Ann: 2024 AGM Chair address and presentation, page-96

As you know @Scarpa - the trade off with grind size is a reduction in float performance.

Dialing down the level of mag separation intensity could help if the product is as claimed very low in Fe. We have no public data to confirm but their statements suggest they have room to make an adjustment.

Overall, LTR still forecasting recoveries rising to 70% by Q3 FY26. No doubt they have somewhat factored in planned adjustments to both grind size and mag sep for that figure. If we take the ballpark 15% plant losses outside of the float circuit, that means the float would be achieving 85% recoveries which is great. That said, LTR's comments to consider float performance as plant performance came across as a very selective definition and led many to wonder how on earth there was such a gap between float performance and overall recoveries. That has since been clarified but the confusion remains with some even pointing the finger at the transitional ore sorter.

As you would know, and further confirmed by LTR, higher feed grade = signifcant reduction in losses / better plant performance resulting in higher recoveries. LTR is clear that post FY27 they'll be aiming for DFS LOM level of recoveries. With feed 1.5% or higher, 76-78% sounds plausible. In the meantime, they've got a couple of years of working through lower grades.

Regarding costs of production - KV OP looks to have been cut back with a large floor in place of clearly visible Spodumene. I previously mentioned that AISC isn't particularly well suited to OP vs UG. What we have now is a full ROM pad and optimum open pit. That should result in AISC being close to C1. Effectively means LTR have been able to use the "rampup" period to engineer the ability to post lower AISC in H2 FY25 due to their chosen OP mine plan and scheduling.

Divvies next year - even if LTR claims operating profits at KV, I doubt there will be positive group free cash flow in FY25. Even if they were in a genuinely profitable position, I'd be shocked if the lenders would allow it. Hard to get them to sign off on divvies while interest payments are being capitalised. Further complicated by the LGES notes with a strike price of $1.80 - dividends would naturally reduce that downwards. That would result in higher dilution if LGES opts to convert rather than redeem.

Offtakes - have mentioned previously that in the near term neither Ford nor Tesla need the SC. The OTAs were about securing supply. It would have been a hassle for Ford to take and find a converter to process / onsell without taking a loss. Good on LTR to be able to use Ford's request to delay to switch to a Carbonate reference rather than Hydroxide. It appears the Carbonate premium is here to stay for at least CY25 - perhaps longer.

The delay in offtake also allows LTR to sell more on spot- this has a 2 fold benefit of higher pricing than contract (especially those linked to Hydroxide) and the use of the spot sale price discovery as a negotiating tool with long term offtake partners. As we've seen since the first PLS BMX auction, spot sales have tended to be beneficial on several fronts.

WA Gov support. This is an interesting one, and according to media reports this past year, lobbied for by LTR. It's a great outcome, but kinda contradicts LTR's assertions that they are good when it comes to financing but need Gov support to ensure survival. Were they bluffing the Gov or being overly optimistic with investors? Will this be the end of retail investor complaints / accusations that China subsidises?

I've always maintained that if Aus wants a Li Chemicals industry it needs to pay. WA Gov is in the best financial postion to do so and will reap long term rewards if it pays off. BUT $150m is not enough to help local downstream compete. It's a start yet I suspect Kwinana & Kemerton are destined to be multibillion dollar mothballed writeoffs - labour, fuel, regulations and lack of expertise make it impossible to directly compete with China, South Korea or even Indonesia. Rather than the types of measures we've seen anounced by WA, I'd prefer to see very significant equity level investment from a new Australian sovereign wealth fund. Our Nickel industry has been decimated. Australian governments have the opportunity to strike now before nations without mines capture significant conversion market share.