Critica Limited (CRI) Earnings Call Transcript

Good afternoon, everybody. Thank you for joining today's webinar with Critica Limited. I'm Dannika Warburton, the Investor Relations representative for Critica. And it's my pleasure to be joined by Jacob Deysel, the CEO of Critica, who will be providing an overview of the Mt Lindsay Scoping Study, which was announced yesterday, the 29th of September 2026. The format today will include a short presentation by Jacob, and this will be followed by a live Q&A session. At any time, please feel free to use the Q&A feature down the bottom of your screen. We'll try to get through as many as we can, live. And if we don't get to your question, we can follow up by e-mail if you don't ask it anonymously. The webinar is being recorded, and the replay will be available tomorrow. Before we begin, please note that today's discussion includes forward-looking statements, which are subject to assumptions and cautionary statements in the announcement on the 29th of September 2026. Nothing in today's webinar is financial advice. So without further ado, I'll hand over to you, Jacob.

Thanks, Dannika. Hi, everyone. Thank you very much for joining us this afternoon. So yesterday marked a very significant milestone for Critica with the release of our Mt Lindsay Tungsten and Tin Scoping study. And I think projects of this scale and strategic importance are increasingly scarce within the Western world. Scoping study demonstrated compelling economics, low-impact capital-efficient underground mining concept and a clear pathway towards the development of what I believe, a new source of Australian critical metals. Now importantly, and I think this is a point to just highlight upfront is that this is not a greenfields discovery. We're not starting from scratch here. We have a granted mining lease area here. We have an established mining resource. There's more than 88 kilometers of drilling done in this resource. So we understand it very well. And then, of course, the significant historical technical work that has been done around Mt Lindsay. And I think the Scoping Study is really giving us the next steps in terms of the next pathway forward for the project. Just our disclaimer and cautionary statements. But I think let's get to the interesting part of it. Let me start with the numbers. And I think this is really where the scale of this opportunity comes through. The base case deliver after tax NPV of just over $1 billion. Our after-tax internal rate of return of just over 55%, and a payback period of about 1.9 years. But I think importantly, the capital here to get into production is about $244 million. And if you think about this just for a moment, the project delivers $1 billion after tax against a preproduction CapEx of $244 million. So that's 4.1x NPV to preproduction capital, and that's a significant strong number. And I think that stands out for me. And then, of course, over the life of mine, the project delivers $5.2 billion in revenue and just over $3.1 billion as far as EBITDA is concerned. So we have an underground development concept here of 1 million tonnes per annum that potentially generate significant value compared to the capital required to build this operation. If I just walk through, I want to touch briefly just on the market. I think it's important. And the question is, why does Mt Lindsay matter now? And for me, that answer really starts with tungsten. Tungsten represent about 75% of Mt Lindsay's modeled life of mine revenue. And tungsten is one of the most concentrated critical mineral supply chains in the world. China controls about 79% of global tungsten mining supply and about 85% of APT refining capacity and I think this concentration really matters to the West. Tungsten is essentially -- very essential in advanced manufacturing, cutting tools, defence, yet there are very few projects capable of providing meaningful new supply in the Western world. And this is where Mt Lindsay really stands out. Now what's more about it, it's not just a bit about tungsten. Our second main revenue stream is tin. And tin, again, if you look at the demand for tin, more than 50% of the demand is going into solar. Solar is the glue of modern technology. So all data centers, AI, infrastructure gets hold together by tin. So when you look at Mt Lindsay, I don't really just see a simple mine. I see a potential new Australian source of 2 very strategic and important metals at a time when the Western supply chain is really looking for safe and secure supply. And then, of course, there's magnetite, which is another concentration stream in our financials. And then excluding from that is a number of byproducts that we will develop and explore as we move forward, copper being one of those. Now this next slide, I think, is important and probably a question on a lot of people's minds. And for me, I think when we look at the markets, the market for us is structural. It's not cyclical. We have seen significant repricing in both tungsten and tin. But importantly, we haven't built this project to this financial case based on spot pricing. If you look at our base case, we use $2,500 per MTU for tungsten and that compares to a September benchmark of about USD 3,000. And that USD 3,000 has been maintained now for the last -- consistently for the last 6 months. If you look at tin, we -- our base case used $45,000 for tin. The September LME price for this metal is $54,000 plus per tonne. So I think if you look at that on a percentage basis, our base case in terms of tungsten is 17% below the benchmark. And as far as tin is concerned, it's 18%. So -- and we think that this really matters. There's a real -- supply is extremely highly concentrated. New mines take years to permit, finance and build. And as a result, we think our long-term discount assumptions here are really addressing that supply constraint, they are real and they are enduring. Now why do we think Mt Lindsay can be developed. And I think having strong economics, a supportive market is, of course, very important. But ultimately, we want to design a project that can be developed. And I think this is where Mt Lindsay have a real advantage. We are in an established Tasmanian Mining District. We are very close to operating mines, existing mining services. If you look at that map where we are located to compared to Metals X Renison Mine, the Savage River Mine. We have access to roads. We have access to power infrastructure, and this is predominantly renewable hydroelectrical grid in this area. We're 120 kilometers from the Port of Burnie. So we have easy access to the external markets. So many of the foundations is already in place if you look at where Mt Lindsay is located. And then I suppose if we move on, apart from the location, one of the areas of strength is that the Scoping Study is underpinned by a substantially well-defined resource base. So the Main and No.2 skarn deposits, approximately 14.3 million tonnes of mineral resource. Of that 12 million tonnes is in the indicated category, and that translates into about 32,000 tonnes of contained tin, 23,000 tonnes of contained tungsten. And importantly, I think when we looked at the design here, there's about 92% of the production target is based on indicated mineral resources. So we have a very good understanding of the resource. And then I suppose, apart from that, we're only using about 75% of the Mt Lindsay mineral resource. So that gives us quite a bit of upside and further exploration potential. This is something that quite excites me being a mining engineer that started in the deep level gold mines underground. So we -- the previous development case for Mt Lindsay was open pit. We've taken a complete different approach to this. We're looking at a 1 million tonne per annum underground mine. So we've got 13.5 years of a mining schedule here, 11.6 years processing and that process around 10.9 million tonnes of material through the plant. And I think the important thing here is we've designed this operation from an environmental sensitive approach. So the access -- portal access is an existing disturbed areas. We're going underground here. We are looking at conveyor transport using existing disturbed areas and roads. And then the process plant is about 600 meters from the portal access. And then, of course, one of the other -- the big benefits of going underground is we're using -- we can return a lot of the tails back into the underground, so using paste fill. And all of this really helps us to reduce the footprint. So if you look at what was there before from our open pit compared to where we are now, there's more than 50% reduction in the disturbed area because of this approach. And I think that is quite important for us as we move this project forward. This is a good example just to show what this concept will look in real life really. So the proposed portal sites sit in a previous construction quarry, which was used for hydro infrastructure processes. And that is from the portal to the process plant, we're about 600 meters. So it's a fundamental different concept to what we've looked at historically, much more targeted and a much smaller footprint. Now just touching on the process very briefly. Once the ore, of course, reached the process plant, the flow sheet really produces 3 separate salable products or concentrates. At a high level, it goes through crushing and grinding. We then go through magnetic separation where we produce a magnetite concentrate. And then the remaining material, which really goes through tin and tungsten circuits using simple gravity and flotation processes to progressively separate those 2 minerals and then upgrade them into a final tin concentrate and a scheelite concentrate. So a number of stages in this, but the principle of the flow sheet is relatively straightforward. And then as you can see at the bottom there, life of mine output as far as scheelite concentrate is concerned is just over 19,000 tonnes, just over 31,000 tonnes of tin and then 2.1 million tonnes of magnetite concentrate. And the recoveries, again, the recoveries are very close to the test work that we have done across Mt Lindsay in the past. I think the study estimated about 244 million tonnes -- $244 million as far as preproduction capital is concerned to bring it into operation. And we've taken a very capital-efficient approach with regards to equipment. So we are looking at leasing and renting arrangements as opposed to just go out and upfront purchase of equipment. So I think this has been a very deliberate approach in terms of how we're deploying capital. And we're using what's already there, keep the development footprint very focused and avoid upfront ownership and capital intensity. And this really translates into that ratio, I said before, which I think is meaningful and probably one of the key aspects for me when I look at the development concept is that ratio of 4.1x NPV to preproduction capital. Our Scoping Study won't be complete unless we look at the sensitivities. And I think it's no surprise that commodity prices is one of the key aspects that's showing, and we model this against a plus or minus 20% base case NPV there of just over $1 billion. And if you flex commodity prices, you see that the project is quite sensitive to commodity and ore grade. But again, even at a 20% flex, it still gives a very meaningful NPV. And then the project is less sensitive to the rest of the parameters that we show on that tornado graph. So for me, the key takeaway is that the development case doesn't depend just on single assumptions going forward. We've looked at those and flexed them to see how robust the economics are. Now this is probably another slide that's very important. And I think for me, this is quite personal. When I joined Critica, my vision for the company was to really transform from an explorer into a developer of critical metals. And I think that requires execution. We said we're going to deliver a Scoping Study on Mt Lindsay, and we've delivered it. Now the path is clear for us in terms of next steps. The Scoping Study itself is quite a catalyst. But our next step is really a definitive feasibility study. Moving along parallel with that is permitting further metallurgical optimization work. And then, of course, there's been a lot of discussion as we speak in terms of product qualification, but then also offtake and future funding initiatives. Now I suppose -- sorry, I suppose that it's great to have projects, but what's important is you need people to actually deliver on those. And I'm very proud of the team that we've assembled at Critica. Across management, across the board, we have very deep mining, operational and project development experience. There's exploration, metallurgy, capital markets and project finance experience is really deep entrenched within the team that we have. And I think that's important because where we are moving with Critica now requires different capabilities. And I think we're building that team to be able to deliver on these projects going forward. Just very briefly touch on the corporate snapshot here. And I think the point here is we've got 200% owned critical metal projects, Mt Lindsay with a Scoping Study that we're talking through now. But then Jupiter, which is one of the largest clay-hosted rare earth resources in Australia, scoping study is due soon. And there's not many companies that can bring forward 2 critical metal scoping studies in, I suppose, in short succession as Critica has or will. In terms of -- I think I mentioned that for me, the Scoping Study is really a catalyst in itself. It's the platform to really understand what's the next phase of development for this project. I think this allows us to now move forward with the DFS and continue to derisk this project. But more importantly, it also allows us to have much more meaningful discussions with offtakers, strategic partners, look at our product qualification and then that also opens the door for future funding initiatives and alternatives. So our job really now is to further derisk Mt Lindsay through the next stages. And then I think that's probably enough for me. We'll open the floor soon for questions. But I think to finish off, where is Critica today? Mt Lindsay is absolutely not the end of the story. At Jupiter, 1.8 billion tonnes, one of the largest rare earth clay-hosted resources in Australia. We are progressing that scoping study, and that is due for release shortly. So what I see is when I look at Critica today, it's a one Australian critical metals company. We've got 2 major projects here, and we've got multiple critical metals. We've got multiple demand drivers and of course, multiple potential catalysts ahead of us. So I'll stop there. Thank you very much again for your support and for joining us. And I'll open the floor for questions.

Fantastic. Thank you, Jacob. Jumping straight into those questions. A number of investors have asked about the price assumptions behind the study. Jacob, how did you arrive at the base case prices for tungsten and tin?

Yes. Look, I think we certainly started off looking at -- the key for us was to build a robust scoping study. We didn't want to design the scoping study from spot pricing. And as a result, as I mentioned earlier there, we were looking at our assumptions of $2,500 per MTU, that's 17% below the September benchmarks of about USD 3,000 plus. When we look at Tin, that's about 18% below the LME benchmark pricing. And I think more importantly for me is that we are seeing pricing and the repricing here as a structural issue. We don't see this as a cyclical thing. So we foresee these prices to maintain into the future. And then I did show on the sensitivities as well. We tested this against the sensitivities. And even at a 20% reduction in commodity prices, we still have a very strong business case. So yes, that's how we came about. Our long-term view on pricing is really the structural issue as opposed to just cyclical change.

Okay. [ Lachlan ] has asked about offtake. Where could the tungsten, tin and magnetite concentrates ultimately be sold? And where does customer engagements stand today?

Yes. Yes. Look, we've had significant inquiries in Mt Lindsay already. One of the key aspects was to get to a point of finishing scoping study to put some economics around this. But look, the product both if we look at all 3 of the products at the moment, so scheelite concentrate, which is tungsten -- typically sold to processors, and that gets Japan, Europe, U.S. is where we're getting inquiries from. And that gets used in the production of APT, which then gets converted into tungsten powders, carbides and so forth. On the tin side of things, again, it normally gets sold to smelters and traders. And again, there's a big demand for feedstock and specifically for secure safe western supply feedstock at the moment. And then, of course, having a 65% iron magnetite concentrate, that's high-quality grade iron. So there's easy offtakes for those as well. But look, I think the important thing for us is we're having potential discussions -- we're having discussions with potential off-takers at the moment. And the Scoping Study was important because this allows us now the next steps here to put economics around it and really start looking at product qualifications and more meaningful conversations.

Okay. Fantastic. There's been a number of questions come through on the funding strategy. With the preproduction capital of $244.5 million, how does management intend to fund it?

Yes. Look, I think one thing is that we don't have to go out tomorrow and fund $244 million. I think the important piece for us is we need to derisk. So the next step for us is to do a definitive feasibility study that derisk the project further. And as we go down the derisking phase or pathway here, that really opens up much broader funding pools. But ultimately, there's a number of strategies we'll be looking at here, project debt, strategic investment, government funding. So the key for us is very conscious here about dilution and how we minimize that. But I think for us, there's a next step, the DFS. And each time we move forward, we open up broader pathways in terms of different funding options for us. But there is certainly because of the demand for this product at the moment, we foresee definitely government funding and background and support for us as we move forward with Mt Lindsay derisking.

Okay. And I guess just following on from that, Andrew has asked whether you could provide some detail on, I guess, more of a longer-term funding strategy, whether one project could be sold to fund another?

Well, look, I think the projects are -- and I mean, we haven't released Jupiter yet, but the scoping study is on its way. But I think the 2 projects are actually nicely phased, where we are with Mt Lindsay and where Jupiter will be. But I think not to prejudge what the optimal structure will be here. I think both these projects have different commodities, potential different customers, strategic partners and funding sources. And I think our objective really is to advance both and create optionality. And if opportunities arise where we think we can unlock value for our shareholders, then certainly, those will be looked at from a Board perspective. So -- but today, the important thing is how do we move this forward and how do we unlock value for our shareholders.

Okay. Great. Moving to one from Roderick. He's asked where the proposed processing plant would be built and where the tailings will be stored. Jacob, can you take us through the site layout again in the study?

Yes. I think this slide is probably the best just to explain that. I mean if you look at portal access from there to the plant location is about 600 meters. And then there's a fairly large area here, fairly low environmental sensitive area where we believe that there's -- the footprint has been significantly reduced from what we've looked at before. In terms of tailings piece here for us is certainly looking at placing some of those tailings back into the underground board, and I think that's a benefit of this approach specifically. So we will look at all of those to minimize footprint. And on the basis of where we are at the moment, as I said, there's probably more than 50% reduction in what this looked at before in terms of this concept compared to the previous open pit design concept.

Okay. And is it worth building your own plant versus selling ore to, say, a peer and getting -- or getting a custom milled? Is that something that you've considered or not as yet?

Yes. Look, I think the important piece is that there's a number of mining operations around us, but Mt Lindsay is quite unique in the sense that we've got tin-tungsten. It's a pure polymetallic, right? So our process plant is a little bit more -- has different streams to actually cater for each one of those minerals. And so we don't foresee a specific opportunity just at the moment. But yes, of course, we continue to explore and we'll continue to explore where we think there is benefit in strengthening the business case. But at the moment, no, the scoping study considers building a plant for Mt Lindsay.