Ladies and gentlemen, thank you for standing by, and welcome to Iluka Resources Limited Full Year Results 2019. At this time all participants are in listen only mode. [Operator Instructions] Please be advised that the day’s conference is being recorded. I would now like to hand the conference over to your first speaker today. Mr. Tom O’Leary. Thank you. Please go ahead. Tom O’Leary: Hello, and thank you all for joining the call today. I have with me Adele Stratton, CFO; and Melissa Roberts, General Manager, Investor Relations and Commercial. And you will see that we have released a significant amount of what is, for us and our shareholders, important information. And there is a little complexity associated with some of it, so I will try to move through the presentation quickly, of course, to leave time for your questions. But before I do, I think there are 3 key takeaways today. First, the mineral sands business has demonstrated resilience in the context of global economic uncertainties and uneven market conditions. 2019 saw the first set of underlying results in Iluka’s history with EBITDA of $616 million delivered while commissioning five major projects, making associated operational transitions and adapting to short-term softness in the zircon market. And that, of course, followed our strong financial performance in 2019. We ended the year with a healthy balance sheet with net cash of $43 million, with operations configured to deliver consistent production and with a maturing pipeline of growth options. So the first takeaway is that the mineral sands business has demonstrated resilience. The second, as we outlined in December, is that we are disappointed with the write-down of Sierra Rutile. We have not delivered on the investment case approved by the Iluka Board back in 2016, both in terms of the operational achievements that have been possible in Sierra Leone to this point nor in confirming a defined development approach for Sembehun. Nevertheless, recent months have seen the strongest consistent production performance at Sierra Rutile since acquisition and we continue to pursue a development approach that ensures appropriate balance between risk and reward. Improvement, albeit slower than anticipated, is discernible, but we are not declaring victory. In fact, just at the moment, we are issuing a release to the ASX outlining that operations have been temporarily suspended overnight, but we expect that to be resolved in coming days. So the second takeaway is that disappointment with our write-down of Sierra Rutile, but improvement is discernible. Third, the Board has concluded that a demerger of our royalty business is the best way to deliver sustainable value to shareholders. This will liberate 2 distinct businesses, each with quality assets and promising futures into two stand-alone ASX-listed companies. Our mineral sands business remains well-positioned with strong fundamentals being a foundation from which to deliver sustainable value. The demerger itself is an example of the capital discipline Iluka will continue to practice as we consider future investment opportunities. So the third takeaway is that we are moving ahead with the demerger. On Slide 4, you will see some highlights of our sustainability performance. Iluka’s total recordable injury frequency rate for the year was 2.9, and while down overall, we have seen a concerning rise in incidents with the potential to cause serious harm, which we are addressing. In a terrific outcome though, Sierra Rutile has achieved more than 12 months without a lost time injury and our group injury severity rate has also decreased substantially. Slide 5 provides an overview of our results. And while we reported a loss as a result of the write-down of assets associated with Sierra Rutile, the fundamentals of the business have proved resilient. Our marketing strategy, project delivery and operational configuration all contributed to this outcome. The Board review of the royalty business, I’m on Slide 7, has concluded that a demerger of the royalty business is the optimal way to deliver sustainable value. This is an important milestone for Iluka. The demerger will establish two separately listed ASX companies with shareholders receiving 1 share in the newly established royalty company for every share held in Iluka. The name of this royalty company will be announced in due course. We referred to it as royalty company in this morning’s release and I will do the same here. Our mineral sands and royalty businesses are fundamentally different with distinct characteristics, capital intensity and risk return profiles. Iluka believes that each would benefit from tailored growth strategies and capital structures and, in light of this, that a demerger will unlock value for shareholders. Iluka will hold a 15% interest in the royalty company as a long-term investment to provide additional financial strength. The vision for royalty company, and I’m on Slide 9, is to be Australia’s leading listed resources royalty company, providing shareholders the cash flow-generative and low operational risk vehicle with strong growth potential. Its core business activities will be the management of the existing royalty portfolio and investment over time in value-accretive royalties that provide earnings growth and diversification. RoyaltyCo’s cornerstone asset is the Mining Area C royalty, which generated income of $85 million in 2019. As shareholders know, the asset has a strong growth outlook given BHP’s South Flank expansion and we will see production more than double over the next 3 to 4 years. While RoyaltyCo’s capital structure is still under review, the intention is for it to have low debt and a dividend policy to pay out 100% of NPAT. This reflects the attractive cash flows associated with the Mining Area C royalty in an investment vehicle with a lean corporate structure. We are pleased to announce that Julian Andrews has been appointed as CEO-elect and Jenny Seabrook as Chair-elect of RoyaltyCo. Julian will be joining Adele and me in many of the shareholder meetings that follow this results announcement where you will have an opportunity to meet him. Onto Slide 11, we have been engaging with the ATO on demerger tax relief and submitted a final ruling application this week. We are working towards receipt of a draft class ruling prior to the distribution of the demerger booklet, and we are confident that it will receive a favorable class ruling in due course. As is usual, any final class ruling will only be issued after implementation of the demerger. We are targeting completion this calendar year and will provide additional updates, including on timetable, at our AGM on 9 April. Moving to mineral sands market. Slides 13 and 14 provide a summary of the zircon market in 2019. As we noted through last year, business sentiment and consumer confidence in key markets, particularly China, were affected by trade and geopolitical tensions. We saw customers run down inventory and increase demand for lower quality standard and zircon in concentrate grades in response to cost pressures. Iluka’s marketing strategy evolves over the year and we implemented a number of initiatives, including an enhanced customer rewards scheme and adjusted product offering. We are pleased to have achieved our sales guidance for the 2019 year. While we believe destocking by our customers has largely run its course, the outlook for the start of 2020 remains subdued with the full implications of the COVID-19 outbreak still unclear. And zircon reference price remained at USD 1,580 per ton throughout the year and prices received were relatively stable. Turning to high-grade titanium markets. These are quite a different story. As you will see on Slides 15 and 16, sales in 2019 were constrained by production levels and limited inventory. Pigment and welding market conditions were solid and high-grade feedstocks requirements were strong. Onto Slide 17. As we announced in January, we have signed a take-or-pay agreement with Kronos, one of our major rutile customers. The agreement covers 75% of standard grade rutile from Sierra Leone with a minimum of 100,000 tonnes per annum effective through to December 22. The contract terms deliver exposure to pricing upside while limiting risk on the downside. Our latest agreement adds to other take-or-pay contracts already in place for our high-grade feedstocks, including synthetic rutile and Jacinth-Ambrosia-sourced HYTI. And as you can see, we have achieved a high degree of revenue certainty for this side of the business. And I will now hand over to Adele to cover the financial performance of Iluka in 2019.

Thanks, Tom, and good morning, everyone. Iluka delivered a strong underlying result in 2019 with mineral sands revenue of $1.2 billion and underlying group EBITDA of $616 million, 4% lower and 3% higher, respectively, on the prior year. Slide 20 gives a snapshot of our financial metrics. The statutory loss for the period has been impacted by the write-down of Sierra Rutile and the associated removal of the deferred tax asset, which together contributed $576 million towards a statutory loss of $300 million. We talked to the drivers behind these when we announced it in December. Free cash flow of $140 million is lower than last year, predominantly as a result of the 2018 final tax installment of $127 million, which was paid in June. Moving to Slide 21. Iluka reported an underlying net profit after tax of $279 million, supported by higher received pricing despite the lower sales volumes. Unit cost of goods sold has increased due to the combination of factors, including sales mix with more higher-cost Sierra Rutile products sold, FX movements unfavorably impacting the translation of Sierra Rutile costs, and higher synthetic rutile unit costs following the commencement of Cataby mining. And just to remind you, the higher-cost synthetic rutile production was expected from Cataby and was one of the driving forces behind underpinning the development of take-or-pay contracts. I’m pleased to report that the Cataby business unit has delivered gross margins in excess of 40% this year. It is also worth highlighting that Mining Area C royalty income increased by 53% to $85 million off the back of higher iron ore prices. To Slide 23. Inventory at the end of the year is $425 million, so it is still within what we’d consider normalized inventory level. We have added a build of run-of-mine inventories associated with commencement of mining at Cataby as you’d expect of any new mining operation. Zircon inventory has marginally increased due to subdued demand. And this chart for the first time shows the composition of finished goods inventory between zircon and titanium dioxide feedstock, with zircon constituting just over half. On Slide 24, we have continued to maintain a strong balance sheet, achieving a $43 million net cash position at the end of 2019. [indiscernible] extending it out to 5 years to expire in June 2024 and also learning fees and margin for this facility. To provide any opportunity to further reduce the facility size down by $100 million to $519 million was [indiscernible] medium-term liquidity. The free cash flow generated allowed Iluka to declare a final dividend of $0.08 per share, bringing the full year dividend up to $0.13 per share, which is in line with our dividend framework to pay a minimum of 40% of free cash flow not required for investment or balance sheet activity. And with that summary, I will hand back to Tom. Tom O’Leary: Thanks, Adele. We said at the outset of 2019 that it would be a year of project delivery, and I’m proud to say that it has been. The suite, and I’m on Slide 27, in Australia and Sierra Leone have all been delivered on time and within budget. This capital expenditure program has established our operational configuration to sustain production levels in 2020 and beyond. Slides 28 to 32 provide more detail on our operational settings and performance. The company’s Australian operations performed as planned, whilst some ramp-up challenges were experienced at Cataby [indiscernible] maintained to the synthetic rutile kiln, which operated at capacity following the scheduled major maintenance outage. As a result of the kiln refurbishment though and other improvements we implemented, we now expect our steady-state synthetic rutile production to increase 10% to 225,000 tonnes per annum, as noted in our guidance. Sierra Rutile operations underwent significant changes with the decommissioning of the Lanti dredge early in 2019, followed by the successful delivery and ramp-up of the Lanti and Gangama expansion projects in the second half. While we continue to focus on improvement initiatives to optimize run time and throughput at Lanti and Gangama, the mineral separation plant operated at capacity in the final quarter and we are seeing improved consistency and reliability. Slide 33 provides an overview of what our operations will look like in 2020 and what production we expect from [indiscernible]. As always, we will monitor market developments over the year, particularly for zircon, and adjust operational and production settings as necessary. Turning to our project pipeline. You will see on Slide 34, Iluka has a portfolio of mineral sands projects to sustain and grow production over the next phase of the company’s evolution. On Slide 35, we will try to give some more clarity on the progress of each and the pathways for development, assuming technical and other challenges are met and if we develop each of them expeditiously. It is unlikely we do them all, but in 2020, each of these projects will be advanced. And to touch on a couple, at Balranald, we are undertaking the third field trial. The results of this will establish the viability of the underground mining concept and ultimately the project itself. At Sembehun, study work continues and recent work on alternative mining methods are yielding encouraging results and progressing to field trials in the first half of 2020. Finally, site works at the Eneabba Mineral Sands Recovery Project are nearing completion and certain sales of the monazite-rich concentrate is scheduled for Q3 this year. And that brings us to the company’s outlook for 2020. On Slide 37 to 39, we provide our usual guidance across production and costs. On the production side, we expect increased high-grade feedstock production from Sierra Rutile and a full year of synthetic rutile operations in Western Australia. Conversely, we have held back on zircon production. Capital expenditure reflects advancement of our project pipeline and other sustaining projects we have flagged previously, including the Cataby southern pits development and tailing facilities at Ambrosia in South Australia. The first quarter is seasonally a low quarter for zircon sales with the Chinese New Year shutdown. This is likely to be exacerbated this year with the impact of COVID-19, which is continuing to play out. How this development affects not only China but it is trading partners in global markets remains to be seen, but we are monitoring the situation closely and will adjust as appropriate. The high-grade titanium feedstock market is expected to remain strong. I will now open up the line for questions.

Ladies and gentlemen, we will now begin the question-and-answer session [Operator Instruction] Your first question comes from the line of Rahul Anand from Morgan Stanley. Please ask your question.

Tom, I have several, but I will keep it at two, starting with pricing. Zircon and rutile pricing announcement today. We are in the new period for rutile pricing already and zircon is also coming up the second quarter. So some comments or rather discussions with customers, if you could throw a light on that, that would be good. And then I will come back with the second. Tom O’Leary: Okay. Thanks, Rahul. Titanium first. Look, as you have seen from the slide we put in the deck this time about our take-or-pay contracts, the majority, some 70% for 2020, of our high-grade feedstocks are now under longer-term contracts, which are commercially in confidence. And as such, we won’t be providing pricing increase information for the first half at this stage and what we will do is provide realized pricing information in our disclosures at the end of the half. But what I can say is that the high-grade feedstock, in fact, as I have said earlier, remain tight and remain conducive to price increases for this half. So that is titanium. Zircon is a little more complex, and it relates a little bit to this COVID-19 virus as well. And as you know, we typically sell around 60% of our zircon in China, and that includes our zircon in concentrate, and another about 15% in Asia outside China. So they are important markets to us. As I mentioned, the first quarter is traditionally slow with activity levels only really beginning to pick up following Chinese New Year, and as we have said in the last few years, only progressively after Chinese New Year. Now this year, as you have probably heard, the holiday period was extended to include the pearl festival which ended on 9 February. So what we have observed with our Chinese customers is that less than half have recommenced industrial production at this stage and the majority is planning to do so at the end of the month. This requires a resolution of the current transport limitation and worker availability. Now we understand that a significant number of workers haven’t returned to their workplace and there is some factories, not only of our customers, I have to say, had to stop shortly after returning due to cases of the virus in their workforce. And one pigment producer is in that situation, again, not one of our customers. But at this stage, we don’t have visibility, as I outlined earlier, as to when these sorts of issues are going to be resolved. By comparison to last year, last year, most of our customers recommenced operations around 18 or 19 February, so a couple of weeks earlier than what we expect will happen this year. But as we have observed in the past, it is not just about absolute numbers operating that is key to consumption, but operating rates and the size of the operations. And on this score, I would say that the first quarter consumption is going to be lower than the corresponding period in 2019. So the reason I say all that is because that is the environment we are looking at the moment, and so commentary around pricing for Q2 and Q3, we are going to defer as well. Looking further out to China beyond our own customers, as you know, ceramics make up around half of export - our zircon exports in China and activity in the tile-making sector is always key to our customers. That is inevitably more difficult to track because there are lots of them, but our impression is that the level of activity there is also quite slow so far in 2020. So look, we will report our quarterly sales at the usual time and I expect we will be giving an update on the outlook and the market then, but I -- current expectation is that the first quarter will be relatively low. We are not far behind as we stand today per usual. We are not far behind where we were last year, but we expect that order taking will increase more gradually and some orders will shift to Q2. And just commenting further on the market more generally. You will recall that last year, we expected a restocking pickup in Q2, and it never really came through the year. In fact, there was a further round of destocking over the year as some customers had bought more product than they needed, largely from our competitors. But as we look at our customers today, we believe stocks are pretty low among our customers, and that is evidenced by the fact that when we do get orders, there is a level of urgency associated with having them filled. So stocks do seem to be quite low among our customers. So that is kind of where we are in terms of both consumption in China and, I think, all I can really say about the price outlook at this stage.

So just to your last point there then, your production settings, are you able to ramp them up quickly should the demand return and the restocking requirement come back? Tom O’Leary: Yes we are, we are also caring reasonable level of Zircon finished goods inventory, so we can respond quickly to that.

Okay, perfect. And then the second question, re: RoyaltyCo. So you are aiming to maintain, obviously, the resilience of the mineral sands business as you demerge the RoyaltyCo. There was a mention of limited or modest amount of debt in RoyaltyCo. Is it fair to assume that that debt would be taken on pre-demerger and then the cash will probably be retained in the mineral sands business to provide that flexibility? Tom O’Leary: Look, Rahul, it is probably a bit early to be talking about those sort of details. The capital structure of RoyaltyCo is something that we are still working on at this stage, so more news on that score later.

Okay. That is fair. Thank you very much for that. I will pass it on. Tom O’Leary: Thanks Rahul.

Your next question comes from the line of Paul Lian from Goldman Sachs. Please ask your question.

Yes, good morning Tom, Adele and Melissa. Tom, first question is on the MAC demerger. Can you please provide the audience an idea on why you are confident that you will receive a favorable class ruling from the ATO? And the second part of the first question I have is actually on expected separation cost of the demerger, if you can comment on that. Tom O’Leary: Yes, sure. Thanks, Paul. As I have said in the last while, as South Flank became more proximate, we have focused on optimizing value from the royalty business. And the rules around demerger tax relief are very complex. And in the period prior to the announcement we made back on 31 October, we would undertaken a pretty extensive review of both the nature of our royalty business and the applicable tax law. And as I mentioned back on 31 October, we had determined it may be possible to obtain demerger relief. Since then, through the course of November and over the period since then, we have engaged, together with our advisers, with the ATO, and we have recently submitted just this week a ruling application. And where we stand at the moment, we are confident that demerger relief will be granted. I’m not going to go into detail about the intricacies of the tax legislation, but we are confident, Paul.

Okay, thanks so much. And the separation costs, any comment on that or guidance? Tom O’Leary: Look, Paul, I think in the context of the transaction, the costs are going to be small. That is been a key focus of ourselves and the Board over the last while. And we will provide more detail on that later - well, later in the process.

Okay, thanks so much. Second question is on the zircon market. One of your peers or competitors the other night said that global zircon demand was down 10% in 2019, so interested in just cross-checking that number with you. And also just back on the, I guess, the discussion around pricing trends, what have you seen in the, I guess, the standard and premium pricing markets, just on trends in the new year? And just noting that your realized price was down USD 100 a tonne in the December quarter. Just want to get some commentary about what the trajectory looks like on realized pricing at the moment. Tom O’Leary: Yes. Look, Paul, I have given you a pretty extensive context for 2020. I’m not really sure I can say much more than that. The outlook remains pretty uncertain at this point in relation to demand, but what is apparent now as ever is that a decrease in price is not going to stimulate demand. And so we will be supportive of pretty stable pricing again in 2020. In terms of your earlier comment around demand, it is always a little bit difficult to be precise about global demand consumption with inventory builds around the place, but I think it is probably not out of the ballpark to assume that sort of decline in the zircon market over 2019.

Okay. And so last one for me. Just on the guidance - or your zircon production guidance at Jacinth-Ambrosia, the 200,000 tonnes, which is down on last year, is that in line with the mine plan? Or are you migrating JA this year based on what you are seeing in the market? Tom O’Leary: Now, look, Paul, it is really in line with the constraints we have at Narngulu in terms of production taking that JA product.

Okay. What are those constraints? Tom O’Leary: You know twice I think constraints around the nature of the product JI.

Paul, and also obviously, the Narngulu plant is also processing the Cataby zircon full year of production coming out of that as well. So I think you have got to look at it more broadly across the group for that. So if you [indiscernible]. We have also noted that the zircon in concentrate production is down, and that will be a driver between the 2 periods.

Yes. I thought there is plenty of spare capacity in Narngulu in that range, but I will come back and talk to you then. I will pass it on. Thanks.

Your next question comes from the line Glyn Lawcock from UBS. Please ask your question.

Good morning Tom. So Just a quick one on the SRL disruption overnight. It seems there will always need to be some issues with the community. Can you elaborate a little bit more on what the grievances are, if any? And also, with your off take that you signed now with Kronos, if you had ongoing disruptions, is it a commitment that you have to deliver or what? Are you on the hope that delivery, you have to downsize delivering to the Kronos contract?. Thanks. Tom O’Leary: No. No, Glyn, we don’t. We can certainly declare force majeure in the usual way and not be obliged to go out of market and buy rutile. So let’s make that very, very clear. Going back to your earlier point, not that what it is overnight, as we said in the release, we wouldn’t typically have made an announcement with this sort of disruption. There are inevitably operating challenges in Africa and we have disruptions from time to time in Sierra Rutile. This particular disruption has just emerged over the last day or so and it is in relation to some disputes between families around service rent. And the government, as ever, is very helpful in resolving those, and we actually have a minister on-site already dealing with the issues. So I think we have got pretty reasonable expectation that it will be resolved very quickly. In fact, what I would say about community relations is that they vastly improved over the last 12 months or so and we are very pleased with how that is going. And the support of government is evident from the fact that so quickly, we have got a minister down at the site looking to help resolve the matter. So these things happen from time to time. The reason for the release is simply that we are announcing our results today.

And sorry, maybe just to clarify it again, if it is not a force majeure event though, you just have a mechanical issues or anything like that, regardless of what, if it is not force majeure-applicable, can you still not deliver? Or would you have to deliver? Are there reasons, are there cases where you could find yourself short having to deliver? Tom O’Leary: Yes. I mean, the -- you will see it is somewhat self-regulating in terms of the contract in terms of the 75% of production, but if we are not producing, then we can -- then we do have an outcome of the contract.

Okay. Thanks very much.

Your next question comes from the line of Sam Webb from Credit Suisse. Please ask your question.

Thanks for the opportunity. Just a few quick ones. The draft ATO ruling, do you have an expectation around date to receive that? In the event that it is not favorable, notwithstanding that you are pretty confident that you have done a lot of work behind the scenes, no doubt, what happens if you don’t get the favorable ruling? And then just finally on the strategy of the RoyaltyCo business that you are spinning out and identifying other investments, can you put a bit of context around what commodities you guys would do, what kind of scale and how you look to fund that in time? Tom O’Leary: Yes. Look, on the first one in terms of timing, what we have said about timing is that we expect to be able to proceed with the demerger this calendar year and we will give an update at our AGM in early April. So beyond that, I wouldn’t comment further. In terms of your second question about where we would go in the absence of a demerger ruling, look, as I have said, we are confident about obtaining that ruling and so I wouldn’t really want to speculate on something that I think is pretty unlikely. As I said, we expect to get a draft ruling prior to lodging the demerger booklet. And the third question around the strategy of the RoyaltyCo, we will talk more about that in time, but inevitably, we are looking for the RoyaltyCo, we will inevitably be looking to increase value and look to acquire value-accretive quality royalties over time, but you will see more about its strategy in the demerger booklet.

Is the demerger tax related contingent on acquiring royalty strength? Tom O’Leary: No.

Okay. Thanks Tom.

Your next question comes from the line of Paul McTaggart from Citi Group. Please ask your question.

Hi all. So we have talked a lot about the demerger. So maybe I just wanted to ask a little bit more about the same thing. So I know you are hoping, through this year, you can have a sense around what the preferred pathway is, but maybe if you can give us some sense of what the options are, of the potential scale of those options might be just so we can understand exactly the sort of various different operations we might be looking at in terms of scale or, I mean, potential CapEx order of magnitude maybe? Tom O’Leary: Yes. Look, Paul, I appreciate the desire for further detail there. What we are doing though is progressing a range of development options. We are looking very much at lower capital expenditure alternative. And we are also cognizant of the equipment we have there, in particular the mineral separation plant adding significant capacity. So we are looking at mining methods, we are looking at the concentrating arrangements, we are looking at logistics and we are looking at the infrastructure. What I would say is that we are pretty encouraged, as I mentioned, by the potential for hydraulic mining. And that is not a method that Iluka has used in the past, but it is used in Africa and in the mineral sands industry. And there is a third-party contractor capability that could be mobilized to Sierra Leone. So we have got a trial, as I touched on, that is going to occur in May, and we will keep you abreast of the progress on that.

And so I mean, obviously, CapEx is going to be lower. I mean, are you looking at the CapEx went up from the $500 million to sort of $700 million or what. I mean, are we looking to something half that scale? Can you give us any sense of how much lower that CapEx might be? Tom O’Leary: Look, I don’t want to be drawing on it in detail at this stage, Paul, but certainly, it is going to be significantly lower in order for pricing to make it an appropriate risk and reward balance for operating in Sierra Leone. As I touched on, we are looking at the capacity of existing mineral separation plant. I know volumes as well may be lower than the in excess of $300 million that we talked about some years ago.

Thanks Tom. Tom O’Leary: Thanks Paul.

Your next question comes from the line of Al Harvey from JP Morgan. Please ask your question.

Tom, it is Levi here. So just another question on your growth projects in the mineral sands business. So that pipeline there, how much extra capital could fall into 2020 that you haven’t talked about if some of these projects progress? Or are we talking about pushing it all out to 2021 [indiscernible]? I guess. Tom O’Leary: Look, I don’t think there is really much prospect of further capital being pushed into 2020 than we have outlined. I guess one exception to that could be the SR1. If we manage to obtain ilmenite supply suitable for restarting that operation, then that may be accelerated. But otherwise, I expect we pretty much got the lot there.

Okay thanks.

Your next question is a follow-up question from Paul Lian from Goldman Sachs. Please ask your question.

Yes. Tom and Adele again. Question around Sierra Rutile costs, and talking absolute costs, and maybe it is a question for Adele. Adele, production is up. We will expect it to be up 40,000 tonnes this year, but absolute cost is only up USD 4 million. Can you just step us through why that is the case? Is that just effectively economies of scale and shutting down the high-cost dredge?

Hi, Paul. Look, as I have said a number of times, the fixed cost base in Sierra Rutile is pretty high. So hence, that driver of the $4 million balance that you note in terms of absolute cost is pretty much a variable cost. So it is a shift in terms of some of the operations. As we have outlined, the dredges come off and redundancies attached to that dredge that happened in 2019, that obviously won’t reoccur in 2020. And we are sort of doubling the existing sort of concentrators and sharing that fixed cost base across the two, so that sort of - the real driver is just pure variable costs that have come in.

Well, it must be 95% fixed cost, Adele, in that case?

Yes.

Okay, right. So second question is on the growth around Atacama, and maybe this one’s for Tom, just commentary there. I mean, there is been a lot of discussion around the future of JA over the long run. Just a comment there about potentially have materials on production from Atacama? Are we talking, therefore, an increase on the base case, i.e., declining? Or are we talking about an increase on the current - this year’s production of 200,000 tonnes? Tom O’Leary: Look, I think we are talking about an extension of production at the order of 200 and more for several years with the Atacama development goal.

Alright. And then just last one from me here so I won’t restart. Are those opportunities on third-party ilmenite largely in and around that Eneabba Cataby region? Tom O’Leary: Yes, and potentially around import. Although as we have said over the years, running a business and the kiln campaign around imports can be problematic, but it is certainly something we consider.

I would now like to hand the conference back to your speakers. Tom, please continue. Tom O’Leary: Well, look, that is all I had for today. So thank you for your time, everyone. I look forward to meeting you all over the coming days and months. Our next update will be at the AGM on 9 April. So thank you.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.