Syrah Resources Limited (SYR) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Syrah Resources Q1 Quarterly Report Update. I would now like to hand the conference over to Shaun Verner, Managing Director and CEO. Please go ahead.

Thank you, and thanks for joining the call. With me this morning, I have Stephen Wells, our Chief Financial Officer; and Viren Hira, our GM of Business Development and Investor Relations. And as always, we will reference some of the slides released along with the report on today's call. First quarter of 2025 saw enormous uncertainty in electric vehicle battery and anode material markets with the U.S. and Chinese government policy announcements and particularly tariff implementation seeing changes to industry participant strategies and financial positions. Chinese dominance of sales growth, supply chain development and EV penetration extended further during the quarter, whilst the U.S. drove clear policy intent towards critical minerals independence and leveling the playing field for U.S. manufacturers. Measures being taken by both EV and lithium-ion battery manufacturers and governments outside China are having major implications for the evolution of the industry. Whilst the global market for EVs and their input cell and process material components are being buffeted by a series of high-impact policy decisions and demand changes, there is major opportunity for Syrah with available operating capacity in both ex-China natural graphite feedstock and U.S. anode material production. Given increasing urgency for ex-China risk diversification, getting Balama and Vidalia to commercial production levels with long-term high-quality purchases is the core objective of the team. Therefore, despite the major market and policy dislocations, we approach the remainder of the year with a positive view of our pathways, subject to the timing of our 2 major tasks, restarting Balama and commencing commercial sales from Vidalia. Syrah's operating position remained challenged in the first quarter with Balama impacted by ongoing process disruption unresolved since the Mozambique national elections last year and reliance on increased support from the national and provincial governments in the remaining elements of resolution of the issue. Strong progress was made later in the quarter and subsequent to quarter end, which I will cover shortly. And we're increasingly confident that resolution is now close. At Vidalia, whilst we're making good progress towards qualification and ex-China policy settings have seen significantly increased customer demand in the coming years, the company is still incurring costs awaiting the commencement of commercial sales, which are impacted by the volatility around Chinese supplier dominance and OEM and battery manufacturer addiction to subcost pricing behaviors. Continued negative working capital was therefore evident to the company in the first quarter. Given the strategic critical mineral position held by Syrah and our unique capital deployment and operating experience outside China, we continue to work collaboratively with funding agencies in the U.S. ESE and DOE regarding ongoing working capital support through the external impacts on the company and the implications for the loans in place. Progress towards Balama's operating resumption and Vidalia sales is being made, and we're focused on cash conservation whilst targeting the soonest possible positive operating cash flow. Both upstream and downstream market conditions ex China are developing strongly in favor of Syrah with increased demand and supportive pricing in these segments, and there is genuine interest around supply chain opportunities for collaboration to accelerate available capacity. In light of international policy and market volatility and our challenging operating and cash flow position, Syrah's focus into 2025 has simply been to drive all activity towards resumption of production and sales of natural graphite from Balama and qualification and sales efforts for anode material from Vidalia whilst minimizing our cash burn. Our development progress and production readiness beyond others in the ex-China integrated anode material and input feedstock markets continues to extend given the lack of progress in most projects, but production and sales volumes are critical for us, ensuring that we can take advantage of that head start. Turning to Slide 5 and the overview of the quarter. There was no production at Balama due to the protracted protest actions at site despite the reduced impact of nationwide unrest related to the Mozambique national elections as the quarter evolved. Syrah continued to support community, labor and security efforts through the ongoing disruptions and achieved a resolution agreement with the processing farmers authorized by the provincial resettlement authorities, which now requires final implementation. Given the restricted ability of the Mozambican government agencies to provide unimpeded access to site during the remaining illegal opportunistic protests, Syrah's declared force majeure status at Balama remained in place, but we believe we're very close to resolution. The final available natural graphite sales of just over 1,000 tons were made from inventory. Almost all fines in the sales mix with a sales price of over $800 a ton sit [ph 5:57] for this small volume. And at the end of the quarter, all available inventory has been depleted. We do, however, retain significant inventory feedstock at Vidalia. Production at Vidalia continued only for qualification purposes with ramp-up timing awaiting certainty on commercial sales to minimize operating costs and working capital. We continue to achieve strong progress on anode material technical qualification processes with a range of customers, including quality and performance testing, process reviews, measurement processes and customer line audit visits. Positively, our second multiyear binding offtake for anode material was announced with Lucid Motors and strong commercial progress was made towards further offtakes in line with policy developments. Higher volumes and earlier demand is evident for ex-China material given the direction of the new U.S. administration towards supply chain independence, evidenced by a number of executive orders and policy changes. Our expectation remains that we will achieve Vidalia anode material commercial sales this year with timing dependent on qualification progress and enhanced by changes to U.S. and China government policy, competing tariff volumes of Chinese anode material supply to North America and greater urgency in customer procurement strategies. A final investment decision on Vidalia's expansion to a potential 45,000 ton production capacity is dependent on Vidalia sales from Phase 2 and definitive outcomes in customer and financing commitments, which have ratcheted in intensity. The company had a quarter end cash balance of $66 million, including $44 million of restricted cash under the loan facilities as well as $47 million in undrawn liquidity under the DFC loan Tranche 1 for Balama. Steve will talk further on this in a few moments. Lastly, in summary, and as mentioned, government policy evolution continued through the quarter at pace, including progress with the U.S. Department of Commerce and U.S. International Trade Commission determining that the U.S. anode material industry's development had been harmed by imports of graphite anode material products from China at unsustainable and unfair prices with preliminary countervailing duty determination expected by late next month. Significant tariffs were implemented, which impacts both artificial graphite anode material and natural graphite anode material, providing an important mechanism to support U.S. producers such as Vidalia, consistent with the overall policy direction of the U.S. Further review of and definition around FIOC requirements in the U.S., both in terms of entities to be designated FIOC, which is foreign entities of concern and under what criteria and the application of those rules to different tax credit and subsidy arrangements. And finally, China restricting some exports of graphite products to several destinations utilizing their government license controls, causing market disruption, including in some areas in the U.S. All of these elements are of major concerns to OEMs and lithium-ion battery manufacturers in the U.S. I'll now move to the situation and the way forward at Balama. As we discussed in January, just prior to the end of Q3 last year and the Mozambique national elections in October, we began to deal with the community protest action, which impacted our ability to freely access the Balama operating site and led to the demobilization of most of our personnel. This action was initially driven by a small number of landholders related to dissatisfaction with resettlement compensation received under the joint Syrah, Mozambique government and local community resettlement programs from 2016 onward, notably, all of which were in line with both legislation and international practice guidelines. Through this quarter, Syrah has worked extensively with the government resettlement teams and the farmers directly and has achieved a headline settlement agreement and a plan for implementation. Unfortunately, throughout the extended protest, the inability of the authorities to support mine access and control some illegal behavior has seen other opportunistic individuals join the protest action. So whilst we now have farmer, community, employee, stakeholder and government support to implement the plan for restart, a small number of these protesters have continued to impede access. As we've previously talked about, Syrah has experienced challenges in receiving an appropriate level of government and legal enforcement support in resolution of the issues at Balama. This situation, however, has improved later in the March quarter, and we're now more confident of near-term resolution to provide the conditions for restart. Protest action has obviously led to ongoing production disruption and consequently, there was no volume produced at Balama during the quarter. There's been no intentional damage to equipment or infrastructure at the plant site with processes remaining outside the operating area. More broadly, the increased acceptance of national election results through the quarter and the effective commencement of new government ministers and various appointees has seen a reduction in countrywide disruption and the return of focus to broader security, economic and social improvement, all positives for the operating and investment climate. Challenges still exist, but we expect continued improvement from here. We remain absolutely committed to resolution aligned with both the legal framework under the Balama Mining Agreement and to utilizing the processes available to us to ensure a long-term solution. We think the plan in place will achieve that and the government representatives are aligned with wanting Balama in production and generating value. We emphasize again that historical audits and third-party independent reviews of our resettlement practices through various accreditation processes, including consultants for funding and as part of our IRMA audits have seen Syrah as a positive and responsible developer and operator. In addition to complying with all legislative requirements, we continue to invest in valuable community developments in infrastructure, health, education and sustainable income generation for the broader community. We're dedicated to ongoing positive community and country contribution in Mozambique, particularly in our 8 local host communities. We're optimistic that resolution of the issues impacting Balama's operation will be achieved shortly, facilitating resumption of inspections and maintenance initially in readiness for production to recommence and all efforts are going towards ensuring this is the case. Importantly, given the very challenging supply conditions for natural graphite, both inside China and from ex-China suppliers into the industrial market and with the ramp-up of new ex-China anode material capacity, Syrah has a positive near-term sales outlook and there's solid customer demand for restocking and ongoing sales specific to Balama. So I'll now hand over to Steve to talk through the current funding position and interactions with our lenders and the important part of which provides support for us to navigate the return to Balama operations and commercial sales from Vidalia.

Thanks, Shaun. Good morning, everybody. Turning to Slide 7. This slide outlines our funding position at the end of the first quarter, which represents a combination of unrestricted cash and cash that is restricted under our loan arrangements with the Development Finance Corporation, which closed and funded in late 2024 and the Department of Energy loan, which has been in place since 2022. Restricted cash under the loan arrangements are typical of these types of facilities and are split into cash available for funding each operation and reserves for typical lender protections. These splits are highlighted in the right-hand column of this page. As you can see from the chart, at the end of the year, we had a total of $66 million in total cash with $22 million of that unrestricted cash, including cash from the disbursement of the DFC loan that was then distributed from our Mozambique operating entity to support corporate expenses. The DFC loan for $150 million includes $100 million in Tranche 1 with $53 million of that drawn to date and a further $47 million still available, subject to meeting various loan requirements. In terms of unrestricted cash, there was $8 million of net cash outflows through the quarter with $3 million relating to corporate expenses, $3 million relating to Vidalia and $2 million relating to Balama. The unrestricted cash outflow for Vidalia relates to the payment of interest and principal, which is the subject of current discussions with the DOE, while the Balama-related costs relate to logistics costs not covered by the DFC loan to our Mozambique subsidiary and payable by the parent absent production and sales of the Balama operation. As mentioned previously, cash burn is being minimized at Vidalia pending certainty of sales timing following qualification, and at Balama, we are below our fixed cost targets. The impacts of protest actions at Balama resulted in certain events of default being triggered under the DOE and DFC loans, although there have been no payment defaults. Both counterparties recognize it is a challenging period in Mozambique more broadly and undertook significant diligence on the Syrah Group and extensive diligence by DFC on our Mozambique operation, including our community engagements. The DFC also funded the loan while the process were impacting Balama and following the Mozambique election. So the situation was not new to them. The DFC provided a conditional waiver for the events of default relating to the Balama loan, and we are continuing to work closely with them. We announced during the quarter that Syrah had been successful in its application for a tax credit relating to the further expansion of Vidalia to 45,000 tons per annum issued under the 48C program. Accessing the tax credit requires the achievement of certain milestones over the next 4 years, but the key benefits from Syrah's perspective are: a, a further demonstration of the importance of the Louisiana facility to an independent supply chain in the U.S.; and b, possible monetization of the tax credit in our funding strategy for the expansion of Vidalia. We've also commenced processes on accessing significant 45X tax credits under that program relating to operating costs for the first few operating years since the completion of construction at Vidalia. I'll now pass you back to Shaun.

Thanks, Steve. And turning to Slide 8 through to Slide 14 and the current market conditions, starting on Slide 9. China's anode production growth has outpaced year-on-year global EV sales growth through the first quarter at 45% year-on-year compared with 36% for EVs with a strong growth in energy storage demand accounting for some of the gap. Monthly China anode production has grown over 5x in the last 5 years and continues to see inventory ahead of demand given the artificial graphite oversupply. As the 2 right-hand side charts on Slide 10 demonstrates growth in artificial graphite anode production in China has spilled over into the natural graphite feedstock market with Chinese domestic natural graphite production remaining relatively constant despite the massive anode production growth as artificial graphite supply has dominated. China has not required significant volumes of imported natural graphite for more than 18 months. Slide 11 demonstrates the pricing impact of artificial graphite overcapacity in China with both medium and low-capacity artificial graphite anode material now lower priced than natural graphite equivalent products and high-capacity product approaching the crossover point. Much of the Chinese artificial graphite anode material capacity expansion has enjoyed subsidized or beneficial land, power, funding, tax, employment or other Chinese government policy assistance at local levels, provincial levels and in some cases, at national levels. And brutal competition is seeing low utilization of that capacity with pricing in many instances below cost. These elements are fundamental to the antidumping and countervailing duty case review of pricing that's currently underway in the U.S. On Slide 12, after the imposition of export license controls on graphite and anode from China in late 2023, there's been recent confirmation of some challenges in many producers being able to be granted the licenses for export of both natural graphite and anode material to some countries. The Chinese export of spherical graphite to Indonesia has increased as Chinese-owned plants seek to work around the U.S. tariffs and the FIOC classification. Notably, our belief is that such a process cannot be FIOC compliant for the U.S. and we'll talk more about this when we cover some of the detail on government policy. Post quarter end, Posco Future M announced the final investment decision for the spherical graphite plant in South Korea with an expected demand of around 80,000 tons of natural graphite feedstock annually and initial shipments expected to be required from second half of 2026. Balama is the key contracted supplier to this project and is pleased to see the FID completed and construction ready to commence. The right-hand side chart on Slide 12 demonstrates that concern of price and supply impacts under the new U.S. administration saw high exports in November and December 2024, but far lower exports in Q1 this year. And in part, that's understood to be due to the challenges in gaining those export licenses. Slide 13 demonstrates the competition in China. In the Chinese domestic markets has seen exporters continue to lower prices to find offshore market share. U.S. customers, in particular, have benefited from massively anticompetitive practices from China with prices of finished anode material benefiting the anode material producer with upstream feedstock and precursor suppliers in deep financial difficulty. However, under the direction of U.S. policy and the antidumping case, this trade from Chinese producers may not continue to provide such opportunity in the future. On Slide 14, the recent volatility in North American EV sales is evident with total 2024 sales increasing strongly against 2023, with volumes at the end of the year and into 2025 highly volatile, driven by end of financial year sales and policy concerns. The policy and market retaliatory measures playing out between China and the U.S. underscore the need for OEM diversification in ex-China anode supply for U.S. domestic cell production, which is very beneficial for Syrah. Both upstream supply of Balama product into new anode material facilities outside China and downstream growth of Vidalia's capacity are of key strategic interest to OEMs and lithium-ion battery manufacturers who are realizing that awaiting policy certainty may not be a viable strategy when our capacity is limited. Although, commitments have taken longer than anticipated due to the continuing policy evolution and complexity in market understanding, there is real benefit here for Syrah. So turning to some more detail on government policy on Slide 15, particularly in the U.S. and China. I'll hand back to Steve for comments on the change of U.S. administration and the investigation into China's anode material supply to the U.S.

Thanks, Shaun. Clearly, there are a lot of policy announcements and actions from various governments impacting the supply chain for this and other battery minerals. However, working through the announcements, there is absolute clarity on the direction from the U.S. government as there was in the first Trump administration, security of critical mineral supply chains, ex-China focus and U.S. production for strategic and commercial security, all of which is supportive of Syrah's business strategy that has been developing since before graphite became a geopolitical issue, but which is reinforced by the current geopolitical landscape. The geopolitical policy and market uncertainty for commercial positions of anode material customers has continued from the second half of 2024 into the first quarter of 2025. Policy evolution in China is presenting real challenges in achieving licenses for export of some graphite and anode products, while the Trump administration's major policy and tariff announcements and retaliatory Chinese tariff actions are causing volatility in anode material, battery and EV demand. Conditions now are even more uncertain for buyers than in the final months of last year as the U.S. administration was in transition. However, the direction is clear. There is an imperative to access ex-China material. While imports of natural graphite feedstock and precursor products into the U.S. are exempted from tariffs, coated NG natural graphite anode material and all artificial graphite anode materials are tariff, providing a major cost impost for U.S. battery and EV manufacturers importing that material. The only current certainty is that there is a benefit in direct domestic U.S. source of anode material such as Vidalia, and Syrah is seeking to leverage that position for current and future benefit. As noted in the earlier market discussion, there is significant U.S. government attention on the dominance and activity of the China exporters of anode material, both direct from the Chinese Mainland and from newly constructed China owned and operated facilities offshore. The recent designation of BTR, the world's largest anode producer as a foreign entity of concern or FIOC is a case in point. Syrah's target customers are assessing implications of current and prospective tariffs and potential implications of FIOC designations on graphite sourcing requirements under the existing Section 30D consumer tax credit program as well as the potential extension of that policy mechanism on the lucrative 45X production tax credits by executive action or via Congress, as well as the possibility of further potential supply restrictions under China sourced or operated anode material supplier offtake agreements. There is also a clear focus from buyers on the potential additive tariff impacts of the antidumping and countervailing duty or AD/CVD, investigation by the U.S. Department of Commerce and the U.S. International Trade Commission, which Syrah continues to monitor closely. This investigation seeks to understand the extent and impacts of unfair prices of natural graphite and synthetic graphite anode material products imported to the United States from China, which determined in January that the development of the U.S. domestic graphite anode material industry has been harmed by Chinese government subsidy and supplier actions. The preliminary assessment of the countervailing duty tariff outcome is due in late May and the antidumping tariff outcome is expected in July. If levied, the preliminary duty and tariff changes become immediately payable and are held on deposit by the reserve pending final termination, which is expected later this year. These decisions would have a significant further impact on the cost of importing anode material from China. It is also important to note that this is a separate tariff and distinct tariff process from the broader tariff discussions, and this is specific to graphite and based on a defined time line. The absolutely clear geopolitical implication is that China's current and intended further domination of the EV battery and battery input material markets globally is being challenged by U.S. policy and the importance of domestic U.S. sourcing from facilities such as Vidalia and from other ex-China anode material suppliers such as Posco, who source Balama's feed will be critical for cost management and supply continuity in the U.S. And I'll now pass you back to Shaun.

Thanks, Stephen. And finally, turning to operations at Vidalia, where we're focused on small production runs at the moment, supporting progression of multiple qualification processes and a focus on managing costs until commercial production ramp-up with that timing dependent on final approvals from customers. Our CLP 18 product quality continues to demonstrate strong performance and feedback from the various phases of qualification testing from multiple customers and our concurrent internal testing. On Slide 20, we show that the physical and electrochemical performance of product from Vidalia is consistent and tightly ranged against specifications. We do internal testing. We use third-party battery labs, and we receive customer test feedback. And the results indicate that cells using Vidalia anode material are performing in line with or better than cells for intended EV applications using an equivalent benchmarked anode material. Cycle life testing is also progressing well. So although, it's not so externally apparent, we're making continued strong progress at Vidalia through these technical qualification steps with our customers as well as the performance testing, TQM and commercial aspects of interactions with multiple parties for current and future sales. Our expectation is still for high-volume sales to commence later this year, but we cannot yet be specific on that timing. Key factors influencing the timing include the customer qualification process completion, further tariff and U.S. government policy evolution on FIOC requirements, the delivered price of competing tariff volumes of Chinese anode materials supplied to North America and how all of that plays into customer purchasing and risk mitigation strategies. Although, the duration of these processes continues to be frustrating from a company perspective and results in a working capital draw, we remain very confident that we are the most advanced and stand to gain the most benefit in the short and medium term and that the policy and market settings in the U.S. are increasingly positive, not just for the current Vidalia plant capacity, but for future expansion. The implication of the market conditions for anode material outside China and the evolution of China and U.S. government policy means that U.S. consumers of anode material are seeking to diversify their sourcing to provide alternative options, and there is real momentum and intent in reaching contractual arrangements that provide that certainty. Syrah's commercial strategy and operational activities are aligning for offtake and we are ensuring that policy and geopolitical elements are taken into account with market considerations before allocation of our current and potential future volume is made. Although, there's still significant work to do, we believe that Syrah is as strongly positioned now as it has been at any time to benefit from the commercial discussions and operational progress that's underway in the current policy environment and that returning Balama to production and seeing Vidalia ramp-up will evidence this value. Thank you, and we'll now move across to any Q&A.

The first question today comes from Mark Fichera from Foster Stockbroking.

Just a couple of questions from me. Firstly, just regarding -- you mentioned in the quarterly about you've applied for a permanent injunction versus the provisional injunction for the Balama restart. Does that give you more confidence, I guess, in terms of getting Balama restarted? And how does that permanent injunction differ from the provisional in terms of -- does it force the government to really intervene on your behalf?

Thanks, Mark. I think all of our activity in seeking to resolve this dispute has included actions that involve interaction at government level, so whether it be national, provincial or local, interaction direct with community leaders and the protesters themselves and the legal avenues that are available to us. And the provisional injunction is really focused on the illegal interruption, the illegality of the interruption to our access to site. And the process of that going from provisional and progressing from there does provide further legal support for underpinning government action or security action. However, ultimately, our focus is ensuring that the resolution processes that we put in place lead to ongoing community support for the operation in the future. So we are not relying on legal enforcement for resolution of the process. And as we referred to during the call, the majority of protesters we've reached a settlement agreement with and have an implementation plan for. The legal process will provide an element of support for that. But ultimately, it's around community and government overall support for the operation.

And you mentioned about the -- you've come to an agreement and obviously signed with the government on the resettlement agreement. To implement it, I guess that means that these other protesters must fall into line. Is that how to interpret it?

Yes, that's right. And we've dealt in this agreement with the majority of protesters and work through a resolution there. And we are reliant on the government to assist with the finalization of this process because there's an element of illegality to the remaining protest.

And just Vidalia, you mentioned about you've recommenced discussions with the Tier 1 sort of U.S.-based customer for anode. What prompted the recommencement of discussions? Just wondering a bit of background on that.

Yes. I think the combination of policy and market conditions, I think, have no doubt led to many of the interactions that we've been having commercially really ratcheting up in intensity and momentum. Whilst there's an element of volatility and uncertainty to what's occurring, the directions ultimately are pretty clear in that there's a strong tariff focus on imported Chinese material and there's a strong focus on critical minerals independence in the U.S. And I think that's encouraged U.S. OEMs and lithium-ion battery manufacturers to really redouble their efforts to try and secure long-term large-scale supply domestically to supplement at the very least supply from China.

And I guess, can you give an indication of a time line of expectation of a binding offtake agreement? Obviously, you're working to that with this customer. Can you give some color on that?

Yes, we're obviously seeking to bring things to conclusion with a number of parties as soon as we can because it's critical not just for our allocation of supply from the existing capacity, but also as an underpinning position for a potential expansion decision. I can't give a specific time line outcome for that party or others, but we are very focused on making sure that we have all interested parties working through the same time line as we make those decisions. So as I said earlier, the most important point is that the policy and market conditions are such that there really is a much greater momentum now in getting those decisions made.

We have another question from Andrew Harrington from Petra Capital.

Can you give us a bit of background on the U.S. level of imports and how much will need to be replaced by yourselves or any others that are in the North American market that can displace what is now under tariff?

Yes. We can do that, Andrew. I mean I think the important point here is that basically everything that's coming into the U.S. at the moment is subject to some degree of tariff, whether it be the general 10% or the China-specific position, which for anode material, the current position there is estimated to be 170%. Imports of finished anode material depending on classification, somewhere between 80,000 tons and 120,000 tons. And as I said, the vast majority of that is subject to some tariff and the vast majority comes from China. So there is a significant amount of opportunity for existing capacity. And obviously, that import level is expected to rise significantly in coming years.

So let's say, midpoint 100,000 tons a year, there isn't 100,000 tons of capacity in the U.S. today. Is there to replace that or any?

Absolutely. Yes. Some degree of that supply is going to continue to come from tariff imports, and ultimately, the policy and not just tariffs, but other elements of policy on subsidy for production tax credits, consumer tax credits, et cetera, are all designed to incentivize the development of U.S.-based capacity to help fill that gap.

And I guess in the medium term, that's effectively half, so approximately 45,000, that's about half of the U.S. market would be supplied from Vidalia?

Yes. I think with the lead time that we have on expansion, we obviously expect the market to grow very significantly from there as well. So our estimate has been previously that even with an expansion by the time that came into production, we'd still account for not much more than 10% of total U.S. production. So there is plenty of room. It's one of the reasons that we've never been too concerned about supporting competition because ultimately, our offtake agreement with Posco is for their expansion of anode material capacity, part of which would be aimed at the U.S. market. But the U.S. market for ex-China material is well and truly big enough for multiple players.

And then questions around, -- if I'm looking at your cash flow waterfall, it looks like effectively fixed costs are around $20 million for Balama. Is that a fair level?

Over what period there, it's more around sort of $4 million a month, but we're tracking well below that at the moment. And that's purely fixed costs. And obviously, if we start ramping up for production, then we put out our cost guidance for 20,000 tons a month sort of 430 to 480 C1 costs, which includes fixed and variable.

So if you have fixed cost for a month, it's roughly $12 million. What makes up the other $8 million in operating costs? Is that spread over Vidalia as well, that $20 million in Slide 7?

Yes, it'd be both. And you'd also have corporate costs as well.

At this time, we're showing no further questions. I'll hand the conference back to Shaun for any closing remarks.

Thank you very much for attendance and participation today, and we look forward to updating everyone further as we progress with potential Balama progress and Vidalia. Thank you.