Metal and alloy are just intermediate products that are nice. It’s nice to get revenue to satisfy customers and broaden the market of people who can receive things, but the goal is magnets. On that front, our magnetics team is about 60 people. We just moved into that. As we said earlier, we moved into the building. We have a – and it’s really an incredible site because what we have done is we have set up the research and engineering to really be connected to the factory. And so we are just going to have a lot of great interaction between our research, our engineering and the operators. And so that all is happening, it’s going to take us a while, obviously, to be producing magnets and to be doing it at scale. But I am very pleased with how that’s been developing.
And of course, with the caveat that with anything we do, particularly in building a business from scratch, these are painstaking things and we want to make sure, particularly because it’s our capital risk that we are doing things methodically and thoughtfully and it’s going well.
Bill Peterson: Thanks again for the color and insights there.
Jim Litinsky: Sure.
Operator: Thank you. The next question is from the line of Lawson Winder with Bank of America. You may proceed.
Lawson Winder: Thank you, operator and good evening gentlemen. Thank you for fitting me in. I appreciate it. I wanted to ask about heavy separation, and I am hoping you will be prepared to provide a little bit more specificity around the heavy separation project. I wanted to be clear, is this designed to process only ore from Mountain Pass, or is the idea that it will take both Mountain Pass and third-party ore? And then to get a little bit more to the specifics, when do you expect the expansion to be complete? How long do you expect it to ramp up? What would be the main products? And what’s the expected CapEx? Thank you.
Michael Rosenthal: Hi. This is Michael. I will start with that one. So, first of all, we are very pleased to be producing high-quality SDGs, the key feedstock for our heavier separation facility. But the facility is designed to accommodate third-party feedstocks as well. Perhaps even a majority of the feedstock would be expected to come from third-party feedstocks. In terms of the progress, the engineering work is advancing through detailed engineering. Certain separation equipment is on sites and a lot more is on its way. Continuing a theme from earlier in the call from a procurement and build-out standpoint, we are committed to delivering the project in scale and flexible capacity in the most capital-efficient way possible. So, we are really looking at that very, very carefully. Yes, we believe we are very well positioned to deliver the project more efficiently and more quickly than any other projects outside of China.
Jim Litinsky: Yes. Lawson, and in terms of – I would just add – I was just going to add, we mentioned this on the last call, but when you think about – I think this is just relevant so you can sort of understand thought process here. But if we go back to 2022, the DoD actually made awards to both MP and Linous [ph]. And then there was a substantial follow-on award earlier this year, and we made clear on the last call that we had requested a level playing field and had every expectation [Technical Difficulty] the government moves at their own pace, and it’s never as quick as we would like. But to reiterate Michael’s words, we certainly think we are positioned to be the quickest online.
Michael Rosenthal: And Jim, just to complete the thought I missed. The priority products are dysprosium and terbium from that, although we will produce other heavy earths as well. And our biggest priority is to support our Stage 3 customer and the customers of our Stage 2 business.
Lawson Winder: Okay. Thank you for taking my question. Nice quarter.
Jim Litinsky: Thank you.
Operator: Thank you. Our last question today comes from David Deckelbaum with TD Cowen. You may proceed.
David Deckelbaum: Thanks Ryan, Jim and Michael for taking my questions today. Maybe just to put a pin on everything in this conversation, I am curious just, Ryan, if you could kind of put bookends just how we think about capital progression or spending progression in the ensuing year. You guys highlighted a lot of projects that appear to be of low capital intensity and high return on capital. When we think about the $300 million or so of growth CapEx this year, in the foreseeable future, should we think about that as a peak year of growth capital? And I guess how much do you see that stepping down in the years ahead?
Ryan Corbett: Sure, David. Yes. So, the one thing I would flag just to highlight one change in our guidance for this year is I did mention in the prepared remarks, and you will see it in our filings tomorrow that we expect to spend $270 million now this year versus the $300 million that we had previously expected. That’s primarily from some of the initiatives that Michael talked about just trying to be as capital efficient as possible as we progress these projects. We obviously have continued to earn a pretty nice return on our cash on our balance sheet. And so we just want to be thoughtful about timing and pacing of capital. You are absolutely right that we talked about a lot of exciting relatively low capital intensity, high-return projects.
It’s a little bit early for me to provide multiyear guidance or specific 2024 guidance. We do intend to provide 2024 guidance on next year’s earnings – next quarter’s earnings call, excuse me. But what I would say is this year’s capital plan includes a pretty significant chunk of Stage 3 CapEx, which is quite a big project. And so I think that’s important to think about what a normalized spend profile would look like. We just want to reserve our rights to do other very high return on capital projects, and I have spent a lot of time with Michael out of Mountain Pass trying to find those, and there is a pretty long list. So, we will continue to keep you updated on that. But certainly, we are very focused, as Jim laid out in terms of our alignment here on making this a very high free cash flowing business.
