© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Thank you, Ashley. Good morning, everyone, and welcome to our March quarterly results call, Kathleen Bozanic, CFO, is joining me and for this call, and I will sit here through our results for the quarter. Obviously a challenging quarter with a number of issues in the nickel and waste businesses. Before I get into that, though, I want to talk a little bit on safety and reflects on our sector performance through this period. And while we are seeing some positive trends in our leading indicators and very reengagement from our leaders across the business, greater injuries and incidents continues and remains about stable its prior quarter but is far acceptable level that we're all aiming for. And this is, of course, both mine that brought [indiscernible] something we're focusing heavily on. I'm confident that the work program that we've got on the way is that will make a difference. And clearly producing hard our people is the most important work we've got to do. That really pass through strong engagement with our teams run across the operations. And in the quarter, we actually took some time out with some safety resets, safety starts to talk about that. And everyone's role in identifying and consulting across that business. As I noted in our half year results call in February, we had a very serious incident or contract exploration crude at [ Kwinana ]. We're involved in a [ deeper ride ]. One of the individuals involved in that seriously injured and it's continuing this recovery is quite a challenging rate there. And I think that is a start mining right across that business just owns and the work continues to do every day and then we keep improving.Moving on to the lithium business, and I'll start there. Look, as a difficult quarter, I think we signposted for IGO. Our balance sheet remains in the right position. And that's despite reporting our first quarterly EBITDA loss for a long time, many now since that happened. And that metal predominantly on the performance of the let business, reflecting by the roll-through of the oil prices that we saw through the quarter but also the sale of volumes that we sign posted with a lot of nominations from the joint venture partners. On a positive note, over, I'm very pleased to announce that we've just confirmed agreement been file joint venture to sell 200,000 tonnes of spodumene concentrate from stockpiles at relishes to our partner, TLC. And that volume is or above their offtake volume and that sale will be booked through the June quarter. That sale will largely put the inventory side and will give us a good runway to make slowing, which is operating for production through the rest of this calendar year. Greenbushes a bit further. We announced, obviously, production for the March quarter was going to be lower than the mine's capacity as the sales team work to manage the inventory build against the production demand from the JV partners. Production is 290,000 tonnes was 22% lower than the prior quarter, and sales were reduced even more than that. As a result, the low production cash production costs were marginally higher at AED 3.86 per tonne. And our sale of revenue of $296 million, obviously substantially lower than the previous quarter, tie in part to the volumes, but more significantly lower realized prices, which dropped to around $1,000 to southern U.S. as compared to $3,000 in the prior quarter. As you also know, the new marketing pricing that took a bit through this quarter. The point of spodemene Greenbushes with our capital program, where continues on the bill of CGP3. I was down there a few weeks ago with that starting to look at that while that had some delays with some of the pilling going on it's progressing well now. We all still coming on the ground, and they've really got a redo. So I'm pleased to see that getting flat there. We went through the mine services area, that's complete and commissioned and they're just signing at the books, but they're all up and running using that for the mine. And the completion of the first couple of hundred rooms, accommodations done, there's more work coming, and we expect that facility to be develop around the midyear. Turning to Kwinana. I was also down in weeks ago and was great team and look at their detailed plans for the rest of 2024. What we did see though was a continued ramp-up improvement of the performance on the [indiscernible] and our expectations, but they are producing very consistently now the growth abort 96% of the price is hitting that target. Very low levels of impurity in material as well, which is also after by our customers. So the quality of the product is hitting the mark, and that's very important. It is obviously all about recent quarter volumes now. And we spent some time looking at their plans, and I was very encouraged by the level of thought and work into that. But also the team -- I mean, believe team there, we're well aligned where eating well really digging through how the supporting each other through what's going to be a challenging year, but I expect will deliver a step change in the work. Moving on to our nickel business. I'll start with Cosmos as we announced in January, we transited the Cosmos was care and maintenance. That's been a difficult process for our people. As you can imagine, significantly at some people who have signed up there to be part of a new mine for the future. And so we manage that a lot of care and attention and I give a lot of credit to leadership team in the way that they've got about that work. I really do very sensitive for our impact on individuals, but also provide going sort of the assets, of course, and draw the line effectively to start ramping down the assets and putting a storage on site and decides needed to make sure that every is getting good shape. And obviously, we are in the process of milling the available ore producing concentrate. We produced or processed 27,000 tonnes of ore in concentrate during the quarter and shipping commenced in April. There's a further 161,000 tonnes of ore available to be processed at the end of the month. And we expect as it's produced to be sold certainly mostly by the end of June this year. Total costs at Cosmos for the quarter were $61 million, some of which has been capitalized in the industry, but most of it is now making expenses going forward. We expect the quarter to benefit from that revenue that's flowing through to our product sales and offset some of the remaining costs as we went down in the maintenance.Turning to Slide 8, moving to Nova. The quarterly result there was impacted by a number of challenges, the weather, which I think we saw right across that part of Australia impacted our price as well. But more significantly, there are enough operational issues coming out of a segue shutdown in months. We saw a big impact on the availability and of course, that drive into our new corporate action and, of course, repeat our costs. Cobalt and nickel production were 10% and 16% lower, respectively, quarter-on-quarter and driving cash costs up 21% to over $5 a pound. Nova revenue was slightly higher due to the product of the sales, and the average realized price was in line with the prior quarter at around $25,000 tonnes. Nova's free cash was lower quarter-on-quarter, again, attributable to the life sale at signing. Despite the continued weak in the nickel market and obviously lower production, we're still generating positive cash flows. And year-to-date total, it's just over $200 million. Move on to Forrestania. And as you know, that mine is coming to its end of life, we still have to see more and more of that variability in those challenges with the ore body as we get through the filing sections of it. We achieved marginally lower quarter-on-quarter production and cash costs were also low, which was good to see. They did experience some challenges with the trucking product to get to our customers. That was by the function of the weather that we saw also the right access conceive. That impacted revenue through the quarter, but we expect that to improve through the June quarter coming up was clear most of that in the industry. Importantly, for same continues to generate some free cash during the quarter, thanks to our hedge position, which is priced at $3,000 a tonne. Recognizing, obviously, we've got a short line life land for us saying we're well into our work on planning and starting that rent down in the air and maintenance and siting the revitalization plans that will follow that. So that we have in all the responsible transition to that operation. Moving on to Slide 10 and explporation, and I don't want to go into the detail of the individual work programs. We've got some more of that in that quarter moving forward. But I did want to mention that we are commenced a comprehensive exploration business review. We're working through that closely with the team to help us drive size our project expire and portfolio capital reporting to the space. We've got absolutely sellability in this space, a man technical skills and I think rental capability right through the pipeline and life cycle of exploration is a unique capability in the industry in Australia, and we have an amazing portfolio of 10 [ spodumene scale ] positions across very prospective grounds to come through. So we need to make the very best of that realize or not may see the opportunity but equally look hard at how we're translating that to value through our business. And so that review is progressing, and we'll provide an update the next quarterly on that work and the outcomes. I'll come back and wrap up with a few some comments a little bit. But first of all, I'll hand over to Kath to runs through some of the final highlights the for.
Thanks, Ivan. I just to Slide 13 where we summarized our financial results for the quarter. Of note, we expect the decline in IGO share of profit from TLEA, which was the loss of 10 for the quarter. This reflects lower lithium prices and sales volume at Greenbushes and an EBITDA loss at Kwinana as expected or an asset in [indiscernible]. The EBITDA loss at Kwinana of $53 million, a much more significant level the loss reported in asset primarily due to to normal cash in our net adjustment as well as higher revenue generated by [indiscernible]. Normal cash investments accounted for just over 1 of 4 of results. The group recorded an underlying EBITDA loss of $15 million for the quarter, meaning a loss reported by our business, excluding the [indiscernible], the predominant driver the impact from cost loss. Group underlying free cash flow was $79 million for the quarter, and we reconcile our cash position on the next slide. You'll note our cash balance stayed steady over the quarter at $276 million, despite several ratable movements, including the interim payment in the [indiscernible] Cosmos. TLEA fows included $106 million income tax refunds, a $25 million in sales from M&A and a $52 million received from our rate business. Importantly, our nonmanaging operations continue to generate underlying free cash flow despite challenging market conditions in the sector. Our balance sheet remains strong with liquidity just under [indiscernible]. It's not only for an optionality, but also provide a strong platform for growth and as we expand current market segments. To you, Ivan.
Okay. Thanks, Kath. Maybe just a quick wrap up in summary, and then we'll open up for some questions. Firstly, safety. I mean, the 5 priorities I set out here I've talked about really since my first quarterly call back in January. Takes quickly the last priority for us. We've made some progress, but there's plenty to do. I'm confident with right working environments for our program and the right engagement from our leaders, but there is still a plan to do. In terms of our results, look, it was a challenging period for [indiscernible]. The most significant, of course, like prices and lower production compounded in the same period. That said, the additional sale I just mentioned will be for unconstrained in production team at [indiscernible] that's very healthy outcome for the rest of the year. We are focusing on working [indiscernible]. The agreement that we talked about that previously as well. There's points need to do. It's been tactical adding very non-loss opportunity. And I think rolling our collective strengths will unlock that. Kwinana, that's been a real challenge for the business for some high time we very encouraged coming in the last visit and discussions, working through the plans. Their general planning between 2024 is half along [indiscernible]. And I think as I've learned more about this industry, I see across the industry, the new one working the [indiscernible] voting process has got we think about. What I see, though, I would say it's very clear on those challenges, we've got the right actions in place. They know where they need to focus on their risks and then managing asset better about each month, which is great to see. Notwithstanding some of the operational difficulties over [indiscernible], the businesses are generating can planning to demand stores and optimize their cash flow safe sustainably through the end of the mine life precast. And I've talked a bit about exploration, look, I don't state the potential on the opportunity there. Very significant. I realize it's been some frustration with the results from the exposed investment that we've made so far. But this is not something that we want to shy away from the one makes it's targeted to manage group thoughtfully, but do an capability and the dedication that our team has and is their work programs in lenses. It's a great success. It's a key part of our strategy and as we work through our refresh that that will come through. I'll share more of that in the coming months once we can complete that through the next quarter. Moving on to Slide 17. Look, I think there's a lot of IGO at the moment cannot of a difficult quarter, but if I look at the level commitment and dedication to our purpose and digest across the broader business, living our values, fantastic to see the energy for the team. By [ January ], we have a fantastic platform and financial strength and our balance sheet, cash generation exposure to the world [ aliases ] and hence business remains cash positive people in culture, which I've talked about previously, continues to shine through. And then most importantly, our purpose and party where we're taking the business as we refresh the strategy standout setting. So lots to be positive about belong. Thanks for listening so far. I'll hand back to the operator now to walk through your questions.
[Operator Instructions]. Your first question comes from Hugo Nicolaci with Goldman Sachs.
Just a couple of questions on the lithium business, please. Just firstly, on Greenbushes, for the additional sales volume, any indication from Tianqi, whether that's for the ramp-up of their own [ AG ] plant or more of a reflection of broader market conditions and how they're seeing the market? And then just to clarify, is the 180-day payment terms on that volume subject to any provisional pricing?
Yes. Thanks. Look, I can currently comment on [ TLC's ] intention for the product specifically is following a question for them. So look, just a news that the product through. And I'm sure they're probably got a number of different pathways there. In terms of the pricing, it doesn't [indiscernible] in terms of recognizing the even getting as tonnes out and obviously, the reduced storage costs and so it's a one-off in terms of that sale, otherwise, the pricing mechanism from towers and remains.
And then just as a follow-up on Kwinana for Train 1 and then the shut in September. Any color there on what's being rectified or equipment costs and how meaningful of an uplift you're expecting in utilization as a result?
Yes. I [ need ] the numbers. I don't want to take the team and I said that was first started with [ Rite ] until I can see that the physical model of the physical assets and deal sense we've got base to do that forecast work. I don't want to start putting numbers out. They have got a great plan. It's aggressive. I'm sure they're going to push to sell us to [ even ] I think what's encouraging is a step back from the numbers per se is the depth of understanding of what's bottlenecking or holding us production and that continuous slow and the actions they've taken to remediate. And what I saw was a really deep understanding in the behavior of particularly to that end of the line where we've had the problems. The improvement will come in 2 parts. There will be initially improvement to come through to a big shutdown is planned in August, September. Just through better asset reliability and better operating control of the asset, and they've got, again, very specific work programs in place to improve there, and that should deliver step-by-step improvement a month. We've seen that obviously in the last quarter, and the April result was an improvement again. So we're just getting more and more confident that they're getting in control of our understanding of the assets behaviors. And then, of course, we have the one significant shutdown would have a number optics that were planning to install changes to the asset to remove some of the things that [ Alexa ] holding it up. All in all, so I'm not prepared to give you specific numbers at this point in a difficult position. They are working well on that digital log as well that's coming together. They've got a CGP3 plant models. They're busy connecting that into the underlying systems. And my next is hoping some of that working in progress. But I'll have to come back to you once I've gone through that and then get to some specific numbers.
And maybe just one quick one, if I could. Train to just confirming that the installed equipment there that's already in place. Have you had issues with any of the corresponding same equipment in Train 1 that have been significant or not expecting any issues with the previously installed train 2 equipment?
Well, most of it is the front end that's been installed. And I think the issue that did have with normal conditioning issues, nothing material and nothing that would give us concern with what's been put in place. The booties have been in the back end of the farm, which was not built. That said, of course, the study is underway on fee work that's underway. It's taken the learning from frame 1 and contemplating what's the best path to that should we decide to make that extra capital investment.
Your next question comes from Rahul Anand with Morgan Stanley.
Look, I've got 2 on the Lithium business as well to follow up from Hugo's questions. Look, first one is on Kwinana. You've talked about the major shutdown in September. I guess you're saying you don't want to talk around numbers, but the time we had attended the site trip, there was still a target in place to achieve capacity utilization in line with the nameplate eventually. Can I perhaps test you on whether that remains your target still post however long it takes for these rectification works to happen? And then secondly, on Kwinana, in terms of Train 2, is it fair that despite the FEED study continuing, you probably want to wait to see Train 1 completely ironed out and running at a decent run rate before you give the green light for Train 2. That's my question on Kwinana. I'll come back with a question on Greenbushes.
The nominal name flight from an engineering point of view stands until we've done that work on that model to really understand a simulator I think it's you making up a number. So will clearly chase that engineering outcome. And then once we have more one can adjust if need be, I think I mentioned in the previous call that there is, of course, a scenario where it may be that you need the 2 trains together and some redundancy between the 2 of them to actually get the optimum outcome and that would then imply some reduction from the total [ plate ] on both trains to achieve that, again, on speculating because it's too early to tell. Those things that the team are looking through them in their engineering and development sale currently. The target this year is not impacted by either of those fees. They're working through the current ones and where the full is impacted. And remember for the time we produced for the year is a cumulative view, and we expect to see a good step after that so down in September. So the last quarter is where we're going to see then obviously a more material output based on the success of those changes. Just a part your question around confidence and the trigger on Train 2. Yes, clearly, we need to know that we've got a pathway to an economic valuable asset for we invest the capital we do understand what the tone will be accordingly, how far you got to be on the way to prove that. I think again, is open to some debates still. It's why I'm so hesitant to put out numbers at this point, until seen that digital model until we can see a level of confidence here ability to forecast performance month-on-month. I think it's worth getting into what that line looks like. But you're quite right that there will be a quite between the performance of Train 1 and any decision on Train 2. So that stands as a question of what that threshold looks like.
Okay. That's fair enough. Look, second one is on Greenbushes. Obviously, pleasing to see the mine return to full production for the rest of the calendar year. I wanted to check whether there's been any further color that you can add in terms of the mine plan and the TLC plan for the medium term that we were talking about last quarter as well, and we were somewhat expecting an update this quarter. It may still come in June. But all I wanted to test was perhaps future expansions beyond CGP3. Is it fair to say that the mine's footprint and capital requirements could be constraining factors, and you probably want to look at the underground options and it might be a cost or a capital-light strategy over a capital-heavy, higher operating cost strategy in the medium term? Especially given strip ratios and where they need to be if you're going to mine in those sorts of rates?
That's a lot of questions. Look, first of all, let's about expansion. So the CGP3 is progressing, that's doing along well. We've done Q3 next year. So that's step one. There's been no change to that schedule or delay a slow in, I mean it's just run a full [indiscernible]. Behind that is CGP4. And what we the last quarter is that still remained in study mode. Once we see that, we can look at that. Clearly, that is done in a way that's cognizant of the mines to support it and how that's optimized. And then that brings you obviously to how you extend the body over time. And I think we began to signal that is like the underground mine methods will be appropriate to supplement the surface mining that we've been doing so far, exactly how and when is not determined yet. It's not something I can get into, but that's the work we need to do. And having a plant built without having thought through the mine capacity the fender, tailings management, et cetera, as [indiscernible]. So all of that's going to come into that decision as we look forward. I'm sure we will take all that for granted. I think I see back to and say that while we both know that every mine has got some sweet spot at the rate it can run out equally, when you have the cost position and the ore quality or material quality that we get for Greenbushes then we want to maximize that. We want to maximize production and we want to meet the significant growing demand we see in this market. So there's a clear intent to bring the very best and hit margin tonnes into the world as quickly as possible ahead of other investments that might be out here in the industry. Certainly, the way I look at it, but we need to sure that final step we've said before is done on the basis of not just the plan capital expectations, but also mine and related infrastructure as well.
Next question comes from Jon Bishop with Jarden Group Australia.
I'll try and keep it to 2. Just around your nickel strategy. Obviously, you've taken obviously a big haircut on the Western areas acquisitions and you've had to put Cosmos on care and maintenance. I did notice a nickel junior, the other day announcing a joint venture partnership with the Japanese consortium on nickel laterite admittedly. But I guess I'm interested to understand, given that geopolitical bent, are you seeing any emergence of ex China interest in those assets?
John, [indiscernible] question, firstly, I can't really comment more broadly. But I guess my replacement of the nickel industry, if [indiscernible] question is that [ Simon ] obviously, it's got an interest because of the sales fell production and that's significant to of demand continue to pursue the low cost eco they can get, and they've got the loss of expansion opportunities in their other locations around the world. So if you think about incentive to operate here, it's hard to mention that we can see a big shift from the other options.
Yes. Okay. I guess I was just pushing out to see whether you started any sale process, but I'll park that there. Probably the other question I have for you is just around the reserves and resources at Talison that you announced with your December quarterly results. And then obviously, Albemarle has announced independently. There was some disparity between those numbers. I guess it probably ties into Rahul's question around underground and CGP for decision-making. I think the market had an understanding that CGP4 was predicated on the continuation of open pit. And then obviously, underground would be part of a longer-term strategy. Is that something you're able to definitively call out at this point? Or is it still part of your optimization work?
No, that's still going to do. I mean I think when the underground funds in to optimize on cost for and we [indiscernible] for 5 years, obviously, they're going to run from times. We have to be out getting us in the near term and well beyond that. And a different was been the oil report and, of course, what we release from Talison and existing reporting standards, which I'm sure has across our businesses as well, different between [ Gorgon ] and BCC set regulations in terms of how reserve and resources are reported.
Your next question comes from Tim Hoff with Canaccord.
Might dive straight into that one. I guess the difference between Albemarle and you're reporting that you've noted that it was a conservative differentials between the what we see in terms of that mine plan that was put out. Can you drive into what specifically is conservative about it? I mean obviously, we have no TRP. There's no underground, but you're not advising to an underground either. Can we dig a little bit more into what those differences are?
Tim, I couldn't hear you super well on that, but it sounds like we're looking to break down or reconcile differences between 2 reports, which is on [indiscernible] and you can go through that if you like. There are different standards of reporting in terms of certainty around the resource. There's difference in price assumptions sequencing cost, there's a number of different factors that also roll back into those 2 different outcomes, which are more reported to versus what Talison reported to. So I don't know what are you chasing with that question.
Just if you can outline what the difference is between the conservative nature. But we'll move on. Just looking at the Windfield accounts, there's a large differential of about $3.5 billion between the noncurrent assets of the Tianqi Lithium Energy Australia JV and Windfield. Can you give a bit of information about what that might be? Is it just the cost of Coronado that's on the balance sheet? Or is it additional assets or goodwill being held on the balance sheet of the Tianqi Lithium Energy Australia JV?
Look, honestly, we will tell you off the top of my head because I don't set to the accounts in front of pay. Lastly, we do that one offline. I don't want to [indiscernible] information on that one.
Okay. Well, we didn't have too many hits there, are those ones that--
Sorry. I wish [indiscernible].
That's all right. We'll follow up. And then perhaps lastly, if I may, the Sprint rate of logistics at Greenbushes, obviously, 200,000 tonnes is a great outcome for the operation. What's likely to be cleared out within a quarter?
All of it on the ship or you'll probably to the shipping and or constraints. But I mean there's an interesting if you could do one [indiscernible]. That's what we could bring a down so that on so it's not like there's any way or it's fueling the fast as we can sit in an hour.
Your next question comes from Levi Spry with UBS.
Maybe following on there a little bit. So stockpiles and sales for this quarter. Can you confirm what the stockpile was at the end of the quarter. And I think previously you've said sales would be 20% below production. Is that still what we work on for this quarter?
Well, in stockpile March 30, roughly months like that. So we're largely that give a take a bit of work in human treated. And with sales were 180, if I remember.
I think you're seeing uplift it's going to be [indiscernible].
On nominations for this quarter.
Yes. The nominations this quarter was fairly full.
Yes, at least for the last quarter, [ Live No ], we saw 9 agents, obviously, across the half being lower, we said about 2%. But the bulk of that was the impact in the first quarter of this calendar year. And so when you think about the [indiscernible] was ready for this second quarter or the June quarter, plus 200,000 tonnes that's been flat.
Okay. I follow that up. And then just on the 200,000 tonnes, can you explain to us a little bit around the nomination process for that? And I guess the 180-day payment terms, you talked about recognizing that we getting that out, but also I guess, in the money option on the pricing mechanism. So spot price is 1,200. I assume this is going to be sold at the March average price. How do we think about that in the cycles of prices going forward up and down?
Yes. So look, this is data on nominations both by [indiscernible] the half earlier this year, and I stand that will nominate for Q3 in little while that process is is unchanged at the point just throwing a thousand tonnes in addition to that support our eminent obviously, got a lot of benefits. You're right into a surprise to see drawer at that month also in line on pricing in terms of the audit players. And basis, is that attractive for them different spot price today more potentially, but stop price today [indiscernible]. So I also make sure that's necessarily comparable on base.
Yes. Okay. And maybe I'll sneak one in, just on CPG3. So you confirm the timing September 25, I think. The CapEx has gone a little bit slower there than maybe how is the rate of spend, I guess, going on the project?
Yes. It moved you've got to separate out on the purchases and rate of activity we do pin versus all of us to build at some way in the hour. So difficult to say, we'll basically stand reiterated. I'm looking at actual progress and while there has some delays in the filing, they're definitely moving the pace down, I think running to schedule or to take into account that delay. We still like that in the supply for significantly overall delay in the project there, which is why we're still talking about that second quarter next year.
Your next question comes from Robert Stein with Macquarie.
Just a quick one on the Kwinana profitability. So obviously, with the negative EBITDA result impacted by NRV, can you give us an indication of what that would have been without that NRV? And then secondly, can you talk to potential utilization rate? I know that you said that you don't want to comment on absolute production. But can you just talk to how you're expecting for the utilization rate to grow post that post that shut that you're going to have in the September quarter, are we expecting a pretty sharp increase? Or are we going to expect it to be very long and protracted?
I'll add to the first part of one, Rob. The profitability there is about a corner order that is in NRV adjustment. So that will able that capitalize much was the tone rain the quarter. If that answers your question.
And then Robert, on the utilization, at September [ easy lease ], but if you look at the run rates and average production you've seen in the last few months that was sitting just over 20% through April, which is great, having less about 0 days than outages, which is promising. And as I said, we'll continue to plan to continue through that shutdown with steady operating and liability improvement, which then have obviously based on the asset changes coming out of the shutdown.
So Ivan, just a follow-up there. So we're expecting this to be an availability, utilization or rate improvement following the September shut or all 3?
It is [ 3 ]. I'll try to give you some specifics just to try and make it a bit more tangible. One of us is they identified with the amount of liquor hydroxide that's recirculating effectively. So producing hydroxide but not extracting and crystalizing it pulling it out. And so they're expecting the rate we started enfant issues that they can reduce that issue. They're also going to do things which will affect availability or improve available in other words, to reduce the unplanned outages industries. So it's definitely common. [indiscernible]. And honestly learning, as I go on these assets and the refining process. So no surprises, and I think there's a Phase III or processing it. The stability of the plan is also key action overhaul. And when they have a lot of outages, you never actually get you rhythm. And what we saw through was they started to get extended periods without on outages and that in itself helps the overall stability of the client and the production rate as well. And so that's a huge part of the focus on sources of shutdown because the learning that they're doing through that and being they achieve while obviously then amplify when they make some of the asset radiations or modifications in the shutdown.
Next question comes from Kaan Peker with RBC.
Two questions from me. The first one is on Greenbushes. Can you maybe provide some further detail on that approvals process for TLC, how that works? And why April 29? And given that prices have increased this quarter and TLC is taking up beyond the allocation, does that mean that they won't take up allocation next quarter and maybe some timing around that to the decision?
To head off the last page first, look it's unrelated to the normalities process. I'll go through that normal exercising so we don't expect detail that don't expect there to be the [ small ] nomination in Q3 to offset that. This is above and on clear inventory figure, great signal from TLC pulling that through. It's been one of an [ MYOB ] Partners. The decision-making process ultimately goes through the Windfield board. So the TLC made the request. That was then considered by the partners, TLEA, [indiscernible] and we went through quite a bit of analysis process and as my decision to accept that order on this term is well seed, but make this all that lined up with the rest of the plans of the business.
Sure. And maybe the second one is on Nova. Can you provide a bit more detail around Nova. It just seems like we've pushed out that high-grade stope last few quarters. And now there's like a additional mill shutdown. When should we see Nova grades get back in the operation throughput get back to what it was doing sometime early last year?
Thanks, Kaan for question, and we just [indiscernible] very close detail. They basically [indiscernible] so to speak. They had an issue with a buyer that was in the one spot to move a few days ago, and that opened up a new segment so we're looking forward to seeing that come through from this during this quarter.
It's likely 2025. No, we'll see that rate start down basically. So from being a that is going to start in the mill. And the mill is up and running.
Yeah. Mills writing. In fact, it's running at high rates. Certainly, they had a bunch of challenges last quarter, and they are frustrated, and I think it's never easy. For us, it's in that distance and you go more can we go faster, but they have a lot of talent to work through, and I give them a lot of credit ways that work. Sustained now in place to set themselves up for what will be a very strong quarter at. That's certainly the plan. And it all comes down to pushing that at higher rates than it would use to.
Your next question comes from Mitch Ryan with Jefferies.
So dividends from the TLEA were paused in the December quarter, ending colorization of calendar year clinical budget and operating plan, given the $25 million dividend during the quarter, can we assume that, that budget and operating plan have been finalized? And can we get any color on what that looks like.
So just to clarify, you're asking about what potential dividends would look like going forward?
No, the calendar year '24 budget and operating plan sitting inside TLEA.
Okay. There has been continuing to be viewed, and it should be signed off in the coming weeks.
Okay. So the dividend resumed prior to that being finalized?
Yes, it did.
Okay. And then just with the election from TLEA to take the addition to -- and are there any logistic constraints in tracking that support given that will be a step up relative to prior operating rates?
Two great questions. It's I'm not sure the specifics on. Look, always have moved volumes at card. I can't pin on the data constraints and the rate tracking to get into it. We're pushing the 300,000 some down as soon as possible on but that common motivation, I guess, we can some species that's how for where we have all those tonnes there this quarter.
Your next question comes from Daniel Morgan with Barrenjoey.
Sorry to come back to this, but just seems incredibly opportunistic that it was decided yesterday that TLEA can take 200,000 tonnes of spodumene at March prices and with 180-day payment terms. You do have a great asset, but there is market concern that under your ownership structure, Tianqi can shape revenue or cash flow from you in good tonnes and bad. How do you comfort shareholders about the structure and that it will work for IGO shareholders through the cycle?
Well, I mean we had a lot of comments late about our JV functions over the last few months, which we're trying to work through and provide more trees variant can structure and the decision making. I see this as a tremendous poles. They had a fairly somber and negative view looking into 2024 and a long [ nation ]. Obviously, that had an impact on production, and we now long-conversations about that [indiscernible] again. That's taken a view now to support tuned out again a specific decision making, but I think that's healthy. The timing of course, it's favorable in the sense that we are seeing some rise in the year price, and they'll be taking these at that low end. But the sense for suspicion around around TLC's decision. I don't know that, that's fairly reasonable. Albemarle obviously at this as well they equally stand back half of the asset and behind these decisions and they're encouraging and welcoming the sale on a period of these tonnes. If I talk to a question from another section, the offsets, of course, being about the [ non-nomination ] process when we're in a slow period of market demand because what we do want to do is [ patent ] online, we will optimize that, optimize cost in this performance. And that's the [indiscernible] spending more time talking about the partners. [indiscernible] that improved pace we then plan to optimize that operation but beyond that, I think we're talking about the swings of normal supply and demand through a pretty difficult change in the market environment and your price can massively over the last 9 months, and there has been a much adjustment through the whole industry because of that.
And maybe further to this, just on the operational plan. I mean if I'm reading correctly from the presentation releases, this will enable Greenbushes to return to full production. Is that what you'd envisage at the exit of the June 24 quarter?
Yes. That's right. And obviously, give us some rough flexibility there at right now, but we can't bristle back end of the year or like the point is we don't have a full inventory stockpile at this point once this is clear. And so the worst case, we still got that office needed, but we're not seeing any indication that were going to need that up right now. It's about getting that mine rainfall rate and driving the cost back down.
Your next question comes from Kate McCutcheon with Citi.
Just following on from Mitch's question, the assumption of TLEA dividends from the last lot of disclosures, I think there was still a few hundred million of cash sitting in the TLEA accounts. You've got $25 million of the dividend this quarter. Does that resumption mean that -- did you say that you're still working through the budgeting process? Or is there more clarity on Kwinana? And do we assume dividends resume from here out interim dividends?
Well, let me comment that [indiscernible]. I mean, look, being specific on the numbers. We said at the half cash condition of both TLEA and Talison and does the cash as for you can [ saltines ], but it's material cash set. The budgets are done with the [ final sink ] we've got a view on the year of the dividend flow that scale decision to come, but there is still a considerable amount of cash that's approved in both entities. And as a [indiscernible] in both cases. We also don't want to be sitting there. So the process that we've used to expect will to really instituted any course.
Yes, I've got nothing to add to that. Just indicated cash as growing at branch somewhat. And in terms of the debt profile, the main sooner.
Yes. Got it. Yes, my question was on the TLEA accounts. I mean, you can back out how much cash is sitting in there.
Yes. Sorry, the second half year. They coming front. So the cash generation is obviously coming from buses. Kwinana is still obviously tap grow at this point. And as long as we've got come to that based on our run on Kwinana, that obviously gives us a view of what we can then release [indiscernible].
Okay. And then Cosmos, I hadn't quite appreciated the cash still to go into that set the quarter past the March quarter and the quarter to come. Is the end of this FY, the end of that key spend on Cosmos? And how should we think about any care and maintenance expenditure going forward?
So we made the decision on the cost on at the end of January into cash that we paid and was actually paying the December and January, and we went into a period of rand debt, it's a situation. So that's a reduction of the tail of that move. In respect to the next quarter, we need to think that we continue to finish mining this month. We will still continue to process until end of May in order to realize the value from the stockpiles as well as there will be a number. There will be some redundancy that have been there. So that's the table that we've got line with mortgage care maintenance. We guided that care and maintenance will be between 12 and 15 million per annum going forward. I think it's states that, that will mean somewhere in the June month. So you could forecast that from in the next quarter.
Your next question comes from Matthew Frydman with MST Financial.
I had a question on Kwinana and you cited in the release, the ongoing qualification processes and contract discussions. I'm just interested to understand what's driving that. I mean, Kwinana has been producing battery grade for 2 years now. My understanding was that you had long-term offtake customers in place. So yes, just trying to understand what qualification is still taking place? Is that seeking new customers, new contracts? And just trying to understand, I guess, what the JV is seeking in terms of those new contracts? Is it additional volumes, new geographies? Yes, what's driving that ongoing process?
Good question. Just the customers to that a couple that you mentioned in the results call, which take products already. We qualify more customers and that gives us more pathways more options as the production grows.
Okay. Have any of the pre-existing off-take contracts that you guys have previously cited, have any of them expired or been terminated for any reason? It's clearly just trying to build out the customer base on top of some of those that you've already highlighted?
We're building it out. Yes, it's really they're still current, albeit probably delayed to the expected to date, but is [indiscernible]on the second product.
Yes. I understand. And if I could just ask another quick follow-up in terms of the process around the additional 200 kiloton sale. Obviously, we've covered a lot of ground there. But TLC were the ones that requested the volumes and obviously have been given the sale. Does that imply that IGO could also unilaterally request to take an additional cargo above any nominations in the quarter in the future? Is that something you would ever look to do, I guess, particularly if you see similarly favorable pricing terms or if you're interested in picking up a shortfall in the allocations, would that be a possible outcome?
Yes, on the current [ present ], so at a wind field level, the way that's structured the aliases to those 2 or take partners [indiscernible] and that flows on to back to TLC. So no current [ sales ].
Okay. I understand. And sorry, can you also remind me under the terms of those sale agreements, does the buyer have to use that material internally? Or are they allowed to toll treat it or sell it externally to a third party? Is that within the scope of the agreement?
They can do but process for their need, I guess, is effectively at the agreement required and we see both [ Mincor ] and TLC doing that.
Your next question comes from Lyndon Fagan with JPMorgan.
Ivan, just going back to that technical report, are you able to bridge the gap as to why the strip ratio has gone up and the grades have gone down relative to the previous technical report. Just trying to understand that.
The overall mine or just current performance?
No. This is the total mine plan at Greenbushes that was released to market. Just trying to reconcile why there was such a big change.
At the top of my head, I'm happy to get back to you on that. That's [ helpful ].
No worries. And then just to be crystal clear. So Greenbushes is now back at running at nameplate. There's no intention to throttle back sales relative to production. That's how we need to frame it going forward. Is that right?
Correct.
That concludes our question-and-answer session. I will now hand back to Mr. Vella for closing remarks.
Look, we're right on time. So [indiscernible] next few times greater assets. Obviously, some new news around the [indiscernible]. I think that's fabulous for the business and a growth sign for Greenbushes for the year. There's plenty of point to do there as to you all know as we look to grow and optimize that business. And the other key markets we're talking about is the forward plan will now on refineries we got to see the clarity of the team of the way there or looking at that. Thanks again. I look forward to talk to you all again in the next quarterly call. Thanks for joining.