Elevra Lithium Limited (ELV) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, shareholders, esteemed guests, my name is Dawne Hickton, the Chair of Elevra Lithium Limited. I'm honored to chair today's extraordinary general meeting. And on behalf of my fellow directors, it's my pleasure to welcome you to this EGM. Joining me here in Brisbane is our Managing Director and CEO, Lucas Dow. Many of our other nonexecutive directors are joining us online. At this EGM, we will be asking for your approval and ratification of various share and option issuances and the financing arrangements outlined in the Notice of Meeting. Today's EGM is a hybrid meeting. It's being held both here in person in the Capri by Fraser in Brisbane and online via the Computershare online meeting platform. Online attendees can watch a live webcast of the meeting and have the ability to ask questions and submit votes online via the Computershare online virtual meeting platform. If technical issues arise with the webcast, and I don't believe it is reasonable in the circumstances to proceed with the meeting because of that, I will adjourn the meeting until the problem is fixed. Where the meeting is adjourned for a prolonged period, we will upload notification of the adjournment onto the ASX platform and the Elevra website. We will also provide details on those sites about when the adjourned meeting will be reconvened. I hope this won't happen. So I now call this meeting to order. I confirm that quorum is present and now formally declare the meeting open. Our Group CFO, Christian Cortes; and our Company Secretary, Dylan Roberts, are also in attendance. Our share registry, Computershare, is represented today by Jessie Yerma, who is appointed as our returning officer. To enable shareholders to consider the business of today's meeting, A notice of Extraordinary Meeting was made available to all shareholders via Elevra's website and the ASX announcements platform on the 12th of June 2026. I will take the notice of extraordinary meeting as being read. And before proceeding further, I advise that 470 proxies totaling just over 69.97 million votes have been received for this meeting. And where an available proxy vote has been given to the Chair of the meeting without instruction. I will vote in favor of Resolutions 1 through 5. So let me go over the agenda and outline the structure of today's meetings. First, I will present the Chair's address. I will then run through the formal meeting procedures. And third, we will deal with the resolutions, proxies and voting. You will be able to ask questions on each resolution put to the meeting, and those questions must be relevant to the resolutions being considered at this meeting. And please note that we will also make ourselves available with the refreshment session after the close of the meeting to answer any additional questions that you may have. So let me move into my chair's address. One of the most compelling drivers of the merger between Sayona Mining and Piedmont Lithium was the opportunity to unlock value that neither company could have achieved independently, and that is the North American Lithium Brownfield Expansion. After exploring a single-step expansion, we challenged ourselves to find an approach that could be delivered more efficiently while reducing execution risk. The result is a phased expansion strategy that increases production more quickly, requires less capital upfront by staging capital deployment and provides greater flexibility throughout the life of the project. This expansion will be delivered in 3 stages. The first stage focuses on optimizing the existing operation and increasing throughput to the currently permitted 4,500 tonnes per day milling throughput. We recently announced a groundbreaking on this expansion and have placed orders for key equipment needed to deliver Stage 1 and the expected 15% to 20% increase in annual spodumene concentrate production capacity. And I just want to make an aside here that just a couple of weeks ago, we held our Board meeting in person up at that site, and it was something to behold. And it was really exciting to meet the team, to tour the facility, to participate in the groundbreaking and the kickoff expansion. We had our directors there and along with Sylvain Collard's team, an incredible group of the best metallurgist, mining experts, safety experts, geologists, you name it, we have a team there ready to work on this expansion, and it's really exciting. The second stage expands milling capacity to 6,500 tonnes per day through additional temporary crushing capacity, combined with increased grinding and flotation capacity. This stage will bring our production capacity to the expansion target of just under 340,000 tonnes per year, and it's expected to be completed by calendar year 2028. Turning to Stage 3. That completes the expansion by replacing the temporary mobile crushing utilized in Stage 2 with a larger crushing circuit aligned with the expanded mill feed requirement and improved ore sorting capabilities. This is the stage where production capacity and lower unit operating costs are fully realized and become sustainable over the long term. Now there are several advantages to the sustained approach or this phased approach, I should say. First, it's going to allow us to deploy capital progressively rather than all at once. Second, it shortens the time line to increase annual production. So instead of waiting for a single large construction project and the permitting to be completed before realizing any benefits, each phase delivers incremental production as it comes online. That means shareholders begin to see those returns sooner. And third, it substantially reduces the execution risk. Each stage builds on proven operating infrastructure and incorporates learnings from the previous phase. This allows us to manage technical, construction and market risks in a much more disciplined way than a single step expansion. So ultimately, this project reflects exactly what we set out to achieve through the merger, delivering greater value than either company could have achieved independently. Now as we turn to Slide 5, we'll look at the key benefits of the NAL expansion as outlined in our Updated Scoping Study. The NAL Brownfield Expansion is not simply about increasing production. It is also about creating a larger, lower-cost, more resilient business that is positioned to generate sustainable returns for shareholders. The Scoping Study released in May 2026 demonstrates why we're excited about this opportunity. Compared to maintaining the operation at its current scale, the study outcomes show that investing in the expansion delivers meaningful improvements in production, meaningful improvements in operating costs and cash generation, which should translate into that value creation. Once all these stages are complete, annual spodumene concentrate production capacity is expected to increase for approximately 74% compared to today's operations. And perhaps more importantly, unit operating costs are expected to decrease by around 21%. So again, given the stage development approach, these benefits are not deferred until the end of the project. As each stage is completed and commissioned, production will increase incrementally while unit costs will begin to decline. This combination of higher production and lower production costs mean that we can simultaneously produce more tonnes while improving our operating margins. Together, this will strengthen the resilience of the business through all phases of the lithium price cycle. In summary, this is exactly the type of project we want to invest in. This expansion builds on an existing asset, delivers attractive incremental returns, and strengthens the company's long-term competitive position. And as we outline on Slide 6, we successfully complied a financing package which allows us the ability to plan confidently and execute decisively. We raised AUD 275 million before fees through a fully underwritten equity placement to institutional investors. The financing also includes a AUD 146 million strategic investment package from the Canada Growth Fund through convertible notes, reflecting its confidence in both the NAL expansion and Elevra's long-term role in building a secure North American critical minerals supply chain. Additionally, we have entered an agreement to divest our interest in the Ewoyaa project in Ghana and subject to satisfaction of its terms, we expect to receive approximately AUD 87 million in net proceeds. While we continue to believe Ewoyaa is a high-quality asset, its joint venture structure added complexity to our growth portfolio and this sale will allow us to redeploy capital towards our core North American opportunities. This financing package fully funds the NAL Expansion under current market conditions and by securing the necessary funding upfront. We can focus our attention on execution and delivering the projects safely, on schedule and within budget. This capital raise strengthens our balance sheet, and it preserves for us financial flexibility, which will be key to our success. We anticipate that the lithium industry will continue to experience periods of volatility, and maintaining a strong liquidity position allows us to manage through commodity price cycles while continuing to operate from a position of strength. It also provides the capacity to evaluate and pursue value-creating opportunities as they arise, rather than being constrained by a capital structure. And the financing is also expected to support a faster path to growth. Approval today of the proposed funding arrangements means we can progress the staged NAL expansion in line with our development schedule rather than pacing investment or pausing development around future financing events. We anticipate that this will allow us to bring additional production online sooner and begin realizing the operational and financial benefits of the expansion earlier. Importantly, Funding the NLA Expansion does not come at the expense of the rest of our portfolio. This capital raise actually opens the door for us to invest further in our growth portfolio, specifically in the Moblan project. This project remains one of the highest quality and scalable undeveloped hard rock lithium projects in North America, and we are continuing the technical studies, the permitting and development work needed to position that project for a final investment decision. And that final investment decision will follow an updated feasible study on Moblan, exploring the potential of increasing the annual output given the significant increase in the Resource and Reserves since the previous study. As part of the ongoing work at Moblan, we announced that we terminated an Offtake Agreement with lithium offtake Inc. That's an investment vehicle that was managed by Waratah Capital, in exchange for Elevra shares and options. As we advance the development of Moblan, the ability to purchase these offtake rights and remove -- excuse me, and remove a life-of-mine commitment to deliver tonnes at a discounted market price, presented an opportunity to enhance the project's economics and increase the flexibility around future supply agreements and future financing opportunities. And finally, I'd like to discuss the investment from the Canadian Growth Fund and the structure of the convertible note in more detail. For those unfamiliar with the Canada Growth Fund, it is a large investment vehicle established by the Canadian government to support the development of strategic industries that strengthen Canada's economy and critical mineral supply chains. The proposed CGF investment is structured as 2 tranches of convertible notes with a AUD 65 million Upfront Tranche and an AUD 81 million Conditional Tranche which are subject to shareholder approval at today's EGM. We believe this structure is attractive because it aligns the investment with project execution, while allowing flexibility with respect to issuing the Conditional Tranche. And importantly, the notes are convertible at a premium to the market price of the company's shares at the time of the transaction. That premium helps limit dilution for existing shareholders while providing Canada Growth Fund with the opportunity to participate in the long-term value that we believe this business can create. Beyond the immediate funding, we see this as the beginning of it could become an important long-term relationship. As we continue advancing projects across our portfolio, including the future development of Moblan, we believe there may be opportunities to work together again. And while there are no commitments beyond the current investment, establishing a relationship with a long-term strategic capital partner creates optionality that could prove valuable to us as we continue to grow. Ultimately, the proposed Canada Growth Fund investment strengthens both our balance sheet and our strategic position. It provides capital on attractive terms, it supports the execution of the NAL expansion, and establishes a relationship with an organization that shares our long-term vision for developing a world-class North American lithium business. So now let me turn to the formal matters to be considered today. Voting on all resolutions today will be conducted by way of a poll. Shortly, I will outline the procedure for the poll, and then we'll run through each of the resolutions to be voted on today. The wording of each resolution and the proxy votes which have been submitted for each resolution will be shown on the screen as the resolution is being considered. As a reminder, as I said upfront, I will take questions on each resolution from shareholders or their authorized representatives. Those questions should relate to the resolution being voted at. When voting on all resolutions is complete, we will close the meeting. The results of the poll will be published via a release made to the ASX and will also be made available on the company's website. And I appoint Mr. Jessie Yerma from Computershare as the returning Officer. I will now explain the procedure for the poll to be conducted on the resolutions. Online attendees can submit questions at any time. To ask a question, select the Q&A icon and type your question in the text box. Once you finish typing, please hit the send button. And note that while you can submit questions from now on, I'm not going to address them until the relevant time in the meeting. So please also note that your questions may be moderated or if we see multiple questions on one topic, we'll put them all together. To ask a verbal question, please follow the instructions written in the broadcast. If you are eligible to vote, once voting opens, please press the vote icon and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. There's no need to hit a submit or enter button as the vote is automatically recorded, and you will receive a vote confirmation notification on your screen. You can change your vote up until the time I declare the voting is closed. For shareholders and proxies who are attending here in person, you would have received a blue voting card when you entered. Please complete the reverse of your voting card and the member of the Computershare team will collect your card at the end of the poll. I now declare voting open on all items of business. And for those of you online, I will give you a warning before I move to close voting. So now let's turn to Resolution 1. This is ratification of prior issue of the institutional placement shares. This resolution is an ordinary resolution to ratify the issue of 22,540,984 shares issued under the institutional placement at AUD 12.20 per share, raising approximately AUD 275 million. Ratification of this issuance is being sought to refresh the company's ASX Listing Rule 7.1 placing capacity so that the issue does not count against the 15% limit for future equity raises. I note that a voting exclusion statement applies to this resolution is set out in the notice of meeting. I refer you to the screen for details of the proxies received for this resolution.

Are there any questions from shareholders firstly from the room? Yes, sir.

Just a clarification. I note that you've got 18 million shares excluded. So you've got 96. 4. Where do you take account of the ones that are excluded in that 100% of votes eligible?

Yes. If I understand your question correctly, you've asked about the excluded shares. They are not going to count in the vote, that's correct.

But they look like 25% of the total eligible votes and you show 90-something percent for?

Well, 90% of the existing votes eligible to vote that have been cast are in favor. Okay. Any other questions in the room? I'll turn to our moderator. Any questions online?

There are no questions online.

Okay. There being no further questions, I put the resolution to the meeting. So if you haven't already done so, please now cast your vote online for this item. And then we'll move to Resolution 2, approval of issue Tranche 1 convertible notes and shares following conversion. This resolution is an ordinary resolution to approve the issue of CAD 655 million Tranche 1 convertible notes to LCSC Holdings, Inc. which is a related party of the Canada Growth Fund, and any shares issued on conversion of the Tranche 1 convertible notes. In short, shareholder approval is required as this proposal exceeds -- the issue exceeds the company's available 15% placement capacity, and it is a condition precedent to access the funding under the agreement with the Canada Growth Fund. Further details were set out in the explanatory notes accompanying the notice of meetings. And I note that a voting exclusion statement applies to this resolution is set out in the notice of meeting. I refer you to the screen for details of the proxies received for this resolution. So again, I'll turn to the room first. Any questions from our shareholders in the room? Seeing none, I'll turn to our moderator.

There are no questions online.

Okay. No questions online either. So there being no -- we do a question in the room.

I'm not sure where I asked this question, but are the ordinary eligible shareholders given an opportunity to purchase shares?