David Robb - Managing Director Alan Tate - Chief Financial Officer and Head of Strategy and Planning Doug Warden - Head of Resource Development Matthew Blackwell - U.S. Sales & Marketing

Chris Terry - Deutsche Bank Clarke Wilkins – Citi Matthew Hodge - Morningstar Mike Harrowell - BBY Glyn Lawcock - UBS Owen Birrell - Goldman Sachs Brenton Saunders - BT Investment Management Lachlan Rutherford - Taylor Collison

Ladies and gentlemen, thank you for standing by. And welcome to the Iluka Resources 2014 Full Year Results. At this time all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]. I must advise you that this conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. David Robb, Managing Director. Thank you. And please go ahead.

Thank you, Leah [ph]. And welcome everybody, thank you for your time today. With me, I have Alan Tate, CFO and Head of Strategy and Planning; Simon Green, GM of Finance and Risk; Rob Porter, GM of Investor Relations and Corporate Affairs; Doug Warden, who is Head of Resources Developments; and Matthew Blackwell on the line from the U.S., Head of Marketing. I draw your attention to the disclaimer, please note what is there. Be advised also that we are joined on the call today by a Transaction Advisor Chaperone in line with and as required by the Irish Takeover Code. Turning to slide 4, as I said in the ASX commentary, 2014 was the year in which in my view the health of the company was preserved, foundations were laid for recovery in the existing business and new options were secured for future growth. But of course reported profit was not satisfactory with regrettably our inability to extend the life of our U.S. operations resulting in an impairment charge. Healthy free cash flow, I think evident to all, a final dividend of $0.13 fully franked making a full year total of $0.19 fully franked. I’m very pleased with our cost performance, our CapEx was low but we did all that we wanted to do to maintain, acquire and progress the options for the future. And our balance sheet finished even stronger than it began the year. Slide 5, look there is not a lot new here. I think we’ve covered most of this through the year but markets were pretty much as expected. Margins stabilized at a solid level of profitability. Our operations were managed as we indicated they would be. And volumes were achieved consistent with our guidance. In terms of 2015 guidance, as you know our practice has been to issue key physical and financial parameters, guidance document at the time of this full year results release. We are not in a position to issue the 2015 guidance at this time. But we’ll do so in due course and it will be in the same form as in the past. Please note this decision is not related to any M&A activity. Slide 6, the strong improvement trend in our environment health and safety performance continued. And we are now in many respects at or approaching best practice levels. And that’s a very pleasing outcome. Slide 7, as I said at the half, there is more red here than we would like to see. But solid free cash flow was used to increase dividends, reduce debt and invest for the future. Slide 8, 2014 dividends were paid consistent with our framework. That’s a framework that’s been observed since 2010 with the restart of dividend payments and the cumulative payout ratio is now 68% of free cash flow. With that I’ll now hand over to Alan to run through the results in more detail.

Thank you, David. Just turning to slide 9 for the summary of group results, as David noted on slide 7, the mineral sands revenue has declined 5%, and this was due to lower prices which were down 12% to $1,030 per ton, partially offset by higher sales volumes we saw up 5%. The net impact led to reduced earnings with group EBITDA down 13% at $257 million. But Iluka has been able to retain a relatively healthy margin structure with Group EBITDA margin of 32.5% which provides significant cash and earnings leverage to volume recoveries and pricing; with an impairment charge of our U.S. operations at $82 million, Iluka’s net loss after tax was $62.5 million, down from a profit of $18.5 million from 2013. Free cash flow for the year was $196 million up from a cash outflow in 2013 of $27.5 million, which reflects the reduced cost structure that was introduced in 2013, having a full year’s benefit in ‘14 and also timing of receipts. Iluka’s net debt at 31 December was $59 million and gearing of 3.9%. Average exchange rate for 2014 was $0.903, which is still well above the levels we now see it trading at of around $0.78. Turning to slide number 10, this slide outlines earnings from our mining area C royalty, again this year we’ve seen an increase in both production and sales. However, this was offset by decline of prices down 23% to AUD98.7 per ton in Australian Dollar terms. As we have noted previously, obviously the area C mine is a low-cost high quality mine an increase in production we’ve seen over number of period highlights the quality of the assets. And whilst the U.S. dollar prices per ton of iron-ore has decreased since 2013, the lower exchange rate has offset this somewhat. And as I noted, on the prior slide, the exchange rate has reduced further into, from 2014 in 2015. Slide number 11, this graph shows the key changes in earnings between 2013 and 2014. The key driver is I’ve mentioned on prior slide, was the lower prices which on a U.S. dollar basis had a negative $118 million impact, offset partially by the lower AU dollar which had a positive impact of $50 million. The restructuring of operations in 2013, so full year’s benefits in 2014 with lower cash unit costs to goods having a positive $29 million impact and lower restructure and idle costs of $30 million relative to 2013. And as you saw in the prior slide, MAC earnings were down $22 million. The items of the waterfall to this point represents the decrease in EBITDA of $38 million to $257 million. As well, the [D&A] [ph] was slightly up and it was net higher $42 million charge to 2014, in 2014 relative to ‘13, in carrying value adjustments associated with the U.S. impairment. 2013 had the impact of lowering [discount rates] [ph] applied to rehabilitation provisions which increased the charge in that year, which cumulatively resulted in a loss of $63 million. Turning to slide 12, and the slide shows the overall change in net debt and the free cash flow of 2014. It was a free cash inflow of $196 million in 2014, operating cash flow was $255 million which was after an overall decrease in trade receivables of $89 million. As you will recall from the previous presentation, Iluka’s sales and therefore cash collections can be lumpy. And as part of the process on working capital efficiency in 2014, we put in place two trade receivable facilities at a very low U.S. dollar financing cost which enables earlier collection of receivables. The mining area C royalty contributed $75 million and Iluka continued to spend on growth with exploration of $22 million and the investment in Metalysis of $18 million. Capital remained low at $48 million predominantly on project studies, and with the component of the graph to this point representing the net cash inflow of $196 million. Dividend payments were $42 million, made up of 2013 final dividend of $0.06 and 2014 interim of $0.04 and so net debt at the end of 2014 was $59 million with the gearing ratio of 3.9%. Slide 13, and as we discussed last year, in 2013 Iluka faced low cycle business conditions and responded accordingly with production and cash costs reductions. We’ve been able to idle or reduce utilizations to achieve significant cash cost reductions which you’ll note in the red line. And we’ve been able to do that while maintaining efficient mine operations in USA, Eucla Basin and the Murray Basin. In 2014, we’ve seen the benefit of reduced cash costs on a unit cost and slight improvements in 2014 productions. And as I noted earlier, this was achieved whilst maintaining a relatively healthy EBITDA margin which in the mineral sands level is still 32.9%. Slide 14, this slide sets out the production settings for Zircon and rutile SR, we flexed production and reduced associated costs to more equally match our sales profile. [This has meant that] [ph] into 2014 we’re able to maintain a low cost base and as well Iluka’s retained the ability to quickly flex up productions with market conditions warrant with associated improvements in efficiencies. Slide 15, and you will recall this from previous presentations, overall finished goods inventories declined but this was offset by building HMC predominantly at our WRP mine in the Murray Basin which will be drawn down from completing mining activities there in the first half of 2015. Let’s say normal inventory is at about $350 million to $400 million mark. And hence, as it starts to drill down over the coming years, this material will be highly cash flow accretive and provide significant production up-scaling as market conditions improve. Slide 16, and finally on the balance sheet, as noted earlier, Iluka retained significant financing capacity on the low gearing ratios, current financing facility is A$850 million Australian and we have 10-year A$175 million out to April 2017, and A$675 million out to 2019, and with current gearing level of 3.9% and net debt of A$59 million. So we retained a very healthy EBITDA margin, and we have inventories of good quality that we can drill down with higher cash flow accretion, and low gearing and a healthy finance structure. And with that I’ll pass back to David.

Okay, thanks Alan. We now turn to market conditions on slide 18, as we observed through the year, our quarterly and obviously the half, there is no big change in Zircon or TiO2 market conditions. But in my opinion there were some interesting aspects as we moved from 2014 into 2015. In terms of major producers it would appear that they are following a demand-led approach. And there is evidence of lower supply than perhaps some expected. At slide 19, while imports don’t necessarily equal sales in the short term, in the long-term they clearly do. And I’ll just point out here that 2013 and 2014 imports into China were above 2011 for Zircon. This is 2012 was a little unusual in that it was first half weighted. Whereas 2013 ended and 2014 saw the more typical second half weighting and some of that as you know is associated with the timing of Chinese New Year in the first half. Slide 20, sales volumes for Zircon improved quarter-on-quarter through 2014. There was some mix variability but prices overall were stable. Interestingly and I would caution that it is nothing more than an interesting point at this stage. But our combined December, January volumes were the highest we’ve seen for some time. Obviously Chinese New Year is a bit later this year so it will be interesting to see how February goes. But adding together December and January I think you get a reasonable view that’s less distorted by year-end practices and by the January typical low sales [ph]. Slide 21, we are comfortable with respect to the Zircon outlook. Of course in our business we are not immune to global geopolitical and macro-economic forces as you heard me say many times. And our results will reflect the impact of those forces as they will for other businesses. Slide 22, in TiO2 we had seen a return to more normal operating regimes and the question now is whether the industry cycles beyond that, more towards high cycle conditions as the fundamentals continue to improve. Slide 23, as with Zircon, we’ve seen a combination of supply restraint and supply disappointments in terms of project advancement and indeed initial performance in some cases. Slide 24, these aspects of our TiO2 production and price outcomes and plans, I think have been well covered in earlier commentary and ASX releases, including obviously our most recent quarterly, and I’ve touched upon the decision we’ve taken in the U.S. Slide 25, I think it would be interesting to see how supply and demand dynamics interact in 2516 [ph], as I’ve said with the backdrop potentially of the industry moving beyond the normal operating regimes that it has recovered to. Turning to our areas of focus on slide 27, you will note that our objective is to both create and to deliver value for shareholders. And we think about growth in that logical sequence. I’ll touch on each of these areas arguably, except the last one on this slide 27. To be clear and I’ll ask Doug and Matt to comment along the way if needed and certainly to help in the Q&A period. We’ve got a lot on. Slide 28, market development. We continue to invest to improve our knowledge, our footprint, our product range and our overall customer offer, and we’re excited about the opening of our technical center in China this year. Slide 29, we have specialist experts and international marketing capabilities that are unusual in our industry. Slide 30, in terms of mineral sands projects we’ve got a set of options at varying stages of development. This slide attempts to show most of them, starting from a zero-year base if you like. And what we think about when we look at these options is capital efficiency and timing flexibility. You’ve heard me say before that in this industry we think timing of investment decisions is very important. Slide 31, I want to emphasize that Balranald is a significant project for Iluka but certainly also in an industry context. It is a very rich ore body and it’s large in terms of rutile and zircon production [indiscernible]. In terms of our DFS progress I would emphasize that anticipated and some new challenges have been addressed today. And I want to emphasize a bullet that says current technical and financial analysis support the view that financial returns are likely to be above an appropriate risk weighted hurdle rate. You know that’s how we think about investing. And I certainly support continued investment in feasibility studies and the approval processes. I do not support and I have reasons not to support some of the sort of negative sentiment that appears to be in some people’s minds about this project, quite the reverse. In terms of Cataby, in a number of ways, it’s more straight-forward than Balranald. It will be a significant SR ilmenite and zircon producer. It’s a bit further advanced and we are in fact moving into pre-execute planning phases. Importantly, the WA government has agreed some additional start-on flexibility under our existing approvals. Meaning we don’t have to renew them. And I would emphasize again the point that the current technical and financial analysis supporting our view of returns of our risk weighted hurdle rate and that we should continue to move forward. Slide 33, in the Eucla Basin, we have a number of satellite deposits which can potentially benefit from existing infrastructure. This is a little bit more preliminary and our focus currently is on physical characterization of the ore body and more detailed work on likely product attributes. Puttalam, in Sri Lanka, while we like this opportunity. We liked it when we had it in the 1990s, we liked it when we reacquired it. And we like it even more following the somewhat unexpected change of government in Sri Lanka. Slide 35, we’ve continued to bear down hard on CapEx without compromising any of our project options or any of our innovation and technology initiatives and opportunities. Slide 36, as you know, our resource base is circa [ph] four times, if memory serves me correctly, Doug; our current reserves are -- okay, our conservativism to four; four to five times our reserves. So not surprising resource to reserve conversion is a focus for us because of the value it will create for shareholders. Our search is international for new resources and we also think about non-mineral sands opportunities that are adjacent, whether that be geographically, technically or commercially to our mineral sands interests. Slide 37, our industry needs new answers; you’ve heard me talk to this before. Our industry relies predominantly on old approaches and old technologies, and we are determined to change that. Slide 38, our JV with Vale in Brazil is a question point [ph]. We’ve suggested a path to Vale that’s different to the one they were on, and to how the industry has thought about this mineralization in the past. Slide 39, this is a very large mineral complex, the titanium dioxide and in the REO oxides between a thin overburdened layer and the phosphate below that has been mined for a long time. Slide 40, we have a strategic relationship with and a strong shareholding in a company with a revolutionary technology, and we’ve seen multiple sources of potential value for Iluka’s shareholders in this move that we’ve made. Slide 41, it’s a simpler, cleaner, cheaper more flexible way to produce titanium powder, tantalum powder and powders [ph] from many metal oxides. Slide 43, as explained, I’m unable to provide the usual guidance document at this time. But our expected major asset utilization is shown here. Slide 44, in 2015 I see lots of positives, including our balance sheet strength that underpins much of what we do, and that at this time not many can do frankly. As I look forward I see top line growth, margin expansion, inventory monetization and another low underlying CapEx year before project expenditure kicks in full. We don’t guide on free cash flow but I would draw your attention to the sort of mirror image [ph] nature of CapEx and sales revenue in 2015 which means we expect free cash flow to be second half weighted. Finally slide 45, as I’ve said before, we think having a range of options is a valuable attribute. And while flexible in the short-term we see consistency in our focus in the long-term, creating options both, conventional and innovative, organic and inorganic is what we seek to do. And we have the balance sheet strength to deliver those options. And with that I’ll conclude and we’ll begin questions. Thank you.

[Operator Instructions]. Your first question comes from the line of Chris Terry of Deutsche Bank. Please go ahead.

Hi David, two questions from me.

Chris, can you just speak up a little please.

Sorry, is that better?

Yes.

Yes, two questions. The first one is on the growth projects you talked about timing being important. [Indiscernible] Balranald, what would you say is the late time? And how do you think about the overall project in terms of the rutile market and working out what price do you think will be the medium-term price whether that project is in or out? And then secondly, just around your zircon, obviously a very encouraging start to 2015, with that December and January number on slide 20. Can you talk a little bit just at the moment on the maybe as a percentage from the top to the bottom from standard to premium grade zircon, just so we get an idea of how much the price can be moving on some of [sales] [ph]? Thanks.

I’ll deal with the second one first. Look, it’s interesting, we typically have and I think the industry generally has a reasonably big December, all kinds of reasons in terms of zircon and then you have a much lower January. So, what we gave you just add the two together and compare that with history and it’s an interesting trend. We don’t disclose products with I think what we’re doing in this space, leverages our capabilities. And I frankly just don’t want my competitors to know that level of detail. So choose not to go there, I’m sorry Chris. On the growth projects, and the lead time for Balranald, well we haven’t finished the DFS yet. We got a second stage of DFS to do, we deliberately broke it into two to make sure some of the major technical challenges were addressed lot upfront and they have been. We need to finish the second stage of the DFS before answering that. And again, some of those lead time questions can be commercially sensitive. On the rutile where we will bridge the gap with the material from Murray Basin that sits in the concentrate there, we’ve flagged previously that we would be apportioning that materially if you like across the gap. And of course we have synthetic rutile. And I’m confident that – the role it will play in 2015. On pricing, we don’t have a single-point view, I think single point views are dangerous. We stress test and I guess, even though I think it’s totally irrelevant, and it leads to pro-cyclical investing, today’s spot prices are something we do test. We have to make an appropriate exchange rate assumption that matches that. And if we do both, then the two bullet points on the slide, Chris, still hold. So, the notion about current prices being somehow an impossibility is wrong. On the numbers we have today, we haven’t finished the DFS, but only on the numbers we have today. So I would emphasize though we have a long-run view of the prices. You know that we do inducement work, you know we do very detailed supply-demand modeling. Let me just emphasize, and I know this is a long answer. One of the great failings of the resource industry is that it invests based on stock prices and shareholders pay the price for that trend following behavior which is not [good] [ph]. Now next question please.

Your next question comes from the line of Clarke Wilkins of Citi. Please go ahead.

Hi Dave, question just on the sort of the work in progress inventory, like it’s a pretty clear pathway I suppose in the Murray Basin how that gets drawn down. But in terms of the concentrate at the Eucla Basin or JA that continues to build how long you’re comfortable continuing to build that inventory before a decision has been made about operating rates etcetera there?

Look, it’s already pretty stable Clarke. And obviously depending on sales performance we’d expect it to start to go the other way, so it’s not an issue. Obviously there is a lot of value [entrained] [ph] in it, as Alan said. As I’ve said before, you got to balance the inventory build in that with the unit cost benefit of running efficiently, that’s what we choose to do. I mean, it’s not, it’s - we’re getting to a point where it will go the other way. Okay, next question.

Your next question comes from the line of Matthew Hodge of Morningstar. Please go ahead.

Hi David, just a question around incentive pricing. It’s been a while since I guess you’ve put something exclusive out in the market. But just I wanted to get your sort of general view industry CapEx is falling quite rapidly, does that kind of change your long-term view of what kind of price is going to be required to bring on new supply?

Look, I think the last time we spoke about inducement pricing I just gave a leg-up to the whole industry frankly. But it wasn’t, it’s probably one of our dumber moves. But anyway, I think it’s a long-run view we have, it doesn’t sort of shift that much. I would agree with your observation that this industry has battened down the hatches. And there would be a consequence of that in due course around new production. It’s also true as we’ve said before this is an industry with the quality of the resource that we know of ahead of us, is more challenging. And you factor in lower prices, more difficult ore bodies it starts to look hard for new projects. And I’ve made the point strongly about how we see our own projects as a contrast to that.

Okay. And just a second one if I can. You rattled off a lot of options there and I can see you’ve built quite a few throughout the last year. How do you go about sort of sorting those options out and making sure you’re focusing on the right ones?

Well, ultimately shareholders will judge whether we’ve done it well or not, obviously. And we look at lots of metrics, we’re very financially literate and disciplined I think. We look at lots of financial metrics. We don’t have a myopic view that NPV is the only thing that counts, we look at payback periods, we look at profiles, we look at IRRs, we look at return on capital, you name it, we think about it in the context of how we prioritize things. And if we get it right, as we clearly did with JA in pressing ahead during the GFC and having a surge capacity post the GFC. If we get it right, it can be very rewarding for shareholders. And it’s good to have them what we call shovel ready if you like, so you spend the money on the DFS to know exactly what you’re going to do, what it’s going to cost. You then have the timing option that is available to you.

Thanks David.

Your next question comes from the line of Mike Harrowell of BBY. Please go ahead.

Hi, good morning David. Just page 30, the internal production options, what does the period extent of the green bars mean? I can see the J-A, I guess that means it’s expected to run-out in the middle of that fourteenth year. But what does say Atacama, Sonoran and Typhoon terminating at the end of 2012 that actually mean? Because I would have thought it could have been shifted?

Yes, sorry Mike, sorry Mike that’s obviously we haven’t been clear enough on that slide. That’s if you start from a notional view zero, Atacama, Sonoron and Typhoon would have a 12-year life. So if we started it today, it would finish roughly 2017 -- 2027 that’s what we’re trying to show there or indeed Balranald from when it starts would have seven or eight years of life. And then obviously you layer them on top of one another to get the right mix that we think meets the market requirement. Yes, go on.

And the Cataby bars there, does that reflect the upper level of the ore body or the upper and lower levels of the ore body?

It reflects that kind of reserve.

So the lower level has the same challenges as Balranald?

No, I’d say it would be more grade reliant but yes, that [ph] mark obviously doesn’t help. But the reserves is almost double the reserve at Cataby. So at higher prices I guess, another way of putting it, at higher prices more of that resource comes into reserve. It’s just a pricing function.

Right.

Ore cost. We’re assuming a conventional development of Cataby Mike.

Okay, but that lower part of the ore body is below the water table, so you’d be facing the same challenges as Balranald from a pit stability point of view, wouldn’t you?

No, it’s no way near as meaningful in terms of water rise. But yes, there is - there would be de-watering aspect.

Okay.

But nothing that we would find overly concerned.

Okay.

Yes, Mike, look, obviously water management is a big part of our DFS’, there are no issues that we see with the watering Cataby indeed nor we had we to de-water the ore at Balranald.

Okay, thank you very much.

Your next question comes from the line of Glyn Lawcock of UBS. Please go ahead.

Good morning. I just got three questions. Firstly, just on your comments about the projects can make returns even at spot. I’m just wondering, if you go ahead, would you prefer to see a contract where the pricing environment has got a floor, or do you think you’d be happy with these unlike what you’re doing with the U.S. to take just market price or do you need a floor? Second question, on your comment about free cash flow being second half weighted, is that volume inventory movement or CapEx timing, that’s driving that comment? And then thirdly, if I look at -- if you don’t do many projects this year, you follow your current dividend policy, you’d probably end up net cash. Just wondering your intention or thoughts, is that where you want to end up or if you don’t spend the money this year because projects get pushed out due to market, could you see a slight change just for this year on your dividend policy? Thanks.

Yes, okay. All good questions. Well, how do we think about revenue aspect of projects, is project specific, as I think you just pointed out in your question. We think that risk has a lay effect [ph] and there may be some aspects of risks that you choose to reduce, if you can do that with a credible off-taker. In some cases you might do that for part of the revenue stream. I’ve said previously we don’t wish to return to the contracting methods of the past in this industry. We’ve worked very hard to move away from that. But are there some projects where you might choose to reduce risk in some way with an appropriate off-take arrangement? Without selling the future if I could put it that way, then sure we would look at that. There’s not a lot of counterparties in this industry frankly where you would feel confident about their ability to deliver such an off-take. And particularly difficult in zircon it’s fair to say. And on free cash flow, look it’s a bit of everything that you mentioned. Certainly the CapEx is more front-half weighted that we see. There is some sales timing issues. We’re usually second half weighted as we generally observed. So if that normal pattern occurs, it would be second half weighted. Alan, is there anything else do you want to say on that?

WRP finishes first half [ph].

Yes, WRP, Gyn did you get that, finishes in first half. So on the dividend framework I don’t see the framework changing. You are right, that we’ve dropped, that we are at the bottom end of that framework by minimum of 40% of free cash flow. We do have some significant project expenditure ahead of us. And you might recall we’ve said previously that we would expect our five-year average CapEx to be in $200 million probably more like $250 million a year range. So ‘14 is unusually -- will be below that because the projects might start at ‘15. So yes, I would hope what shareholders feel about us, Glyn is that we believe in getting cash to shareholders and we believe in getting franking credits to shareholders and we’ll continue to do that.

Thank you.

Your next question comes from the line of Owen Birrell of Goldman Sachs. Please go ahead.

Hi guys. Well I’ve just got a question on the SR kiln restart. Since you’ve said before that the potential of the restart, the prices of SR has deteriorated somewhat. I’m just wondering how the economics have changed for this restart and whether you’ve been able to sort of I guess restructure the potential operating metrics to keep the economics constant? And I’m just wondering if we can get a sense from you what hurdles you are considering in terms of requiring, I guess return hurdles required to do the restart. I see that Tutunup South only has a three year mine life left. Am I correct in assuming that you’re going to need at least a three-year payback to justify a restart?

Okay, there is a lot in that Owen. We’ve said -- I’ve said very consistently to our customers and generally we only run assets if we can make an appropriate return, and SR kilns are no different. In the case of SR 2, the big one which is first kiln [ph] off the rank, that we could either choose to restart it for negligible CapEx, which is essentially using the remaining life of the refractory in the kiln, call it a three-year campaign or so, or you do a realign which gives you a full four-year plus campaign life. And I’m not going to comment today on which of those we’ll choose to do. I’ve never put any numbers on any targets because it’s the first thing that my customers want to know. So we choose not to quote them, I’m sorry. But it’s pointless me being that transparent with our customers, so we don’t. Your issue about the economics, the big driver of economics is ilmenite freight [ph] cost. It’s how flexible you are in ilmenites that you can use. And we’ve done a lot of work on becoming more flexible in what we can put into the kiln and what we can make out of it. You can be assured that if and when if it restarts it will be on the basis of attractive returns to our shareholders.

And is assuming above cost of capital a fair assumption?

Well, look I think yes, it’s pretty basic that if you’re going to generate value for shareholders you have to generate a return above your weight, so yes. But as I said earlier, we’re financially literate resources company, perhaps more so than some.

Thank you.

On the Tut South, you have to look Tut South is only one element of that supply options. And there will be others.

And your next question comes from the line of Brenton Saunders of BT Investment Management. Please go ahead.

Good morning, gentlemen. I just wondered, David if you could just expand a little, what aspects of the zircon market are encouraging you to think that you’re likely to see a slightly better year this year, if not in prices then in volumes?

So, can you just repeat the last bit Brenton?

What aspects of the zircon market are encouraging you to the point where you can see an improvement this year in volumes if not prices?

Well, I guess sales trends, obviously the budgetary process that we go through which involves a very granular assessment dialog with all our customers, around analysis, you name it, it’s -- Matt, given you are in the U.S. and been passionately waiting to say something, why don’t you comment on that.

Okay, David thanks. Brenton, what -- in answer to your question I’d say that we look very hard at the market. For example our leading indicator pack is made of 79 different data-points. So it’s just particularly not one element that we focus on, we pull all those together and then we form a view on where we think the world is going to go. And that also includes feedback from customers. And we have seen growth in recent times for example in the zirconium chloride area, zirconium chemicals, very strong growth in 2014 in that area. It’s across the board, Brenton and we don’t, as I said, we’re not focused on one particular data-point.

And it’s also fair to say Brenton that I believe there were some people counting on supply that’s not going to be there.

Okay.

Other than us obviously, but it doesn’t include us. But you only have to have a look at what’s happening in this industry more broadly to understand why we’re confident.

Well, I mean, within that context, I think if we think about some of the big demand drivers for basic materials and mineral sands generically you -- I guess where my questioning is coming from is that we’re still seeing big parts of it, notably the Chinese real estate market, at this point at various levels and by all accounts it continues to seem to be slowing. So I’m just trying to understand it within that context.

Well I’d say to that we have a very substantial in-country presence. We have first-hand read -- not derivative read on what’s going on, Matthew mentioned that the zirconium chemicals trend is very, very positive. Remember the ceramics is only just over half of demand for zircon. Then in China, it’s all about property sales, not the property acquired [ph] line, not where the property developers are making any money or not but our people are following and trading up in terms of what they live in. And so generic assumptions about our market versus others, if you look back over the years, we’ve actually tried our own cycle, not that it is trying to hit to anything else.

Understood. One last question from me, I guess quite a big consideration for some of us is what you’re doing on the new business side, the Kenmare purchase has been dragging on forever and we continue to hear that we’re not allowed to say anything because we’ve got some guy from Goldman Sachs on the line, but when do we see this process reach some kind of finality one way or the other?

Well, obviously that I can’t answer that question. I can only refer you to things we’ve said about we continue to believe in discussions, we can conduct due diligence on Kenmare. I think surely the interpretation is, should be that we are disciplined, that the issues of financial merit are upper most in our mind. Most people have heard me talk about being skeptical of strategy with a capital S. So we’re a disciplined company. And that is reflected in the process we’re in.

All right. Thank you.

[Operator Instructions].

Looks like last chance, if anyone wants to ask any more questions. So thank you everybody. Yes, okay, one more.

The next question comes from the line of Lachlan Rutherford of Taylor Collison. Please go ahead.

Hi, that was Taylor Collison. Yes, thanks anyway. Can you just, kind of if you could expand a bit more on your non-mineral sands explorations, exactly what you’re up to in that area?

I don’t think we’ll tell you exactly what we’re up to.

Well, yes, generally.

It’s all about adjacency. We understand the risks of leaps into the wall beyond which we don’t propose to take. But Doug, do you want to comment on the non-mineral sands?

Lachlan, we do not think same time it’s a fairly significant package for [indiscernible] in the Eucla Basin. And for many, many years that region has been considered, at least contextually in the minds of numerous geologists, prospective for base metals. So we are having a look at that, probably a little upside. Considered contextually prospective but why it’s important because no one has really don’t much work, in large part, we think because of the remoteness of that area but we’ve been exploring that for over 10 years now and we think we can handle that remoteness pretty well. So, we’re having a look at that.

Okay, thanks. A - David Robb: I think we’re all out of questions. Thank you Lachlan. Look just to conclude, thank you for your time again. Obviously these are busy periods of the year. I would just say that we do hope to get out guidance, do expect to get out guidance shortly. As I think about the year ahead and beyond I see top line growth, margin expansion, inventory monetization and another low underlying CapEx year before our project expenditure kicks in. So thank you for your time.

Ladies and gentlemen, that does conclude the conference for today. Thank you all for participating. You may all disconnect.