IGO Limited (IGO.AX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the IGO Limited FY '25 Full Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Ivan Vella, Managing Director and CEO. Please go ahead.

Thank you. Good morning, everyone. Welcome, and thanks for joining us today for our annual results call. I'm in Sydney with Kath Bozanic, our CFO. And I think it's probably worth calling out, this will be Kath's last results call with me. She, as you know, is standing down from her role as CFO later this year. We'll come back to that the time in our next call where I'm sure join me as well. But moving on, look, it's a busy day for all of you, I'm sure, with what's going on across the market so we'll keep our comments brief and jump into your questions and go from there. First of all on safety and sustainability. Just a couple of highlights to call out. And I talked at length about safety in the last quarterly so I won't restate all those key messages other than to, again, confirm or reemphasize the importance of safety in our business. And the property is, I guess, in the sense of stable and engaged workforce that are operating well in our business. And the improvements we're seeing are really encouraging. Overall, the headline, TRIFR [indiscernible] down slightly. But underneath that, we've seen a significant reduction in the recordable injuries and service incentives in the business. There's a lot of work going on, but I'm really pleased with the progress we're making. We're really starting to show that we're getting an increase in maturity and performance across the business, and that will continue as the key priorities through this [indiscernible] year. Other quick highlights. Look, I think our focus on addressing our carbon footprint stands out at Nova, and we achieved net zero albeit some cancellation of [indiscernible] there. But a real focus from the team the team that are in their control to try and address their carbon footprint. Some fantastic work with Forrestania maintenance that obviously we expected that we would be able to complete the transaction with [indiscernible] That's in final stages now but still continuing to work around our environmental impacts, managing that with the local lines as well. And I think more broadly, our ESG framework, as we talked about in the last quarterly, as well, stands well for the year ahead. If I look ahead -- sorry, look back on FY '25 on a whole, a couple of key themes to touch on. First of all, look, the results as headline, are clearly disappointing. And we acknowledge that through the headline numbers, we've achieved a lot. It's been a lot of hard work through FY '25, and we have gone through a very disciplined review of our portfolio and I think positioned ourselves for the future. But that has meant taking some great that's impacted our people and stakeholders and, of course, our shareholders through the year. The [indiscernible] I guess is the markets, and we know that both lithium and nickel have been subdued through FY '25. Lithium and spodumene [ off ] about 65% from the year prior and nickel down about 10%, already coming off from its previous high. And look, there's not much we can do around that. We're selling to those markets and certainly, the market will become more mature and more efficient as time goes on. Ultimately, it's about focusing on what's in our control, and that's managing our costs, managing our operating performance, safety and so on. And I think we've made some progress at Nova. We'll talk more to that but equally supporting [indiscernible] which is now settled in and got a new management team around him and making great progress on the improvements across that business. I guess I wanted to talk a bit about the significant impairments that we've taken this year. Firstly on Kwinana. I think it's a recognition of the ongoing challenges of that asset. The issues that we see as IGO IPO in the cost structure, and I guess, ultimately, our view that there isn't a pathway to acceptable long-term investment returns. We are ultimately accountable to you as our shareholders. And we've taken a lot of care, work through the numbers, understand the asset technically and in a smart context and we didn't take those decisions lightly. Clearly, if there was going to there, we've been assuming. We're not silly. It's not something that we're going to make a rash call on, certainly not emotional. And so we've worked through that and ultimately come to those conclusions. Many of you will have seen recent comments in the media from our event of TNT around Kwinana. Clearly, they have a different view on the viability and the future of the asset and that's okay. As I said, it's not about what their opinion is. It's ultimately about having our view, and as I said, being accountable to our shareholders as we work through that. We have discussed the range of options. We're working through that. There's been some very good conversation with our joint venture partner. And there's a strong relationship there. And I think that's the applied with the decision that we joined took on Train 2 and our ongoing alignment with both Greenbushes. Ultimately, we will continue those conversations and see [indiscernible] successful for both parties. I don't think there's much more to say. I'm sure you'll have some questions. But I mean, there's not a lot more I can say while that's running, certainly not something we will work through in this call or in any other broader public forum. It's that we do that diligently, respectfully. And once we've got concluded, we can then obviously share that broadly. We also took obviously a substantial impairment on our exploration assets and have really reset that [indiscernible] our approach. and assisted the team, sale of the team that has impacted a number of our team members and as I've called out before, all credits what they've done. They were doing a great job at executing on the previous strategy. We've recognized that wasn't getting us what we need. We've changed that and we've got the team refocused. They're already making some tremendous progress, and I'll talk more about that later in the call. I want to touch on Nova because I think that's a really strong story. You know that our first half was tough. We were getting into [indiscernible] that way. And it was difficult. There's a number of characteristics that we had to work through in the way of the body presented. And the team had to do some very hard work technically, both in the mining and the processing [indiscernible] to get to a place where we were back on our feet, so to speak. Second half was fantastic, but a really solid really stepped up and saw that come through in the results. And we feel like we've got a very solid plan looking forward to the end of the mine life at the end of next year, so 2026 calendar year. The focus on safe production, stable operations and really getting the very best out of generating as much as possible. It's clear across the business, everyone's very aligned and working diligently on that. For Greenbushes, business, that mine goes from strength to strength. Any asset that can deliver a 66% EBITDA margin at the absolute bottom of the cycle is extraordinary. $1.5 billion of operating cash flow is just amazing. And generating cash, yes, we're still investing in the CGP3 and other parts of the business. But despite all of that, still pouring out cash, just an amazing asset. The best part is obviously, that full potential is still in front of us. We are far from having that business optimized. There's a very, very strong team in place around [indiscernible] great work at shaping and prioritizing that program with improvements. And I think as time goes, we're going to start to see that flow through in the performance of that business, driving each of the assets to deliver their best, making sure we're getting the ultimate best returns we can from each bit of deploying capital that we have, that we've really optimized that orebody and thought about what its future is 10, 20, 30 years out. We need to take a long-term view. And then I think most importantly, it's not new news. I've talked about it several times is making sure that we're a great local, and we're working extremely well with communities, with all of the local stakeholders that are contributing well in the region and something that a broader reach is very proud of as one of the biggest contributors of lithium units across the world, supporting the energy transition and ultimately, the strength of mining [indiscernible] So there's a lot of focus there, a lot to do, but equally, we come off of the strong base, a very privileged orebody and a great business. will continue to play our role and support the joint venture, however possible. We are working across a number of streams there. Wherever look to support, that's our first priority, given just how important that is in the future. Through the financial year, we also refreshed that strategy, and I'll talk more to that [indiscernible] I mean, I think that has set the foundation piece. Obviously, Greenbushes is in the focus there and strategy looking forward. I'll come back to that further. And there's also been quite a lot of change in our organization, which I touched on as one of the last slides of the deck. But it's fair to say that that shift always takes the focus of [indiscernible] for the team to see they feel that change. It can create some so we're conscious of that and working through. But I look across the broader leadership team in IGO and I'm super impressed at the very, very strong to working in a very manner. We're investing in leadership development where we're investing in safety leadership and safety culture. We're investing in the integration and alignment of the team and all of that's starting to retain So a quick round-up on some of the key areas of progress across FY '25. Now leading to the numbers, I'll turn it over to Kath to walk through the line then.

Thanks, Ivan, and hi, everybody. As Ivan said, the overall financial result is disappointing reported net loss after-tax of [ $955 million ] which is impacted by [indiscernible] disciplined review of our portfolio. We reported impairments of $720 million with Kwinana being fully impaired by $605 million and $150 million related to the rationalization of the exploration portfolio. In addition, we increased our rehabilitation provisions of our nickel assets by $58 million. We reported an underlying EBITDA loss of $43 million and an underlying net loss after tax of $173 million, which includes $165 million of contribution from Niobrara and $58 million increase in the provisions, which I've already noted. I noted a number of you are trying to reconcile our EBITDA reported our quarterly rebased results. Our quarterly underlying EBITDA did not include the $58 million increase in rehabilitation provisions. We guided to this being between $50 million and $70 million in that quarterly. As Ivan mentioned, Greenbushes' results this year were remarkable, given the market context. 1.5 million tonnes of spodumene was produced at a [indiscernible] $325 per tonne unit cost, giving a 66% margin and $1.5 billion operating cash flows. Cash flows invested in containing [indiscernible] grade, which is expected to be commissioned around the end of the year. Revenue of $528 million was down 37% from last year. This was due to several factors: lower volumes for Nova, lower realized prices and substantially lower [indiscernible] from Forrestania cost loss this year after [indiscernible] The operational helped deliver positive underlying cash flow of $140 million for the year. Finally, our balance sheet remains strong with $280 million in cash after paying dividends of $197 million and $300 million of undrawn facilities, which we refinanced slightly Slide 5, I don't plan to talk to you very much because I've gone through all the numbers already. This just gives you a detail summary of this year's results compared to last year's. If we go to Slide 6, this slide sifts through a bridge of our cash balance. We ended the year with [ $218 million ] cash in bank. There are a couple of callouts that I want to make. We've provided significant returns to shareholders during the year, $197 million [indiscernible] dividend, we have marginal increase in cash. Our corporate and exploration spend will be lower in financial year '26, resulting from the disciplined reshaping of our business during the year. We guided exploration expenditure of between $35 million and $40 million for FY '26. And you've seen the reduced corporate spend in our quarterly results. I'll now hand over back to Ivan.

Thanks, Kath. Okay. I'll agree with just a bit more detail, a couple of key points I want to call out here. Firstly, I mean, obviously, it's a fantastical body of great assets delivered very, very low cost, spodumene or SC6. And now and again, there's conversations about pricing. Obviously, our pricing is formulaic, depending on the 4 price reporting agencies. And what you can see in the chart there on the left is not only for SC6 [indiscernible] no surprise, and it's great. But when you start adjusting or comparing that with some other peers in the market, we're actually doing pretty well. And that might be to surprise some people, the realized pricing despite the fact there's no sophisticated marketing or effort to contract this in detail. There's 2 big customers that take the product and based on what the market is doing, we're actually realizing very good outcomes for the product that comes out of Greenbushes. Second key point I wanted to make here is really the positioning now. We know it's the lowest on the cost curve by a long shot in the hard rock space. And that's a definitely a function of that amazing orebody. I think the real challenge for Greenbushes and the excitement I have is seeing [indiscernible] when he says [ $1 30, ] the lowest cost partner. That is that's how we're starting to talk, which is about talent and Greenbushes to challenge the best brands in the world as well. And you can work through what that might look like and what that takes. Given the scale of Greenbushes and the growth potential is still in front of us, continuing to push those costs and challenge them and really pull the mirror up to ourselves and saying, where and how can we be more efficient, drive more production, drive better outcomes, the way we manage our capital? And our cost is exactly the kind of narrative kind of challenge that I think makes sense for that business. So very like mine, very good team in place and clearly pushing themselves to the best performance. So we'll keep you informed as time goes. I think we've seen that shift through FY '25. come in management and start to put some different aspirations in front of them. And I'm delighted, we're there to support it to whatever we can to help with that work. I think he's got [indiscernible] in the background to do this. And we'll be able to then report follow that journey of improvement quarter-by-quarter as the progress evolves. Naturally, and again, we talked about the focus on delivering full potential or full value requires a huge program of work, starting with the orebody, particularly understanding that, profiling that, looking at the shape of the shale, the schedule, the fleet, the application of that fleet, how we get the very best out of our operating assets both in the mine and processing. Asset management reliability is a huge opportunity that throughput. You can argue it's almmost [ 3 tonnes ], just using existing capital more effectively. Ore characterization and recovery and improving throughput and outcomes from that point of view is another key outcome. And I guess we've talked again previously about, you have such high grade material, capturing more of it or avoiding less of it going to tail is naturally a very easy win and the team are thinking about that, how they reduce the fines and drive recoveries up further. General operational management, focus on productivity and getting further costs out is part of that as well. So I'm not trying to go through the detailed program, give you the headlines. I think a couple of quarters ago, we talked further on this. It gives you a picture of the work that's ramped up, broad program of work that happening to drive that improvement right across Greenbushes. From here, I just wanted to take us out a little bit to reflect on our strategy. And 2025 was a very busy and very difficult year. There were a lot of hard decisions. I mean, it really weighed on me at times, the amount of change that we've worked through. We've had a real effort to go through a review of our portfolio. Now that evidence of the top line assets, we talked about Kwinana, obviously, earlier piece on Cosmos and so on, but there's also a number of other projects in side of the business that aren't visible that impact our people and momentum. And they generate anxiety and uncertainty for our people and working through that, trying to maintain engagement and maintain focus is, of course, a challenge. I keep throwing back to our strategy which we released in September last year. And we just put, I guess, [indiscernible] here just to refresh everyone. That absolutely drives that focus and we still are convinced that we're on the right path. Our focus on is there with Greenbushes getting the very best out of that. Beyond that, we know that, and we said this in our strategy at the day, difficult commodity. It's very easy in the world. You need to be extremely cost competitive and very strong in the hard rock space to be competitive and work through the cycle. And so that really falls out [indiscernible], which is obviously is a point there. Copper remains a strong area of focus. We think that provides very effective diversification for lithium, given the volatility. Nickel, look, we're still in the business of nickel. And is one of those fantastic Tier 1 orebodies. Unfortunately, we don't have another 10 years, but there are very few nickel sulfide mines in the world that are operating, generating cash. Certainly, none like us at the end of mine life when it gets very difficult, and this is credit to the operating team and the technical team for managing the complexities of that. It's easier to say just 1.5 years ago, the extra complexity and challenge is significant as we get to those in the orebody. And they're working through and managing that extremely well. But beyond that, I really struggle to see a lot of upside in nickel, and that's just a return to [indiscernible] and how does that compare with other options, given the benchmark for us to allocating capital is thinking about Greenbushes and the amazing returns there. So that's always top of mind. We are doing a lot of good work to position ourselves for growth and for the future, getting our portfolio in shape, getting our business in shape, driving our costs down. It's all part of that, making sure that Greenbushes is on that path to full potential, and that sets us up for further growth. Taking on the following slide, which I think sort of draws us out a little bit further. And again, I talked about organic. Organic is always out there, but internally, if we look at our capabilities, they continue to be delighted. I mean, our exploration setting really is impressive. We've got outstanding talent there, incredibly strong in the field, but also in the generative space and the work that they're doing on lithium targets in Australia is excellent and very ground and working through that, and we're drilling several of them through this year. And then up, we're looking internationally, and there's a number of opportunities that we're busily working through and they're very exciting. And more and more, it is focused on very commercial, very targeted focus of exploration, making sure that we spend our dollars very wisely. The focus on actually drilling mineralization and driving out what is going on in there and economic resource there or not is all part of it. A big shift from where we were with very large scale greenfield exploration, which was very -- going to be very long-dated and for me, just wasn't going to deliver the sort of outcomes for our shareholders. So you can see I'm confident we'll be reporting some positive outcomes from that work through the coming financial year. Secondly, our technical capability is extremely strong. And there's some deep expertise in our team in this space. Looking at critical mineral also processing, mineral extraction across these key commodities that are in our focus. That includes copper, lithium and nickel but others as well. I think these capabilities are helping us unlock other opportunities that we see there to grow. Again, it's more that I'll talk about through the next -- the coming financial year. And then lastly, we only grow -- we've talked about that on a few calls. It is not the primary area of focus. I'm the first to call out just our to do that well and generate value for shareholders. So many deals in this phase don't, and we're extremely disciplined. Our clear focus if we are doing anything is that as project level, where we can add value, where we would be a great partner, the right owner or partner and bring something material to the table [indiscernible] to win a battle with our balance sheet in Looking forward, so we'll get to some Q&A in a tick, but the priorities for '26, I've talked to a little bit. Greenbushes, I'm not going to go over the ground again. There's a lot to do there. The team's working hard and making progress and where they work with them and support them. Kwinana, our focus is on making sure that we're not spending money that isn't value-add. Working with our partners to make sure while the business is running in its current form, that we're managing as prudently as possible. And more importantly, we're continuing conversations with the on what's the right feature outcome there for both parties. Nova, we'll focus to drive as much value in cash of safe stable operations through this year. just talked to and will bring more in the coming quarters. So real mentality, getting to understand what's the don't necessarily drill it out fully but make sure we understand where we're adding value and we see more be done move on. And the strategy growth we just talked to. Just before I wrap up and turn to questions, I just thought I'd also reflect on the team and thank a couple of people, in particular. now wrapped up. You know that she was with us 13 years and made a huge contribution to our business through FY '25 and obviously in the years leading up to that. She's a tremendous support for me and helped me settle into my role. So I thank Sam for all her work and shared well for next -- thank. Kath will leave at the end of the year. Again, I'm going to miss her that smart look, we're well progressed with our recruitment processes, and we'll update you on that with the success that it's from Kath. But in the same year, obviously, Marie and Brad joined early in the piece and [indiscernible] in a couple of weeks' time with our people and sustainability officer. She's very high quality, very capable and experienced these teams that have worked internationally worked across multiple commodities and have a lot of operating experience. So as well as employees in the future. With that, let's turn it over to some questions, and we'll come back for a wrap-up at the end.

[Operator Instructions] The first phone question today comes from Matthew Frydman from MST Financial.

Sure. And look, Ivan, I know you made some comments around this in your introductory remarks but I was wondering, in relation to the CEO's recent comments, I think he alluded to the fact that IGO hasn't made any proposed or proposed any variations to the JV arrangement as of yet. Is that the case? Have there been any proposed changes to the JV, arrangement made? And if not, as Mr. suggested, then why hasn't IGO proposed any changes to the JV structure?

Okay. Thanks, Matt. Look, as I said, I don't want to get into a broader conversation about those discussions. They are active and ongoing. We're working through the range of issues. And of course, there's a different view of Kwinana. I stand by our economic assessment. I think it's pretty -- well, I think it's straightforward, at least on my spreadsheet, to work back what you have to believe for this to make any sort of return whatsoever, to make a return that warrants putting further capital in, I really struggle with. That's our view [indiscernible] different view, that's their prerogative. We're working through that into it, there is an open conversation. It's very constructive. We're working through it diligently, we have been for some time. I just don't give comment further on the product media in this space.

No, I appreciate that. Maybe moving over to, I guess, the FY '26 guidance that you previously provided around Greenbushes and the CGP3 ramp-up. Just wondering if there's, I guess, any more clarity around that outlook, and I guess the budgeting, timing of when the JV will actually kind of decide on 2026 numbers? Can you give us an indication of when that actually will be? And then I guess in that context and noting that I don't believe Windfield paid a dividend in the fourth quarter of FY '25, what's your expectation of how the JV is going to think about that cash position in Windfield currently? And how that changes as volumes ramp up and CGP3 spend rolls off into 2026?

Yes, okay. A couple of points in there. Let's start the cash. I think it's just over $600 million in the bank. As you've seen, we feel it's not bang on the cash and our capital demands certainly ramp down through FY '26. So that will roll out in due course. For me, that's really not a big issue. There's nothing more to see there than just how we're managing the business and being prudent as that flows through. Naturally, the drag on any dividend that's paid from we feel to at the demand that Kwinana places on it, which is why it's in focus for us. Again, we're working through that with set emergency. We clearly understand our accountability to shareholders there, and we're working on that as quickly as possible. And then beyond that, flowing out to the [indiscernible] TLEA. So that's -- I know if something everyone wants certainty on. We'll provide that as quickly as possible. Coming back then to Greenbushes and where they're at, I think the dry plants across grinding surface conventionally down. They've run off through it. They're building a bit of the stockpile going well. line is still construction and still progressing to the end of the year. Look forward for that as we've signed projects that -- we issued that were in the [ last 2 months ] of the winter has been a little bit mainly more normal but certainly unusual for the last few years with the amount of rain that they've had, which is very good. I mean, ironically, a year ago, we were talking about levels and what levels of Greenbushes and now we've got a different problem. But no, look, the team is working hard getting through it. Commission teams stepped up and running, they hopefully will get through a lot of that work and allow more of the team transfer on the can as they come out through [indiscernible] And the intent is to run that up as quickly as possible. I don't try and play crystal ball in the market. It is far beyond me. I think every month, there's a different view from the experts. All I think we need to do is take value. And for me, my voice and my analysis suggests that every tonne we produce out of Greenbushes is [indiscernible] Getting those assets online early and running it well also manages your cost better. So I think we -- from my point of view, I'm clearly incentivized to drive that. That's the plan, the team will ramp up that asset in a thoughtful and safe manner but as quickly as possible, that the year of work to get an asset that online and running well. And that's the go as we get a bit further into it, we'll give you more details in the upcoming quarterlies.

Okay. Got it. Thanks, Kath, for your contributions.

Thank you.

The next phone question comes from Levi Spry from UBS.

Sorry, I might have missed some of the detail on that last question. But so in terms of the optimization process that's ongoing at Greenbushes, what's the deliverable time line for us, I guess, in terms of starting to sneak out some detail into the market?

Well, certainly, I think the first key level is, of course, just lower cost and increased, which we working on that. That work's happening right now. I mean, they are delivering focused month-to-month on improved productivity across the business. They're both as you can imagine, is focused in processing plants as well. And we see lots of good momentum but equally lots of upside. The broader piece of work is behind that, which is more complicated than it's taken some time is the overall optimization of the orebody, thinking through what's the best way to manage that resource and convert it to reserve and get it out mine and process and into our customers' hands and optimize the value accordingly. That work's happening. As we get through the elements, we'll be able to report, obviously, in our actuals to show performance. And then we get to a logical point where we'll work that through the JV partners and see how fit to share that we are on to market. I don't have data, as I've sort of said before, over some particular milestone that we're pursuing. And I don't want that to take away they do it any impression that the team are flat out on and making new progress.

Okay. And then just in terms of rehabilitation and specifically thinking about nickel but maybe elsewhere, when does that turn into cash? Should we be modeling some cash flow here for re-up?

Let me comment briefly first just on the broader picture and then Kath [indiscernible] 3 parts to that provision. Obviously, no [indiscernible] Cosmos. We increased the provision for Forrestania, albeit that will get adjusted back if we complete the transaction when [indiscernible] but it's just prudent when we've got to assessment, made the adjustment. We could have let it out but I think it just shows the sort of integrity of our finance team and our approach to be looking. Cosmos is much more long-dated and we've got to think about the nickel there. We're in sort of 5 steps of taking a view on our nickel mine at Cosmos, but there is prospectivity in those tenements. And it's not like Nova which doesn't have or doesn't have other inherent value in the region. So the likelihood of that closed any time soon is very low. We will complete relevant continuous rehab where it makes sense. And we'll continue to adjust and revise the closure and rehabilitation estimates for Cosmos, but it's a lot further out. So I think take away a bit specific to your question on cash, it's pretty negligible at the The real area to focus is Nova. That's a mine where we see that finishing at the end of next year. There is no more orebody extensions or other options or other things nearby that we can see someone finds something in the meantime that's great. We think that's unlikely. So we intend to do a straight not by care and maintenance and waste money on that sort of holding pattern. That planning is underway. The feasibility is underway. We've got a very good team on is doing a great job of CapEx to do that. Some of the assets will be sold or turned over. There's a great paper runway out there, it's probably the most easily runway in the southwest of WA. can would say obviously, the assets are around 10 years old so they're actually in pretty good order. So we'll work through that. We've made an adjustment, as you can see in that space, and we'll tighten that up as we finish the feasibility. In terms of converting that to cash, I mean, you would expect that you would start to see some spend from [indiscernible] from now, but that would ramp up through 2027 as we get into the works. But ultimately, there's activity happening as we speak. Kath?

Nothing from my end. You've done it all. Thank you.

The next phone question comes from Kate McCutcheon from Citi.

Just a quick accounting question for Kath. So I guess we don't see peers take those rehab provisions and equity gain losses in underlying EBITDA. So just maybe what is the rationale for that for a non-accountant, please?

So you're a bit soft so let me just make sure I got the question. You were asking about the rehab and why we didn't adjust our underlying. Is that right, Kate?

I was just making the comment that peers, we don't see them include those rehab changes in the EBITDA and same with the equity revaluations.

Okay. So we're pretty prudent and strict with our accounting application and movement in provision means [indiscernible] EBITDA for us and the -- as well as shares, movement in shares. So if you actually look at the definition of the burning of EBITDA, at a depreciation and administration and movement in provisions and movements in equity part of our business and that being depreciation [indiscernible] so [indiscernible] were doing it, but we're just giving you the works from accounting perspective.

Okay.

Sorry, just to reinforce. Kath made a point previously. Obviously, we did post this in our quarterly. There is adjustments. We get a range, we just have since some of the work, and it will be,but we've now obviously taken that provision up and the adjustment that you see here in EBITDA and the from the quarter [indiscernible] indication, and we'll continue to refine that. Obviously, there's a likely adjustment in the end for Forrestania in the other direction and it looks over as we go.

The next phone question comes from Hugo Nicolaci from Goldman Sachs.

Congrats on the full year. Presume then, just following a few previous questions, which is optimization is probably more second half FY '26 than calendar '25. Push that 1 too much. But I guess to the extent today, given the [indiscernible] in lithium prices, does your budgeting factor in a return to dividends from the JV this half? And how do you think about the timing of distributing that to your own shareholders, just given your capital management framework? How's that liquidity?

Yes. Hugo, I can't guide on dividends. I mean, I'd love to [indiscernible] I will give you that. But you can see the cash that's accumulating in Windfield and that's only going to improve or increase the rate, as both for capital version comes down but equally is may show some signs of recovery, albeit to speak, that might be modest. But to be honest, at $1,000 a tonne, I mean, it's the business which is we don't see demand. And the slide through, look, it's pretty deterministic really. I mean, we feel we'll obviously work through its dividends. There's no course to hold cash there. And TLEA with the only other burden or other reason to spend money is Kwinana, and that you guys can take their guidance and work through what that's likely to be. The rest of money comes out as dividends to us. And we have our power management framework is clear. We will turn that into return for our shareholders very quickly. We're not [indiscernible] sit on it. And we've, I think, taken a prudent view with our dividend this year to [ 92 ] or a further dividend. We've got a lost cash balance still some uncertainty on market. And I think that just leaves us in a strong position with our balance sheet. As the money starts coming through and we start seeing some more sustained recovery in markets actually that can change very quickly.

Got it. And then just 1 broadly on strategy. Obviously, in the year, you've divested Forrestania. You've withdrawn from Fraser Range. Nova is still coming to an end. How do you think about sort of extracting value out of the Nova and Cosmos infrastructure? And then on the exploration portfolio, is there anything that's starting to firm up as prospects there?

Yes. Look, I mean, it's nothing more to see at other than what we've guided. I think you've got a couple of numbers in terms of the tonnes and costs through the , but then we've given this direction on close, that will get tight. And that's really just [indiscernible] and fall well to the. The size of Cosmos is prospective to really [indiscernible] very, very part the world. As you know, [indiscernible] valley, you can see what is our property see the mine from the top end of town. Bellevue on the other side, there's gold, there's lithium, there's nickel, copper on those tenements. So we are working through that. It's not about our immediate focusing commodities. If we service gold and we'll find a way to monetize that suggestion [indiscernible] going to be a gold company. But well [indiscernible] release leave on the table. So that's all work that's underway right now. And as we have more clarity, we'll give updates. More broadly on exploration, so that's some really good work happening. Nothing that I'm going to report on further. I mean, there's some material reporting sets work at We'll give you some guidance as to where our money is going, where we think there's some potential value. The only thing that's probably not really discussed much is our focus on generative activity for copper outside of Australia, and that's progressing well as well, which I'm really pleased about.

[Operator Instructions] The next phone question comes from Austin Yun from Macquarie.

Just 1 quick question. I note in the presentation. you highlighted that inorganic growth is 1 of the 3 key pillars for the growth going forward. I'm keen to understand, given that you're still kind of working through these challenges out of Kwinana, is there a condition that you need to resolve Kwinana before you can pivot into more growth?

No, I don't think so. I mean, the Kwinana is just -- it's a critical priority. Greenbushes is #1. That's #2. We absolutely finished that work, and that's been in focus for some time. Inorganic product is extremely hard and lowlight. As I said earlier in my comments, we think about asset project-level type investments, where we bring value where we could do something that a partner who we see can't achieve on their own, that's the kind of value-adding activity that we are focused on. So we continue that work as over many years. The idea is to deliver some very successful outcomes through its 25-year history, and that's always out there as an option. But it's certainly not the top priority.

Thank you. At this time, we're showing no additional questions. I'll hand the conference back to Ivan for any closing remarks.

Great. Thank you. Look, we got to all the questions inside the hour. Fantastic. So have some of you drop off to other calls and [indiscernible] Thanks for listening. And I guess I want to take a moment and just thank our shareholders for their support through this period. I've been in the business just over 18 months now. It has been hard. There's been a lot of challenging decisions to take, a lot of issues to work through. I think we've demonstrated real discipline in how we work through the portfolio, projects and work to reduce our cost to position ourselves for the future. We've got a very clear strategy and with a team that are working on and are doing an outstanding job, I have a huge amount of and confidence in the work that some underway and I think that's going to bring us some really very positive outcomes for the future. The priorities around Greenbushes are absolutely clear. The value there we can unlock is extraordinary. It's just so nice when you have a world-class orebody, so much upside, potential. Many of our peers are running extremely operations doing a fantastic job, but it means there is limited potential upside in terms of productivity tonnes and so on, and all of that ability to unlock those options at Greenbushes is very exciting. Kwinana, we talked about over the ground depth, but we do stand by our economic assessment of think there's some big marks on it's pretty hard to believe we can generate appropriate return out of that asset under any conditions unless you believe in $35, $40 target kilo, which we don't. But if you take the price decks and roll them forward, if you take the costs, even if you have the cost, you still struggle to get closed. And that's our second priority and then beyond that and looking through our growth. So I'll wrap up there, and thanks for your support. I look forward to sharing results through FY '26 as we make progress. Thanks for joining.