Andromeda Metals Limited (ADN) Earnings Call Transcript & Summary

Thank you all for coming. It's great to be back in Sydney. It's great to be here in front of you, and thank you. And it's been a while. So what we want to do today is give you an update of everything that's going on in our business, everything that's going on in our markets, a lot of the progress that we've made since we last spoke. And I've always promised that we would make this a regular occurrence that we are here and can come to Sydney and Melbourne across Australia, visit with our investors, shareholders, to just tell you a little bit about what we're doing and how it all fits together in terms of our commercial strategy and building our company. So first, acknowledgment of country. Andromeda recognizes the traditional custodians whose land we are gathered here today, the Gadigal people of the Eora Nation and on the lands on which Andromeda operates being the Kaurna people of the Adelaide Plains and the Wirangu people of South Australia's Eyre Peninsula. We pay our respects to their elders past and present and extend that respect to other Aboriginal and Torres Strait Islander people who are present today. So our agenda today, what are we going to cover? Let's start with the DFS, right? We've always maintained that, that was going to be one of the cornerstone deliverables of what we wanted to put together, resetting the enterprise value of the Great White project, resetting the enterprise value of our company. Let's just start there, review the project economics, how we put all that together. We spent a lot of time in September and early October in Europe at the Italian ceramic show, visiting customers, partners, and we wanted to update you on that. The Indian market, we had a lot of people from the Indian market in Europe. So we benefited from that opportunity to engage them on opportunities to do business in India. Why? India, is, to some extent, a natural home market. The freight rates, the free trade agreements, right? They -- it's an excellent opportunity for us to participate in growing our business in probably the fastest-growing ceramics market in the world. We'll talk about that and the agreement with Opaque. Technical marketing, give you guys an update on all the work that we've done in Spain and Italy and everywhere else. What that means for our company, what that means for our business The HRM commercialization announcement. The Hallett announcement that came out today, the work that we've done with Hallett in putting that strategic alliance agreement together, what it means specifically for our company and how does that tie to the existing resource we have and potentially the, arguably, best Tier 1 white minerals resource left in the world, which is Chairlift. And we're going to introduce the inaugural minerals resource estimate, chemistries and potential of that deposit as well, the Stage 1 processing plant, update on other projects and next steps. So just to summarize, where we landed on the DFS, very compelling project economics, average product margins up payback period, looking at the potential for the markets, pricing, the product mix and the impact on the business, mining costs, all in line with what we've seen and what's been delivered in the market. So clear, clear piece of work, rigorously done, put out in the market. And we received quite a bit of interest from strategics, from potential investors. And so as we said and always maintained that we wanted to get this piece of work done first before we went out to the market and said, this is what our company is about. This is what we're planning on doing in the next 15 or 20 years, our resource, our markets, the commercial strategy that was so clearly laid out in the DFS, even to some extent in our annual report. Look, we've got a lot of interest, a lot of interest and more to come on that point shortly. So September meetings in Europe, CERSAIE, we were sort of a combination between Spain and Italy, a couple of key outcomes. Let's start with Spain. We've expanded, to some extent, a little bit the scope of the ibero agreement. So we haven't finalized that and got that binding yet, but we expect to get that done very, very shortly with [ Alberto ] and his team. Ibero will probably include distribution and sales of HRM as well. So we wanted to include that in the agreement and give Ibero a chance with their contacts across Portugal and Spain and Peninsula to see if we can introduce HRM and more on that, why that's important a little bit later in the presentation. The Italian super-white porcelain tile manufacturers, all are thrilled to test our product, all have qualified the product. These are the companies that make the super white tiles and digitally print on top. One of those companies -- there are only 2 companies in the world that make and manufacture proprietary technology to make continuous slab ceramics, only 2. And we have been qualified with one of them. So that means companies that sell continuous machines to produce tiles or large slabs, in this case, almost 170 such machines globally. When you are part of the formulation, you sell the machine and the formulation to a Brazilian tile producer, a Chinese tile producer, an Indian slab producer. So we are thrilled to be qualified with them and go the next step in terms of making sure our product gets into these machines globally. More on that a little bit later. The Opaque Ceramics announcement, I'll talk about that a little bit later in more detail, is a game changer for us. I'll explain why. We've always maintained that we had the possibility -- if you guys remember the first Sydney presentation, right, I pointed out in that -- and I think the slide is in the deck, that there is the potential of our product to displace Zircon in porcelain ware, sanitary ware and ceramics. So this has been confirmed technically. And now you have one of the best and foremost micro milling companies in the world, companies that specialize in milling and micro milling zircon, which oddly enough is from Iluka, right, Australian zircon, right, and are saying, hey, let's work together to introduce your product in our zircon for our domestic market and the European markets. So that's a fantastic development going forward. They will also distribute and sell our kaolin across the Indian market, which is huge, and especially with a focus really on the high-end porcelain slab market. Now what we mean -- we talk about large-format tiles. But remember, the slab market now is a large slab that does what? Furniture, tables, inside, outside, and that's a market that is growing the fastest globally, especially in Australia where because of crystal and silica, that's the only alternative you have, right? Southeast Asia qualifications with multinationals, in line with our strategy. That's going well, and we're working through that and making sure that those qualifications lead to commercial agreements for places like Thailand, Vietnam, Indonesia and will grow our business. So really good outcome. Very happy with the India agreement with Opaque, very happy with the outcomes in Italy. And as those develop and are commercialized, we'll let you know more about them as they get done. I think Ibero will wrap that up here shortly and put that as a binding offtake agreement in the bank and make sure that we can go forward with that team. So let's talk about India. India is huge as a market. Not only is -- could it be our home market from a freight and free trade standpoint, but the way that market is growing, population-wise, the average square meters of tile that they had, they are second to China, growing the fastest. They're adding 250 million square meters of capacity this year alone. But what's more interesting is that note how they are also amongst the leaders in digital printing. So those continuous high-tech machines I mentioned before, right, India is buying them up right, and making super high-end tiles that are digitally printed, competing against Spain and Italy. Remember, for us, it's a lot cheaper to get to India than it is to get into Europe, right? So something for us to think about in terms of how we position our business. Opaque is a first great partner. We'll talk a little bit about -- more about that later on. You can see if you're looking at production, exports or consumers, India is clearly there. The key number that you want to focus on here is the exporting countries. Look at how much India continues to export, right? So a lot of those exports are competing globally for both the high-end market and the commodity market. And they're growing in a -- at a dramatic rate. So Opaque, really, really outstanding company, private company, family-run company. The technology that they have is proprietary. They mill zircon. They have a wide range of different products. Zircon is essentially an opacifier. It whitens stuff. It whitens tiles, porcelain. It widens a lot of other materials as well. For us to participate in any of these or create our own product line with them is a once-in-a-lifetime opportunity because they already have the benefit of being able to flower the zircon or mill the zircon finer than anybody else by 2 to 5 microns. So you already have the higher value and use of using less zircon in an application combined with the potential of Great White kaolin. And mixed into that, it could be a potential game changer for any type of application that needs opacification, including paints and coatings. It's an area we haven't talked about. So a lot of work to do with them. Great labs, great product development and looking forward to kicking that off as soon as possible. This is the slide I showed in the first Sydney presentation. I don't know if you guys remember this, right? I said, look, there is a potential, right? And I remember saying this that we could sneak into this area, right, which is much higher value than this area, right? And we are doing just that, right? So just -- you can do the math, right? Zircon is $2,200, $2,300 a tonne. Kaolin is probably somewhere in the $350 to $450, $500 range, depending on the type of kaolin. But if you have the properties to sneak into the whitening square, then that's a game changer for your business.

What cost are you expecting from that.

I'm -- so Graham, that's an excellent question. It depends how much zircon I will displace. So if we -- and I'll show you the numbers later. If we were to say that we could displace, depending on the formulation, a number between 10% and 20%, right, you could be looking at, at least 25% to 30% increase in value news and price. I'll show you those numbers just in a bit. Sorry, guys. I am going the wrong way. Oops, sorry. We've lost that.

Go back to the first slide today.

Just a slide that I was on, on Opaque Ceramics. Right there. Let's go to the next slide. There we go. So where are we on the technical marketing piece? All the technical marketing work has been more or less completed. Ceramic tile body against the best kaolin in Europe. We are either as good or better, just to summarize all that, right. And specifically in color, slightly better. The big surprise that came out of the technical work, which I wasn't expecting, is that we're actually a very good glaze mineral, the top of the tile, the glaze, the glossy stuff, right, be it porcelain or sanitary or ceramic tiles, the stuff that gets printed on top. That's the highest-value spot for any mineral to be in. Just look at how -- this is the best glaze component you have, right? This is where we end up. So we're stronger better, give a better glaze and better mechanical strength. That means if you try to break the glaze, it's like creme brulee -- you guys know creme brulee in a restaurant? When you try to break the cream -- the coating on top, we have better mechanical strength in breaking that top glaze, which is fantastic for a ceramic tile producer because that's what you want. You don't want to break the glaze, you don't want to break the tile, you want to give that type of strength, heat resistance, so forth and so on. So there's a whole opportunity for us to commercialize this as well. We haven't even touched -- we haven't even looked at this opportunity yet in terms of what it means for our business. Lastly to Graham's point.

Are there any major switching cost for new customers in replacing zircon to kaolin?

No. There is then an incredible demand, right, to do that because the majority of our customers and end users see a very big supply-demand problem with zircon, right? And if we look at our own country, right, if we look at the challenges in the direction Iluka's going, right, they are quickly -- they're not quickly, but they're moving more to rare earths. They're going to mine -- go back and see what [indiscernible], so forth and so on. If you look at the new zircon projects, the economics of the new zircon projects and the ability to get additional zircon into the marketplace, if it's not coming from Africa, globally, supply-demand for zircon looks very, very tough in the next 10 to 15 years. And there's a lot of good work from David, at TZMI supporting that, that does in the marketplace. Graham, back to your point, zircon replacement potential here, somewhere between 10% to 15% based on the work that we've done with Ibero. We're going to validate this work. So you can imagine if you can displace even 10%, our own thought was maybe 3% to 5%. But let's say, pick a number like 10%, right, in that formulation for zircon. Very, very interesting. And then, of course, the next question is how would you price that? So let's do the work first, and we'll get back to the value news with -- hopefully, with Opaque's help to introduce it into the marketplace and find the customers that want to pay the premium for that product based on security of supply. So where are we? The last piece now to wrap up our technical marketing piece is full plant trials. So the ITC, of course, is sponsored by all the Tier 1 multinationals in Spain and Italy. There will be a group of those companies that at the ITC's request will do full plant production trials with our product. So we're keen to that not only to confirm the work but also to sneak in and get potential contracts with those guys, right? They're all potential customers of ours. Most of them belong to the Altarea Group, which is the largest tile producer in the world. And I mentioned the tile production. The work that we're doing in Italy, the work that we're doing with the technology suppliers, all of that can lead to breakthroughs for us, not only in Europe but the rest of the world. So let's come back to our original commercial strategy, right, hub and spoke. Europe's the hub, sell 20,000, 25,000 tonnes there to facilitate getting into the key multinationals that formulate the mix for everybody in the world. But that's not where we want to sell our product. We want to sell our product in the markets that are growing and have the best freight economics and margins and returns available for us. So that hub-and-spoke model is developing nicely. One of the key spokes will be India, Southeast Asia and China, right? But the European piece, I would say right now is coming together nicely. And we are at where we want to be in terms of volumes and returns for the first 2 to 3 years of our project with the partners that we want. So you've seen this slide before. We've always maintained based on the properties and applications, our iron-to-aluminum ratio world-class. In fact, Chairlift is even significant -- I would say, significantly better actually in ratio than Great White. We'll talk about that later. The high brightness and how that translates into additional sales and opportunities, that's very clear. The mechanical strength is clear. Now we've added the zircon replacement piece, right? And that's another opportunity for us to develop into the same market, including slabs, large tiles, sanitary ware, porcelain ware, anything that needs whitening and potentially other whitening applications. So very much in line with where we originally wanted to be, very much in line with our commercial strategy, very much in line with where we want to go. So today's announcement really -- not only exciting, not only important, but just shows that I think when you're developing a new product, that's a completely different game, right? We have been developing and working and trying to find natural partners for HRM for the better part of 1.5 years, maybe 2 years. And we have not succeeded because our understanding of cement and concrete, the product is new and for us, it's a new end use. We've been selling kaolin into ceramics for 75 years. We're trying to introduce a rheology modifier into cement and concrete, right, as probably the second or third such product globally. So we have found not only the natural partner but a company, I think, that's going to work with us to promote our product exclusively in existing and new products that they're planning for low-carbon applications across South Australia. So the Hallett Group privately owned South Australia-based leader in innovation, low carbon, I invite you to take a look at them, the work that they're doing in Port Augusta, the announcements of what they're planning on doing with the whole fly ash pile and the investments and the people that they have is world-class. So we're thrilled about the strategic alliance. We're thrilled about working with them. You can see how the logistics make sense for what they're planning on doing, what we're planning on doing. And the benefits of working with Hallett are not just HRM. We'll be buying steel from them. We'll be buying possibly timber, other services that they can supply. They're a fully integrated private homebuilder that believes strategically that we want to have our own concrete, our own timber, our own steel, and that's how we can deliver the best value for our company and shareholders in the marketplace. And they have done so incredibly successfully in the South Australian market. So to participate in a market -- I won't say that it's a captive market. But if you are supplying concrete to a homebuilder who's building 60% of the homes in SA, it is a little bit a captive market, right? And so that possibility, including concrete, including roads, like what is the -- what is...

[indiscernible]

What does the T stand for?

Darwin.

Darwin, right? Major roads, housing, pumpability, rheology, shotcrete, mining, they are in all those applications uniquely with unique formulations based on their own technology. So very excited about that. Fantastic group and looking forward to working with them to not only commercialize HRM but participate in each one of these opportunities to develop low-carbon alternatives to respond to the Australian market, not only South Australia, right? So we're -- it's a very, very big step forward for us. We set up a very formal structure with them, how we're going to work, who's going to participate, what are the short-term deliverables. And as we achieve those and commercialize those one at a time, right, we'll be letting the market know how we're doing in terms of moving in that direction. Port Augusta is slated to be up and going end of next year. That works well with our timing, also works well with the bagging facilities and partners that they've picked for bagging their products are the same partners we've picked. So an opportunity to do a little bit of staging, supply chain, cut out some of those 30% freight costs that we have in our model. So really, really, really good potential and excited to be working with them. And they're a very good team, really world-class team. So -- and not that far from us as well. So more on that. Chairlift. Look, Chairlift turned out to be a big surprise. 2 big surprises, right? One is the chemistry, which -- as 0.18 or lower, which makes it probably one of the best deposits in the world. So high aluminum, low iron, but low TiO2. That means what? That means you are in the coatings game, performance coatings. This type of paint but also textured paints, stucco, those kinds of coatings as well. So there is that potential for us as well and excellent stripping ratio. But the big surprise is the amount of HRM that is available in Chairlift as well. So we have HRM Great White, and we have HRM identified in the Chairlift resource. We have chemistry as good as Great White for tile and porcelain allocations, but we also have chemistry the potential to get into really high-end coatings, $800, $900 a tonne, right? Why are we not in those markets? Because the challenge with Great White is to create such a product, you have to throw more than 2/3 of the product out. It's a great recovery relationship. So at the end, it was never worth the work and the cost and the margin to develop a paint product. It's very, very important for us, right? But here, that's a game changer. So we've decided -- even with all of the other priorities we have going on, we've decided to finish this work and put this resource out. And it's been a pleasant surprise for us and really shows the potential of our business. Here's the HRM piece, where we've drilled out and where you can clearly see based on our rheology index, there's quite a bit of HRM available to us. And here is the CRM based on brightness and availability. It's important to know where you see these small arrows here is that we believe we've drilled that area out, but you can actually extend that into those -- into a wider region both east, west and north in both cases. So as part of the final JORC work that we'll do on this, that's what we're planning on doing. But for right now, I think we've done enough to show that we have probably the world's premier white mineral resource just to the south of us. Processing plant. I was over in Amsterdam, took a look at our fluidized bed, a fantastic piece of equipment, great partners ready to go. This will be probably the heart and soul of our plant, big drying capability, good turn up, good turn down. I think the guys have done a great job testing controls, all ready to go, packed up. Everything else that's on long lead time items has been ordered, right? And all of that is a plan to get over here in time for us to put it all together. I think they're an interesting company, Tema, right, because they make these products for almost everyone in industrial minerals. And they produce 60 units a year. So I mean still there are people still growing in this sector, which is interesting. So other projects. We've maintained from the beginning, remember when I came here to Sydney the first time, and I've come back, be it Melbourne or Sydney or wherever. I said, "Look, we need to focus on core, complementary and adjacent." And we have, from the beginning, from the time I started, said, look, we need to really move and focus on the core parts of our business. We've been able to do that. Drummond, the gold project has been completed. Cobra and Wudinna gold project is more -- the agreement has been executed. There's still some CPs left, but more or less, I think that is done. And we're happy to have completed both of those. Took a long time, very complicated projects, very -- multiple shareholders, stakeholders involved, but that was very, very important to get that done so well. The Camel Lake project, we decided based on where it is, location and access issues, potential costs going forward, we are letting go of those tenements, right? So that's it. We're done there. And that's not core to our business. Now the...

Is the initial indications were at how we sit content that are just actually help us. I don't know what the cost is per year [indiscernible].

It's about -- Graham, it's about $100,000 a year to hold on to it. And I think if we really wanted to develop the halloysite market, we've done a lot of work that we can share at another point in time, in WA and the rest of Australia. I think that if we define halloysite, we could find it in areas that are probably more accessible than Camel Lake. So for us, it would make good strategic sense to say, hey, especially now where we really want to focus on managing our costs short term, especially '24 and '25, let's really bring it down to what's critical and what's core. Let's talk about carbon capture and the conversion project, right? A lot of questions, a lot of debate, a lot of angst over this from the beginning, past, present and future. We still own the IP. That's important. We still have it. We still can use it. We could still develop it. That's very, very important. Remember, when I first discussed this topic with you [indiscernible], we're conducting a strategic review, part of the commercial strategy. And we decided at that time that carbon capture nanotechnology was not core to us or complementary. It was at best an adjacency, right? And we're not going to spend the management time, the money and the effort right now to develop that, right? The components that showed up are -- were uncertified. Not saying why or how they were uncertified and they remain uncertified so we've decided to recycle that steel, get rid of it. We can't use it. So let's say we had a process, we had a chance to go forward with this. We could not use it because it's not certified to Australian standards. The fluidized beds that I just showed you, a bag house on the top for collecting dust. The 2 compressors on top of that baghouse are made in Italy. We had to wait 6 weeks to receive certification from the Australian government that the compressed air in the baghouse met Australian welding standards. And you get the associated staff that goes on a unit this big that puts compressor in your baghouse for your fluidized bed. You are not allowed to ship and use equipment in the Australian market that doesn't meet high-pressure welding certification. So we can't use it. So we made the decision to do that. And we are still progressing discussions. There's a lot of people still interested in carbon capture nanotechnology. It's not dead. And it's not that we, as a company, are saying, we're not going to pursue it. We're going to pursue it at the right time with the right person in the right place. So that's where we are in carbon capture. That's a very, very important point. And that's where we are on all of these projects. It's exactly what we said we were going to do when we started this journey. So we're very pleased, a lot of work to get this done. Next step, HRM, very, very big part of what we want to do. Lots of -- this is almost project by project now as we're -- so you're not only validating and commercializing the product. You are participating in every one of these opportunities with your partner, right? So if you need to pump concrete a longer distance to be more competitive, if you need to make slabs or stairs for a new housing project, if you need to compete on a contract for shotcrete, we are a part of that solution for our partner on a contract-by-contract basis strategically. So we're thrilled about that because we also get to learn much, much more about our product but also much, much more about the end use. We are on the back of the European trip doing a cost-benefit analysis on expanding the initial plant to 100,000 tonnes. We think why? Because we believe that at the cost-benefit point at the incremental capital for the extra 50,000 tonnes and having 100,000 tonnes tied up with binding offtakes is a much better, more secure revenue line than the one we have. And we believe we can do that based on what -- on the feedback that we have. We're not committing to it. We are not committing to it. We are looking at that very carefully to see what makes sense. If we can service more debt, if we have a better project, if we can get it up earlier, if we have better and more interest from strategic investors and customers at that level and it makes sense, we'll want to do it, okay? And especially based on the demand profile, especially if zircon replacement gets going and especially if, let's say, in the next 6 months, we have a lot more interest on the cement and concrete side and the strategic alliance with Hallett really comes together. Binding offtakes, we'll get Ibero done. We have India to do. We have a whole bunch of work to do in Europe to bring all those binding offtakes all in line. We have a couple in Southeast Asia. I think all of that is looking, I would say, pretty good right now in terms of both pricing and timing. We just need to make sure that, that gets done whilst we're working also in our domestic market. I think that's important. And lastly, look, what we thought the DFS would do, it has done, okay? That's really all I can say about that at this particular point, right? We have the interest we want. We're enjoying that in terms of trying to figure out how all that comes together, and we'll certainly have much more to share with you relatively soon on what that looks like. It's a big piece of work, and I think it's going to be really in the best interest of our company, best interest of our stakeholders and certainly, in the best interest of our shareholders and investors. So that's it. That looks a little bit long-winded. Apologies for that. It's a lot to share with you today. A lot of work since last time I was here, a lot of progress on multiple fronts. So that's what I wanted to do today. I wanted to give you a lot of insight into the direction we're going. Always aligned with our commercial strategy, always moving in the right direction. So with that, I'm happy to take your questions or comments on any of the topics.

I'm going to ask everybody just to wait until I bring the microphones that everybody online asks. And everybody will be limited to 1 question. I will come back to people who want multiple questions. But I have to be fair to everyone. First question -- you put your hand up. The first question is how close is finance? And when is first shipment still expected October 2024?

So we are still working towards a Q4 2024 schedule. We are still working towards that. We have not promised people that, but there is an expectation in the market that that's what we're going to do. However, right, that's not a binding placeholder. If we move forward or if we move a little bit later, right, that's not an impact -- that won't have an adverse market impact in terms of the relationships we built in the marketplace, right? And I think right now, on the finance part of the question, right, to the last point I made, let's wrap up those discussions with the DFS interested parties, if I can call them that. And I think that will really lay the groundwork for that next step. Paramount to that, let's get the binding offtakes done. When we talk about binding offtakes, I don't think of it as binding offtakes, right? I think of it like what do I have to do to secure a revenue line that's 70% to 75% bankable, right, and achievable. So I -- you know what I might do it with [indiscernible], I might do it with DSO, I might do it with CRM, HRM, I might do it with a combination thereof, right? People say, well, you need this. No, no, no. We need a top line that's secure and bankable with companies that are creditworthy. That's the objective. It's not just to get binding offtakes with whoever, right? We have to be selective. We have to be patient. We have a product that nobody else has, nobody, right? So we just need to make sure we balance that versus the need to get that for the financing that we need but also to address some of these opportunities like zircon replacement sooner than later because the pricing and the value and the margins are significantly higher than what we have in the DFS. Next question, Graham?

Okay. It doesn't sound any different. I really have an out of body question, but I guess, what level of offtake -- sorry, if you're going to go for the 100,000 tonne per annum project, what level of offtake do you have now in a portion to what you need for that 100,000 tonne?

So we are, Graham, at between 42 to 47 now, and we would have to get to 65-70, to answer your question specifically. That's exactly our goal and our objective. How we get there -- and the challenge is there is more than one way to get there. So we want to get there in the best possible way with the best credit rating and the best return for our company so that we can service more debt, raise less equity at the end of the day, if needed, right, and really bring this project to life, right? So that's what we're looking at. It's not that we're afraid or worried about financing this now. We're looking at a demand portfolio that's matching our supply portfolio and trying to segment that to the best possible return so that we can finance this -- finance the company -- finance the project in the best possible way, right? That's what we're trying to do.

Question on line is HRM economics and have we -- do we have HRM validation?

We have strength validation for HRM. We have cement reduction validation for HRM. The economics for HRM, I think, are in line with what we've always maintained, roughly a 2.5 to 3x increase in [ BIS ] versus our base volumes. However, I would say this, right, that the value of HRM will also depend on the end-use application. If you are really using it for low-carbon cement -- I'm sorry, low-carbon concrete, then the value end use is very high. If you're using it for shotcrete, maybe it's lower. If you're using it to pump your concrete from point A to point B, maybe it's higher. So we also need to learn the value and use of HRM not just in cement placement. There's a lot of ways to use concrete, right? So that's the opportunity that we have. And then similar with a CRM, we'll pick and choose, right, where we play. We ultimately want to play where it's the highest price and highest returns. But let's learn more about concrete and cement. One of the challenges in the journey has been that we didn't realize that at the end of the day, you need to partner with someone who buys cement and values your product much more than someone who makes cement. It took us the better part of a year to figure that out. So that's what's important. That's called value end use, right? And it sounds simple, but it's not. Question?

Wonderful presentation. Thank you, Bob. I feel really excited about Andromeda again. How would you explain though that our current market cap is where it was 3 or 4 years ago before we had all of this additional information, additional specification, contact into the industry, indeed, even when the first DFS was released, we were about almost 10x the market cap we're now. And actually, I believe the market cap right now is almost equivalent to what the company has in tax losses. So...

Correct. Look, to answer your question very simply, we've become boring, right? People are less interested in rigor, discipline, industrial end-use consumer applications than they were about that story that our company had at that particular time. So my view is that as shareholders, investors, stakeholders, catch on to really the possibility of what this value is, how bankable it is, how sustainable it is, how it fits both the low-carbon piece, the consumer piece, the India piece, the how are you going to make a project in South Australia come to live piece, when that knowledge and education happens, I think we will get to where the DFS valuation of this company is -- I believe that. I believe that 100%. So I think from now until then, I think there's a lot of people sitting on the fence, right? They're saying, you know what, India, zircon replacement, all these things, right? The -- it's not -- it's -- it needs a lot of time and needs a lot of research. It needs the average investor to understand much, much more about our business and end users than before. I mean just think about it, we are focused on a specific market segment, right, which represents probably less than 10% of the total market segment and represents a potential of 600,000 tonnes of kaolin, of which 400,000 tonnes is short today. Now in any economics cost, any commodity, copper or kaolin or whatever, if you present that as a base picture for a business case underlying a certain project, you would say, hey, you know what, there's nothing better than this project. But until people catch on to that and understand those fundamentals, people tell me that all the time, [ researchers ] tell me that all the time. Bob, for you it's clear, right? For you, zircon replacement is clear. You're so excited about it because you've lived it. You've lived it with Rio Tinto, you've lived it with Richards Bay Minerals, you've live it with Iluka. But for the average investor, it's not clear. So the only thing -- that responsibility falls on us to have the patience and educate and be patient with investors, shareholders and stakeholders to understand what we're doing. Because we're not building a project. We're building an industry. Just think about this for a second, okay, Great White, Chairlift. We haven't done anything up north. So this is just 50 million tonnes sort of like a little bit of drilling here in Chairlift. We have the Great White. We have Halfpipe, I'm really talking about an industry, right? We're talking about a mining lease for 300,000 tonnes in a market that is asking you for 600,000 tonnes. That's what the economics are, that's what the demand is, that's what the demand portfolio is. So until we get that out there and people understand it in very simple terms, that's the job we have to do.

There's a question specifically on the [ data room ]. So we opened that in June, but was there nobody who made an offer? And why has it taken so long?

We've had a lot of interest from a lot of parties. I think why it's taken so long is that I mentioned before, our top line revenue. As we have made strides to lock that down from June to today, the majority of the success we've had on that top line has been in the last 60 days, right, just to be honest, right? So we are where we are -- where we need to be now. The interest is there. We have excellent, excellent counterparties that are interested in helping us move forward, and it's up to us. Once we believe that we are where we are not -- we need to be on our top line to move the project forward. So we feel pretty good about that. Doug?

Yes. Bob, that was great. Just a question on the HRM. The IMCD offtake, would you consider that to be -- to fall into that category of preferred partners bankable? And is there any relationship to how it just coming through?

Yes. IMCD will continue to represent the distribution channel, right? They will be our partner to distribute HRM to companies that need it, right? So the Hallett piece is a strategic piece, right? We are developing IP applications, end users, existing and future, right? So that is a different piece of work. What comes out of the Hallett work and the ability to use HRM across all of cement -- potentially cement and potentially concrete applications, that's something that we're willing to share with IMCD and grow that part of the business. In the same way, we're developing distributors. I didn't mention that before. I sort of skipped over it. We are in discussions with 2 or 3 Tier 1 distributors for distributing our product in Mexico, Latin America and North Africa, right? Why distributors? Why not -- why don't you do it direct? Because distributors want to sell 5 or 10 or 20 tonnes, what we call less-than-truckload, LTL shipments and charge the end user 100% markup, right? But those markets aren't interesting for us because they expose us to Mexico and Latin America, right, for a fraction of the cost. So distribution, be it for HRM or CRM, has to be part of our strategy, especially as we get closer to kickoff.

Is there any time frame for expectations around validating HRM for particular uses?

We -- look, we're expecting to -- we're kicking off work for -- across all of those end uses and segments. And I think we -- that will be the key focus for what we're doing in the next 3 months -- 3 to 4 months. So I think clearly, in the next quarter, the work that we're going to be doing with Hallett is going to be critical in terms of identifying where the best value and use for our product is, how it is best to be commercialized, understanding the end use, right, whilst at the same time wrapping up the top line revenue on ceramics, tile and porcelain that we need to get to where we get to for be it either the 50,000-tonne or 100,000-tonne case. Greg?

Thanks, Bob. Great presentation. Thanks very much. Good to see we're realigning the strengths of the company again and getting a real direction on where we need to get to. Assuming that there's plenty of appetite for our product. To go from the 50,000 to the 100,000 a plant, is that a redesign or is it an additional to where it is? So are we going to be on track for quarter 4 for the 100,000?

So our plan in just looking at that potential, Greg, is that we start with the 60,000-tonne case. We have the engineering, everything is done. We move from 60,000 to 100,000, right, in that first 12 to 14 months. What does it mean? It means an extra filter press, an extra drum washer and 4 or 5 extra tanks. So the incremental cost of capital -- so just look at the incremental cost of capital of just the 5 or 6 major pieces of equipment I talked about, is less than AUD 15 million. So what we're looking at right now, we're saying, hey, hold on a second. We have demand, right, for 100,000 tonnes. For that extra slice, I could get that. I don't need to change anything, engineering-wise, whatever. I need an extra cyclone back, I need an extra filter press, I need more people, right, so forth and so on. But let's stick to the original strategy, which is build out one, get that up and going, morph into 1A plus, which is nothing more than adding a couple of pieces of equipment at a relatively small capital, generate revenue while you're doing that, prove out the concept, right, and get to where you need to get to. Because by that time, you will have the foundation for 1B, right? You will have the foundation and potentially the demand for 1B, especially if you ramp up to 100,000 tonnes in that time frame. But let me reiterate that we're looking at this right now really from a cost-benefit analysis. Our plans remain what they are. But I'd have to say right now that the 100,000-tonne case looks very appealing. Okay. Other questions?

Progress on bulk logistics, container and so forth?

So bulk line containers, we've tested that. We found our direct partner for us. We have that in place, and that's ready to go. I would say right now, a key area that we have to work on in the next 3 or 4 months is a bulk solution, right? So a bulk solution, what do I mean by that? It means a bulk port or a bulk option between Ceduna and Port Lincoln on that side of the Peninsula would cut out 15% of our delivered costs. Now if we are -- if we start really delivering significant quantities to markets like India or to Port Klang in Malaysia to distribute from Port Klang in Southeast Asia, the way Luca does, right? [indiscernible] takes large shipments from Geraldton to Port Klang and distributes from there, right? We can do, to some extent, the same but at a significantly lower cost than delivering containers to those customers. But that bulk solution is really one of our top priorities right now, be it [ Thevenard ], be it Lucky Bay, be it on the other side of the peninsula, what options do we have and getting the support that we need to consider getting time on someone's belt, either existing or new, really, really very good for us. It doesn't mean that we don't have a project if we don't have that. We have it. We have good economics. We have good returns. All of the DFS is based on containers and bulk [indiscernible] containers with a significant cost. Now how much more value could you get in this company if you really optimized the supply chain, which unfortunately, involves trucking right now all the way across the peninsula, either to Port Augusta or all the way around to get containers out of Adelaide. Very, very expensive part of our business.

The potential for HPA to become a product?

HPA is very exciting for a lot of reasons, partly because we know we have technology and an approach that we've developed to move it forward. I think at this point in time, I would say it's complementary, it's an adjacent -- it's not a focus. But depending on who would potentially want to partner with us in the future, HPA can come to the forefront in a hurry, right? So we're not going to move HPA to the forefront until a partner or a potential partner says, hey, we want to do that with you. Because we don't have the time or the money to do that, and we need to focus on what we need to focus on. Paul?