Calix Limited (CALX) Earnings Call Transcript & Summary

My name is Darren Charles. I'm the Company Secretary and CFO. Today's meeting is being held as a hybrid meet. We are pleased to be joined by shareholders in the meeting room here in Sydney, and welcome those of you participating online in audio and video format via the Lumi platform. We hope that the hybrid format allows as many of our shareholders, proxy holders and guests to attend the meeting as possible. For online attendees, written questions can be sited at any time during the meeting. You can also ask questions directly during the business of the meeting when each resolution is being considered. To ask a written question online by Lumi, select the messaging tab at the top of the Lumi platform, type your question in the box towards the top of the page and press send. A copy of questions you submit along with any written responses can be viewed by selecting my messages. Please note, while you can submit questions from now, they will not be addressed until the relevant time of the meeting. Please also note that your questions may be amalgamated if we receive multiple questions on one topic. Finally, due to time constraints, may run out of time to answer every question. If this happens, we will answer those questions via e-mail. To ask a question verbally using the online system Click Request to speak on broadcast window. The audio questions interface will now be displayed. You will be prompted to confirm your name and enter your question topic. Please submit these details and select in queue to be connected. If prompted by popper, select allow to grant access to your microphone, then follow the instructions. The agenda for today's meeting will see our Chair, Alison Deans, provide her address to the meeting followed by a business update from Managing Director and CEO, Phil Hodson. After Phil's update, we will hold a short Q&A session on the update to be followed by the formal items of business of the meeting. There will be multiple opportunities for questions and answers, including after Phil's update after each item of business and before the meeting closes. Shareholders and proxy holders who are attending online have the same ability to ask questions and vote as those attending in person. To help facilitate the business of the meeting, for each individual item of business, we will invite people in the room to ask questions before then inviting people attending online to ask questions via the Lumi platform. I will now hand over to Alison for her address.

Good morning, and welcome to Calix's 2025 Annual General Meeting. Calix acknowledges the traditional owners of the land on which we meet, the Cameragle people, and we pay our respects to Aboriginal and TorreStraight Island of people. I'd like to start by introducing the Board members attending the meeting in the room today. We have nonexecutive directors, Helen Fisher, who is Chair of our Audit and Risk Committee and Sustainability Committees; Sarah Ryan, who is Head of Chair of our Technology Committee; Peter Dickson, who is Chair of People and Remuneration Committee; and CEO and Managing Director, Phil Hodgson. I'd also like to welcome Calix' auditor, Daniel Camilleri, of KPMG. Last week marked 20 years since Calix is founding. 20 years since our Chief Scientist, Dr. Mark Sceats, and his Co-Founder, the late Connolly, invented a better way to process minerals and metals. Better because it has the potential to be more efficient and flexible in its energy use and more efficient in its use of mineral resources, better because it has the potential to avoid and mitigate hard-to-abate sources of industrial carbon dioxide and better because it has the potential to improve the viability of making cement, steel, aluminum and critical minerals in a decarbonizing economy. Putting years on, we've come a long way. From a simple but revolutionary idea for a new type of kiln to a platform technology focused on some of the world's largest heavy industries, in partnership with global leaders and with a clear strategy for demonstrating and licensing each application. At the same time, we've built a growing revenue base and carefully managed our costs, extending the runway for executing our commercialization strategy. In the 2025 financial year, Calix reported significant progress towards these goals, and I'm pleased to note that we've continued this trend in the first quarter of the 2026 financial year, announcing some significant commercial milestones and new strategic partnerships, while also recording further revenue growth and expense management. In Iron and Steel, we were delighted to announce yesterday that Rio Tinto, one of the world's largest iron ore producers will support the demonstration and commercialization of Calix's zero emission steel technology to Zesty. Under the terms of the agreement and subject to confirmatory due diligence and project milestones, Rio Tinto will contribute over $35 million of cash and in-kind support for our Zesty green iron demonstration plant. The plant will be located in Kwinana, Western Australia, and will continue to be developed as an industry-wide facility. Rio Tinto's support for the project is a significant contribution to the matched funding and commercial milestones -- sorry, and commercial commitments required to progress the $44.9 million ARENA grant, which was awarded in July 2025. In alumina, a new industry partnership with North Hydro, announced this quarter aims to develop the Calix technology for the electrification of alumina production. Calix and Hydro will jointly develop our Zero Emissions Illumina or ZEAL technology. through material testing and engineering studies that are expected to deliver over $1 million in revenue to Calix and also develop designs for potential applications in commercial alumina refineries. In lithium and in partnership with Pilbara Minerals, we remain on track to complete demonstration of our midstream demonstration plant in Western Australia this calendar year. This plant aims to electrify the most carbon-intensive step in the production of lithium battery material. Producing a concentrated lithium salt at the mine site, also aims to reduce transport costs, unlock ore deposits and enable new supply chains from all sources to end markets. Completion of the midstream demonstration plant will be a significant milestone for all our applications, our first fully electric plant at a commercially relevant scale. And we look forward to sharing more on this exciting milestone in the coming weeks. In cement and Lime, we delivered an important plant upgrade, an operational test campaign at our Leilac facility that demonstrated the stability and flexibility of the Leilac technology. We also continued to progress our scale-up projects. However, market headwinds have led to slower progress than we hoped. Construction of Leilac-2 in Germany remains subject to permitting and financing being secured at the project or subsidiary level. Meanwhile, Project Zesty and electric line calciner in South Australia with carbon capture and use has now moved into front-end engineering and design, having completed its pre-FEED stage on time and on budget. Project Zesty is actively sourcing the project-level funding needed to match the existing grant from the Australian government. Unfortunately, Leilac U.S. projects in cement, lime and direct air capture remain paused pending the outcome of the U.S. Department of Energy funding reviews. In a magnesia line of business, investment in new facilities in the U.S. has added the production capability and market reach needed to underpin ongoing revenue growth in our largest water treatment market. In our Australian water treatment business, growth was driven by new contracts with Unity Water and City of Gold Coast. Together, these contracts have secured long-term engagements with 2 of the largest consumers of our product in Australia. As I touched on earlier, Calix has delivered revenue growth and cash flow discipline in FY '25, and I'm pleased to report that this has continued in the first quarter of this financial year. In FY '25, Calix's products and services revenue increased by 17% to $28 million. Helix also implemented cost reduction measures that delivered a 23% reduction in its operating cost base in the second half of the financial year relative to the first half. And in the first quarter of FY '26, Calix's products and services revenue were up 28% compared with the same period in the previous year. Gross profit was up 36% and operating costs were down 23%. This revenue growth and disciplined cash management mean Calix continues to have an 18-month cash runway to pursue further commercialization milestones and subsidiary and project funding. In terms of the market environment in which we operate, current and uncertainty and economic pressures may have slowed the pace of industrial decarbonization. And some changes in policy direction in the U.S. have drawn public attention. And these pressures appear to have had a strong bearing on market sentiment towards clean tech stocks. At the same time, long-term drivers of global industrial decarbonization continue to move forward. 77% of global GDP remains covered by national net zero commitments or 84% with the inclusion of U.S. state commitments. In 2025, China added cement, steel and aluminum to its emissions trading system. As a result, 80% of global emissions from steel, cement, aluminum and fertilizer are now covered by carbon pricing through either planned or existing policies. In Europe, following the introduction of the carbon border adjustment mechanism, the EU will begin phasing out exemptions to its emission trading system. Starting in 2026 and fully implemented by 2034 producers of cement, steel or aluminum, either in the EU or importing into the EU will be required to pay the EU ETS price for their carbon dioxide emissions. And in the U.S., a fixed price tax credit for captured carbon dioxide was enhanced under the Trump administration. Specifically, carbon oxides that is captured and used will now receive the same credit as carbon dioxide that's permanently stored. And finally, in Australia, a critical minerals production tax incentive and a green iron investment fund were launched in February 2025. A and an Arena renovation fund is expected to open soon, including $750 million in funding for green metals such as iron, steel, alumina and aluminum. It's not surprising that there are bumps in the road to net zero. But the majority of the world remains committed to the destination and is deploying the policy drivers needed to get us there. Sustainability sits at the heart of why our company exists, and our 2025 sustainability report outlines the progress we've made against our key sustainability ambitions. This included strengthening our governance, setting outcome-based targets and enhancing our ability to measure and report our impact. We also continued our commitment to the United Nations Global Compact. As we look forward to the remainder of the 2026 financial year, we have a clear focus on delivering our strategic priorities. That is continued growth in revenue and gross profit, combined with diligent cost management and the delivery of further commercial milestones and subsidiary or project level funding. In Ireland Steel, we aim to complete financing for the Zesty Demonstration Plant and commence engineering, procurement and construction management. In Alumina, we aim to complete material testing with North Hydro, while in lithium, we look forward to the imminent completion of construction in the midstream demonstration plant with Kilbara Minerals. In cement and lime our Leilac business aims to complete the permitting and funded needed for Leilac 2 to commence construction and to complete a FEED study and secure funding for Project Zesty. In conclusion, we made considerable progress against our strategy for commercializing the Calix technology focused on the most attractive market opportunities. And at the same time, the team is demonstrating a disciplined approach to growing revenues and managing costs, extending the runway further for delivering commercial milestones and securing subsidiary and project funding. On behalf of the Board of Directors, I'd like to thank our senior management colleagues and all the staff for their dedication to the goals Calix has set. I'd also like to thank our customers and partners for their continued support and collaboration. And finally, on behalf of the whole Calix team, we sincerely thank you, our fellow shareholders, for your continued support. We hope you continue to share our conviction in the opportunity ahead of us, and the potential to create long-term value for shareholders, industry and the planet. Thank you. And I'll now pass to our CEO and Managing Director, Phil Hodgson.

Thank you very much, Alison, and thank you all for being here. And to those online, welcome as well. Just in terms of Calix's mission, I've just got to get this thing moving forward. We continue to target, obviously, decarbonization of heavy industry. And at the same time, continue to grow revenues and manage our costs and it's a growing revenue piece, which is particularly important for us as we navigate the next few years. But the commercialization progress that I'll talk about today is also really important for us. And yesterday's announcement was obviously really important for us. Joint development agreement with Rio Tinto, you can see here it's nonexclusive. So the agreement with Rio Tinto has them supporting us to develop the technology. It is nonexclusive. So we are free to continue to work with other iron ore and steel players in developing the technology -- but Rio obviously see something in it and decided to back us. It's great -- they've been great to work with over the course of the last few months to get this deal across the line. The deal, in essence, constitutes both cash and in-kind. So there's $8 million in cash in 2 tranches, $3 million in Tranche 1 and $5 million in Tranche 2. The $3 million in Tranche 1 is subject to customer due diligence associated with developing the project, things that we would have done anyway, and $5 million is to get the project FID ready. So really, it's to get to that point, again, that we would have been normally doing by ourselves. But it's great to have Rio next to us as well, helping us to get us there. And those $3 million and $5 million tranches are triggered on completion of that due diligence for the project. But also, there's another $27 million in kind. And that $27 million in kind is associated with all sorts of support, technical and engineering supported an ongoing sense tolling and provision of iron ore, none of which are small matters when it comes to a demonstration unit. And so that level of support is significant from a company like Rio, and it really does help us start to think through and derisk this project longer term. So really important for us. If we just move to the next slide, sorry, I -- so just a bit more on Rio Tinto. It outlines the way that Rio may actually take an equity in a Zesty subsidiary. So the $8 million is convertible by Rio at their option, into equity in his Stacy. Now you may recall that with our cement and lime business, the Leilac business, back in 2021, we had an investment directly into a subsidiary of ours called Lilac, and that was from an investment fund called Carbon Direct, and that was EUR 15 million or about 7% of Leilac. What that deal did for us is it gave great look through value on the value of the Leilac business. And obviously, they allowed the business to continue its commercialization pathway. And we've been very clear about our strategy with respect to developing the iron and steel business. It's the same. -- we're looking at getting impact funding into a subsidiary called Zesty interestingly enough, this deal with Rio has -- gives them the option to do the same. They can join alongside funds in investing in Zesty their choice. And so our strategy remains to continue down that pathway. The key thing is that if you have a look at the way impact funds have invested over the last couple of years into clean technology, it's always -- there's always a strategic involved. And what I mean by that is there's always an industry participant who's always been there to help validate the technology and derisk it. And so with Rio on board now as part of this JDA, that significantly helps us in our strategy to get funding into a subsidiary to continue to pursue the iron and steel opportunity. So a really important piece of the JDA is that opt-in there for Rio. The other thing in here is we've agreed to sort of terms, the key terms around a licensing agreement. The full licensing agreements will need to still be put in place. But the interesting thing about this is our business model is about licensing ultimately the technology. The business model is not capital heavy, the customers of the technology, the ones that will deploy and invest in the tech and pay us a license fees that technology is used. So that's been our business model. And we've sort of proven that out. We've got a couple of licenses agreement in place in Leilac business, one with Heidelberg Materials and another one with Arlon for the direct air capture opportunity. We've got a license agreement with Pilbara Minerals as well now. And this is now the third line of business that we're starting to get the proof of concept or proof of business model, if you like, with respect to licensing this technology. There were a lot of even 2 or 3 years ago before we started to get these agreements in place. People will go, where's the proof? How you're going to license this technology? You may have to build and operate these plants to actually deploy the technology, which will be very capital heavy for us. But now this is now a third tick in that box of being able to demonstrate that our business model around licensing the technology can be achieved. So really important part there. The last bit that's really important about this deal is the ability for Rio to sub-license this. What I mean by that is they can take our technology and market it to their customers. And if you think about where Rio's customers are, they're exporting mainly to China and other steelmakers around Southeast Asia and the Asia Pacific region. And so marketing our technology to those players is a really interesting part of deploying Zesty commercially. There's the opportunity here in Australia with a green in opportunity. Obviously, the government is very interested in that. It has the chance to really multiply revenues with respect to iron ore, changing from iron ore exports to actually green iron exports. But the other opportunity is also in places like China. So China has cheap renewables. China has lots of steel works, and Zesty technology can be deployed at steelworks, so there's a lot of sinter fines and these sorts of things that still works producers. And there's technology is actually pretty good by converting those center fines into a green iron. So deployment here in Australia and deployment overseas. Now if we just march into China ourselves, I think we'd be chewed up and sped out as a little Australian technology company, but standing side-by-side with a company like Rio changes the equation for us. So as far as commercialization is concerned, it's a very significant step for us because of those reasons as well. So just about the Green in demonstration plant itself. We're going to be located in Kwinana. We're right over there in Western Australia, proximate to what's called the NeoSmelt project, the NeoSmelt project is a joint venture between Rio Tinto, BHP, BlueScope, Mitsui and Woodside and the NeoSmelt project is looking at taking a direct reduced iron and purifying it, okay? Our plant produces a direct reduced it. And if we're producing it from ores from the Pilbara region, that ore needs purification before it can go in an electric arc furnace. It can go straight into a blast furnace, by the way, but it needs purification before it goes into electric arc. And so if you have a look at the NeoSmelt project, it's and it's supported by ARENA, and it's got some pretty big partners in there, as I've mentioned. Its aim is to look at how to take ores and get them pure enough for electric arc steelmaking, because ultimately, electric arc can be run on renewable electricity. Zero emission steel ultimately will probably be done through electric arc but there's still 70% of the steelmaking fleet is still blast furnace operation. And so with respect to the DSP project, it's thinking about the future with electric arc steelmaking. But blast furnace operation is also of interest to us. We can produce a green iron pit using our technology. And for every ton of that material that's introduced into a blast furnace, you can reduce the carbon intensity of that blast furnace. So it's a way for blast furnaces -- very young fleet of blast furnaces in Southeast Asia, too, by the way. It's a way for those blast furnaces to reduce their carbon intensity. So the nice thing about Zesty. It's in this Kwinana region. It's proximate to the art melt. There's a nice pathway through to zero emission steel using electric arc furnaces, but it's also a good demonstration of producing a material that will help blast furnaces reduce their carbon intensity. Ultimately, over time, if you look at the International Energy Agency, they're predicting that blast furnaces ultimately will start to fade out by about [ 250 or 260 ] so they've got a long way to go. They're quite young, the fleet here in the Asia Pacific region. And so Zesty represents a means for those to reduce their carbon intensity as they're journey towards a net zero steel. So you can see there, as I say, proximate to NeoSmelt in Kwinana, you would have seen the Premier of Western Australia come out last week talking about a green steel industry in Western Australia. Kwinana is right in the electrode for Madelin King, the Federal Minister, and you would have seen also the premier talk about the government assisting through procurement, getting a green steel industry up and running in WA. So it's a great location for us. We have a great partner. That partner is a joint venture in NeoSmelt. So the path through to electric arc is becoming clearer. And you have a state which is looking to really try and grow green steel industry. So very nice location for us. And just lastly on Zesty, in terms of its development, One of the things that we said when we first published or put a patent in and first started to talk about Zest in the public domain, we said we wanted to move quickly. So what we've done is sleep pretty quick, between 2021 and 2023, we're able to secure some funding from arena. We're able to convert 1 of our facilities down Abakusmarsh into a green iron facility. That had a capacity of 500 tonnes per year, which is definitely not lab scale. We're calling that pilot scale. That was a nice ability to pivot and convert that particular facility to make a green steel. And if you look at a lot of the other green steel technologies today, they're still not at that scale. And so within 2 years, we converted and done some initial test work. And then, again, with the support of ARENA through the Hit, and with 6 of our major iron ore producers. We tested 9 different ores in over 150 test runs through 2024. And that effectively proved out the technology for us at pilot scale. We've got excellent results. We went on to win an outstanding project award at -- as of by June last year, Cop29, I think it was. And of course, since then and only recently, we were able to announce $44.9 million support from ARENA to go and build the next scale up. This next scale-up is full-scale tube. So scaling up from our next scale is just multiples of those tubes. So we're building a full-scale single module version which is why we're going to call it a commercial demonstrator. A full-scale single-tube version, which will be targeting 30,000 tonnes per year of direct-reduced iron. So that's been pretty quick to move through from 2021, pilot the technology, move through and get the support from the government and now just as we're able to announce yesterday, get the support of a company like Rio Tinto, the largest iron ore miner in the world. To join us with developing the technology is pretty quick. We're pretty pleased with progress. So where to from here. Obviously, we want to get this final investment decision through, we need to raise that capital either at the project level or into the subsidiary the remaining capital to go and build this facility, and we're targeting 2028 to commission and start that up and start running. So yes, pretty compressed time frame, but we're pretty pleased with progress to date. So they are the next steps in Zesty. Just also recently, we talked about commercial progress. Obviously, SA was a pretty big announcement. But one that perhaps went under the radar a bit, but very important is the announcement we had with North Hydro, One of -- they have run the largest alumina refinery in the world in Brazil, and we're able to announce a test work program with them to make low emissions alumina using our core technology, same core technology again. And so working with a company like North Hydro, are the largest aluminum companies in the world, again is significant for that particular vertical. It's not quite the same scale as iron and steel, Illumina is only 1/10 of that. But even so, that's a multi, multibillion-dollar market every year in alumina production. We're targeting the same business model here ultimately, nonexclusive. So it leaves us open to make deals with other alumina players. But North are keen to work with us to test the technology. We're testing it right now. down back as much. They've sent material over, and we started the test work program that we announced earlier. And so we're testing that material now. And that will then lead into a pre-front-end engineering design study to work out how this can be retrofitted into a running alumina plant. So significant for us, a big opportunity for us. And very pleased to see this one another -- yet another vertical, another significant vertical or line of business for us starting to make its commercial journey. So how does decarbonizing alumina work? Well, when you're making aluminum, you start with bauxite. You take that bauxite and that gets converted to what's called aluminum hydrate. They basically use this stuff called caustic soda to suck the aluminum out of the bauxite. Now that aluminum hydrate has to be heated up to drive the water off it basically. And at the moment, that's being done in very large kilns with natural gas or coal. And it's sort of the last bastion of key decarbonization opportunity in the aluminum industry because once you produce aluminum oxide, that then goes into very, very large smelters that basically suck the oxygen of it and their electric and so that particular part is already being done with electricity, converting aluminum oxide to Illumina, which is the second part of the chain here. But upstream is where we are upstream is where our Zesty technology can be utilized -- so if we can replace a natural gas or coal-driven kiln with an electrically driven kiln, then that is a way to decarbonize that particular part of the aluminum-making chain. The other advantages of our technology. The steam that we produce is pure. So as the aluminum oxide falls down her tube, and gets converted to a steam comes out the top. That steam is hot. That steam can be used for heat and other energy requirements in the Illumina refinery. So it's a way to use renewable electrons to do this process, and it's a way to recycle that steam and into useful heat. So that's why people like North Cadre are interested. Quickly through the -- another couple of elements of stuff that we're doing, obviously, lithium, interestingly enough, we've seen in the last week or 2, quite a rally, if you like, or a bit of support coming back and optimism into lithium was quite timely. I mean our plant here, which which we started to budget for, by the way, over 2.5 years ago, that's going to be brought in on budget., And as Alison mentioned, in the next few weeks, we're turning into complete construction. So with our adjusted time frame, we're on time, and we're still on budget. Now for a project in the Pilbara priced 2.5 years ago, that's a pretty significant achievement in and of itself. You can see here the various stages of construction, a nice big truck there with the Calix symbol on it, that got a bit of press as it rolled through the streets of Perth, all the way up into the Pilbara region. And you can see in the bottom right-hand corner there, the newly completed plant. You can see the call side and the foreground, the big tool tower there. And then behind that, you can see what we call the hydrometallurgical process, and that's the process to take what we make which is converting alpha to beta spodumene is called and to extract the lithium from that beta spodumene. And so naturally, people are going, well, great, when are you going to start this plant up? And we've always said, "Look, we're not going to start to run this plan at a loss." We want to make sure that the market conditions are right. and Pilra minerals, our partner in this project, our joint venture partner in this project, are aligned with that. We're not going to start the seeing running up at a loss. So we're a bit unclear when we're going to start it. But interesting enough, we've got a very close eye on what's happening in the lithium space. So I think the lithium supply was always thought over the course of last year to be well in excess of demand. So a lot of lithium supply came on stream, and you would have seen the Lithium price slump to a very low level. And so it was uneconomic to run this plant. But just over the course of the last month or so, there's been a bit of a rally in lithium prices. CATL, biggest battery maker in the world, has kept increasing its forecast of baseload energy storage. So baseload energy storage is where lithium batteries are used to balance the grid. And they've actually seen that start to go even ahead of their reasonably bullish predictions on the amount of lithium that needs to go into baseline energy storage. And so that is starting to create a situation where perhaps demand is starting to match or even outstrip supply. And so it's going to be a really interesting market to watch over the course of the next short term, a few months. And so yes, restarting this plant and commissioning and those sorts of things, we're unclear at this point, but we're watching the lithium market with interest. Leilac. So with respect to the line part of our business, which is the CO2 mitigation for lime and cement. We did an upgrade on our Leilac-1 plant to make it electric ready, what we call hybrid ready. You might remember last AGM, I talked about the ability to actually energize our tube with different energy sources. We can energize it with electrons we can energize it with standard flames, if you like, from burning waste or biomass or standard fossil fuels that ability to do both and switch between them within minutes is really interesting, especially for things like grid balancing and taking advantage of really cheap electrons on the grid when the sun is shining and wind is blowing and there's excess power in the grid, that actually creates interesting income streams completely separate from the CO2 capture piece. So we've retrofitted the Leilac-1 facility in Belgium at the Heidelberg Cement facility at Lexa with an electric ready tube. And then we ran some tests on it. We haven't electrified it yet, but ran some tests have got some excellent results. So we're really very, I guess, enthused about this ability in what we call the hybrid application of our technology to switch between different energy sources. As Alison mentioned, Leilac-2, we're still waiting to get the permitting through and also, we need the financing coming in at the subsidiary level, at the Leilac level to move that project forward. So there's a couple of areas there that have slowed that project down, which is a bit frustrating, but we'll work through those. We're working through those now. With Zesty, as Alison mentioned, we're moving into the feed stage there. This is a lime -- a fully electric lime South Australia, supported with $15 million in federal government funding. So that particular project there has moved into feed. Again, part of that Leilac raise, we'll be looking to see how we raise the capital to complete this project, and that will either be the Leilac level or at the subsidiary at the project level. And lastly, U.S. The good news is, our projects have been canceled. The bad news is we don't know. They haven't been affirmed yet either. So we hope that we would have heard some news following the U.S. summer break. But of course, the U.S. government has been shut down for several months. So we still wait. So we're in a bit of a sort of like his cat. We're in a super position on those projects. We don't know if they're going ahead or not yet. So anyway, we'll wait and see what happens there. And lastly, just on magnesia. You can see here, and Alison talked to the yearly figures from FY '24 to FY '25. And what I'll mention here is the quarterly just compared to prior period, just the quarter just passed, unaudited, but the quarter just passed, significantly up in terms of revenue and gross margin. And so our strategy with respect to the magnesia business is to continue to grow that as best we can. It's generating good cash for the business. It's growing nicely. And so it really starts to underpin and help support all the other stuff we're trying to do in decarbonization. So a really important part of our business, magnesia. So Alison did mention a new contract with Unity Water, one of the largest users of magnesium hydroxide. The extension for another 10 years of the contract with City of Gold Coast, and these guys are also increasing their use of magnesium oxide. So Australia, we've been plateaued at about $4 million a year in revenue. that's set to rise significantly with these contracts and with the expansion within these contracts. So we're very pleased with Magnesia both across the U.S. and in Australia. So I won't go through every single project here. I've mentioned most of the lines of business. There's no real update in this slide compared to the slide we presented at the full year results. We'll continue update so as we move through. And of course, our half year coming up when we announce our half year results in February. So just in terms of the strategy then, just to be really clear, the commercialization piece, we're very focused on commercializing this technology. We've had significant announcements just in the last few months down the alumina side of our business and now down the Iron and Steel. So we're making great progress in commercializing the technology. The cash runway, we talked about 18 months runway at the full year results, very much a focus of this company. I talked about growing revenues that helps. We've been very prudent on costs. And so maintaining our cash flow way is important for us, and we look forward to updating everyone at the half year results on the latest position on our cash runway. People have asked us that we cut costs to which can we continue to do the projects that we need to do with the resources we have. Lances absolutely. And actually, one of the things that's really interesting for me is to see how AI has blossomed over the course of the last 6 to 12 months only. And it's the pace AI which is improving. So our AI engineers are using AI. They're using it to help with their designs to do a lot of stuff that maybe we used to have to employ quite a few people for. And so the use of AI in our business, not just in engineering but across the business is enabling us to be more efficient, and we'll continue to explore that and use that as best we can. So keeping a lid on costs, but using the tools that are becoming available to be able to maintain, I guess, the portfolio of things we're trying to do is what we're very focused on. And lastly, licensing and deployment. I mentioned that with respect to, say, the Rio Tinto deal that we've done, the licensing key terms that have been put in place there with Rio and the validation of that business model, the validation of using licensing and royalties as the future of this company. Once we get through the proof of and demonstration phases, that is the business model. That's where we're aiming. It's a high-margin royalty, if you like, annuity-type stream of income that we're targeting here. And if we can get there, it will be a very valuable company. So I'll finish on that note. Lastly, again, look, huge thanks to the Board for their support and guidance over the course of the last year. Since the last AGM, it's been a tough time in the market. We're very pleased to have updated the market with some great news, which was a long time coming. It's always a bit tricky when you've got something that big and you can't say anything, but we're so pleased to be able to say it now. And so sincere thanks to the Board for their support through a pretty tough 12 months. Also, our staff at Calix, if any, are listening, huge thanks to you guys as well. They've been through some tough times as well. We've had to cut a lot of costs out of this business, and they haven't waived it, in terms of our resolute attitude, if you like, our resilience to making sure this business gets to its potential, the staff have been outstanding and so my sincere thanks to the staff. And lastly, of course, to all of you shareholders. For those of you who continue to support us, even though the time has been tough, I have just the utmost thanks. And so on behalf of the Board and the staff, we really thank you for, I guess, supporting us through what's been a very tough time. So hopefully, the dawn is breaking. Yesterday's announcement is very satisfying for us, and I hope you guys were pleased with that as well. So on that note, I'll finish there. I think we're doing a Q&A questions and answers now, yes, so. I'll stay here, yes.

[indiscernible] .

No problem.

Thanks, Phil. So yes, before we move on to the formal items of the agenda, we're just going to take -- invite any questions really about the results for F '25 and the priorities for F '26 and adjust that. Yes. I'd also note that during the rest of the meeting, we'll have time to answer questions specific to the actual resolutions coming up. But if you've got any questions at this time, just ask that you please introduce yourself and to ask your questions.

There might be semantics, but we keep calling that we're doing a demonstration plant and a pilot. The technology is proven, and I'm assuming it's just slight different configurations or temperatures that actually work in the different industries to the mix that you put in. So if the technology is proven, why do we keep going through demonstration phases? Because that to me sounds like we're still trying to get to the point of having a commercial outcome. And it's been operating in back of us for many, many years. So just a question as to why.

Absolutely. So with respect to demonstration, each industry will want to see it demonstrated on their own material. And each material comes with its own sort of interesting foibles environment cement, for example, when you heat up Limestone and turn it into lime, lime is pretty sticky. And so the ability to handle sticky particles is a really important part of the demonstration process. And sometimes that's not evident at a pilot versus a demonstration scale or it isn't evident in terms of its ultimate impact. And so your ability to work out what to do with sticky particles was part of the lime development. And so that is just one example. There's some iron, that's sticking someone that's not sticky. Alumina, when you're looking at alumina and alum hydrate, they can clump before they ultimately get heated up and separated. And so dealing with each different mineral actually requires the development. And so that's why we need to go through this development scale step with each application.

Do you want to also talk about the challenges are scaling as well. And -- so therefore, why it can be proven that the back is smart scale, but then needs to be proven in demonstrators as well.

Yes, absolutely. So add back of Smart, we've got effectively a small commercial scale calcine, the big picture that you see there. That's for magnesite. And we won't need to go much bigger to actually deploy into magnesite. Certainly won't go bigger in tube. We just have multiple tubes. The same scale tube in terms of its size, a bit longer is what's been deployed in Belgium. And indeed, the same scale tube is what's been deployed at Pilbara Minerals with electricity on the outside. So once we've proven at that scale to go from that single tube to multiple tubes is a simpler or, let's say, less risky scale up from that to multiple tubes. So getting these single tubes, full-scale single tubes up and running for each application is an important step for us.

Okay. Thank you. Any more questions in the room? Are there any questions online, Darren?

Yes, we do have a question online, Alison. And it's -- thanks, Dan, Mr. Daniel Vasquez, will the testing regime for iron ore focus on low-grade ores or will the focus primarily be on mid- to high-grade iron ore.

The testing to date has all focused on low grade. We have tested a few samples and runs with what we call high-grade ores, which are magnetite ores. But the majority of the testing has been low-grade ores. The reason we've done that is 96% of Australia's exports are low-grade ores, what are called hematite gurtidores and it's the ability to metalize those ores and to get them into format for export that we're proving, if you like, through the demonstration scale facility. We've already done it a pilot scale. We've produced little brackets. Those brackets have to be what's called a certain density to be shipped safely. And so the ability to produce those briquettes with sufficient metalization, even though they've got impurities in them at the right density for export is part of what we're doing here. So while we're focused on those lower grade ores, and we feel that's where the first deployments are happening, and that's what Rio is interested in and the other players here in Australia. Of course, high-grade ores are not outside the scope of the technology either. We have done some metalization tests on what we call the magnetite ores, and we'll continue to do that. And that will be mainly for overseas deployment. So yes, lower grade because we're Australia focused first in terms of the industry here, but the high-grade ore are also part of the planned development.

There are no more questions.

There are no more questions. Great. No good.

With Leilac-2, you indicated that we're still going to need to seek some further funding. What is the quantum of the funding -- extra funding that's needed? And why isn't Heidelberg coming forward with that funding, if it is because that proves out the fall pipe module, I assume, which is very important for us.

Yes. So we do have a joint venture agreement with Heidelberg, where they have committed some funding to that project, but not all of it -- so we've always said we needed to raise some more capital there. What's the quantum? At the moment, we can't talk about what Heidelberg committing. So it's a bit difficult to talk about the total quantum. When we announced the project, we talked about a EUR 26 million capital project. About a year after that, 18 months after that announcement, we went through that COVID period and that inflationary period. And we talked about a 30% to 40% increase in that budget -- so we're still roughly there in terms of where we think the capital end up for this project. So it's not small amounts we'll need to raise. We'll need to raise tens of millions of euros to contribute our part. And so as and when we're successful in getting that away and we could talk a bit more publicly about it, we'll update, but it's not a trivial amount. We'll need to raise a reasonable amount of capital.

And have also I think it's helpful any way to think about the 2 alternative ways to get to demonstrate a scale in cement and lime. One is with Leilac-2, the others Zesty, which already has a good chunk of government funding. Okay. Thanks.

No more questions.

Thanks, Darren. So we're going to -- Actually, we're going to move to the formal items of business, but I think you're going to talk through the voting one more time.

Yes, the voting instructions. Thanks, Alison. So voting for the meeting is being conducted by way of a poll on all items of business. To provide you with enough time to vote for those joining virtually, polling on the resolutions is now open. For those in the room, polling cards handed to you on arrival can be completed at any time during the meeting and before voting closes. If you are attending online and eligible to vote at this meeting, a voting tab will be visible on the Lumi platform. Selecting this tab will bring up a list of the resolutions being put to the meeting and present you with voting options. Cast your vote, simply select one of the options presented. Your vote is automatically recorded, so there is no need to click a submit or enter button. You are able to change your vote up until the time the chair declares voting closed at the end of the meeting. For those in the room, once your voting cards are complete, they will be collected by staff at boardroom and tabulated with the online vote. The results of the polls will be published on the ASX platform later today. I'll now hand back to Alison for the commencement of the formal items of business for 2025 Calix.

Thanks, Darren. Okay. So now to the formal items of business in the meeting. So I can advise that 132 valid proxy forms have been received by the cutoff date, totaling 105,529,445 shares being equal to 49% of the shares on issues. There were no invalid proxy forms received nor were there any proxies lodged by security holders with an balance. Each resolution before the meeting for consideration will be decided by a poll. So the first item of business before the meeting is to receive and consider the financial report of the company, including the director's report and the auditor's report for the year ended June 30, 2025. There's no formal vote on this item and I note that the company didn't receive any questions on this item prior to the meeting. We now invite those in the room or online to ask questions on the accounts, either of the Board or the auditors who are present in the meeting here today. So are there any questions in the room? Okay. Thank you. Are there any questions online?

There are no questions.

Thank you. Okay. So I'll now move to the 5 resolutions before the meeting that are open for voting. The first is the remuneration report. The resolution reads to consider and if thought fit, to pass the following resolution as an ordinary resolution. That for the purpose of Section 250 or Part 2 of the Corporations Act, the remuneration report of the company for the financial year ended 30 June 2025. And which forms part of the Director's report be adopted as described in the explanatory statement. The proxy votes received for Resolution 1 are presented on the screen. If you have any questions on the remuneration report, please ask them now. Are there any questions in the room? Thank you. And Darren, any questions online.

There are no questions online.

Thank you. So if you haven't already done so, please vote using the online tool as indicated earlier or by completing your voting card. As the next resolution relates to myself, I hand the chair to Phil Hodgson.

Thank you, Alison. Resolution 2, which is the reelection of Alison Deans as Director. The resolution reads to consider and if thought fit to pass the following resolution as an ordinary resolution, that for the purpose of Clause 13.6 of the constitution Listing Rule 14.4 and for all other purposes, Alison Deans having been appointed to the Board of Directors on the 1st of March 2023 and who vacates the office in accordance with the constitution of the company and who being eligible offers herself for reelection, be reelected as a Director of the company. The proxy votes received for resolution 2 are presented on the screen. I'll now invite Alison to speak to her election.

I'll just do that here. So it has been an absolute privilege serving on your Board for the last years. As I think you've heard today, Calix is an exceptional company with a rare opportunity to contribute to one of the most important challenges of our time of decarbonizing the planet. Now as we all know, the last few years have been a particularly challenging time in the market for clean tech companies, both the funding clean tech capital projects and for the valuation of clean tech companies, and Calix has certainly experienced these pressures. But against this, the Board has worked with the CEO and the leadership team to focus the company's efforts on the most prospective applications and apply disciplined cash management to extend the commercialization runway. And the team has made strong progress in this commercialization. They've delivered on new partnerships with global leaders in every segment, validating the potential of the technology and working towards funding at a project or subsidiary level. Over this challenging time, the purpose, opportunity and technology of Calix has united the highly skilled motivated and aligned team of Calix. That's on the board and on the executive and it really is a privilege to work with this team. These 3 themes of purpose, technology and people have been the threads through my career. I've consistently focused on helping to build companies that are tech-enabled, people-driven and anchored in an alignment of purpose and shareholder value. Over the last 35 years, I've worked as a consultant with McKinsey as the CEO of eBay Australia and 2 Venture Capital Funds and a Board member and adviser to many tech companies. I'm currently the Chair of Cochlear and a Non-Exec Director with Ramsay Healthcare, and I also serve on the Investment Committee of Main sequence, a venture capital fund initiated by the CSO and investing in Australian deep tech companies with the potential to solve global challenges. So if elected today, I'd endeavor to bring my experience from all those environments, to deliver long-term value for shareholders and to society. I look forward to serving the company and helping realize the potential of Calix. Thank you.

Thank you, Alison. If you have any questions on Alison's reelection, please ask them now. Are there any questions in the room? Are there any questions online?

There are no questions.

If you have not yet done so, please vote using the online tool as indicated earlier or by completing your voting card. We will now move to the next resolution, and I'll hand back the chair to Alison.

Okay. So the third resolution is the approval of the short-term incentive, the STI grant of performance rights to Phil Hodgson. The resolution reads to consider and if thought fit to pass the following resolution as an ordinary resolution, that for the purposes of ASX Listing Rule 10.14, Section 208 of the Corporations Act, and for all other purposes, the issue of 160,527 STI performance rights under the Calix EIS for FY '25 to Dr. Phil Hodgson be approved. The proxy votes received for Resolution 3 are presented on the screen. If you have any questions on the issue of the STI performance rights, to Phil Hodgson, please ask them now. Are there any questions in the room? Are there any questions online?

There are no questions online.

Thank you. If you haven't already done so, please vote using the online tool as indicated earlier or by completing your voting card. We now move to the next resolution. Resolution 4, which is the approval of long-term incentive LTI granted performance rights to Phil Hodgson. The resolution reads to consider and if thought fit to pass the following resolution as an ordinary resolution, that for the purposes of ASX Listing Rule 10.14, Section 208 of the Corporations Act and for all other purposes, the issue of 824,758 LTI performance rights under the Calix EIS for FY '26 to Dr. Phil Hodgson be approved. The proxy votes received for resolution 4 are displayed on the screen. If you've got any questions on the issue of the LTI performance rights, please ask them now. Any questions in the room? Any questions online?

There are no questions online.

Thank you. We'll now move to the next resolution. And as the resolution relates to myself, I'll again hand the chair back to Phil Hodgson.

Thank you, Alison. So we now move to resolution 5, approval of issues of shares to the directors in lieu fees. The resolution reads to consider and if thought fit to pass without or without amendment, each as a separate ordinary resolution the following: That pursuant to and in accordance with Listing Rule 10.11 and for all other purposes, shareholders approve the issue of director shares as follows: Up to 107,500 worth of director shares to Alison Deans, up to 67,500 worth of director shares to Helen Fisher, up to 67,500 worth of director shares to Dr. Sarah Ryan and up to $67,500 worth of director shares to Peter Dickson. All their respective nominees on the terms and conditions set out in the explanatory memorandum. The proxy votes received for Resolution 5 A 2D are presented on the screen. If you have any questions on the approval of the issue of these shares to directors in lieu fees, please ask them now. Are there any questions in the room? Are there any questions online?

There are no questions online.

If you have not yet done so, please vote using the online tool as indicated earlier or by completing your voting card. I'll now pass to Darren.

Thanks, Phil. If you have not yet done so, please vote using the online tool as indicated on the screen. I'll just leave a bit of time for everyone to finish their voting. [voting] That concludes our discussion on the formal items of business.

Thanks, Darren. So before closing, we'd like to provide a final opportunity for questions and answers. So are there any final questions? Darren?

There's no questions online.

So that concludes the business of the 2025 Calix Annual General Meeting. Thank you for your attendance and on behalf of the Board and the whole team at Calix, we thank you sincerely for your ongoing support of Calix's goals and ambitions. We look forward to providing you with regular updates on the progress in the 2026 financial year. Thank you.