Deterra Royalties Limited (DRR) Earnings Call Transcript & Summary

Well, good morning, everybody, and thanks for joining us here for our first Deterra Investor Briefing Day. It's -- I feel like I'm talking to an aeroplane fuselage in here. But firstly, I just want to acknowledge the Gadigal of the Eora Nation, the traditional custodians, and acknowledge the elders, past and present. So thanks very much for coming along today. I think there's an issue with the train, so we might have a few people coming in later. You may have seen already that we've lodged an updated corporate presentation on the ASX this morning. Today's format is going to follow that presentation, and we'll talk to each session, and we'll take Q&A at the end of each session. And there will be a mic, so if you've got a question, just please grab the mic and state your name, where you're from and ask the question. The proceedings will be recorded, and we will be uploading only the audio to our website after this event. So with that, I'll hand straight over to Deterra's CEO, Julian Andrews.

So thanks, Jason. And again, thank you, everybody, for coming down this morning. As Jason said, we put a slide pack up on the ASX platform this morning. We appreciate you are unlikely to have had a lot of time to run -- to go through it, so we'll be stepping through that today and obviously, happy to take questions as we go. As Jason said, we'll try to keep those to the end of each segment, and then we'll have a bit more time at the end to come back to any particular issues that you want to cover off. There we go. So a quick rundown of the agenda. I'll speak a little bit. I'll give a bit of an overview of the strategy and the approach, just a refresher really on the business model, what it is we're looking to execute on and how we're going about doing that. Then we're very pleased to be able to have Jonathan Evans and Luke Colton from Lithium Americas, who will be coming in over remotely, and they'll give a short presentation around the Thacker Pass project. It's obviously a project over which we recently acquired a royalty. So we're very pleased to have them join us. We'll then talk a bit more about some of our key assets and some of the catalysts around those. We'll have a break and then cover off on capital management. As I said, then at the end, we'll circle back and obviously, happy to take any further questions at that point. With me today as well as Jason, who's just introduced me -- introduced himself, I have Tyron Rees, who's our Chief Operating Officer, based with us in Perth. He came across as part of the Trident acquisition. We also have online somewhere up in the -- from Denver, we have Adam Davidson, who is -- leads up -- heads up our American operations, who also came across as part of the Trident operation. So look, I know you're all very familiar with the business, but just a quick overview for those of you who may not be. We're a diversified resources royalty company. We've been listed on ASX since late 2020 when we were spun out from Iluka Resources, who remains our major shareholder with a 20% holding in the business. And with a market capitalization of around $1.9 billion, we're part of the ASX 200. So as I said, I'm sure most of you are very familiar with the business model. It's a very simple one with a compelling investment thesis, and there's really 3 key elements to that. The first one is that we give our investors top line exposure to mining activity, which comes with very limited exposure to operating margins or operating costs or capital blowouts as well as the ability to participate in expansions or extensions to the underlying operations at no cost to ourselves. We have a mix of high-quality, cash-generating assets and development assets that support strong shareholder returns. And we have a consistent and disciplined strategy and approach to creating additional value through investment in new assets. And I'll cover each of these points in turn. First, in terms of the business model, as I said, it provides a way to invest in mining with some key structural advantages. In particular, we're exposed to commodity pricing and to volumes. But because it's a top line exposure, we don't have that exposure to other elements further down the P&L, so particularly operating costs, so we don't get caught in margin squeezes when operating costs go up. And we're not exposed to increases in capital costs, whether that's sustaining capital or investment capital. At the same time, the other critical component of the model is that we do have that free carry into extension or expansion. We get the benefit of the miners' capital investment in that extension or expansion without having to contribute to it. So in many ways, it's effectively a free carry into that expansion or extension. Clearly, this is a qualitatively different exposure to mining and comes with a lower risk profile than your typical mining equity investment. The model is very well established in other parts of the world, particularly in North America. It's been around for many decades, but it's really taken off in the last 15 or 20 years. And we now see in terms of the major listed organizations, the sector has a combined market capitalization in excess of USD 80 billion. Despite this growth in some of those other jurisdictions, we remain the only listed ASX royalty company of any kind of scale. So we offer -- we're unique in our ability to give ASX investors exposure to that model. To dig a bit further into it, what drives performance and how do royalty assets generate superior value? We believe there are really 2 key factors that drive value in royalty companies. The first one is quality. And by quality, we mean the ability to continue producing and generating revenue over time, and mine life is a really critical component of that, and also to attract capital for further investment in extensions or expansions. That's not enough in its own right. It's a key driver of sort of the base value, if you like, but the alpha is really about that extension and the expansion. And to have that extension or expansion, assets need to have optionality. That is the likelihood of having extension or expansion. So how do we measure that? So what do we mean by that? What does that actually mean in practice? So when we look at investment opportunities or we look at royalty assets and say, how are these likely to drive superior value, we look at a number of factors. First one is really mine life, and mine life is critical, as I said, because long-life mines tend to -- they will experience multiple commodity cycles. So timing is less critical. They will go through the ups and downs. And particularly given that price risk in commodities is often asymmetric, longer mine life assets have the ability to participate in the occasional commodity price fly up that is a feature of commodity markets. There are also some valuation elements that are important when we think about mine life. Cost position, obviously, critical. Again, it's a slightly different consideration than when you're looking at an equity investment in a mine. Obviously, a well-positioned mine in Q1 or Q2 is critical. It's a binary risk, if you like, when you're royalty. You're less concerned about what's going to happen to your margins over time. You're more concerned about what's happening to the top line. So price is obviously a factor. That's an external, but volume of production is critical. So the binary risk is, is it producing or not? So ideally, you want to make sure you've got a mine that is sufficiently well positioned on the cost curve that it's going to continue to produce through fluctuations in pricing cycles, and also that it's sufficiently profitable that it is going to be worth investing either in sustaining CapEx to keep it operating effectively or expansion CapEx if there are those kind of opportunities. So as I said, sort of the Q1, Q2 assets, obviously, are important. Scale is important. And that's really for a number of reasons, but probably the most important of which is the large-scale assets typically are better positioned for brownfield extensions or expansions, particularly if you've got a very large deposit, that gives you much greater scope to expand production down the road or extend production from an original mine plan. And as I said, it's that expansion or extension that really drives the additional value. The quality of the operator, and that's really about ensuring the fact that well-capitalized and well-run operators are better able to continue to invest in sustaining capital or to fund future expansions as well as obviously, a well-run operation is more likely to continue operating. And then finally, location. So where it's located is pretty important for a number of reasons. One is the jurisdictional risk, and we've seen examples recently of operations in higher jurisdictional risk locations having issues with that. But -- so we typically focus on lower-risk jurisdictions, but also the location in terms of access to infrastructure because that, again, really drives the ability to continue operation and the ability to actually attract funds to invest in further expansion or extension. So that's the business model, and I'll talk a little bit about that, how that then reflects in both our current portfolio and our future thinking about further investment. The second part of the business -- the second element of the investment thesis is about our existing portfolio and the fact that we have a mix of high-quality, cash-generating assets as well as some development assets in the portfolio that will support shareholder returns over time. Maybe just to run through, and we talk about this quite a bit, but I think that's because it does bear repeating. We were founded really around a world-class asset in the Mining Area C royalty. The -- if it's not the highest quality royalty in public ownership out there, it's certainly one of the top 3 or 4. So if we think about it in terms of those criteria that I just went through around what really drives quality, it's large. It's the largest iron ore operation in the world. It represents about 9% of global seaborne iron ore trade. It's just recently been through an expansion to take it from 65 million tonnes a year nameplate capacity to 145 million. It's reached that on a nameplate basis in the middle of last year; has further significant optionality. There are a number of deposits that you'll see a map a little bit later that just outlines with some of the other deposits that have been identified by BHP as falling within that royalty area. It's low cost, so at $18 or $19 a tonne, that's obviously a very low-cost operator. Clearly, best quality operator you could ask for in BHP operating. It's a joint ownership with Itochu and Mitsui, well located right in the heart of one of the premier iron ore provinces in the world. And in terms of -- we talk about the royalty term is life of mine, it's a long-life mine. BHP has talked about operations going certainly out to the late 2040s, early 2050s with the potential to go decades beyond that, as I said. So really high-quality core asset in the portfolio, generates a lot of cash for us. I think it's worth perhaps lining that up, and that's what we've done on the slide here against the Thacker Pass royalty, which is a royalty that came in as part of our acquisition of the Trident portfolio last year, still in development. As I said, Jonathan and Luke will be talking to that further. But just to quickly sort of line that up. Again, a very large asset. Recent 43-101 technical report that Lithium Americas put out; had a significant increase in the reserves, making it again a world-scale project; long life, the target development plans potentially as long as 85 years; a lot of optionality in terms of stage development, taking it up to as high as 160,000 tonnes a year. It's low cost based on the guidance LAC has put out. Again, great operator support through Lithium Americas. It's got General Motors having both -- having a project-level interest as well as offtake; and strong support from the U.S. government funding. And again, in a Tier 1 mining jurisdiction in Nevada and the U.S.A. So again, another very high-quality asset that we're adding to the portfolio, still a little bit out from production, but we see real potential in that. This is a new slide that we put in. I thought it's just worth adding this in just to talk a little bit more about optionality and particularly how that can drive long-term value. So Mining Area C royalty is, again, as I said, it's -- to come back to it again, it's, again, a textbook illustration of how royalties can work. So just a bit of history. Mining Area C royalty was really a holdover from an interest that consolidated Gold Fields had in the original Mount Goldsworthy mining joint venture dating back to the mid-'60s. Over time, that interest sort of morphed into sort of a carried interest in Mining Area C that was converted to a royalty in the mid-90s. Turn of the century, no production had been announced. There were no announced plans to develop, and the valuation on that was very low. I think in the demerger -- sorry, the merger booklets between IGC and Westralian stands at somewhere $10 million to $14 million. So some option value, but no real cash value. 2002, BHP announced it was going to start. It was going to develop the North Flank on the royalty area. The original plans were to put in a mine that would have 15 million tonnes a year of capacity by 2011, and it would cost $213 million. In actuality, production actually got up to 55 million tonnes a year by 2011. So again, that production exceeded the original plan. So there was continued investment in further capacity. And the really key point on here is that the royalty holder contribution, it was Iluka at the time, was $0. And in fact, under the nature of the royalty, there was some capacity payments coming back, which are not shown in this chart. More recently, we saw a very similar dynamic with the announcement of South Flank development in 2018 when BHP and Mitsui and Itochu announced that they were going to be developing a second mine on the royalty area in South Flank. And that would add another 80 million tonnes a year of production. Capital costs much higher this time at USD 3.6 billion. And that expansion was essentially begun in '21 and completed in -- completed on a run rate basis by 2024. So again, no contribution from, in this case, Deterra, and we benefit from capacity payments that come back to us. But I guess more importantly, we could benefit from the increase in volume productions that come out. And what's interesting about this chart is it shows that we've chosen this time frame to sort of illustrate the point that between 2015 and 2020, broadly flat production volumes between the sort of the completion of the North Flank development and the beginning of the South Flank development. Clearly, at that point, when your volumes are relatively steady, revenues -- the royalty -- gross revenue royalties are going to be driven by pricing, and you can see that on the chart. We're then going through a period through '21 through '24, where we see that increase in production volumes, which, as I said, you get the benefit of both price and volume. And effectively, what that does is that, that resets the pricing fluctuation at a higher level off a higher base because of the increased production. So in that way, you're getting short-term variation from pricing. Longer term, that's typically driven by volume. So again, the real power of getting that free carry into the extension of the expansion. There's been billions of dollars invested by BHP and its partners in the Mining Area C operation. We generate -- we get the benefit of that. So in terms of the portfolio itself, again, this is a chart that we put out before, but it just shows that we have within the portfolio now, we've got a broader exposure, both geographically across a range of jurisdictions, commodity-wise and stage of development. Notwithstanding that, as we currently stand, we're still very much exposed to Mining Area C, just given the size of it. So from a revenue perspective and from a valuation perspective, we're still heavily weighted towards Mining Area C. And to be clear, we'll talk a little bit more about some of the assets in the portfolio a little bit later. The third element of the investment thesis is about the consistent strategy to add value through the addition of new assets. And just to talk about this in a little more detail. Clearly, within the existing portfolio, we have some important drivers of future optionality. We still have a little bit more growth to come from Mining Area C to the extent that it achieves nameplate capacity on a sustained basis. I've spoken a bit about Thacker Pass, and that's in development at the moment. And then there are some other assets like La Preciosa and Mimbula that also have longer-term optionality. So we have a degree of optionality within the portfolio that balances the cash flow that's coming out of Mining Area C and the gold offtake contracts, which again, we'll talk to a little bit further in a moment. But we also -- the other leg of the strategy is to also continue to add assets to the portfolio that add quality, add optionality and in so doing, bring value growth and earnings, additional earnings, sources of earnings into the portfolio. To be clear, our appetite hasn't changed. This, I think, is consistent with how we've been speaking about investment for quite some time. And in that regard, we have been selective. We have been disciplined. We've been around for 4 years. We've made one major investment, and I'll talk a little bit more about our processes in that regard. But to be clear, when we look at this -- our investment activity, we look at each individual opportunity in its own right. And each one has to be value accretive in its own right. We're not being driven by any kind of desire to get a certain degree of commodity exposure within the portfolio by a particular point in time. We're not looking to add -- we're not looking to deploy a certain amount of capital over time. If we're able to do that successfully, then we believe that there will be some portfolio benefits may accrue to us over time. And that's around the increased optionality that, that brings, scale benefits and diversification benefits. And given the size of the portfolio, we're quite leveraged to portfolio effects. But to be absolutely clear, that is not the objective, that is an outcome of our activity. Each we are focused on value addition each opportunity. I'll talk in a moment about what that means to us. Look, I won't linger on this slide. It's been in our pack in one form or another for a few years now. But just a reminder about the consistency of the strategy and where we're looking for opportunities. We do focus on areas where we think we bring something that's a little bit different. The vast majority of our sector is focused either exclusively or primarily on precious metals. We're not. And so we think that there's a large group of capital chasing, a relatively still large, but relatively smaller proportion of opportunities. We're in that orange zone where there's a smaller number of people chasing what is a relatively larger pool of opportunities. And within that nonprecious sector, we are a substantial player. Again, I won't linger on this. This has been around for quite a while, this slide. No change in our appetite, no change in our focus. Yes, in terms of size, commodities, geography and stage are all pretty consistent. We're looking for opportunities, bulk-based battery and electrification. We're looking in developed mining jurisdictions, and we're looking for assets that are either in production or where we can see a line of sight to production. In terms of where those opportunities are really coming from, we're looking at opportunities to write new instruments that is to act as a source of capital for people looking to fund development. Alternatively, it may be that we can acquire existing royalties from third parties. And then there is a third source, portfolio or M&A. To be clear, that would be opportunistic. And I think, again, needs to be very much a value-driven. Our focus is primarily on new instruments and existing opportunities. So just to cover through this. So we've put out a little bit more detail about how we think about investments and the process we go through to screen. As you can see on the left there, we've just tried to illustrate the way that the pipeline narrows. And to be clear, we see a lot of opportunities. About half of them we can cut out pretty quickly through just an initial screening exercise. And that's generally, that's on the basis of commodity in a commodity, we're not focused on or jurisdictions that are in a jurisdiction we're not comfortable investing in at this point of time. So we can generally sort of screen out about half of those opportunities pretty quickly. We then go through a process of a more detailed but desktop review, one that uses our internal resources, where we'll look at public information or there may be some preliminary information provided by the counterparty. And we'll go through and we'll actually do a bit of work to understand a bit better the risk return trade-off. Again, that's quite a tight screen and typically, a lot of those can be screened out at that point. And then once opportunities do look prospective, that's when we'll go into a detailed diligence exercise. And what that approach really allows us to do is to really make sure that we're able to maintain a low fixed cost overhead. So we maintain enough expertise in-house to be able to do probably those first couple of steps internally. But then once we get to that detailed exercise, we're able to leverage external expertise. We get the right expertise for the right opportunity at the right time. So that's how we sort of approach our diligence exercise. From a valuation perspective, there's no sort of magic in it. We will look at -- typically, we'll start by looking at projected production profiles. We give our investors exposure to commodity price. So typically, we'll be looking at a consensus outlook on pricing. We'll look at discount rates or cost of capital, if you like, that really reflect the unique nature of that project. So we look at the operator, the commodity jurisdiction stage of development, all those sorts of things, take a view on what the right cost of capital for that project is and then look to generate a return something above that. That gives us a good sense of the base value, if you like, of the base case of the project. As I said, a key component of value from royalties is that optionality. So that's where we also focus a lot of effort. And that's really driven by technical analysis of the deposit, what's in the ground because ultimately, that is going to drive what that optionality is. And there's obviously a bit more subjectivity around that, but it's really driven by that technical due diligence. In terms of the metrics we look at very -- as I said, when we look at the cost -- we have a unique cost of capital for each project we look at. Clearly, we're looking to price in a way that generates an IRR in excess of that cost of capital. And typically, what that would mean, again, depending on the nature of the individual opportunity, somewhere in the high single digits or low double digits. We tend to focus on net asset value as a key metric as given the nature of some of our investments, they may be in development or the optionality is an important part of it. Immediate cash flow and immediate EPS metrics don't always capture that. So we tend to focus on net asset value as a key metric. I'll just -- I'm aware that we're running a little short on time. So I'll just wrap up quickly by giving a quick update on the Trident acquisition. As I said, that we announced that deal in June and closed in September. It was an on-strategy countercyclical investment. It was very much value-driven. We saw an opportunity to acquire a portfolio of assets with some assets that we really liked at a price that we felt was below what they were worth. So it was a value-driven investment. Even though it was a public market transaction, we still saw that as driving value. It delivered us some good quality development, near-term development options. It delivered us immediate cash flow from the gold offtakes, and it also brought some longer-dated optionality around some of the assets. Since acquisition, it's continued to perform very well. In fact, it's outperformed certainly our expectations over the period. It's still early days, but it's certainly heading in the right direction at the moment. John and Luke will talk in a moment about where the Thacker Pass project is. But clearly, we've seen that significantly derisked certainly from a funding perspective over the last few months. And we've seen also an increase in the reserve size in that recent technical report I mentioned in January. Gold offtakes are performing beyond expectations in terms of volumes delivered. And clearly, it's a great time to be in gold as a commodity over that period. So those have performed very well. As we say, there is the optionality to divest if the value is compelling. And to be clear, I think we said from the beginning, those assets are noncore. If we see an opportunity to divest those at what we think is an appropriate price, we would certainly take that. And we're sort of exploring all options in that regard. But we're not looking to sell them at any price. So look, I'm conscious that we've got John and Luke on the line. So I ran a little bit over. So we haven't got time to take any questions immediately on that. But as I said, we'll have plenty of time a little bit later to take any questions you may have on this element. So with that, I'll hand over to -- I think we have Luke and Jonathan on the line. So to introduce, so as I said, I'll hand over to Jonathan Evans, who's the President and Chief Executive Officer of Lithium Americas; and Luke Colton, who's the Chief Financial Officer of Lithium Americas, whose flagship development project is the Thacker Pass lithium project in Northern Nevada. So with that, I'll pass over to Jonathan and Luke. Thank you.

Thanks a lot. I'll introduce myself and let Luke do the same. So I'm Jonathan Evans. I'm the CEO and President of Lithium Americas. I've been with the company for 7 years, if I include my Board time. I was an Independent Board Director before coming into management in 2018 in the fall. I'm a chemicals executive. I spent my 40 years with General Electric and their materials businesses, advanced materials and thermoplastics. I've been in pharmaceuticals. I ran FMC's Lithium division as the President for 5 years when lithium was 1/10 of the size that it is today. And if you want to speak about DLE, I've run the only DLE project in the world, which is in Argentina. I was in private equity for 6 years in the chemicals and industrial space, working for both [ Premera, OX ] and the Jordan Company, so [ bolt bracket ] and mid-cap private equity and then, of course, joined Lithium Americas, engineer by training and to the core of an operations person. I turn over to Luke.

Hi, everyone. I'm Luke. I am the CFO of Lithium Americas. I started about a month ago, so I'm fairly new. Career-wise, I got my masters in accounting in the U.S. and worked for Ernst & Young for 4 or 5 years. I then joined Rio Tinto, and I had a variety of roles with Rio over a nearly 20-year period. I won't bore you with all of them, but the 2 that I might just briefly mention, I had about 6 months in Melbourne, helping to negotiate a very large JV agreement between Rio and BHP. We did complete the negotiations, but it didn't make it through regulatory approvals, unfortunately, but I did have 6 months in the lovely city of Melbourne. And I also spent 3 years in Perth, Australia working for Rio Tinto Iron Ore. It was during a period of time where there were major capital projects going on in the Pilbara. Rio was updating its rail, its port. It was building new mines. It was a very dynamic time to be working for Rio Tinto Iron Ore and really enjoyed my time in Perth. I still miss Cottesloe sunsets, one of the best places I've ever lived for sure. But happy to be with Lithium Americas now and excited for the adventure that will be Thacker Pass and excited to be speaking with all of you today. Thanks, John.

All right. I'll start. I hope you can all see the slides, and I think these are probably available to take away from Deterra or we can send them to you. So you can see some -- a lot of activity here. I don't think the pictures really do it justice. We've been busy on site here since March of 2023 and have really started to accelerate starting last fall, and we're in full construction at this point. Just sort of a snapshot of who we are and what this project is about. This project is in Northern Nevada. So from a permitting and regulatory standpoint, the best place and we think in North America. Nevada is, as you all know, and you're familiar with the gold space, is a very large producer of gold, not that far away from us in Battle Mountain in the Elko area, but also to the east of us as well. We have a lot of skilled workforce and a state that knows how to permit and also welcomes us given what we do. We are the largest measured and indicated lithium resource in the world. We -- for 43-101 or SK 1300 in the U.S. or the Australian rules based on our drill results, it's over 1,000 drill holes, all in this small area here, this project area, which looks like a peanut in the southern area of the Caldera. Our reserve is over 14 million tonnes and our resource is approaching measured and indicated over 45 million tonnes. So I've had folks ask us is the larger of the Atacama. Well, what they've measured, it's larger and it's larger than anything else that's being either explored right now or is being in production. We are fully funded. We are closing our last financing up with Orion, who I know quite well, and I think Deterra probably does as well. They are very well versed in this space, actually even working with the U.S. government and the Defense Finance Corp as the U.S. has made critical minerals front and center for this administration strategy. Frankly, it's been -- strategy may be quieter, but in the last administration and certainly in the first Trump administration as well. The main element of the funding stack is the Department of Energy ATBM loan, which is closed at this point. We have no CPs except for to commit and spend the capital in the JV between us and GM before we draw on the loan in the fall of this year. We work even now weekly with the Department of Energy, and it's right in the sights and on the focus of what this administration wants to move forward with the all of the above approach around critical minerals, oil and gas and nuclear. It's a low-cost project. So even in today's pricing environment, we would be cash flow positive. Our OpEx is around $6,200 a tonne, and this is a fully integrated project. So we mine and process all on site. When it leaves the site, it's in a super stack, and that material is bound for a cathode facility in the Midwest, whether that be Ultium facilities with GM that are run by LG and Samsung or it could be PostCO in Canada, or given their agreement now with Hyundai, it could be folks like SK Innovation or EcoPro. So we're already doing qualification now at this point. We're qualifying with 7 different vendors at this point early on. And again, the largest and the only fully permitted asset that's actually fully funded and actually in full construction in North America. We have a long-term offtake agreement. GM is a joint venture partner, and I'll talk about it a little bit more. They are a 38% owner of the JV along with us. They're invested at the top of the company as well. So all told, between cash and cash equivalents, we've invested in the project almost $1 billion. So this is a key part of their strategy for supply chain that they have oversight on to, but now as a joint venture exposure from an accounting standpoint at cost, even though they'll be buying the product through the JV. Our Board and management team -- our management team is composed of folks that are engineers and experienced folks from large companies that came here to build a project and actually operate it. We have a very experienced owners team led by folks from Fluor and Bechtel and Wood and everybody else managing Bechtel themselves. We built this company to actually build and operate. This isn't a resource company that we're out shopping around to try to have somebody buy the company out. This is a serious company that's actually going to have this thing built in production by the end of 2027. We've derisked the project greatly. At this point, we've kept the final engineering going at this point, it's approaching 60%. So this audience is well versed. When you typically take FID on a project, you're at around 1/3 of the engineering done. We're at well over half. And by the end of the year, we'll have almost all the engineering done anywhere from 92% to 95%, which has been super helpful in that we have a high degree of confidence now as costs are coming in and around schedule and around planning, that stream of work was key to keep fully funded and at full pace even as we were starting off construction fairly slow. And this is backed by our technical development center, which is in Reno. We have the process -- basically the entire process circuit has been -- is under one roof. The upfront part of this process, the beneficiation, which is where most questions are tested at scale and that equipment now has all been moved in our 3-story high bay, and we've run several hundred tonnes of ore on the front end at scale. And then the rest of the circuit actually, the chemistry is actually quite simple, especially when you get to sulfate, it's exactly like you would do for spodumene conversion or at the end of it, actually, they all look the same in terms of polishing and other process steps that you would put in there to get battery-grade material at the other end. Our schedule here, it's been a long journey. This resource was discovered by Chevron, actually as MP Materials project was as well. And you can see the milestones over the last several years, whether they be permitting, work with communities, with community benefits agreements, GM's initial investment and then conversion for their second part of the investment to a joint venture-type structure. Our loan closed back in early October of last year. And then after that, shortly after it, the JV closed because the government had to memorialize that and actually it was very credit enhancing from a government risk standpoint. Our reserve and resource estimate, which came out in January of this year. And then finally, the last announcement was the final financing with Orion sponsoring it to ensure the project is fully funded through construction. Good partners here. I spent a lot of time in Washington, D.C. I was there for almost the bulk of last week, well known by leaders in both houses. I was at the White House last week, the Department of Interior, Department of Energy were a project that was permanent during the Trump administration and that was purposeful. I can say that now publicly. We were defended and helped by the Biden administration as well as the strategy around reshoring and domestic minerals was also important to the Biden administration. And now with the new administration coming in, critical minerals is associated and equal with oil and gas. So we're in a very friendly environment for us to continue to move forward. As I mentioned GM, the only OEM that I know that has put this kind of money and support into a project directly. They spent a lot of time derisking their supply chain well beyond lithium and nickel. They have two investments in graphite, both synthetic and naturally occurring in semiconductors with GlobalFoundries. They have -- with magnets and with rare earths with MP materials. So amongst the OEMs, they put their money where their mouth is as they know this is a long journey to set up success to have the supply chains to be able to grow in an industry that's going to continue to evolve over the next 10 years in an environment now which is very unstable and becoming very political between one part of the world and the other. And then finally, Orion. We had several investors that were interested in us, the process itself was lengthy and that we had to finish certain things before we could actually close off on this, namely the JV, the loan close and the JV close, and then we pivoted to the final financing. And Orion was, by far, the best partner. I think they're quite familiar in this space. They knew what they were looking at. They actually also work with the U.S. government, and we're excited to be partners with them and they're excited to be partners with us. As I mentioned before, a lot of derisking done. Our workforce hub is going up right now. That's, of course, the housing for the workforce. We're not in the Pilbara, and we're not in Northwest Argentina, the Andes Mountains, but still we'll be employing up to 1,800 people at peak here. So we will provide housing, meals and busing to site. It's located right off I-80 in Winnamocka, and it's about 40-minute bus ride to site. So it's actually well suited with good infrastructure around it. Our excavation is essentially complete. Blasting has been done. We -- our batch plants on site. We'll be starting to pour concrete in May. All of our long lead time equipment has been ordered. And we've committed at this point, several hundred million dollars between long lead time equipment and equipment in general in terms of commitments and money spent to ensure our time line is kept to schedule, plus also we derisked on pricing in some cases. And then as I mentioned, detailed engineering, that number continues to tick up quickly, and we'll be having that essentially complete by the end of the year, this year, too, which is the way you want to do a project that's not -- you don't move engineering and construction at the same time. About 25% of the project will be done, and we'll have 100% of the engineering done. So there's no more questions or risks at that point. Just some pictures to give you some idea of what's been done, and it's hard to capture this. You can see these things from space now in terms of the amount of excavation that's been done, what's been set up on site, all utilities, water, fencing, all the plant pads, our set media piles. The mine has started the excavation. And you can see the bottom right, the workforce hub, the peers. We have all the housing units on site where those are being placed actually now. I'll actually be next week with the Governor of Nevada along with our Congressman at this at an event next week because they want to come out and actually and see it. And also, of course, as a press out for them, just given critical minerals is so important to government policy at this point. Our process, because we get lots of questions on this. Yes, it's the first clay process. And this is something -- the first thing I'll say is I don't think there's been any company that's done due diligence more than us. I think that it's clear that you have an OEM that's made a direct investment who's a pretty conservative company. You name me a battery company and they've been out. I think we're out of engineering companies that we can use actually to come in. There hasn't been no red flags that have been raised. And frankly, look, I have a lot of experience in this sector, both in brine, and I know Hard Rock pretty well. Every project is different. Every flow sheet is somewhat different. What we have here is essentially steps 2 through 5 are practiced every single day and actually step 1 is practiced every single day in the phosphate industry. So nothing that we're putting in here is different or not off the shelf. There's no equipment that's sized here that isn't in operation around the world in multiple quantities. What we do on the chemical process side, where most of the CapEx is practiced every single day, whether it's done in Chile, whether it's done in Argentina, whether it's done in China or even in the U.S., to some degree, for lithium hydroxide for both Albemarle and I guess, Rio Tinto Lithium now, there's nothing new here. The ore body is different, but that's why the cost is lower is that unlike spodumene, I don't need to blast, I don't need to crush, I don't need a flotation, and I also don't need to calcine. We essentially put it into a slurry, and the ore is loose and friable in your hands, and it's basically particle size separation. We have lithium up to 1% by weight in some cases. So it's a very rich deposit. Our mining CapEx is extremely low. It's about $60 million for a project that's close to $3 billion. So it's actually a fairly simple process. And I would point to, again, lots of folks, well, this hasn't been done before. Well, the nickel industry said that as well about Indonesia for the laterite deposit, which has killed the nickel industry. They figured it out. There's been several mines shut down now because they figured that out. It's a little lower grade deposit, but the mining is extremely easy. And the processing, they figured it out. China doesn't have the world on this stuff. If you put the right engineers together, we spent several years putting this together and spent about $10 million putting together a pilot plan for this as well. And we've been through everybody. Tesla, you name it. They've been through this site. So GM was the fastest and the first, and we're happy to have them as a partner because they share the same long-term vision that we have is that there are domestic resources available in North America. Just like any other project, Australia and the U.S. very much alike in Canada. The upfront CapEx costs here compared to the past for this industry are higher than people think, and the size of these projects is much larger than in the past. I mean my history, 10,000 to 20,000 tonnes was a lot for a plant. Now anything less than 40,000 tonnes is considered small. So your CapEx for these types of projects runs anywhere from $2 billion to $4 billion at the end of the day. And that's actually the cost for something like this. It's -- Australia is the same. Even Argentina, when you look at companies like POSCO, came out and they want to put up to 100,000 tonnes in Argentina, and they said they think it's going to cost them at least $4 billion. That's the real cost. So I've seen lots of feasibility studies, $500 million, $600 million run because that's not the real number. And the guy who ends up buying it and ends up building it at the end of the day is going to find that out. OpEx-wise and cost curve-wise, you can see where we sit. What we've done here is put the full potential with our feasibility study. We have the ability here to make up to 160,000 tonnes a year with 5 phases. The first phase, of course, is 40,000 tonnes. On a C3 basis, you can see both life of mine and also years 1 through 25. I mean we can high grade for the first 25 years easily. We can actually do it longer than that, given the deposit is so high quality. Where we are today from a pricing environment, we'd still be cash flow positive. I don't think price is going to stay there, and we can talk about why. But I know the industry pretty well. I know what CATL has done. It's had the same impact in Australia and even Argentina, whereas a lot of people are shutting down and shelving and this thing will end up popping. Don't believe it will go back to $80,000 a tonne, doesn't need to. $20,000 to $30,000 a tonne offers a good enough IRR for folks to get back into the business again and actually start putting good projects in place. What this typically tends to do now is the projects that aren't economic, especially in this pricing environment, aren't going to get funded because no one is going to talk about $80,000 a tonne now. Now they're going to talk about what happened in the last 3 years when they look at projects and economics. Our reagents is the largest part of our costs. Those are all domestically sourced or can be sourced from Canada easily. The lowest cost naturally occurring soda ash deposit runs by rail right by our transloading facility in Winnamocka on its way to South America. We make limestone on our own with our own quarry. Liquid sulfur comes from the Gulf Coast, Midwest and can come from Western Canada as an alternative as well. Management team here. You met Luke, myself, a couple of other people to highlight on our Board. So Kelvin Juszinski, well known in the space, former President of Barrick. He ran AngloGold as well, World Gold Council member. So he knows this business. Also, Kelvin's known very well in the government communities as well, but a very skilled executive, long time in the natural resource sector. Phil Montgomery, who is a Director and Chair of our Technical Committee. Phil is the past Head of BHP's capital projects and Bill Jansen and several other projects. So some real knowledge on our Board and oversight. So a couple with Richard Gersbasher. Richard, we recruited from Fluor. I think he was actually in Australia at the time as one engineering company was kicked out and Fluor was brought in on a major lithium project to get it back on track again, but intentionally hired somebody from the other side of the table who's done this and built mega projects around the world. Richard actually helped get our Argentina project done. He speaks fluent Spanish, spent several years in Chile. He's been in Indonesia, has been in Asia, Australia and has built power projects in the U.S. and has built an excellent owners team with folks that have qualifications like him to manage our partner, Bechtel, who's the EPCM of the project. This year, so this is key for us. It's probably key for everybody, but this is a slide that's relatively new. And this is something that we think is very important and the importance of U.S. of national and economic security. I'm an American. I'm in the U.S. Obviously, Department of Defense spends a lot of money on this, not only for radios, communications, but for submarines, drones, jets, tactical gear. There's a whole variety of different things. It's the reason why it's a critical mineral in the U.S. and why it's gotten so much focus in addition to copper, nickel, cobalt, rare earths and others. And this is something that resonates, and there's a lot of development that's going on in the U.S. around batteries in general. And I think privately, if you speak to U.S. legislators, which I do, they view batteries as very strategic. EVs gets compounded in the election that happened. But at the end of the day, there's a real agreement around the Board here that we need to have the ability to make our own batteries in this country, too, not 100%, but we need to have the raw materials and the know-how is already here. For us now, it's going to be moving forward to draw in September and at that point, moving forward at pace. This year, we'll spend about $1 billion in capital. We'll be completing the project mechanical handover by commissioning by unit and starting the plant up by the end of 2027. We have a 1-year ramp-up to full production, and then we'll be basically in full production and probably thinking about Phase 2 depending upon how market conditions are. But excited that it's been a long process in an industry that's challenged, I think, with a difficult environment and especially now getting private capital off the sidelines. It's been a tough journey, but we feel proud to do it. And I think as we're in the middle of construction, the industry is going to turn around, and we'll have the benefit of that. You've got to build through the cycle in these industries. Otherwise, you cause problems like we had a few years ago where pricing spiked up to ridiculous levels and a lot of folks that had no business being in this industry all hung their shingle out, and there was a lot of capital that was wasted. And that's all I've got.

Thank you very much, John and Luke. And we've got a few minutes for questions if we've got any questions in the room. So John, you touched on it. One of the questions we feel a lot here is just where the Trump 2.0 administration is at with the loans that have been either closed, in your instance, or in fact, there's a lot of letters of intent that we see here in the Australian market. Perhaps you could just give us a bit of color. You touched on the fact that the LAC loan is closed and ready to draw. But just some of the conversations you've had around that and the confidence that you have in that funding.

Look, there are actually not that many loans that have been closed. There's a real distinction. And I think closed without major conditions. So we were given no quarter with the government. Our closing process took 7 months. So it wasn't something that was pulled across the line between the election and the inauguration. The loan closed itself with an obligation. It's actually a legal obligation the government has throughout this whole process. There's no politics involved in drawing. It's all very mechanical. We speak every week to the DOE. We have to give them monthly reports on spend, on safety and all the other things that any lien holder would have. We're already doing a dry run at this point to draw with them. And essentially, what it is, is once they certify that we've spent to commit the capital, an order goes to the federal credit bank to move the funds to Citibank and we draw. So there's no politics involved. I don't go back to ONB or treasury. And look, I spend a lot of time in Washington, probably too much. It's been helpful with both sides of the aisle, but our project and what we do is a center focus of this administration. I mean critical minerals, it comes up almost every single day. There's rumors about another executive order, some of it, I'm not quite sure is real or not about building stuff on military reservations. But for sure, the environment from us from a regulatory and from a government support standpoint is very overt and open. I mean I was at a conference last week with 3 very senior senators that have permit reform very high on their list from Utah and from Alaska. And also the moderator was Senator Scott from Florida, very powerful guys. I was the only industrial representative in their whole panel and actually the only industrial guy that whole day. And it was really around how important it is that we support not only what we do, but permanent reform in general in the U.S. is around pipelines, it's around building plants and so forth. So we have no worry. And in fact, the EOs are being -- are very clear in that what we do, as opposed to, say, charging stations and other things, is right what the government wants us to do. So actually, in some respects, it's made it a little bit easier for us than it was in the past where like there's no questions in here that you're going to ask me. Nobody asked me any questions around Scope 1, Scope 2 emissions, Irma, tribal relations, any of those types of things because at the end of the day, you're all investors. So you're not going to invest in a project where you don't get a good economic return. And the government's view very overtly actually is that directly now as opposed to some of the other stuff, which has been removed and was a barrier in some cases for projects where NGOs got involved and wanted to slow folks down, which lots of Australian companies operating in the U.S., which gets stuck in that in Canada as well. I think a lot of those barriers have been basically flattened by the current administration. So actually, I feel bullish, to be honest with you.

Well, Luke and John, thank you very much for your time. Much appreciated. Great to see the progress at Thacker Pass, and congratulations on the progress to date, and we wish you well for the future.

Take care. Bye-bye. Thanks very much.

Okay. The next section, we are going to talk about our key assets, and it's going to be a team effort. I'll talk a bit about MAC, and then Adam Davidson is going to talk a little bit more about Thacker Pass and its ownership through Trident and Deterra, and Ty is going to talk about some of our other development assets, and I'll touch on offtakes as well. So everybody is very familiar with MAC. What I'll do is I'll just touch on the new material that we have in the presentation. Everybody is familiar with MAC. What we've done on this slide is just lay out some of our future revenue opportunities from the Mining Area C royalty. Firstly, in terms of capacity payments, you can see at the bottom left there, the blue bars represent the capacity payments that have come from Mining Area C. And just for those who perhaps aren't as familiar, a bit of a refresh, Deterra receives a one-off payment of $1 million every time Mining Area C has production of 1 million dry metric tonnes per annum that is over and above the previous 12-month high watermark. So in 2023, Mining Area C produced 118 million dry metric tonnes at 145 million wet metric tonnes, which is the capacity of the plant. When you take out the moisture, that represents about another $17 million worth of one-off payments that we would receive as they move through to full production capacity. In terms of the timing of those receipts, whether or not BHP hit that production this year or over the coming years, we'll see in due course. Then in terms of the ongoing gross revenue royalty of 1.232%, we've put a table there that just gives you some sensitivities. The pricing that we've used is not the 62% index price. It is the BHP realized price. For reference, the -- in 1 half '25, BHP's realized price was USD 81 per wet tonne. That's dry tonnes there just to make the calculation a little bit easier. And again, for reference, the gross royalty revenue that Deterra received from MAC in 1 half '25 was $104 million. So you can see and choose your pricing and your FX view, and you can see what that would represent in terms of an annual revenue to Deterra. Finally, I get asked a lot about Deterra share price. And just to give one lens to that is that the consensus NAV for MAC on a stand-alone basis is $2.6 billion. So you can do the math yourself. That ends up as a sort of NAV per share on a MAC stand-alone basis in the high 4s. And again, just reinforces what Julian was saying about the power of MAC and where we really see some of the value in that asset. With that, I'll hand over to Adam to talk about Thacker Pass.

There we go. Hopefully, everybody can hear me. So obviously, John covered off Thacker Pass in some detail, so I won't speak to the asset, but I think it's worth touching on the royalty instrument itself and kind of what the economics and outlook is for Deterra specifically. So the quick headline on the Thacker Pass royalty, it's an 8% gross revenue royalty. 60% of that is attributable to Deterra. And then you'll note there that there's a partial buyback that LAC can execute. All the previous studies have assumed that they would do so just prior to first production. Otherwise, 8% is a pretty egregious royalty rate. So upon execution of that partial buyback, we'd see the royalty step down to a 1.05% gross revenue royalty attributable to Deterra and USD 13.2 million come back to Deterra as part of that buyback. And important to note that, that royalty is untapped life of mine, has an area of interest around the project, such that if the project area grows, the royalty grows naturally with it. So really high-quality instrument in that regard. But actually, the most important thing, I think, on this slide is the milestones. It kind of goes back to what Julian was speaking about earlier with regards to the royalty model in that these are effectively derivative style instruments. So any growth in the underlying asset at no incremental cost to us as a royalty holder, we get the benefit from that growth. I think Thacker Pass royalty is a sort of perfect poster child for that kind of growth. In 2021, the royalty was acquired by Trident. At that time, it was a Stage 1, Stage 2 project of 30,000 and then ultimately 60,000 tonnes per year. Within that same year, it increased by 33%, which again goes sort of straight to our bottom line, increase to the 40,000, 80,000 tonne a year that you see today. And then there are quite a few sort of qualitative benefits along the way. We saw General Motors equity investment up to $650 million. The first tranche of that was released and then the record of decision was upheld. That was sort of the final key federal permitting hurdle. And then early last year, obviously, John mentioned the Department of Energy loan, $2.26 billion. But that's carried on even post acquisition of Trident. So Trident was acquired in September last year. In October, we saw that DOE loan closed, which locked in that funding. And then we saw the restructure of the GM JV, which will ultimately lead to them putting in $945 million. So I think that's the largest investment by an automaker into a mining project directly. And then with Orion stepping in on the final bit of funding, it kind of have as good a blue chip backing as you can get from a project perspective. But I think actually the most exciting milestone was probably in January of this year when LAC updated its 43-101. As John mentioned, it's now the largest global lithium resource and reserve. They doubled the planned mine life from 40 years to 85 years and also increased the production profile such that the project through various stages grows up to 160,000 tonnes of annual production. I think the exciting thing is, obviously, this is a world-class project, both with regards to scale of resource, scale of production, but it's also very tangible. I think in their most recent release, they flagged first concrete being poured next quarter. Plant commissioning is going to be Q2 2026 and then first production in 2027. And then from there, the asset is going to operate for the better part of a century and has plenty of scope to extend beyond that. And then just flipping to the next slide. Just in the interest of time, I won't linger on this too long other than to just flag the economics of the royalty itself. You can see that table there, pick your poison with regards to lithium price. But I think a couple of things to flag. One is this is the anticipated royalty revenue at Stage 1 only. You can quadruple that as additional stages come online. And the other thing to note, and John touched on it briefly in his presentation is lithium is obviously a growing sector, as everybody is aware. I think, rough demand last year was about 1 million tonnes, anticipated consensus demand by the end of the decade, which doesn't feel that far away, is about 3 million tonnes, and it's anticipated to continue to grow from there. When you get sort of these growth commodities, there's a lot of volatility. We've all witnessed that a lot of peaks and quite a few troughs. We're sitting at a trough at the moment. I don't anticipate it going back to 80,000 tonnes and staying there sustainably. But with the royalty being a very derivative style instrument, we are best positioned to capitalize off those peaks. But if it does get back up to [ 40 50 ] before coming off again. With Thacker Pass rolling into production within the next couple of years and that style of exposure, you're sort of perfectly positioned over its 85-year life to capitalize on some of those sort of heavy markets. And then it's a high-quality Tier 1 asset such that in the trough, as John said. From an ASIC perspective, it's well positioned to weather those sort of periods of time. So I think that's why we're so excited about this asset. It really does stack up well. It will take some time to develop, but it stacks up well relative to Mining Area C. And I think we'll complement it nicely as it continues to be appreciated by the market and the asset advances further. With that, Jason, I'll hand it back to you.

Thanks, Adam. So Julian mentioned that the gold offtakes are noncore and potentially divestible for the right price. They are important to us, though. And so I just want to spend some time giving you a little bit more detail around those offtakes. So in terms of -- since they've been under Deterra's ownership, we have a book value when they came on to our books of AUD 86 million. And in the first 4 months of our ownership, they've generated $7 million. So they're certainly generating more than we expected that they would. We're very pleased with them. You can see on the right-hand side that in calendar year 2024, 306,000 ounces were delivered under the offtakes. And in 2005 calendar year, 2025 calendar year, we're expecting 293,000 ounces to come through. Now that drop is predominantly related to Victoria Gold Eagle mine in Canada, which in 2024 had a fairly catastrophic heap leach pad failure. And so that mine is in suspension at the moment. So we're not anticipating getting any ounces from that operation. Now on this slide, we've laid out a lot more detail around the offtakes, the caps under each offtake, the ounces that have been delivered through the life of that offtake through to December 2024 and then the ounces that were delivered in the 12 months through to December 2024. I'll leave you to work through the level of detail that you want to in terms of each offtake. But important to know, if you look at the right-hand side of that slide, that when we look at the Equinox and the I-80 assets that they have about 1.2 million ounces to be delivered under those offtakes, and they will actually, at the current run rate, take through towards the end of this decade for those to actually deliver into those offtakes. Bonikro delivered 46-odd thousand ounces in calendar 2024. Now there's actually no cap and no time limit. The current mine plan has that mine ceasing in 2029. However, Allied are actually contemplating extending that mine life as well. So that's something that we'll continue to watch. Blyvoor is obviously a very significant offtake for us. They have not delivered material ounces into that offtake yet. And really, the key catalyst for them is completing a SPAC capital raise and listing in the U.S. that they're currently undertaking. They're seeking at least $50 million, and they need that capital to then undertake an extension and expansion of that Blyvoor operation in South Africa. Even when that happens, then we would expect to start to see more material deliveries under that offtake. And then stepping out of the operating mines, I touched on Eagle, and we see option value there that could come back online at some stage. And then obviously, Vault's Sugar zone deposit, which a lot of people here are familiar with. Again, probably a little bit more than option value. They're making some progress with their planning around that. But as and when they come online, that's when we would anticipate deliveries to start occurring under that offtake. Now I'll pass you over to Ty, who's going to take you through some of the other assets in the portfolio.

Thank you, Jason. So the Mining Area C has obviously been touched on in a fairly high level of detail already. So I won't rehash that other than just to read the potential impact of the capacity payments there as well as obviously just the impact of the higher royalty volumes expected as BHP maintains a steady state production at the 145 million tonne per year. Thacker Pass, John and Adam have obviously gone through that in a good level of detail. Again, just to reiterate, that contingent payment, which is effectively a buyback, and in all scenarios will be exercised. So I think we take a very high level of confidence that will be exercised. And frankly, if it doesn't, it's an 8% gross revenue royalty. So we'll take that as well, but that will be bought back. Stepping down to perhaps some of the smaller assets in the portfolio that probably don't get quite as much attention, but do drive a reasonable amount of value in the sort of short to medium term. I think our La Preciosa silver royalty, Preciosa is operated by Avino. It's a relatively high-grade underground mine in Mexico. That's basically just signed the last of its required landholder permits that's needed for development. So Avino just, last quarter, has come out and said that they're expecting development works to kick off immediately with those landhold agreements signed off and expecting first production from that asset in the second half of this calendar year. And from our perspective, the materiality of that largely relates to the $8.75 million payment that's due within 12 months of first silver from Preciosa. So we expect that some half in calendar year next year. That also then triggers a small payment on our half to the original vendors of the royalty, which is coal mining. So net of $7.75 million inflow to us. And I think more generally as well, what we sort of end up with there is a nice silver royalty over a producing mine. Preciosa is effectively a large satellite deposit to what is an existing processing plant that's been operated by Avino for a long period of time. And at that point, we've got a nice material silver royalty that's just sitting there plugging away. And as many in this room will know, precious metals royalties obviously have a high value attached to them in the market. So to be able to sit on a nice silver royalty like that is quite attractive to us. Antler is an interesting one that is being operated by ASX listed New World, just recently went out and raised another $14 million just over the last few days. It's a copper zinc project, polymetallic project in Arizona that's moving through the state and federal permitting process at the moment. So state permits are expected to be granted over the rest of this year and into Q1 of next year. Federal process is running in parallel. And that's expected to lead to an FID decision in Q1 of next year. And from our perspective, there's a couple of interesting aspects to that one. So there is a buyback as part of that royalty. So there is the opportunity for them to buy that down, which would result in a AUD 9 million payment on the sort of the core royalty. And then there's also a broader area of interest royalty that contains a separate buyback provision. So if all of the buybacks are exercised independently, that's AUD 13 million that would come back to us in total. But more broadly, I think you've heard a bit today from John about the importance of U.S. domestic production and the focus on that. And I think that's a really nice example of a project that is starting to get quite a lot of traction. We've seen in Arizona in that part of the world, another sort of project that's a little bit further advanced, but has recently attracted a reasonably big investment from Royal Gold in terms of Royal buying a bigger royalty that was sitting over that project, paying USD 55 million in cash to get exposure to that asset. And we've also seen Hudbay come on to the register of that business as well. So that's Arizona [ Sorin, ] TSX listed. So we're starting to see a lot of that North American flavor coming into that market, and we think [indiscernible] is well positioned to benefit from that as it moves forward within the current Trump administration focus on domestic supply, et cetera. So we think that's a nice looking project. Our instrument there allows us to have quite a lot of involvement in that process as it moves forward. We've got various rights of first refusals, rights of first offers, matching rights, et cetera, to essentially anything that they do with royalty streams, prepays, offtakes going forward. So it just gives us a nice amount of flexibility and optionality just to watch as that develops. And if there's an opportune time there to sort of get involved in a more material way, then we have the ability to do that. And in the same vein, there's Adler, copper. So Mimbula is in Zambia. It's been producing for probably 4 years now. So we first invested in that back in 2021 as Trident. I think it was our second investment. It was really funding working capital as they were ramping up towards 10,000 tonnes a year. As you can see now, they're moving up towards 56,000 tonnes as part of a Phase 2 expansion, which is going quite well. I think it's taken a little bit longer than they would have liked just as they work through COVID, et cetera. But the management team there is quite strong, very good ability to raise capital even as a private business. So that's developing nicely. And you'll see there that, that's a 5x expansion on when we first invested as Trident and is really starting to stretch now, and there's still potential further expansions there as well. So I think just to sort of summarize and just to be clear, this is just a small sort of subset of a number of the assets within the Deterra portfolio that came across with Trident. But obviously, Mining Area C and to a certain extent, Thacker Pass will be the sort of material drivers in the short term. But just to highlight that, within the rest of the portfolio, there is a significant amount of optionality. I think the way we think about these things is within the development pipeline, as things move from left to right, closer to production, that's where you get a lot of the genuine sort of value growth throughout these royalties, very few royalties are bought producing royalties and generate substantial value on day 1. So we see a lot of value as these assets move from left to right. And over time, I think we'll see that they will become more material in the pipeline, and they will provide a bit of that diversification, et cetera, as Julian says, we see that more as an outcome of what's within the existing portfolio as much as anything as opposed to an input or a target. With that, I think we're ready for Q&A, but I'll throw that to Jason.

Yes. Thanks, Ty. You might want to stand up. I think we have to stand up to -- but any questions on the assets that we've just covered or, in fact, Julian's introduction? You're a very compliant. I know we've got one down the back. We'll just get a microphone for you.

I think it was an excellent initiative to get LAC to speak to us all. Thank you very much for that, and we all learned a lot. Julian spoke about cost of capital several times. Can you -- and I ask always royalty companies, what is their cost of capital? And I'll ask you the same.

You might want to answer that, Julian, but I think you need to stand up, too.

Yes. So I talked about cost of capital in the context of when we look at further investment opportunities. And in that regard, I just want to be very clear that we take a ground-up approach. So we will look at each opportunity and say, what's the nature of that investment? Where's it located? What's the commodity? All of those sort of factors and say, what's the cost of capital to invest in that and then we look to price to drive a margin. And the reason why I emphasize that is because we are very conscious that in -- with the Mining Area C asset and the cash flows that it generates, we do have -- we have a very bankable asset, if you like. So our cost of capital is relatively low. And we're not looking to be clear, we don't use that cost of capital to subsidize investments. So we're not using that as a threshold to assess investments. We look at them on a unique basis. In terms of our cost of capital that we drive off primarily off the back of Mining Area C, certainly, in terms of the debt facilities that we have in place, we have a series of revolvers that have an average margin of 1.35...

1.35%. Yes. BBSY.

1.35%, 135 points over BBSY. So that's about, I think, at the moment, what is that, about 5%?

Yes, it will come in about sort of 5.6%, something like that.

So I just want to ask about that portion of the work, the technical work that you sub out to others, right? If you're looking at a new project, is that about sort of sending in a bunch of engineers to understand the technical risks about whether this mining operation is going to deliver, et cetera? What -- so I just really want to understand what that work is and what -- and how detailed it is to give you confidence about your potential investment?

Yes. So again, it's a little bit different with each project just depending on where it is in its development stage. But as I said, we tend to focus towards the sort of the right-hand half of the development spectrum. So typically, when we're looking at opportunities, they have mine plans, they have studies in place. So the starting point for us always is the mine plan that's in the study. So our diligence is very much focused on testing that mine plan and digging into it and saying to what extent, what are the risks in that mine plan? Is it going to produce? When is it going to start up? What is the ramp-up profile likely to look like? That's all at the front end. And then I guess the other element of it is at the back end of that development plan, what's the capacity for this deposit to support more than that if the economics warranted at the time. So it is a detailed review. As I said, depending on the stage of our review, it might be a red flags type review, what are the issues associated with this. But once we get to the point where we're looking to actually commit to put in something, some form of binding bid, clearly, we'll have done a lot of work at quite a degree of detail. We'll have people visit sites to take a look. We'll obviously spend quite a bit of time interacting with the technical advisers that the developer has as well or their internal resources. But it's about really testing that development plan. And then as I said, thinking about the deposit, what else could it support with the economics warrant.

Can I ask specifically with Thacker Pass because it is a different technology. And so many of us have been around for a while. We're all scarred by clay-based projects because separation can be difficult with slums, et cetera. So what was done, and maybe it's a question for Ty is how did you get comfortable about the technical risks about trying to deal with a clay-based separation or clay-based deposit.

So Ty, you might want to start and I can add any further thoughts from our perspective. So...

Yes, sure. So I can talk to it from the Trident perspective, at least when we made the initial acquisition. So look, I think we recognize that, that was a risk. I think we did the site visits. We got the technical consultants. And as John said, you can exhaust every engineer out there and nobody has a specific red flag that they can point to. I think I'm a metallurgist by background, so I fully appreciate the sort of the clay commentary and context. We went through the process. We got in-house people. We -- for that particular one, we're able to talk to the company directly as well, which isn't always the case for secondary royalty acquisitions. Quite often, you don't actually have access to the people directly. So we're able to do that through, again, external consultants, some internal know-how. But I think alongside the technical, I think the way we sort of try to think about things is a bit more holistically as well is we can see that it was a significant project of scale in the U.S. that was probably going to enjoy some government backing as well as good support from others. So whilst we need to make sure that technically, the thing will work within reason. I think we also put quite a lot of value on the potential access to capital to support a ramp-up if things do go a bit sideways because from a pure royalty perspective, on an 85-year asset, if it's delayed by a quarter or 2, frankly, it doesn't matter that much to the NAV. There's short-term impacts, but from a pure IRR NAV perspective, it doesn't matter that much. So we put quite a lot of weight in LAC's ability to raise capital. The day after the record decision came out. I think that when that raised USD 500 million or USD 400 million almost immediately. So we were able to look at that and say we've got good access to capital. The science to the extent that we can, seems to stack up. The piloting, I think, for 2 years or something at that point then after 3 or 4 years of sort of consistent piloting where piloted the entire flow sheet from beneficiation, which, as you say, is definitely one of the risk areas right through the technical sort of chemical back end, which is a bit more widely produced, I think, versus some of the upfront beneficiation of clays. So I think it's a bit of a mosaic approach. We get as much technical as we can internally, externally, overlay that with other qualitative sort of financial aspects. Do we think they can survive a downturn? Do they have a register that's strong enough to back them? Do they have the support from government, autos, et cetera, to be able to push through because there will be delays. It's just inevitable. These things will always be delayed. It will be slower to come in than Lithium Americas think. But again, we sort of step back and look at that sort of objectively from a qualitative royalty perspective and to see that they should have the capacity to be able to weather any sort of any unexpected delays. And I think that's where the value of having GM in at the asset level, the DOE funding, et cetera, gives us a lot of confidence that even if the technical doesn't end up being quite as straightforward as they hope, there's easily enough sort of liquidity there to manage that through. And from a royalty perspective, that's what we really care about.

And I think just to add to that, I think as John said, they've been diligent. I think that project has been diligenced a lot by a lot of different parties. And they have been running the test facility in Reno for several years now, and I had the chance to go there in December. They took me through that as well as through the site. But -- and Ty's point is an excellent one around the nature of our interest really insulates us from any capital cost overruns. It insulates us from operating margin pressures. As long as it gets built and it's producing, we're going to generate revenue. And to the extent that the ramp-up profile in our diligence, obviously, we look at a lot of different ramp-up profiles. We -- it's a time we were looking at a 40-year project plan. They're now talking about potentially twice that. Yes, as Ty said, if we -- if things are a little bit rocky to start with, that's unfortunate, but it doesn't really affect the fundamental economics of the investment.

Okay. Well, time for a quick cup of tea, and then we'll come back in here and talk about capital management. Thanks. [Break]

Okay. Welcome back, everybody. And now for the session that you've really all been waiting for, capital management. So this is the slide that we put up at the first half '25 results. And so just to recap, as you're aware, we declared a fully franked dividend of $0.09 per share. That represented a payout ratio of 75% of NPAT. We also said that going forward, that while we have debt outstanding, one-off receipts would be used to pay down that debt and excluded from NPAT when considering the dividend. So those one-offs, for example, include obviously the MAC capacity payments, the potential buyback from Thacker Pass and some of those other contingent receipts that Ty mentioned. Now just an accounting point on contingent receipts, and I've put a footnote on the following slide that when we receive a contingent receipt in our profit and loss account, there will be an equivalent -- a roughly equivalent amount of depreciation that goes against that as well. And the reason for that is that as we've brought the Trident assets onto our books and booked an accounting value for those assets, part of that accounting value actually represents that contingent receipt as well. So when we recognize the revenue, the asset component of that revenue will also move out into the P&L. So there won't be a material NPAT impact from those contingent receipts when we actually receive them. I'm happy to take people through that in more detail after this session. So moving on to the next page, I just want to spend some time talking through our capital management levers. And the first point to note is that at the top left of that slide that we have about $300 million worth of drawn debt. Now importantly, all of that drawn debt is from our revolving credit facilities. And the nature of those revolvers is that there's no fixed amortization schedule to repay that debt. So it's at our discretion when we actually pay that. So to the extent that we pay them down from the one-off receipts that you can see over in the right or from the NPAT that we don't pay out as dividends, we can pay that down at our discretion. Or alternatively, it's open to us to hold that debt and roll it at maturity as long as, obviously, we're within our banking covenants, which, as I said at the first half and you'll see on the next slide, we're very comfortably within our banking covenants, and we retain a very strong balance sheet. So we don't have a fixed time frame to pay off our debt. We've got a strong balance sheet. As Julian has noted that the debt cost is BBSY plus about 135 points. So it's really well priced. Earnings from the gold offtakes, as I've mentioned before, covered the servicing cost of the debt in the first half. So the key message there is that we're under no pressure, and there's no immediate urgency to be rapidly paying down that debt if we choose not to. That said, clearly, our capital management framework supports our business model and also our investment strategy. And so it needs to maintain that flexibility to provide funding even and when we find a compelling investment opportunity. And just a point to note here and to reinforce what Julian said before, our risk appetite hasn't changed since the Trident acquisition. That was the first investment that we made within 4 years as a listed business. And so to be clear, that's not guidance that we'll wait necessarily for another 4 years to make an investment. It's just simply to emphasize we're patient. We'll wait for that right opportunity, and we'll be ready to execute if and when a compelling opportunity actually presents. So if we were to see a compelling investment opportunity, then in terms of our ability to fund that, obviously, we've got an additional circa $200 million headroom in the revolving credit facilities that we have. But clearly, if we drew that today, we'd push through our target leverage ratio of 0% to 15%. Now we've always said that it is an option for the right investment that we would go past that 15%, but we've also been clear that if we were to do that, we would look to bring our debt levels down to within that 15% ratio fairly promptly after that. Equity is obviously also another capital management lever. Clearly, we chose not to use equity when we did the Trident transaction. A couple of the reasons for that was that the quantum was well within our debt facilities. It was a cross-border transaction. So using our equity was going to increase the cost and the complexity of that transaction. And that was at a time where our share price was in the mid-$4 as well. So to be clear, I don't want people to conclude or take away that we would only issue equity at a certain price. The key messages from the capital management framework are that, firstly, we've got a really strong balance sheet, and we've got no need to raise equity to further strengthen that. But secondly, for the right investment for really exceptional opportunities, we've got a range of options that will allow us to optimize our capital management structure, just depending on what the nature of that investment is and what the circumstances and the environment of that time might be. And so all of those are factored into the decisions at the time as to which levers of that capital management framework we would look to use at that particular point in time. So the final slide here is one that we saw at the first half, and again, just emphasizes the strength of the balance sheet. Obviously, we have a maturity there coming in second half 2026. And as I mentioned, the nature of the revolvers is that we either pay that down or we roll and extend that when we come to that time frame. And you can see that we're well within our covenants, as I mentioned. So that's all I wanted to talk about on capital management, but really an opportunity to throw it open to the room for questions for either myself or Julian to talk to.

Thanks, Chen. We'll just get you a microphone. Down the front.

Chen from Bank of America. Just a question for your gold offtake. You mentioned a couple of times it's noncore and looking to divest in due course. However, that you get immediate cash flow, right, from your gold offtake, which you can use to pay your either interest payment or return to shareholders as dividends. So what's the thinking behind that? You are not going to keep the gold offtake agreement because it's still good cash flow. And as I mentioned, your balance sheet looks okay.

Yes. Thanks, Chen. So we get asked a lot about the gold offtakes. And the simple answer is they're for sale, but not at any price. And as you can see, and the reason I keep reinforcing the cash flow that we get out of there is that they're providing a meaningful contribution to our book and to our shareholders and to our balance sheet at the moment. So we're under no pressure to sell them. And we're in a market where there are instruments that are perhaps a little different to what people commonly see. We treat them internally very much as a short-term instrument, and we look to minimize our risk from holding those. There could be other trading offices, for example, that take a different view and more actively trade them or hold them and are happier to take a longer view and greater risk on those and therefore, might see more value in them. So that's really the message that it's available for sale, but it's not for sale at any price because they are valuable to us.

Just a follow-up on your answer. So it's noncore is because the risk or the nature of the gold offtake agreement of your portfolio. Is that right? Because it's basically your trading activity that you need to take the risk of the gold price and the volatility.

Yes. It's noncore because if you go back to Julian's slides about where our focus is, our commodity focus is base bulk and battery and electrification commodities as well. So we were happy to acquire the gold portfolio as part of the Trident portfolio. We wouldn't have prospected that individually. We think we got it at a good multiple as part of that portfolio as well. But that's why it's noncore.

And perhaps just to add to that, I think the key point is that we -- to the extent we are looking to divest them, it would be because we think they would be worth more in somebody else's ownership than ours. And that obviously is where we come back to the comment about they're not for sale at any price. The other point to make perhaps from a capital management perspective is Jason made the point that in terms of sort of one-off receipts, typically, we would be using those to manage our debt position. So to the extent we sell them, you'd expect we'd use that to reduce our debt position.

So happy for any noncapital management questions. Okay. Good. Well, thanks very much for attending, everybody. If you've got anything that you want to follow up, you've got my number. Please feel free to give us a call, but very much appreciate your attendance today, and happy to be able to let you go on time. Thank you.