MP Materials (MP) 2 Nov 232023 Q3 Earnings call transcript

Good afternoon, and thank you for attending the MP Materials Third Quarter 2023 Earnings Call and Webcast. [Operator Instructions]

I would now like to pass the conference over to your host, Head of Investor Relations, Martin Sheehan. Please go ahead.

Thank you, operator, and good afternoon, everyone. Materials XXXX MP Conference the to Third Earnings Quarter Call. Welcome Operating are today Michael Founder, Chief Corbett, from me Jim Financial Rosenthal, and Officer. Chief MP and Officer; With Executive Materials Litinsky, Ryan Chief Chairman Founder Officer; and

will reminder, presentation, to materially relating subject to forward-looking a release company's differ today's and assumptions included these caveats. and As statements may contain that actual cause to events the expectations statements in and our from are discussion today's filings. earnings are various future Factors that in results SEC

reference in addition, presentation. comparable EBITDA to included In be release slide have some EBITDA. in we adjusted measures means Any appendix financial to non-GAAP found directly our financial most discussion the measures today's earnings today's and this today the in can Reconciliations to GAAP presentation.

Finally, slide the on are our website. available earnings and presentation release

over I'll turn the that, With Jim. call Jim? to

us Thanks, for all joining Martin, thank and today. you

the I who through provide and and commentary give operational then closing today's run followed discuss the of you a will I progress. highlights. review will before some recent Michael, by will overview Let KPIs, me Q&A. brief Ryan To third will financials call. then begin, quarter

slide start XX massive Slide achievement. in business. midstream at let's a is on-spec Producing going scale tons So of end-to-end the begin of X. produced I'm with metric the on to our middle We commenced shipments.

amount Let's that of put for production context moment. in a

averaging EV approximately motors. a feedstock are units make over as of XXX tons sales so metric XX would month. NdPr XXX,XXX U.S. over of In magnets, traction can power per of metric tons XXX,XXX little or the EVs neo which

our doing but that domestic and just from economic are amounts clearly we perspective global very in are ramp, the for production So security runway growth. early a significant an innings with long also of being already

great focused fourth Michael later produce on of expect the team QX change the quarter on XXXX. maniacally in We are low-cost output and increasing position. Michael maintaining throughput in of in and expect to are will improvements our and call. our strides. improving expand making step the reliability, NdPr multiples further They this

be from the first oxide metal customers will quarter Southeast NdPr from NdPr as NdPr Asia. Pass Mountain delivered or MP's either in to

transition upstream products refined our producer or from and officially exciting us midstream It's to customers. an for So an time a underway. is our

and ramping our As extremely in production and have challenging I a commissioning with results. facilities reminder, nonlinear as stated, is though. processing an we tremendous process have consistently confidence team,

with was the structure circuits wanted the this significant quarter is note our not into we business I back me results the tenth stage consecutive side must to achieving to sent quarter metric along. midstream is refining. all Now We did Stage sell tons the for in along critical a of production I in that REO cost operation. our left the as of let over of hum amounts operations. of continues great remember slide Stage that for key as concentrate upstream the driver that II concentrate. XX,XXX This shift upstream the to our we in produced were

will on out production II later. We product feeding the stage detail this takeaway completed the our end. have finished all going charge into is end into here of back to fill front we the the that go where now downstream circuits. now of line at more are is needed product the Stage concentrate that Ryan The means

increases produced risk maximization capital over REO years value goal next fruit. the Stage in is are enterprise our the creation some yielding and me to XXk, increase have enormous Upstream you This of provide highest for lowest share. we Well, I exciting we and news source our strategy towards in return details. on that incremental American past. drive capital expansion heard with Many potential say brownfield have the rare earth X announcing More improvement a within efforts years. incremental that would I suggests of few the modest importantly, supply and investment. nearest-term of be to have which more capacity are will Today, XX% Michael

the we on ground only the officially remarkable have moved the of Lastly, into downstream months magnetic is as Fort Worth. we ago. office factory in business, broke portion This XX

coming and piece major Despite treacherous throughout XXXX. the in expect grow has our progress we factory, of magnetics in opportunity equipment landscape first lot the believe we environment, been the to installed business. macro the Our months more a commercial provides process and

substantial capital to only progress it this facility, way. in making risk-managed can a if on but are high towards done expansion do so expect of return a We we be

thinking that always like you on and are we'll update accordingly. owners, We

With that, our turn to Ryan me it and to Ryan? let run over financials. through KPIs

Thanks, Jim.

right. This Let's start from to look NdPr Slide new as a prior added the bit discussion of has far production volumes on X. slide a we've the quarters

evolve talked operating production we shift concentrate will about to metal we've sales and the as and oxide past, our sales. NdPr in metrics As production and from

evolve Jim X,XXX tons fills spoke is QX at compared about the away production upstream-related to and year's and metric slide XXXX point that over you'll primarily see metric prior What we Sales P&L, declines X,XXX sequentially. about the just very that tons dropped QX production. our see would the revenue on metrics time, the out which will consistent of you were coming far work mentioned represent process clear with QX products. the our quarters. with headings metric on volumes also both metrics QX So in I last calls. due strong left to tons These transition updated that line remains will is volumes XX,XXX also that fall over certain into and for slightly separated likely different in

process filled a storage product be upstream equipment circuit As to each II as product. as operating well Stage reminder, needed at with intermediate

into produced the upstream products XX now have of oxide that circuits into these metric of all with some volume We separated absorbed converting quarter. to in tons transition of concentrate that and NdPr

Early transition revenue than products separated a previewed, our longer with comes cycle to the our products with concentrate of change separated is to also build production time slightly sales on this partners for our is product. to produced extending NdPr tolling primarily with to a used the production further of products the which duration revenue our quarter. inventory we've metal, As NdPr in time begin being to at

yet but So we impact is sales into revenue earnings, this reducing transition will onetime move this midstream lap our without and earnings as upstream XXXX. of and the quickly the benefit we seeing

down lower year-over-year. about Sequentially, highlighted recovered than our in a quarter. pricing better in X% bit $X,XXX you page, per market over pricing pricing realized can impact metric what and late the the realized just on to in XX% On as pricing declined stabilized the of of REO of the concentrate, NdPr had middle expectations see ton, price

costs, this Including production at our related Stage sequentially on II metric flat a about metric cost Lastly ton per ton, cost excluding slide, essentially $X,XXX. was little $X,XXX. was per II Stage costs, the related over

on of you'd that a mostly makes tremendous that Stage P&L amount As count maintenance related. flows II ton portion $XXX and is the brought head expect, per up through incremental of large metric we the a

cost with production, we metrics to the changes product launch evolve of scale separated these reporting will going our and our forward. of With operations

Moving to X. Slide

instance, combined means pricing positive revenues lower for and is On sales. the lower can for volumes impact as the see it from consumption more the counterintuitively lower concentrate NdPr realized our eventually far sales left, us and In sales on internal you of this production volumes.

pricing by can additional EBITDA quarter. solid EBITDA sales, of a Stage the revenue you we flow driven in the in reported through still and most of As our see weak Despite quarter. with see, decline costs lower this corresponding II XX% without the margin pricing, to we

did the million. which And the talk CapEx investments I the costs pricing shortly, operations our our adjusted roughly the Stage related of flow Stage on capital, from commissioning of thought net year's moving finish adjusted would nongrowth EBITDA comparison are diluted in to and higher last million the interest million while therefore, quarter, on but to continues $XX environment, in costs of push right, point separated our said, includes $X to production ahead far change to million, I'll in and cash as the final modest our roughly about free a EPS. most third we working Positively compared our the also about of cash through of large income CapEx start-up our the $X amount II was of significant see understandably the P&L, that only driven out quarter. we of flowed to within $XX was income by I quarter as significant II despite was challenging adjusted of products impacting cash earning Stage Jim generate balance.

still decline our to Worth expected commercial should beginning QX line Pass, until of to be these commercial majority related this Now item there the but that Fort to assets achieving that it some as there. Mountain of item in start-up start production line will costs production, are in facility the relates

nearly depreciation, magnetic over including XX last assets addition, the The our to under earnings Stage comments increase we do We were this more in facility. related increased assets call. II quarters, with into quarter, other expect into which just put depletion investments was put amortization over In months, million coming million in to service by continue service of last Pass. our from at of $XX as to driven $XX and in most line year-over-year Mountain $XXX of the the of climb will and Texas the portions million

taxes GAAP year XXx reflected last had updates is you and given the by the of outsized calculations the small quarter, tax quarter's partially ongoing slight Lastly, current up our full and pretax loss. rate our Similar rate. to of full prioritization is small year expected GAAP a tax rate which This book net as tax near in impact percentage year-to-date relative will an rate. credit in impact versus tax optimizing quarter, on last minimizing to well rate points, our the its increase as of as see the XXXX to to couple cash the a medium updates term production driven our in ongoing

Turning to the balance sheet.

nearly and Stage on of of the cash approximately up gross intact generally total remain our with this CapEx ago. $XXX balance behind $XXX remains very us, Growth for was Pass. the earth year, Our strong the on We The under $XX forecast reduction our a other net Mountain was and while million about primarily $XXX million a investments spend quarter at quarter as separation III, expect in CapEx in a capital basis. projects, cash $XXX to just of robust With expecting Total Stage efficiency. capital from down major as million to due growth prior were billion million CapEx million overall we Stage focus $XX to now capital the our in expectations payments $X.X budget other III and is primarily on consists well in heavy rare of our II heavy spending timing separations million. views.

Stage to capacity at Texas then expansion and on And mentioned, I Jim of additionally, III exciting capital other the high Pass evaluate but to goal we a XXk, expansion Mountain continue smaller to evaluating facility. investment return are our Stage Upstream

to returns balance and maintaining capital on expect details we put as But on focused our always, XXXX our QX plans fortress We cash-on-cash remain further extremely sheet. our call. on

NdPr greater Meadow NdPr Southeast will amount begin production QX. a much sound therefore, I on sales we fair production ramp this Taking all last but when performed quarter, most by all volumes how expect for and circuits our upstream the going broken and from our supporting our Asia and And We Note as a sales internally. you. portion material this Stage decline record shutdown volumes may of our until our thorough build plant volumes and output true about as with infrastructure. affected is talk a we typical at this to like But oxide inventory our look initial that quarter-over-quarter quick NdPr consume X-week especially to stated time we will is was production expect concentrate don't of QX Stage work of midstream partners. of Upstream at date, to our around to turnaround. be production tolling we II a we

weeks. realized up sequentially, Concentrate be to DPR will assuming pricing pricing stability recent likely holds the coming flat slightly in

from financials success in through trough the more in metal stated likely XXXX. as move we I production a this through and expect to to period my enter of opening, XXXX. as off to sales, improve would our oxide to start to hitting to transition QX get transition shifting sales targets, impact line of our we as with results and concentrate Needless of of team sight we say, evident will Importantly, we expect we Michael's from begin as full become NdPr the see in

those a detailed over it update I'll to Michael With that, turn on more give to you successes.

Thanks, Ryan.

shipped X, October was a you periods year-over-year, was Concentrate It quarter, Slide the business. our end higher both slightly quarter with to recovery can a waiting some just unplanned production us our of grade were be Turning but we production operational off-site. to upstream generally primarily higher of downtime, to normal produced see for solid due the to record grade, gave experiment a slightly versus at opportunity at an In concentrate within ranges. curve. which down operating

circuit also production. will, We exciting further over upgrade time, project flotation drive concentrate believe advanced we improvements that X in

camera experienced Like camera manual AI up and incorporates parameters long-awaited make of to and human flotation a an adjustments are circuit. First, probably float a both each flotation started Frost to and color bubble haven't we that automated we things on system other set control the mounted top speed, data of. now have The eyes, collecting a flotation and thought even cameras cell. size we

As our and system the to we team from learn learn it. learns how learns

operations, to gradually help now, this and improve For consistency flotation are trove trial performance. but still we expect computer of and we data learning circuit in

current in enhancement Second, ore particle our will [ more ground liberation this on size circuit. optimal site our grinding believe the ensuring to basalt We to a we mill began ]. significant is while unburden construction grinding

year. the it particles, different this next will a Given the mineral optimistic we notable uplift recovery recovery we enormous after are observe online produce disparity of that comes in sized

out areas grind and challenges now, have The issues mechanical smooth Stage through means to were are predictable few the we disruptive quite majority remain. like. as that most continued of To would be after we day Operations periods. day. as operations sure, improvement no progress by a midstream But II instrumentation in the vast and for initial previous by worked

in The exceeded conservative QC performance has operational to of part our redundant isolation and gained continue capability and our and vessels variability NdPr teams expectations improve of that X we NdPr are addition by the The This types product ensured Stage largely has greater bottleneck production separation including of and should as suffered increased we back spec caused has pass project been to process In experience. of the first capability. as minor These several XQ, and of construction production on the and these held most XQ finishing separations. from and our technical poor premature circuit optimization our our hum workmanship. upstream, failures over restored October, resilience of in issues. circuits of confident are circuits

look points. our and increasing As and most under product spend reach belt tolled of to fewer our enough plant with commitments few are continue With problems ensuring will then to our and targets. same we we are increasingly unexpected ability the encountering metal. first time times we approach XQ now in we the on production commercial our quarters, we next known most qualification on now our to We beyond, confident time and run upper believe needs addressing this pain entirely in areas, customers uninterrupted while satisfies process business increasing testing throughput focus and plant complete finalize and our stability, longer on our next for rate. In

to about of hit again, production sight several hard line of ups our through are have that hard clear we really reach proud in our injury more have expect to completed I'm without of thank and operational and I'd the and teams progress. another and lost optimistic work like downs achievements talent we I'm their for a more our quarter working goal. feel a quarters but goals place unwaveringly stride, to before technical our we Once We our and I confident commissioning. and team's our work. time

our Before to strategy. over, provide on XXk I bit turn it want a I detail expansion more Upstream

business. we've in our heavily lost II we've the opportunity sight Although for past Stage been return years, high on upstream focused X the of never

Over the from growth growth building change low-cost from and the stable I Stage operations by more investments. our past targeting step strategy larger several have call, pursuing described while of projects modest operational improvements upon I certain

step XX past towards efforts picking steam months. over the been growth Our to change X have up

conjunction of engineers expand year, R&D been of earlier, plant have engaged projects our believe team and these piloting our the process working ambitious our and highlighted Over I develop improvements to our X many more facility in geologists, I flotation of efforts metallurgists to in and high while past They growing are with there has existing also more to technicians opportunities. return process growth those. operators concentrator performance. our incremental extensive behind orebody evaluating and understanding and

been to the Pass have resource. working plan a utilize to Mountain The diligently teams entire develop better

Our for The world-class the been mining. to blessed Because processing XX deposit richness and granted sulfide the second site taken orebody. is has somewhat with over is a years perhaps cream this, of truly of ease none. past of

have our flow we example, with cutoff published X%. reports grade an with mineralogy, cutoff sheets As geographies complicated resource, development grades many and more a projects much while calculated for X.X% below

Mountain much what grade a was for sense been might have of X%, the history, gives fact, in past. which the In cutoff ignored of as Pass' recent uneconomic

Pass marginal piloted commercial-scale flotation we Over from XX also from and months, Mountain past and slipstreams the on equipment plans. have with pulled our small feedbacks

in concentrate can capability concentrator overall at XX%. investment improvements, beneficiation we pilot development. Adding days, point, really At take early what next data in producing we targeted underutilized our like to see. we reagent optimization, in is of it the enough REO operational our resources, approximately it steps we we X between and While by confident that increase this the small real-world capital are additional have projects up, years, project

will that, I Jim. turn to With it back

Thanks, Michael.

on on a moment enjoy to this mountain landscape. up Mountain pretty revenue take picture with Please X at gorgeous view this of Let's a wrap Slide Pass.

the all. is so around though, picture the we world pretty not As look at

that third I force expected here. that pray that we to time. regional Middle is in the be for theater East, from think it a does At in of most continues. history say taken possible faults, the never just granted are perilous it or world. America major the war is truth it nothing that things evolve things or to we been in not. her that see. hope us greatest materially believe good With We MP, certainly erupts for and is that can Europe We fair a sad to has The continue the such of that, despite seeing at conflicts

In industry, Chinese before the that our global difficult industrial a pace concerns are about of of been year, it Interest started and the industry the and There remained has rates higher moved very economy October. and EV electrification adoption. and event challenged.

of our at our well companies the value electrification are price for and intact company, is see. right the prices very as share commodities to materials the Specifically, of to and current bodes long-term surprised But products which in market, and our out levered the price cycle, the near-term levels despite makes now. we for favor we secular of turbulence believe, largely are something

and we do MP have America. demonstrate the that what Western you discussed the that In laying and sense would it meantime, we've think for the further recent enterprise And I earth Michael from is hunt value world MP. here. groundwork essence, project earlier, likely in In no incredible achieved global as important capital for rare at been if long-term on remind asymmetric our us events at value creation and make is again sub-assets not

We are proud of that.

for will I Operator? that, open With questions. it up

first The is D.A. of Instructions] from Matt with Davidson. Summerville [Operator line the question

X -- think more you on Stage the from want XX,XXX a the you start, ramp as regarding already if big Stage realizing capability the to I have And helpful. to commensurate adding ground. capability through basis ramping, or that I. on with you asset First, guess can linear the announcement but want obviously, that tons? adding maybe XX,XXX inherent about talk out you be you're Stage is to -- alongside would Maybe II that II years, still talk a Do just I more about look base over tons that this next I is understand, to making

Ryan. mill jump pass XX,XXX will miss, opportunity to will that expect time start. upgrades as current be current will there's it's there our shorter a Michael, a in this to I'll term, be flotation And I out there linear -- Matt, a change for think laid bit that that that anything circuit progression XXk, period. Sure. Upstream tons we to little if X-year in. don't step our we will in our upstream. But to it to We frame but later and over production the incremental and please come given the come much be also relates

some call things actually we step sources, will, that's from it, I that now pretty is right this of waste. alternative that exciting think may change the classify about material one of this as if let's you growth come

results not Tailings, cutoff but of of some by grade. the accretive where XX%, REO. be that. are had production growing from to have We we Some incredibly exciting of value our sources also actually really other this just expect because upstream because opportunities that we're these

we're that. about excited So incredibly

I delivering II that on our your the what we've capacity, is the think to tons question first. terms there committed say in X,XXX of I'd on is focus Stage

and separated. circuit, say any engineering downstream But and sort. don't I we that exactly promises think I factors to get incorporate to designed when how so you about the plenty may of we as want safe of circuits, vitreal that to the And did make it's things

opportunity value with even add that the beyond So talking at continue about we to to and what will look expansion. above we're incremental upstream

give way you projects just share do given does the conditions? realizing last said then of price point, sheet, here. guys you with to is, want the growth that on -- to plenty about Obviously, Jim's stock capital very about think about it. differently you drawing board that, thinking maintain repurchase a having that deployment? market it healthy And does But where doubt change you're balance the it. No Got

And we're I it with very think I as course, price views to you've the think surprised capital where always share I Sure. respect said repeating I of heard the is. are my on worth company. of see that the I'm remarks, calls. we largest the on Matt. it's shareholder to operators. prior owner allocation And generally But Thanks, yes, think

imagine waking for all moment value allocation spend how that can about we every shareholders. You capital create of thinking and to

around means would to is I sort believe we've trough just announced with terms, are X you over years, think kind $X we put billion, incremental businesses course, in valuation which and enterprise valuation be basically call that I if a of that assuming our XX% modest okay? say, theory, increase say, trough XX% can it, right? What should today my announced right, of at Upstream billion worth do in REO, What volatile, that we next, cyclical. we $X.X value, is capital, of we're XXk, that are That the what at in just let's just with cyclical is expand look levels. and And this they today today commodities you hypothetically that a

few the that's more over If probably worth several you value assume a normalized or last out billion. years, double

make the particularly return point from flexibility Those sure to given because all make of But that investments we there, want foremost, from and the we've make our the about and we're environment on we that are sacred to about get want we enormous capital can if invest balance the just think modest must is the have that. company many the clear a very multiples. that sure then have been that The the been and sheet. is assets, when fortress kinds beginning, That we a in, thoughtfully. sequencing amount of that we we to do can to has first you

here I my head. of said, screen look the With that all scratch at kind and

as all that here. reserve with a preface, I right anything do to so And the

But is shareholders. tuned. value again, for creation today stay to be announced enormous So we going some just is believe we've what what

The from the is next with Laurence of line Alexander question Jefferies.

questions. Two

terms including the on you kind price? -- expect to capital or you Can either just that. and the of sort mean normalized that? narrow by payback you spend help you of of to also terms or expansion or sort capital working for capital some people required down just in sort frame follow of First, help in at what like of of Can incremental

Sure. didn't line on a get you Could Sorry. that. that, repeat I Laurence? great

spend how expect for REO much Sure. you to do the expansion?

expect think And plan that probably over either. out don't you sort a million. At can But of how years, in obviously, We're I of linear is be. as that I next this to laid occurring profitable a be our And expect point, what X upstream gives production. seen that order the magnitude is we XX% we and sense. spend about $XXX talking business about expansion you've this

at And And so of we're spend the what ago. that about. think for with to a of point it's sort us to make something It's highlight very grow to exactly of quantum of important I speaks business scale. was this to able our to that level capital minute spend, that think the embedded value Jim just I our that trying assets being here excited

has then cadence granular for And bit or update business? evolved more thinking of metrics the a the financial little you can give a how magnet around your for the

our there. The we ways highlight in thing the we've expansion there. return expand given We customers a initial by to high good on scale a making the in to at facility. similar see cadence and that of in did opportunity very mention is remarks, of laid the in from would gotten the very change looking no really interest a a lot I in scale downstream prepared what closely capital, very There's that Sure. that business potential lot we upstream, of we're out investment

think plan or metrics the so on about how in there's go-forward III no change the business. And we really Stage

can front, lastly, of in on on update seeing, particularly regulatory sort any you of magnet just any builds? chance what the quick then give U.S. you're on of movement And just around the the a

finally Speaker progress. House, we of have that's a so Well, Sure. the

heading into we're season. an think I election

short going one on which And that we think something the world, big think What to I'd standpoint bipartisan discussed so would Committee in doing and I I the that aggressive what's would very the would Mountain area look from say there's I be anything committee House, particularly be Select on has given say, term. expect it'd -- around I in the be Pass front. China, a for, out the -- on

And see do mean, on Washington fronts. on front. this all that I see in what's But -- something both sides on going on so the I will again, you think we

respect we're on. magnet it's we as do certainly tacked not on strong to possibility so something helpful relying that something that think there a with But that And gets business. happens, the

there. -- to And kind with building a making discussing that in -- is on sure but risk that proceeding scratch the we what thoughtfully with really adding understand that before get of to your business. just to business and we are the return is, capital from out respect we're a building business, to we're And managing way Ryan the of question, governor was Magnet on that high that part again, a we

big And we we that and economic just you We're And if we've kind things so are aren't aggressively front want on see we it's course, government of out hits spend. much even to today, were to in there, make before waiting as of the on what And obviously, that go continue have but pretty got, to Fort base we not to sense. hit such, going that going scale legislation Worth there's a larger. if frankly, sort help of there anything do start.

Stanley. De with The of next line Morgan Alba is the from question Carlos

little the is you you -- guidance the NdPr had maybe in guys for in have can cadence this comfortable I just for is of by talked quantify possibilities of oxide guys I do a the important quarter. I up very feel potentially given of more multiples question the And how how question. wonder That your you the said you oxide that production be it think bit narrowed the Michael that you fourth range feel production. -- about your production increasing first if my quarter. reaching target fourth So ramp you would

year. continued into we're give the notable Thanks, clarity progress excited Carlos. in But we do much quarter pretty to expect next more progress I'd expect. making. what We're and too even with we on progress the fourth the reluctant be

are we're uninterrupted then seeing stability, really throughput. more and on reliability, of focus periods to more to reliability, we going longer on So stability, focus uptime and continue

And the add thing Yes. -- there only I'd Ryan. Carlos, it's

production what on also I all ramping and sustainably profitably here we're costs. and chasing volume at not importantly, is focused just think

an his think achieving so I done that so have And incredible team and far. job Michael

so with quarters we where hit a to we have we're today. expect probably before few we more happy And very very, of our stride, ramp but are

All right.

that oxide sales Okay. of hear quarter? already And you ore have expect metal fourth correctly NdPr saying the to in in and you I

QX the the What QX. is sales majority we occur to mentioned of even of in production expecting

tolling and set So certainly is and inventory initial but of thinking in the this QX ruling of out past, particularly up sales out the in of set the timing not sale volumes a that about partners. cycle because sales, laid cycle I've building that

that's pace. important a metal. So uniquely But I this the look early at models production is expect cycle think you and always or oxide for don't be transition in terms the slow to cycle QX. your as this from QX I of exactly sales guys concentrate to sales

right. spend disbursements? last or pace something about that Is And how start cadence on take accelerate the my disbursement? this or XXX we project, X years? you All the take, that the next see think over you should to maybe in -- that million, is is and expect question of Good. Upstream give year the the next the Or this then XXk might do how

many to for is, What Sure. are project different hit say about target. the pathways this I'd us thing front I on exciting there think is that that

out we've then modestly portion year guided as said, of a so confidence different the that very be next I years. outlay a got the the step in work enough But bit may get of start at expect we like ways to lay couple the there. look backloaded strategy. and for that I'd to back towards test And changes initial those likely

of The George is with from Genuity. next question Canaccord Gianarikas the line

kilogram -- despite somewhat like quarters off because seem couple of to to environment. or be EV ago, bottom times for prices to profitability that to First, it of pressured kind the a market. have level pricing I'd based seems It weakening China Inc. $XX be about we seems a of a Jim bounced a being ask a just NdPr at And about of globally on couple talked few

we accelerate? continue EV So any time and least your sales update on around can to not levels or being for there bounce before the whether thinking at these

always that being for me Sure. Thank George. with you, I credit a question starts like giving patient.

So thanks that. on

XX. sitting roughly NdPr is around So

we've what time the If chain. would pricing was the themselves, we across if ones world whether whether seen about but companies you supply held -- it and if that correct this period, it, at OEMs -- the the of ones, some think the today months analysts the pretty both much about versus new maybe in, and ago, it's feeding some of legacy trends several or look you deteriorating consider think a in electrification quarter, we've seen research has semiconductor into that the lot

people slowdown of sort around seen Simultaneously. electrification You've this to thought. feeling what in a relative

canceled. canceled, You've projects wind turbine seen some major wind projects some

relative so have very with even in prices thought. And held of people well. what And though, actually, to all that,

And -- been have so bottom the only we -- bouncing that want long there's require fact money. so parties because mean really I think the to it does speak around are that I the economics to lose we just

which in And out sense attractive levels can to the our these anywhere -- value economics at -- Upstream incremental enterprise very large so in and Upstream the we least very for XXk our it outside makes really because be believe exciting at for have very so the little incremental capital makes what of we non-Chinese gate. create of X long-term economic supply XXk, also certainly, world, any

kinds world positioned well And sure. so a make will frankly, at the to with times you'd these pression I hopefully, prove will in be now elsewhere that think have able to be MP -- ourselves stock as to, to greenfield think, here crazy where for in invest we of sort have that like relative of an to that I buying investments prices

the trends us of is, in the happened what of And what impacts, going has mean theme October a a global as I would couple think is actually of that by strengthening to of just years I and supply to course, forget that theme. think that. that, there this macro talked about But past there's is we've about the with can't failure sure all weapons we deglobalization, chains procurement month then making I that of about theme, we happen would around that certainly reality And the I There's and people see think I further that I is is But say isn't about think be in lastly, world. of what add which think globally. that now starting piece and is a calls on I globalization. about a the unfortunately, must the over see last remilitarization another single along point risk. And of

think beginning, so demand it's going couple you to And -- source things just that trend, think I in and think demand missiles, I actually of these obvious be favor significant I a that's to about of that, think that the reasons. robotics, of And for will chain supply coming that's kind but other that a years. that whether our some guided is have actually obviously, of

you utilize of that and along incremental a electrification have the of recently because say some where should touched weakness. -- use. higher a And probably that world amount hybrids I do big a let's respect from the higher penetration slowing EV NdPr have not lastly, then forget announcement way down hybrids. are of And and down in investing into straight there's more Toyota electrification, about slowing if would to interest go X/X we perception the hybrids rates typically But saw with to this on

so also penetration. bullish growth that's just relative just for And to slower

is anyway, up, all I certainly, ago, adding I I we're intact. that several that -- the bottom, called of would So say months remains think what

term, economy the the think short that I is challenged.

nervous. very I think people are

the of or X for markets remilitarization, months that in bullish theme become is trends going very are a is who to XXXX. capital the those very like. of couple But new the a totally next year particularly look going what is So in think powerful I knows out, all which to

reach a as what kind as be you can then, Maybe steady-state for just of you will production cost your quick per production NdPr? kilogram to as follow-up illuminate to us

what I'll quickly are cost Sure. George, that Certainly, where and on is ramping scale, early take possible initial efficient run Ryan. possible, as little and bit as it's exactly before kilogram quarter we operations start we to What production home a with to here. promises be per want as as production right one. do full rate other profitably at in see now. this we that will our given making it's

those as at some would that to estimate exactly chemistry on on based an expected you of point, say, gave guidelines imagine, What production public, cost the work went when numbers And we is point. I rough can though, plant. in of were we would our as that the amount how at

we And think see calls so about very, what pleased I I've we're very with. prior talked there, in is

will So we prove or think there our conservative. correct assumptions

though, on keep The price those in And mind, basis pretty particular, and a energy. dependent have is on heavily seen variable other thing is to reagents. labor increases Stage significant commodity as cost in II,

get but at we is little give And hope it's point. running information that early so other, to efficiency up days definitive bit eventually offset those as that this our each and a scale and add more and

confident our we've However, that to by low-cost maintain I close ability producer to a as date, position saying we with this seen in industry. in everything our remain

the of is Capital The with Abhishek line next Northland question Sinha Markets. from

Sinha. This is [ Abhishek ] Carlos on behalf of

news of So the we up on to and what production recent just Malaysia's your want if sort export to is outlook on that and of know on you metals, based we supply that saw wanted squeeze. ramp

think, -- do Malaysia were headlines. the lot news, had a Well, of I think just there to I

the chain. do I news Malaysian to of government the think capture the had wanting to with value Malaysia actually, more

so have things side from no they right state material, us to obviously, we I operate see sending Malaysia. more to really -- think from actually really impact Aside industry. we some over that. in But just about That with we're how the impact of kind of wanted now, doesn't respect don't

Sure.

premiums follow-up, wanted experience what oxides over with we NdPr ore? know a As to of you NdPr just sort

you can repeat sorry, I'm that?

to are curious for premium over oxides ore. NdPr We know you what NdPr experience

the I it. to you're bridge talking sort oxide. concentrate Yes. assume Got from about of

a revenue just it's focus on incremental the margin price not to in moving is us, the think I side. is uplift way separation the focus on obviously, and The dollars. about think the we for

oxide and ore quoted both are obviously, the market. so And in

a what kind fairly amount that you as there. production so you we for the expected to to we uplift can ramp what target -- we we pleased about can all together, we in sort expect separation. so be the and on production of putting NdPr But the oxide con math a of of to move and levels, there our But do the revenue and we're nice hit cost insisting do very XX.X% dollars guys con. in expect be versus of the with profit both plant, of as is And get math cost once

with is next Bank. line the The question of Deutsche Corinne Blanchard from

when you delivery time Could shipment? maybe would timing talk shipment in for for the about the the of time revenue oxide recognized the be and NdPr

visibility that there the these site I'd early get Corinne, initial on Ryan. a are last oxide, process electrowinning to refer bit earnest, that. in consistent comments little start as call started which and particularly QX as back our production for inventory shipments take about Sure. the I'll talked the to production, order you to to what is it's well earlier, we be QX efficiently. in tolling inventory to we running an the prioritizing channel. In and a needs tolling level building in of

way of is being us we metal oxide for after port maintain or what metal, recognition slows purposes just into the the has fact once we delivery causes it will given because through of really the it for at And the of title that location so the it revenue of converted. all the sell that and turned our production

for early that's much shipments, to so see shipments, QX and shipments said impact QX. And don't we we've until expect QX these why QX

also -- sell as to intention oxide expect is can certainly, our oxide. You

different contracting variety of And are a structures have. we so there

to of a what's shorter get significant some XXX% con this the this are we then longer are con term, of of Some amount little a consuming change. channel to selling bit transition through driving this filling and go effectively needing as is our But our initial from term.

why think it I'll just it about rough walk. takes sort as you And does, a so long if give as you of

Pass to about from converted port to it getting then about we're think probably Mountain port, X metals. it needs you if get it's about at could sea If spend talking weeks and at week a

take to got month. could customer. get to a that And the So to it we then up

So us to months. X.X lapped that gets that that's impact for quickly. though, X channel very we fill Once

in in getting occurring oxide what's background filled channel net and to revenue the some we forward now, that's that can the right So P&L. so we start look showing you

but All expansion. right. before, like, then I does how follow-up where fit be volume? maybe a did, do as And touched apologize on placing that expansion this Meaning, the on you you that if maybe you with you And the demand? think would the

Corinne. Can that apologize, you again? ask I

Yes.

talking you that expansion XX% next -- expansion about, were the the For over like X by years.

the of absorb what wondering capacity volumes. the Just market to those additional

So just you high level, like view this? how do

Yes. Sure.

think expansion those trouble expect just the volumes. sell but where Sorry. you're about first, hearing you having a asking to we We little I and were

thing metal market important those into XX,XXX as today, con the think Chinese be are in has over making tons that production a to from longer volumes, of keep and transition I the been that oxide sold we and as concentrate, mind selling primarily product. will to historically is no we

an additional capacity for separation XX,XXX tons. is And absolutely so there

no that. about We have concern

And with of we're China pleased what in seen we've then ex pretty also sources. terms various development of

frame time about, And And touched Jim that very to so place bringing feel incremental just about into that that talking that the on all bear volume. feel volume given the very ability we the market. good the to we about good dynamics given we're

question from the line of next Bill The Peterson JPMorgan. is with

describing to wanted around question Jim market the come back was pricing. related to as that to I the

-- wind challenges think I seen like and of EVs you've traditional uses, also which the I is kind yes, kind about more in of some but you talked challenged, accounts you think clearly, XX%. So even

to half first guess, up? as see do think looking Do supply about your further that's discipline you -- recent do X, expansion they in assuming supply week peer's or held then for So lend coming ahead, could lead permanent still pockets China Malaysia, where pricing think And being I offline? of that you see you XX quotas?

would sure Chinese with have was their try downstream, there BYD to in strategic but -- difficult quotas, that price and -- said transition and western year. it think as tea you on next always the best, the our far specifically their to think was growth you but markets supply tell having historically making the evolution transition is We -- that view don't I've moved think maybe I that but supply you a leaves. announced subsidize enough if focus followed to as about feed or a was yesterday. electrification just on I seeing I there it's competitors. the Well, read industry, do do has -- think think I you behavior big see are I that of not some that it that EVs, a growth today world, cut for to downstream I a But to this,

so but there producers and I think discipline a those for own continued quite are And again, supply growing they do of their substantially. sure sort that for is that, speaks -- make to, reasonable amount of producers discipline that around, will

question, As Bill. far great as -- and it's this -- hopefully, a

shocks and think in earth months in industries rare with the that of and that a demand salt and this GDP year to I been the the this the run I absorbed about slowdown I in canceled. we impacted -- turbine China vast still company, as when think projects that far when very as a view grain view because with have this think straight being of majority EVs market wind with all severely has headwinds, the we recent take about I you these of that pricing bullish but have now

I reason is math, the I asked think, it speak the is. And the so you does though, think me what And the right? reason to reason

lot There somewhere supply when lower. meet. meets more destruction get demand is And those when -- demand prices prices but curves this those demand there's also of then too a And high, stuff. meet demand for go

the -- really add so in I to meant And here XXs when I down it's think XXs, and just there's that the difficult.

your China looking China world, world has -- and in its of think don't think have I out certainly I prices from for the then crazy to if if in substantially a frankly be own unless higher be XXX, want to You outside prices the anywhere project, least anywhere certainly you'd an But rare kind time. realities. and XXs, a earth the I on in these in of were at the XXX, return any you risk the investor capital greenfield, NdPr at here, reasonable were

just here. to economics and And world to there's the down supply Western that to speaks be just so speaks to going constraint, me, -- it

my again, general know And thoughts tailwinds. so those it do think, medium this kind bottom. another X, around we're kind I and of of along bouncing I longer-term year or lasts month, if another but don't are

III I question. my ask Stage wanted with second about to

guess of year-end construction looking I should the think setup? what but we expecting on may be have are alloy with equipment So to still the the we III. are you begin the progress out about should year? I by as and production I key this how for Stage guess milestones And it, missed sort

question. great No, Yes.

scale lot of in We've metal, in the made internally of a we shift III. point of Stage broader actually really don't discussions, big who a working magnet the pieces in and today. metal product. -- actually, we get magnet. when alloy of other well One really pieces oxide, that's take big and to going customer with metal, are note pilot then a salable things to progress. actually our And those And focus making produced So are primary metal, more because know, are you the for there's that

is the So that achievement for III big Stage team. a

are track. we on So

that's nice. get And and nice to The broaden magnetics, make intermediate Metal the who and receive or is is goal sort are right? the a long-term then certainly, of products just to people with alloy, respect But customers of never alloy to can market business, goal satisfy are It's things. -- the to magnets. revenue that goal magnet. is

moved that. people. our magnetics into On that XX team front, about is just We

said the As building. moved we we into earlier,

We -- the really and up the to to a really and be an is have what site done research engineering factory. connected set we've incredible because it's we've

a the have to research, our great we're of our just between operators. interaction and engineering so going lot And

so the at But to that while, developing. going take It's to all scale. pleased been of happening. sure, to magnets thoughtfully to I doing particularly that particularly business we're us and is things obviously, well. am And with scratch, our and be capital are bringing be with it And producing a painstaking how and course, anything things that's from a want with do, risk make caveat doing we it's because it's and methodically these going in we that very

of America. The from line Winder Lawson Bank next is of question the with

around wanted ask the to to ore? prepared the I How take and complete? to expect up? I'm expansion What expect what's Mountain project. And both to to little designed hoping separation, and provide bit the Pass to expected wanted And do is a get little you then about products? it the long be be when the specifics, third-party CapEx? Or you specificity main separation to that will bit would to ore you'll be be ramp I clear, Pass? is process from heavy the heavy Mountain this idea only it more more do a

I'll that Michael, is one. This with start

designed for feedstocks very But Perhaps well. pleased from we're feedstock SDGs, our all, facility. a the heavier majority expected feedstocks. accommodate third-party of would be facility feeds as come to to even producing the separation First be to high-quality the third-party is key of

is earlier the In its way. the we're the Continuing equipment delivering detailed to a and is possible. flexible from project and is from procurement a build-out capacity terms of in work way theme site lot on most through in engineering. more capital-efficient engineering and call separation standpoint, on progress, committed in the Certain scale advancing a the

very, deliver positioned that any outside project projects than and China. to So quickly looking well other we very the at we're very efficiently more more carefully. really Yes, we're believe of

you on Lawson, awards the But was made to and MP support going would follow-on actually we to think DoD process can the just think our continue when -- so we call if this and every to last here. I then mentioned Yes. call, ]. substantial of expectation sort was the about relevant and go a award had playing XXXX, [ just project. year, and we there earlier last requested to this back on thought DoD And understand that Linus both you we made field this had I clear a level add, is but that

the like. quickest But and as never online. Michael's I to so just say their quick we we're we it's positioned own would as at reiterate words, be the And government that would moves certainly to pace, think

from earths our heavy And products other and dysprosium II missed. the terbium although the of just our priority our customers thought are to The to Jim, that, And we'll Stage biggest customer Stage is business. complete well. as support and produce I priority III

today TD question from comes last Our Deckelbaum Cowen. with David

everything could or progression bookends year. just I'm Maybe spending in curious pin this a conversation. about to just, put just put progression the kind of Ryan, think in how you ensuing on we if capital

that low of capital? growth peak guess a the we You a on think $XXX do future, of year see and in intensity lot years think about or guys ahead? I down the much growth stepping how projects highlighted should foreseeable in that about high capital capital. appear of that million to the we CapEx, And be as return When so of you

David. Yes. Sure,

one about on return that for we pretty to and to of progress to million would efficient remarks, have from I our That's balance one possible capital primarily our these in continued initiatives year see highlight we our projects. Michael it this the earn obviously mention We just is guidance tomorrow be as previously nice had as you'll $XXX some as about, sheet. in did talked on that expected. cash a trying now just prepared the we the million year this thing So the our I that change flag filings expect to in versus spend $XXX

and just we so of And be to about want thoughtful capital. pacing timing

a that talked significant guidance capital project. on quite relatively chunk plan a me call, provide would next provide bit next which of a projects. CapEx, me. includes early capital year's multiyear III earnings do say right XXXX we quarter's But excuse intend this Stage year's a about earnings pretty We what is high-return intensity, -- low big I absolutely lot to XXXX for specific exciting It's You're little of guidance to guidance. or is

on and think Pass long very would I find that's spent out return important those, what capital think to profile do rights a look spend to We pretty a with to And want trying projects, I so high of and about normalized just to other Mountain like. our reserve a time there's Michael of lot list.

updated free keep we out our So very we will a here high very as this making continue to alignment you flowing are in focused, on terms that. laid on But of certainly, business. cash Jim

stacking meet and And so are we threshold. our sure pretty high organic they up return projects potential and always projects a making

guys targeting about rare think to just that tons side, it Ryan. say I confirm, expansion as to distributor with concentrate appreciate necessarily you to that XX,XXX you And the this become you over on visibility a that. this concentrate a wanted to and upstream I fair to intend would be producer time? Michael, the material is convert of being earth or doing that producer able don't year

developing up our capability mission Upstream certainly several Stage first it's supply the project. existing remain the of and we to Mountain XXk will the this ex we way efficient our is and Pass. most achieving including the which chain. want at think And years optimizing look China to at I II that, future, support be ramping on same, the focused will But in

turn Mr. call final comments. everyone. session. over the our would you, I to Q&A concludes like That Litinsky now to for Thank

tough I call, it Well, our we know economy our us. global it but of but joining keep a MP, certainly business, long in and and are in was you, executing. developments for sector, exciting everyone, excited in a the we'll very we thank a lot about environment with was feel albeit

to quarter. stay we'll talk And so everyone all and you safe, next Thanks.

for your you today's concludes call. participation. conference That Thank

disconnect now lines. may You your