There’s more buyers in the market. There’s more people kind of speculate, frankly, around certain parts of the market, especially in some of the pieces of the carbonate market. So I really do think as an industry, we’re all trying to understand what is the real environment out there, pricing environment, and more importantly, demand environment. So I think we’ll all be, at various points in time, testing out different ways to have better price and volume and demand discovery.
Operator: Your next question comes from the line of Stephen Richardson from Evercore. Please go ahead.
Stephen Richardson: Hi. Thanks. Paul, now that you’ve had some time with the assets and through the integration, could you give us your latest thoughts on — you produce a lot of really high-quality carbonate at Fénix and maybe some lower-grade elsewhere in Argentina? And could you talk about it always seemed to us like there was an opportunity there to maybe feed some of your hydroxide plants with some of the lower grade and sell some of the higher grade? And I know that’s probably easier on paper than it is in practice. But I was wondering if you get your thoughts on that.
Paul Graves: Yeah, look, you’re absolutely right. It’s not that difficult to do in many ways. It just takes time, right? So, we’re definitely doing and exploring that. As you know, we run multiple hydroxide lines fed from carbonate from Fénix, and replacing that with carbonate from Olaroz is absolutely a core part of our strategy. But every line and every customer will require prequalification. We will need to make sure that we’re getting a version of carbonate from Olaroz that fits the needs, because, obviously, we can change the parameters at Olaroz, too. So, it’s a little more complicated in terms of figuring out what impurities we can and we cannot handle, and it varies by hydroxide lines. The newer hydroxide lines have a much wider tolerance of what they can use than the old ones.
But it’s a real opportunity, I mean, because — look, you’re spot on. I mean, you didn’t ask the question, but if you look in the first quarter, the price differential between selling technical-grade or selling battery-grade carbonate, for us at least, was really, really wide. And so, to be able to tap into sell more battery-grade, which we don’t have a lot of, because it’s all produced by — most of it anyway, produced by Fénix, the legacy Livent asset, and consume more of the technical-grade. It’s a real synergy opportunity. I don’t expect to see a lot of that happen this year because of the time it takes, but looking into next year, absolutely something that we are expecting to be doing.
Stephen Richardson: Appreciate that. I guess it’s something we’ll look forward to discuss at the Analyst Day later in the year. Other question just on — and maybe I know there’s a lot of moving parts in the financials here, but Gilberto maybe, on a pro forma basis, I know we have legacy Livent financials at year-end, and then now the pro forma Q1. But considering if I just look at the $20,000 a ton realized price, were you cash flow neutral sequentially or was there a cash burn on a pro forma basis? And again, I know there’s a lot of restructuring as well, but just wondering, is the program self-funded at $20,000 a ton, I guess, is the simple question.
Gilberto Antoniazzi: Yeah. I can answer — the simple answer to the question is the program is self-funded at $20,000, or even honestly, we need a little bit less than that as well. So, we’re not really concerned about that right now.
Operator: Your next question comes from the line of Joel Jackson from BMO Capital Markets. Please go ahead.
Joel Jackson: Actually going to follow-up on that question. Hey, everyone. I thought you disclosed or gave disclosure that pro forma cash was about $1 billion when the company merged. And now I think you ended March quarter with around $0.5 billion free — $0.5 billion of cash. So, it seems like cash dropped at $0.5 billion in the March quarter. Could you please elaborate on that?
Gilberto Antoniazzi: So, I’ll take that, Paul. Joel, it’s — yeah, honestly, that’s a little more complicated now because we’re having Nemaska on those numbers, right? And when I look at the overall cash position that Arcadium, excluding Nemaska has, I know it shows $472 million in 10-Q. But after you do some, what I call, adjustments in cash that is restricted, this number is actually close to — it’s $65 million higher than what you have there just for Arcadium side. So, we — but, yes, in the first quarter, we have important spending. Again, a lot of driven by transaction cost integration, severance. We also have some big tax payments that we have done in the first quarter, and we have made an investment in ILiAD that also was a cash outflow about $30 million. So again, first quarter was a very big cash outflow quarter that is not going to be repeated in the next three quarters of the year. So, don’t take that as a proxy for the remainder of the year.
Paul Graves: I think, Joel, I think you did a bit of rounding there, which makes it sound worse than it was. It wasn’t $1 billion. I don’t believe it was $800-million-and-change. And as Gilberto says, our actual effective cash balance, which we can talk to you offline about why this happens, is north of $500 million. But there was certainly meaningful cash burn and as a result of all the costs of closing the merger and integration costs, all that stuff in Q1, which, I said, absolutely not going to be repeated through the rest of the year.
Joel Jackson: Okay. Thanks for that color. I’ll ask my second question. And looking at some of your slides, on CapEx over the next years and expansion, so — and this is sort of — I know how Livent would talk about projects. So, you talk about 170,000 tons capacity at the end of ’26, which, the first part of the question is, that’s obviously not production or sales volume. Could you talk about if you do hit all these targets, what would ’26 and ’27 production volume sales look like? And then, just on the second part of that question would be, your ’25 and ’26 CapEx guidance you gave on Slide 10, could you break that down by the projects or maybe by Canada, Argentina as you’ve done in your prior deck? Thank you.
Paul Graves: Yeah. So, let me — it’s a little early for me to give you ’26 numbers, because I think you can kind of see this year as we bring on Fénix and Olaroz 2, you can delay or accelerate production levels by two, three, four months easily, and you can go straight to nameplate or you can have a bit of a slower ramp depending on time of year, conditions, et cetera. So, we’re going to have at the end of 2025 almost exactly the same as we at the end of 2023 where we have Sal de Vida, which is analogous to Olaroz, a pond-based conventional process complete and now producing, that will ramp at a different rate to the Fénix expansion completed at the same time, which tends to go immediately to full nameplate production. So, it’s a little difficult for me to answer that one as — I’ll be just misleading, frankly.
And so, I’m going to reserve the right to tell you the numbers on that one later. I will tell you, though, those nameplate production numbers, that — we don’t have a nameplate, and I think we’re going to run them at 70% of nameplate. That’s kind of what the future production level should be at once they’re all up and running. So certainly, once we get into 2027, probably still some ramping up or qualification delays happening with Bécancour. But everything else will pretty much be running at those numbers in 2027 for sure. I’m sorry. Your second question was on what? Sorry, Joel.
Joel Jackson: I appreciate it. And the second question just is on [Technical Difficulty] gave for — in ’25 and ’26 on Slide 10, $600 million in 2025, $475 million in ’26 for growth CapEx, can you break that down by project or like you’ve done before Canada versus Argentina? Thank you.
Paul Graves: Yeah. So, we’re going to do that in September when we do an Investor Day. And the reason we’re not doing it today is not because we don’t know the answer, but, there’s different ways to talk about capital spending. And what we find is that the way Allkem spoke about it and the way Livent spoke about it were both correct, but were different. So, we’re doing a bit of work today to standardize those processes and make sure that we can talk about everything in a consistent manner. So, we’ll ask for a little patience on your part. It’s not that long till September, so we will certainly be disclosing more of that detail and a lot more granular detail project by project at that point.
Operator: Your next question comes from the line of Kate McCutcheon from Citi. Please go ahead.
Kate McCutcheon: Hey. Good morning, Paul, and evening, Gilberto. Funding for your $1.6 billion over the next few years, the development of the Canadian assets, are you still looking at being able to do a prepayment deal there similar to the GM deal, for example? Is the appetite still there from the OEMs to do that? And I guess how are you thinking around funding strategies? [indiscernible] you mentioned that you had the facility available.
Paul Graves: Yeah. Look, I think that customers have a different view depending on two primary variables. Variable number one is what do they need, and variable number two is where is it. So, if it’s IRA-qualified lithium hydroxide, then yes, there’s appetite for prepayments, for long-term commitments, for, really, frankly, structures that look very much like the ones we have in place today. If it’s not IRA-qualified and it’s — whether it’s spodumene or carbonate, far less interest in customer funding, whether it’s prepayments or other approaches. Now — and again, it varies by potential customer. There’s no doubt that we could run a list of today of half a dozen to 10 customers that are very, very providing capital in return for security of future supply.
And I can give you just a longer list of customers that aren’t pursuing that strategy as well. So, it’s definitely there. I wouldn’t describe it as a market norm, and I would describe it as linked to very specific assets, projects and customer requirements.
Kate McCutcheon: Yeah. So, on funding that, what is your base case for that [$1.6 million] (ph) over the next few years — $1.6 billion?
Paul Graves: Yeah. Look, we have some, as you know, prepayments already in place that will contribute towards that funding requirement. We explore — it’s difficult to sit here today and say we are going to exactly do funding in a prepayment or from a customer or from other sources. We have some pretty active and detailed conversations going on today with government bodies that are willing to provide funding, both low cost of interest-free loans, forgivable loans, but also just grants, outright grants. So, that’s a pretty active conversation going on. We also have conversations with customers, too, about what they’re willing to do and where they’re willing to invest capital. So, again, as and when we have that funding arranged and in place, we will be disclosing it.
Kate McCutcheon: Okay. Good. And then, my follow-up question, Mt. Cattlin doesn’t feature in your outlook to 2026. Just remind me when are you expecting that asset to run to? And does the subsequent cutback require a different price than what we’ve got today?
