Operator: We’ll go next now to Aleksey Yefremov at Keybanc.
Aleksey Yefremov: Thanks, good afternoon, everyone. Paul, is repayments from customers still a potential source of attractive funds for Nemaska in current environment?
Paul Graves: Okay, I think the IRA is a different formula for many of the customers in terms of what they’re trying to do. And I think securing low cost IRA qualified material. In my conversations today, the conversations and the opportunities for support and help that we saw a year or two ago are still on the table today. Now, we’ve never thought this was available to everybody or for everything or for every single investment opportunity Nemaska certainly has some characteristics to it that you would think lend themselves pretty well to what a lot of OEMs are trying to do in North America. And if a prepayment helps secure favorable treatment at Nemaska, then generally speaking, absolutely, I think that conversation is a one that many OEMs are willing to have.
Aleksey Yefremov: Thanks, Paul. And maybe to follow up on Nemaska, given, let’s say we stay with current pricing environment for a while and the current capital markets environment, is it still your expectation that you can, internally fund your share of Nemaska CapEx and with sort of free cash flow and whatever other means or don’t need to go to the debt markets or something, some new level, some new form of financing?
Paul Graves: Yeah, look, absolutely. Look, I think Nemaska itself may tap some debt markets. We may, there’s a lot, as I’m sure you know, a lot of capital out there has been chasing lithium and it’s not always necessarily what I’ll call commercial opportunities. There’s some opportunities from incentives, from governments, from innovation type funds and so on and so forth. And there’s definitely going to be opportunities for that. We absolutely expect to be able to fund our portion of Nemaska’s capital requirements and all the conversations we have with our partner IQ are all on the basis that Livent will be funding its share of the equity required in there from internal sources. We will not be heading into the debt or the equity markets to fund Nemaska.
Operator: We go next now to Steve Burns at Bank of America.
Steve Burns: Yeah, thank you. In your due diligence with Allkem, and you certainly dug into that Olaroz lithium extraction facility in Argentina. I’m curious whether you see opportunities to improve that operation with your technology and or benefit from the access to labor challenges and replacement parts that you highlighted, Paul, and or could this lead to a pull forward of that Sal DiVita project that I think Allkem has pushed back a couple of years?
Paul Graves: Welcome back, Steve, by the way. Yeah, look, I think there’s definitely opportunity. Let me step back a little. I don’t look at anything Allkem has been doing in Argentina. I think it needs to be fixed. I think they’re doing a fine job with what they have, what they built. I think we all know that there are certain decisions that we get made at various points in the life of a project that somehow constrain that project’s capabilities in the future. So I think what Allkem or DiVita did originally is producing a mix of technical and battery grade that is probably not going to change. I don’t think we’ve got this kind of big focus of ours to try and change that mix and I think they are doing actually a very good job of improving their production rates and their operating rates there, but the expansion’s a different conversation and I think we both recognize how we can help each other and how, for example, expertise we have, and we’ve mentioned this before in DLE, at some point the LRO’s facility’s going to run out of land to expand to pond-based systems and so moving into some form of DLE-based process, which Allkem had already been looking at, we can absolutely accelerate.
And we can also determine whether actually some pond-based expansions maybe are the right way forward for both our operations at Phoenix, but also integrating maybe what Sal DiVitadoes. I think there’s big opportunities potentially to share infrastructure in Hombre Muerto between Sal DiVita and Phoenix. They’re not far away from each other and shipping brine 10 kilometers from Sal DiVita to our processing capability, that’s a drop in the ocean, no pun intended, relative to other brine trucking routes that we know exist out there in the lithium world. So I do think there are going to be some pretty meaningful opportunities to both accelerate and optimize our expansion plans for both parties.
Steve Burns: and then maybe moving north, do you think that your Whabouchi mine might benefit from what they’ve learned in James Bay? Pardon me and I think Allkem was planning to ship the James Bay spodumene to China. Is there the feasibility of processing that down at your Bettencourt facility?
Paul Graves: Yeah, look, I’m not sure Allkem were actually necessarily committed to shipping that spodumene concentrate to China. I know it was one of their options, but I don’t think it was their first option. I think actually the benefits that we get from Whabouchi, and we see this when we talk to the Allkem guys about James Bay, is the expertise they have at Mount Catlin and the expertise and the knowledge they have of operating spodumene concentrate operations, trains, mining, everything. And they absolutely make a big difference to what we’ll be able to do at Whabouchi. I think in terms of James Bay itself, I think the options around Bettencourt are certainly interesting ones. Bettencourt was always designed to be expandable.
It’s a 34,000 ton unit we have there. The footprint is big enough to at least double, if not more. There are maybe a few questions around infrastructure that we would have to answer, but certainly we’ve already expressed an interest in exploring whether that’s the right economic model for James Bay post-close, but frankly, I think some of the options Allkem had on the table, whether that’s making an intermediate product or building elsewhere, also absolutely deserve pretty serious consideration too.
Operator: We go next now to Pavel Molchanov at Raymond James.
Pavel Molchanov: Yeah, thanks for taking the question. Obviously there have been other M&A headlines across the lithium value chain and I’m curious, once the merger of equals closes, do you perceive the combined company as a consolidator for the future, particularly with regard to some of the junior miners?
Paul Graves: Look, I think an important capability we have, I just mentioned it, is our Australian capabilities. And we have a mine that is getting toward, or will have a mine that’s getting towards end of life above ground and so I certainly think understanding and capabilities to go underground, what those economics look like, whether it makes sense, but I also think we have the capabilities there, absolutely, to look at junior mining opportunities down there in Australia, for sure. Everything’s a value conversation, right? Everything’s a good value. There’s a massive disconnect today, massive, between the value someone’s ascribing to a very, very, very early stage or technically challenging project in Australia, with only a maiden resource, without full ownership, all sorts of technical points.
