmental standards. We're in the middle of the Mojave Desert. To your question on sort of where are we, you know, in our journey, what do we represent in terms of the industry right now? We've been executing on a three-stage strategy since we acquired the business. Stage one is production of a mixed rare earth concentrate, and so mining, beneficiation, froth flotation, that's what we're doing right now. If you look at our financial results over the last couple of years, those have been driven by our Stage one business. Today, we are roughly 15% of the world's supply of rare earth materials. And we produce those materials as one of the world's lowest cost producers of our current product. If you also look at our investments over the last couple of years, the investment has been targeted into what we call Stage two. Stage two is leveraging the existing assets at Mountain Pass, which is a state-of-the-art separations facility and chemical plant. Making certain tweaks to the process flow to reduce operating costs, upgrade material handling capabilities to handle the record output that we've been able to achieve in Stage one. With the completion of this, we'll be able to produce our own separated rare earth oxides in the very near future. We talked a little bit about our commissioning progress on the last call. I'm sure we'll talk a little bit more about that, David, coming up here. We are also well on our way to the next stage, which we call Stage three. We'll be taking some of that NdPr oxide produced in California and bring it to our facility in Fort Worth, Texas. There we have a over 200,000 sq ft facility where the building shell is effectively complete. We're well on our way on a lot of the long lead equipment. We're in factory acceptance testing for some of that equipment as we speak. That facility is sized to approximately 1,000 metric tons of magnets, which we intend to begin selling in 2025. We'll begin selling a precursor product, alloy flake, at the end of this year as our target. With that, we have our primary foundational customer with General Motors to supply into their Ultium platform. Stitching that all together, obviously, to your point, plenty on our plate, but we've made, I think, really great strides in the last couple of years. You know, we are solely focused on our mission to take a large portion of this critical supply chain, from mining through to midstream processing to downstream, magnet manufacturing and bringing that back to the U.S. ... Maybe just, you know, before we get into some of the nuts and bolts of, you know, the upstream Stage two and then Stage three, but taking a step back, because this is our Sustainability Week, can you talk a bit about some of the points of emphasis that you all have made? I, you know, I can think of top of mind of, you know, dry stack tailings, you know, the water extraction- Sure. -process that you have. What are some of the things that, especially as like a U.S.-based company, that you think of as sort of being like the gold standard of a rare earths mining operation in the most sustainably conscious way? Sure. Yeah, I agree. The dry stack tailings, and for those that are not familiar, obviously, you know, mining projects are typically associated with a liquid tailing, with a, you know, retainage pond somewhere, which comes with, you know, a whole host of risks with that. With the facility that's been designed and currently operating at Mountain Pass in our Stage one business, we have, I think, the world's only dry stack tailings process for rare earths. They're present in other minerals, but in very small scale. We think it's low single digits% of projects. That's for a variety of reasons. It comes with incremental complexity and potentially cost. For us, what it allows us to do is recycle the water that is created in our processing and our froth flotation, milling and froth flotation process, to effectively achieve and satisfy 95% of our processed water needs are achieved by dewatering our tailings and recycling that back into the system. When we step back and sort of think about sustainability, frankly, the most important thing before we even get to the environment is our employees. You know, safety is top of that list for us when we think about EH&S broadly. You know, obviously, you can't operate the site safely, none of the rest of that matters. You know, we're proud of our track record there. We want to continue to build on that. We recently actually just surpassed three years without an LTI, so over two million work hours, which, you know, obviously, you don't want to rest on those laurels. You have to work on that every day. As we bring Stage two online and introduce new, and more complex processes, we need to redouble our efforts. We're obviously very pleased with that. To your point on, you know, the facilities, that absolutely is a big part of it. I think that the design of the separations process and, the upstream process at Mountain Pass sort of took this into account from day one, given in the 2010 timeframe, the prospect of building this greenfield in California. You had to do a lot of things to satisfy those requirements. So we sort of wear the environmental requirements of California as a badge of honor. Then, you know, on top of that, there's the element of starting with sort of an inherent advantage that's built into our ore body and our co-location. There are a lot of things there that are unique. For example, our ore is a bastnaesite ore. So that tends to come with lower levels of thorium and uranium found in the ore. That makes sort of our disposal and waste management issues, you know, much, much easier to deal with, a lot less headline-grabbing, obviously. You know, that's a distinct advantage that just is geologic. There's a whole host of things that we focus on, but absolutely, you know, to your point, being able to produce the materials that we do that are so critical to this energy transition and do it in the way that, you know, that MP does, I think has a lot of appeal to a lot of downstream customers. You know, we're continuing to invest in incremental studies and reporting of sort of how we compare versus the industry. Obviously, with such a significant portion of the industry operating in China, the data coming out of that is relatively opaque. There are third-party studies out there that sort of compare, you know, what does it look like from an energy GHG emissions perspective, taking a magnet that used rare earths coming out of Mountain Pass versus, you know, name your other ore body. We continue to compare really favorably, and we think that with the changes that we've made to the process flow with Stage two, that lead hopefully will continue to get even better. We're gonna, you know, walk before we run. We're gonna get those results out there before we tout them, obviously. That's certainly the goal and the vision. Maybe we can talk a bit about Stage two now, since you introduced it. The you know, I see S two as very interesting in the context that MP has a core business that sells a rare earth concentrate, now a mixed rare earth concentrate that has a very strong margin, right? Sure. You benefit from a superior ore body. You have the bastnaesite, so you don't have separating and storage of, you know, perhaps harmful elements. You have a high total rare earth oxide content in the ore. Yeah. You had an existing infrastructure in place, right? You know, how do you, how do you sort of think about weighing the pace of ramping Stage two? Mm. -with, you know, the costs of associated with doing that? Obviously, Stage three is iterative, and it depends on having inputs from Stage two, but you don't need. Yeah. that much from Stage two. Sure. You know, you talked about, like, sort of walking before you can run. You guys have talked about getting to that run rate capacity by the end of the year. Yeah. You know, how do you sort of put that whole Venn diagram together of like, you know, even if we just did Stage one, we're a really good business. We're not gonna grow, but we're making a lot of free cash, right? Sure. The downside case is not so bad, right? Yep. ... You know, we have this other endeavor. We've told the market we're going to ramp to this. We're developing Stage three, getting the downstream magnets really important, but we only need 600 tons a year of NdPr. Right. How do we think about all those things? Maybe we can talk about, like, what's next in this Stage two process before we even think about how fast we want to ramp, you know? Sure. Great question. Stuff that we think about quite often. And I think the huge benefit that we have is, you know, when you think about the volatility in pricing, we started $1.7 billion ahead of everybody else, right? Are you going to go and build a Mountain Pass today, even with the fact that it is, you know, one of the world's preeminent ore bodies? Are you going to build that at today's prices? Who knows? We obviously have a distinct advantage, and it speaks to, I think, to your point, I guess, if you're looking at it from an investor's perspective, from a downside perspective, the asset value implicit in Mountain Pass is absolutely tremendous. However, with the fact that we've got our integrated strategy that we are executing on, we've built this business with the fortress balance sheet that we have, and we've started in such a favorable capital position that we're able to withstand this volatility to put the business in the position to benefit from the upside in prices, right? You know, we don't think that NdPr is going to be $60 or $70 forever. We think that the laws of supply and demand absolutely are relevant in this industry, as they are in all industries, despite some of the influence from, you know, some more opaque markets in China. We want to position the business to capitalize on those opportunities. You know, from a strategic perspective, you know, we've got our initial Stage three business. We're very excited about Stage two. Yes, Stage three draws a small% of Stage two, as we've talked about, you know, we think that the opportunity set for us in Stage three is many multiples of what we're executing on right now. You know, we are building a bigger, broader, fully integrated business. Certainly, while the uplift in earnings is different at different prices of our commodity, it's still present, right? So, particularly with the level of invested capital that we started with, and even at lower prices, looking at the return on the invested capital that we've put in place since we've embarked on our Stage two, even at lower commodity prices, is still quite attractive. It gets more attractive as the price goes up, as with any commodity business. You know, that is the uniqueness of what we were able to put together with, you know, Mountain Pass and the assets there. You know, in getting into the nitty-gritty of, you know, pace of ramp, it's a good question, and I don't know if you asked it. Somebody asked it on the on our last earnings call, where Michael, our chief operating officer, kind of spoke to this. You know, to your point, in prices in the sixties and seventies, it's very unique to see what we are doing, where we've got the entirety of our revenue-generating business in Stage one, effectively going from being a revenue product to being, you know, consumed downstream. You know, run through our circuits and then turn back into a new revenue product. You know, when that pricing uplift is less powerful, do we have every incentive in the world to just go pedal to the metal just because? You know, that incentive is less, of course. The incentive is to be thoughtful. I think we would always be thoughtful, but it's certainly a fair point. You know, we're not focused on just generating volume to generate volume because we said we'd generate volume. We are focused on generating the best return for our investors. I think, you know, we were talking a little bit about this, too. Our management team is, you know, are uniquely large shareholders in this business. We care about cash flow, and we care about doing the right thing over the long term. We continue on our plans to ramp the Stage two business. You know, we obviously will continue to always be thoughtful, and respond to the market. You know, from what we see so far, and we talked quite a bit about this in our most recent earnings call, we're encouraged by the progress that we see. Based on what you know, engineering-wise, is Stage two, as you scale the process, as you start to feed, consume all of the 42,000 tons of REO? Mm-hmm ... in the Stage two process, is the yield assumption, like, held constant, for what NdPr you're going to make at those levels versus if you just fed 4,000 tons of REO? Um- Like, is, is, is it- Right. Is it static throughout the tonnage that, like, your yield is still going to be X%? It's a great question. Obviously, I am not the technical expert, but, from a financial modeling perspective, what I would say is, you know, first of all, in introducing the drying and roasting step, that was a critical piece of our investment in Stage two. The nice thing is, not all 42,000 metric tons of REO have to go through all the processes. You know, we get to separate off early on in the process, in the leach stage, a significant portion of the cerium. In that, in that portion of the process, you know, we are able to really dial in what our recoveries are in leach of the REOs that we want, and then the rejection in leach of the REOs that we don't want. You know, with a well-established, you know, upstream track record, we expect to be able to achieve that. You know, we've seen those results already. Certainly, you know, in answering your question more broadly, there are always puts and takes as you feed the facility, you know, at different throughputs. I think in general, you know, once you get through certain processes, as I laid out, the downstream should track rather linearly. I think the most important thing is that. I kind of look at Stage two and our progress there as the chemistry, to your point, kind of what you're getting at, recoveries, and then sort of the mechanical blocking and tackling of getting the thing constructed and running at run rate. What we are seeing so far is the chemistry is working as we intended, and it is just chemistry. It's a big chemical plant. With that, you know, it gives us a lot of confidence, you know, whether we're running at full run rate immediately or not, that the results that we intend to get, you know, the cost position that we intend to occupy will be there. Of course, as with anything, when you've got labor involved and all those other things, you know, volume makes a difference to your cost position. Interestingly, the difference between Stage one and Stage two is Stage two is highly variable cost driven, right? There are significant commodity reagents involved. There's a significant amount of variable energy involved, and so there is that element where if you're producing less, the diseconomies on a volume perspective are a little bit less. What I'd say is, you know, we continue to think that from the results that we've seen so far in commissioning, you know, we're on the right track from a chemistry perspective, and it's just a matter of kind of de-bottlenecking and blocking and tackling as we move through each successive stage in the commissioning process. I guess, where are we right now, I guess, with stages of testing? 'Cause I think last we left off on the earnings call was testing the acid leach process, if I'm not mistaken. Yeah, and frankly, not a ton of updates to give you in terms of breaking news here. I'd probably kind of reiterate the commentary that we had put on that we discussed on the last earnings call, where, you know, again, our goal is to continue to execute towards that target. This quarter, to your point, we have begun feeding product into our leach circuit. The expectation that we talked about is to get through the impurity removal circuit, the bulk separation circuit, where we separate lights from heavies and then begin sending feed to the individual separations building, where we'll get separation into NdPr within the quarter. That would allow us, you know, then to start turning our focus once we accomplish that, towards the finishing aspect of the business, which doesn't get quite as much, you know, industry or investor attention, but I think is absolutely critical to maintaining, you know, on-spec product, is ensuring that we've got our finishing assets dialed in. That's sort of where we are. No, no material changes to talk about since the earnings call. Okay. I guess, you know, when you think about the price of NdPr and enduring the volatility and making decisions around that, right, it's I know everything is sort of long-term oriented. Do you all have views on, like, what you think the incentive price per kilo is on just maintaining production of NdPr? Because the industry is growing at, call it 20% a year, right? Sure. Yep. If China quota is proxy for the industry right now, then effectively that's where the market is. Mm-hmm. You know, and I suppose we can talk about, like, what happened in the beginning of the year with the price collapse and a lack of Chinese bids in the market and maybe destocking of inventories, and the fact that EVs are not the majority of demands right now. Right. I guess, like, as you kind of square all of it together and you look at it from the vantage point of having the most, you know, prolific ore body of rare earths in the world, you know, what do you think is sort of like the mid-cycle incentive price on a per kilo basis that you think is worth underwriting? A lot higher than today's price. I think obviously it's hard to pinpoint perfectly because, you know, the thing that's a struggle is really understanding what the actual cost structure of the swing producer, right? I think the swing producer, the cost structure there is significantly higher than where we see pricing right now, if you're looking sort of at equilibrium. You know, to your point, we could spend a lot of time trying to fit a narrative to what happened at the beginning of the year. I think in general, in this industry, when you've got a relatively thinly traded market that has zero financialization and is purely, you know, a spot market, you know, small gyrations, very small changes in supply and demand can cause pretty outsized moves on the pricing in the short term. We're much more focused on the medium and long term, and kind of to your point on trying to back into, you know, some sort of incentive price. You know, I think the reality is that you have to think about not just where do these businesses, you know, potential projects, you know, break even, make money, but when you're underwriting some of these NPVs and, you know, IRRs and all these things that some of the developers put out there, is like, what is their cost of capital in order to actually get these things in process? Everything on a piece of paper looks great, but, like, what is the real cost of capital? I think with pricing doing what it did last year and then pulling back this year, so in other words, volatility, I think the volatility has arguably meaningfully raised the cost of capital for new projects. If you're raising the cost of capital, I think that that, you know, it's, it's all interconnected, but that actually raises, I think, you know, the, the shakeout price, if you will, as to where this needs to go. It's likely, you know, north of $120 at least, I would think, to even start thinking about in general, you know, what are incentive prices? It's so dependent on, you know, what project you're talking about. I think that the interesting set of dynamics that we face are that, you know, you talked about Chinese quota. There are certain producers that aren't even producing to their quota at this point. I think what that speaks to, and again, you know, the data coming out of China is very opaque and, you know, there's cross-holdings and JVs and things that make it, you know, particularly difficult to understand exactly what the economics are. You know, Jim talked a bit on the last call about our view of profitability of the Chinese industry writ large at these prices. I think that got a decent amount of attention, but, I mean, that's what we see. It's not perfect data, and it's from, you know, conversations and our own analysis, but that is what we see. In terms of trying to think about how does that influence our decision making, you know, what we fundamentally believe is that there is a supply-demand mismatch. We've talked about, you know, before, the tripling of demand if you come up with reasonable assumptions for some of these new growth areas. The reality is, from a supply perspective, there's no chance that we triple supply. There's just not. What we need to think about is, therefore, where does supply come and meet demand? What does that mean for pricing? You know, we heard a lot about certainly discussions on substitution and things like that, driving some of the short-term changes. The reality is that, you know, we see that in order for supply to meet demand, pricing is going to have to go up, and demand is going to have to come down versus what's on everyone's Excel sheet. You know, that's the reality. I think the last thing I'd add is, you know, what's new in the last couple of years, which I think is fascinating, is this has been talked about for a long time, but it's just finally happening. China is the world's largest exporter of automobiles now. Yep. That has never happened before, and that is a sea change in, you know, an incredibly important industry for us, and for raw materials writ large. You know, the rare earth industry is a tiny piece of that puzzle, and I think, you know, where if we're going to speak about China as a monolith, which it's not, there's a lot of different, you know, decision makers and a lot of different incentives, you know, across the industries and across our industry. But I think the overarching goal from a central planning perspective is ensure there is enough new material to meet the growing supply of automobiles coming out of that country. If you just think about that fact, I think that the incentives are to make sure that pricing is healthy enough to incentivize new production there, because that's not free. Yep. That's fair. I'm curious just on, you know, I hate to ask so much on Stage two, but I think it's just, like, an interesting intellectual exercise in capital allocation. Sure. You talked about being, you know, I think it was $1.7 billion ahead of competition, right? Yep. Probably 7-10 years, right? In the event that something like Stage two is not performing where you want it to be, you know, does that become something where we're willing to devote intellectual capital to solving it, but not necessarily financial capital until we're confident that it's there? You know, let's say that the recoveries or the yields they're just not acceptable. Whereas perhaps we could make NdPr, but we're not doing it efficiently. We think that maybe $500 million to spend would solve it. Like, how do you think about, like, that iteration, or is it, is it really something like that's not really a practical outcome? It would be more like we're going to be testing things for things like recovery at much more limited quantities until we get recipes correct. It would just be a function of time, not capital dollars. Yeah, look, I don't think. You know, hopefully not on what I don't expect this to be an outcome that we need to wrestle with. I think the thing that's interesting for MP, I mean, you've seen, and I think a lot of investors' minds are colored by the one other only greenfield production site that came up. Yeah. You know, had a pretty challenged ramp process and probably had to make a lot of those decisions because they didn't know if the yields were gonna be there. You know, obviously, eventually they've gotten there. For us, the vast majority of the infrastructure has run and has run at scale, and we've got many years of experience under our belt with a lot of the folks that designed and operated those processes under a prior operator. You know, what we've seen from the changes that we've made to the process flow is that we believe they don't just work on paper, they work in reality. This is not new technology, right? The introduction of roasting is something that actually was pioneered at Mountain Pass and was done for many decades. This is not like there is a, at least in my mind, a question as to, you know, whether the chemistry works. I think, you know, to the points that I made earlier, I think what we see so far from the chemistry is extremely encouraging. If you, if you sort of segregate the chemistry and the mechanical, there are going to be mechanical issues that we hit where, hey, you know, this is a bottleneck that we didn't think was gonna be a bottleneck, or we're gonna throw some capital at it. Generally, at almost any price, not any price, but almost any price, those problems tend to be small enough where you put some capital into it and you get it addressed. That is, you know, generally where I think we're gonna be. Hopefully that kind of gives you a sense of at least where, you know, what, the types of decisions I expect to have to be making. Absolutely. No, I appreciate the straightforward answers and the fulsome answers. I know we're a little bit over time at this point. I always feel like every time we talk, I want another 30 minutes, but it's a good problem to have. Ryan. Yes. I appreciate you and the MP team, joining us for our Sustainability Week. Looking forward to connecting with you guys again soon. Best of luck with... My pleasure. Going on. Thanks, David. Yep, take care. Appreciate it. Thanks, everybody.