Hello and welcome to the MP Materials’ Third Quarter 2024 Earnings Call. This call is being recorded. I would now like to turn the call over to Martin Sheehan, Head of Investor Relations. Mr. Sheehan, you may begin.

Thank you, operator, and good afternoon, everyone. Welcome to the MP Materials’ third quarter 2024 earnings conference call. With me today from MP Materials are Jim Litinsky, Founder, Chairman, and Chief Executive Officer; Michael Rosenthal, Founder and Chief Operating Officer; and Ryan Corbett, Chief Financial Officer. As a reminder, today’s discussion will contain forward-looking statements relating to future events and expectations that are subject to various assumptions and caveats. Factors that may cause the Company’s actual results to differ materially from these statements are included in today’s presentation, earnings release, and in our SEC filings. In addition, we have included some non-GAAP financial measures in this presentation. Reconciliations to the most directly comparable GAAP financial measures can be found in today’s earnings release and the appendix to today’s slide presentation. Any reference in our discussion today to EBITDA means adjusted EBITDA and tons means metric tons. Finally, the earnings release and slide presentation are available on our website. With that, I’ll turn the call over to Jim. Jim?

Thanks, Martin. Hello, everyone. It's been an incredibly exciting week in America, and regardless of how you voted, we are all on the same team now. So let's get started on slide 4. Put simply, I am extremely proud of the MP team's execution this quarter. We achieved a new upstream production record of 13,742 metric tons of contained REO. That is nearly 15% or over 1,700 metric tons higher than our previous best quarter. Let me repeat that. We produced 15% more REO this quarter than our previous best quarter ever. Michael will get into more detail shortly, but we believe this signifies material progress towards the significant change in potential we have recently discussed for our Upstream business. Upstream 60K optimizations drove improved recoveries, and alongside those higher recoveries, we maintained solid productivity with consistency and reliability and uptimes. As we have previously stated, our path towards Upstream 60K will be lumpy, but these results clearly underscore the world-class technical capabilities of our team. The vast potential of our Upstream operations, and our confidence in achieving Upstream 60K. Needless to say, record production this quarter translated into strong concentrate sales volumes, despite pushing much more volume through the Midstream circuits. Speaking of the Midstream, and as significantly, we achieved record production of 478 metric tons of NdPr oxide in the quarter. This represents a 76% increase from the second quarter, well above our guidance for 50% sequential growth. I would remind you all that we completed an extended planned maintenance outage in October. We are also beginning to commission additional Upstream 60K projects throughout the quarter. Given these planned disruptions, we expect Q4 NdPr oxide production to be roughly flat with Q3's 478 tons. We then expect a more significant acceleration in Midstream production in Q1 of next year. The strong Q4 production allowed us to nearly triple our sales volume sequentially, highlighting strong momentum in the sell-through of our oxide and metal production. I would like to point out that we have seen a recent, notable uptick in customer inquiries for samples and potential orders. Assuming we meet our production targets and NdPr pricing holds at current levels, we expect to generate positive Midstream gross margins as we exit Q1. Naturally, this comes with all the usual caveats of a complex ramp-up, but we are very pleased to have line of sight to profitability in our refining operations, complementing the continued strong profitability of our upstream. We also received positive news in late October when the Treasury Department issued the final rules for the 45X Advanced Manufacturing Production Tax Credit, which grants a 10% credit on costs related to producing critical minerals, including NdPr oxide. Initially, the proposed rules excluded extraction costs and both direct and indirect material costs, limitations that would have reduced the policy's impact for companies like MP. However, the final rules now allow vertically integrated US minor refiners, such as MP, to include these extraction and material costs. This change is particularly significant for rare earth producers, as chemical reagents make up a substantial portion of our overall cost structure. Moving on to our downstream magnetics business, we have begun commissioning our electrolysis cells for metal production in Fort Worth. By the way, we refer to the Fort Worth magnet facility internally as Independence, named for the road that it sits on and the mission that we strive to facilitate. Our team there is now about 100 people, and we are on track to deliver metal by year-end. We will start externally using the official name, Independence, going forward. In addition, we also expect first production of on-spec magnets in our integrated prototyping facility at Independence by year-end. This will allow us to begin the customer qualification process, another critical milestone on the path towards commercial magnet production by the end of next year. So in summary, this was just a tremendous core of execution across our business. We have a lot of work to do, but I am particularly proud of our team's resilience this year. I am further encouraged by the significant momentum we are building as we head into 2025. With that, I'll turn it over to Ryan to review our KPIs and financial performance. Ryan?

Thanks, Jim. Moving to slide 6, on the far left of the slide, you can see that REO production of 13,742 metric tons increased 28% compared to last year and over 50% versus our more challenging Q2. As Jim mentioned, this led to very strong sales volumes as we sold 9,729 metric tons of REO, a 6% increase over last year, and a 67% increase sequentially. On the middle left, you can see realized pricing remains pressured as average realized price for REO and concentrate was $4,425 per metric ton in the quarter, a 23% decline from last year, but a 6% increase sequentially. We saw some positive movement in market prices in September, which had a slight positive impact on our Upstream realized pricing versus our guidance from last quarter. Moving to the Midstream KPIs on the right side of the page, as Jim also mentioned, we produced 478 metric tons of NdPr oxide, a 76% increase over Q2, and nearly 10x last year's initial production levels. NdPr sales volumes totaled 404 metric tons, nearly triple Q2's volumes. I would point out that most of the higher sales than originally expected are simply due to timing. Given the still relatively low production volumes, timing of shipping schedules and deliveries will potentially have a large impact on our relative sales volumes, particularly as we continue to ramp up our metal tolling channels. Looking year-over-year, production of refined products had just begun in last year's Q3, with our first sales not until Q4. Pricing this quarter came roughly in line with our expectations, down about a $1 per kilogram compared to last quarter. Moving to slide 7, the impact of NdPr oxide at metal sales, as well as strong concentrate sales volumes generated a 20% year-over-year increase in revenues despite negative year-over-year compares in realized pricing. In addition, strong gross profit contribution from our concentrate sales as well as continued cost reductions in NdPr oxide production led to a $15.9 million sequential improvement in EBITDA results in Q3. Our improving cost profile as we benefit from fixed cost leverage resulting in us reducing our inventory reserve by $2.7 million in the quarter. The cumulative lower cost or market inventory reserve at the end of Q3 now stands at $15.1 million. On the far right of the slide, the improving sequential EBITDA flowed through to adjusted diluted EPS where we saw a $0.05 improvement versus Q2. As we have discussed over the last few quarters, our Midstream operation continues to be subscale as we ramp production of NdPr and other separated products. That said, and as Jim highlighted, we have line of sight to generating positive gross margin on our NdPr oxide sales as we exit Q1 of next year driven in large part by the continued ramp in production volumes and as we make further headway in fine-tuning and lowering the cost of our processes. I would note, however, that as we look forward to Q4, sequential concentrate production volumes will be down and NdPr production will be roughly flat. This is due to an extended planned outage we held in early October and the introduction of some Upstream 60K initiatives and equipment, which in the very short term will likely result in additional downtime and unstable performance. This would also result in lower concentrate and NdPr sales volumes next quarter. And as for realized pricing, assuming current market prices hold for the remainder of Q4, we would expect concentrate prices to grow just under 10% sequentially, while NdPr pricing should increase approximately 5%, given the longer lag versus market pricing on NdPr. Moving to CapEx and the balance sheet, we have reduced our expectations for 2024 CapEx to be approximately $200 million, primarily due to the timing of cash costs. We are starting to do a deeper dive on our 2025 CapEx expectations and will provide a more precise outlook on our 2024 Q4 call. But overall, I would expect much of the $50 million of lower 2024 spend to roll over into 2025. With this quarter as a prime example, we continue to find high return projects across our portfolio of assets, but remain steadfastly committed to maximizing long-term free cash flow while maintaining a fortress balance sheet. Importantly, we ended Q3 with approximately $866 million of cash in equivalence and approximately $94 million of net debt. This was after opportunistically repurchasing 24.3 million of MP shares in the quarter at an average price of $10.86. This brings our year-to-date repurchases to $225.1 million or approximately 8.6% of the company. Moreover, along with buying back 8.6% of the company so far this year, we also enhanced our capital structure by extending the vast majority of our debt maturities to 2030. I would also remind investors that last quarter we shared that we expect to earn approximately $190 million in customer prepayments and tax credits by the end of 2025. In Q3, we received the first tranche of $20 million of tax credits and we expect to receive most, if not all, of the remaining $170 million over the coming five quarters. With that, let me turn it over to Michael to give you updates on the operations. Michael?

Thanks, Ryan. Turning to slide 8, you can see an overhead shot of our Midstream assets and site utilities. We made tremendous progress throughout the operation in Q3, delivering all-time production records in both our Upstream and Midstream circuits and continuing to advance our downstream development. We are very pleased with the Upstream performance where a recent optimization initiative achieved better than expected results. Remarkably, our 28% year-over-year growth was achieved almost entirely from improved recovery with no change in feed rate, while uptime increased slightly year-over-year and was just above normal for a non-outage quarter. I'd like to recognize our metallurgists, metallurgy technicians, and mill operations teams whose work and creativity led to this incredible performance. We believe that the results are generally sustainable, though I would advise against immediately annualizing this. In particular, the more rapid improvement puts some pressure on other parts of the operation that may create intermittent uptime challenges. We will certainly overcome these. We continue to experiment with additional optimizations that may also result in temporary setbacks. But I believe we have achieved the step change improvement in our baseline Upstream performance, which reinforces our confidence in our ability to sustainably unlock incremental value from the Mountain Pass ore body and assets. In the third quarter, we commissioned the first modest capital investment project of the Upstream 60K initiative. This flotation equipment enhancement had a slight positive impact on production in Q3. However, it is not yet operating stably, full-time, or at full scale. To prepare for continuous operation, we will implement improvements to the unit in Q4 that will, over time, enhance its availability and its benefit. In Q3, we also began pre-commissioning a significant improvement to our grinding circuit. As of today, some of this equipment has been placed into service, and trial production has begun for additional components. As I mentioned last quarter, while we have very high expectations for this investment, it may initially cause instability and negatively impact the operation before driving incremental recovery in 2025. Our Midstream business accelerated performance in the quarter as well. Improved availability again accounted for most of the improvement and nearly all the outperformance versus our prior directional guidance. Particularly in those circuits where mechanical or operational reliability had lagged, we saw a meaningful improvement in uptime. We remain pleased with our NdPr oxide quality as well as that of our NdPr metal, which saw a large increase in customer deliveries in the quarter. With uptime and product quality as a foundation, we feel increasingly optimistic about our ability to further increase throughput and efficiency. Every day, as one would expect, we encounter our share of operational challenges and setbacks. While these can be frustrating at times, overcoming them showcases the significant potential of our team and operation. As we address these issues one by one, we have more time to optimize reagent use and labor, enabling us to drive production costs downward towards world-class levels. As Ryan discussed, in the first half of October, we executed our semiannual maintenance outage. Typically, we experienced an uneven path to stability coming out of an outage, and this quarter was no different. But this is well behind us now. We do not expect to match Q3 concentrate production in Q4 due to lower uptime and the investments for future growth discussed earlier. But behind the headline figures, we do expect that the strong fundamentals will continue. In the Midstream operation, we expect Q4 NdPr production to be roughly flat sequentially, with much stronger performance in the first quarter of 2025. Our magnetics team continues to make incredible strides too. The expanded capital projects group is doing an excellent job driving design and execution on schedule and budget. There is enormous excitement and stress in the air as we transition from a design and construction project into the construction and operations phase. We are currently commissioning our first full-scale metal reduction furnaces and look forward to delivering quality metal by the end of the year. While not at full commercial scale, our prototype facilities operate at a representative scale and possess the capability to process metal ingots into alloy flake, magnet powder, sintered block, and grain boundary diffusion, or GBD, machined and magnetized finished magnets. On slide 9, you can see examples of unfinished, sintered, ND-FEB magnet block produced in Independence's prototype facility. The quality of these magnets, while not yet perfect, is already well on the way to satisfying the current EV traction motor and other target application standards. Importantly, this facility gives us the opportunity to experiment, iterate, learn from mistakes, and ultimately succeed at a manageable scale and with rapid turnaround and feedback. With that, I will turn it back to Jim.

Thanks, Michael. Turning to slide 10, this is a nice shot outside our corporate offices in Las Vegas. In summary, I am proud to say that the MP team delivered an outstanding quarter across all aspects of our business. Today's results highlight our expanding Upstream profit potential, the rapid scaling of our Midstream operations with an anticipated shift to positive gross margin contribution, and our downstream operations at Independence, which are poised for near-term transformative milestones. Additionally, we have significant near-term sources of cash outside our day-to-day operations, so we will remain well-positioned for opportunities, even amid a challenging pricing environment. Lastly, I anticipate some questions about the transformative political shift we witnessed in America this week, and I look forward to sharing my perspective. But here's the quick preview. Tuesday's results should translate into continued strong support for MP. Our mission, to onshore one of America's critical supply chains, aligns with the clear mandate from the American people. Companies like MP are crucial to our nation's future and now, at this pivotal moment, our work really matters. With that, we're ready for Q&A. Operator?

Our first question will come from Lawrence Alexander with Jeffries.

Hello, good evening. This is Kevin Estok on for Lawrence. Are you able to hear me okay? Okay, great. Yes, I just wanted to know a little bit about what you're seeing or hearing in terms of demand for new robotics applications and maybe the level of interest from downstream customers in any magnetic optic agreements and maybe whether there's any price points that would really spark discussions. Thanks.

Sure, this is Jim. So on robotics, what I would say is we are seeing a ton of action in company formation and venture capital and what I would say is prototyping initial design. As far as mass production, it's still a bit early. If you've heard me kind of in the last couple of quarters, we've been talking about this heating up and I really view this as sort of a few years out kind of thing where it's going to create a step function change. But what I would say is that we see it developing a lot as far as when it will start to have a material impact on demand. That's still a little bit unknown, but I do think you'll start to see real change in the supply chain probably 18 months to two years before that inflection point because people will need to get their supply chains ready. And the scale of demand for robotics, you may have heard me kind of talk about this before, but if you look at the actuators in humanoid robotics in particular, our estimation is anywhere from 2x to 5x the amount of magnetic content versus an EV, and so if you do believe sort of the Musk, et cetera., reviews of billions of robots, you realize that this market is larger than the EV market, and the content per unit is significantly larger, so we think it's a huge theme for us. Lastly, particularly given the fact that robots are in our homes and factories, the national security element to this is significant, and so in fact that video, that webcast that we tweeted a few days ago from Andreessen talks a lot about this, but when we think about EVs and how much of that supply chain we lost, in robotics, there's a big push from knowledgeable people to ensure we have this supply chain here because of national security importance, and so I think it will, as this heats up over the next year, really highlight the importance of what we're doing.

I understand, thank you.

Yes, and this is Ryan. One thing I'd add on that I think is interesting is when we think about robotics, obviously there are commercial applications, but as we consider national security implications as well, an important element to the development of the domestic market in the U.S. is DFARS compliance, so a necessity for those in the defense supply chain to be purchasing magnets all the way back basically to the mine site that have been manufactured in the United States. There are very few companies that are positioned to execute on that the way that we are, and on top of that, one of the benefits of our structure is we don't have this innovator's dilemma where we've got off-the-shelf product mixes that we need to sell into. We can work with the actuator and motor designers to maximize manufacturability and minimize the cost of the magnets, and those are conversations that we have ongoing as we speak that position us very well to execute on this.

Okay, great, thank you. And just my second question, I just wanted to get a sense of your team's maybe read on the political landscapes. I mean, just after this week's election, any change in the mix of senators or Congress people that are more likely or less likely to engage in critical materials and potentially a magnet bill after this week's election?

Sure, this is Jim. What I would say is I think this week's election was an overwhelming mandate. I mean, the key takeaway from the election is that obviously the America First agenda is focused on the American worker, on bringing support to the people who build in this country. It was a very broad spectrum of people who've come together to form what is now this America First approach. Historically, both sides of the aisle focus on jobs and onshoring. But now we have an overwhelming mandate from the American people. Particularly given the red wave, it is the House, the Senate, and President Trump will be able to drive an agenda. It's hard to predict what shape it's going to take because particularly with President Trump, he's very effective at negotiating these things and reaching an outcome, but we don’t know exactly where it's going. Whether it manifests as tariffs or tax policy, it's clear that industry champions like ours, in critical materials and the national security supply chain, bringing jobs back to America, are at the center of what people want to support. We operate in three main states of operation: a blue state, a red state, and a purple state. Our operators, electricians, maintenance workers, engineers represent the center of what we're trying to help. Lastly, we have consistently said that we want to compete against China. They're tough competitors, but we want a level playing field to do so. In industries like ours, we currently do not have that equal footing. Policy initiatives aimed at leveling that playing field will create particularly significant opportunities for us in the coming years.

Our next question will come from Matt Summerville with D.A. Davidson.

Excellent. Yes, can you hear me? Okay, guys. Okay, cool, sorry, it's the first time I've done a call of this format. Anyways, you mentioned some gross margin positivity, I believe, out of the refining business in Q1, any sort of prognostication on when that business can become EBITDA positive, assuming a similar pricing environment today?

Yes, Matt, it's a great question. I think the thing to think about is that when you're comparing our results on a consolidated basis for the Mountain Pass assets, the faster we advance on the Midstream, the more we're pulling away high gross margin concentrate from sales. Obviously, significant gross profit comes from those sales. There is a push-pull dynamic. The more rapidly we progress, we sacrifice some of those margins. The important thing we saw this quarter with growth in production and continued progress on the cost structure is this line of sight we have certainly if we're projecting confidence in a positive gross profit exiting Q1. I would expect that positive EBITDA for that business is not far behind, but it depends on various factors that drive production growth and cost reduction. If you look at our EBITDA in totality for 2025, if we're meeting our targets for gross margin positivity on the separation side, we will continue to have profitable concentrate sales and move into profitability on magnetics as well. Therefore, we are excited about the comparisons between 2025 and 2024.

Got it and then as a follow-up, I want to make sure I understand that sequentially it sounds like there's going to be a pause or a flat quarter-on-quarter level of NdPr production. I want to make sure I understand what's driving that and then similarly what's going to drive what Michael described as kind of a nice jump in Q1. Thank you.

Sure, Matt, I'll handle the finance side and let Michael explain the operations. The simple answer is uptime. We had one of our longest shutdowns in October as Michael referenced, and as we continued to hit our stride throughout Q3, we necessitated a pause for maintenance in October. When coming out of that shutdown, and as we ramp back up, we introduce optimizations and new pieces of equipment into the operation, which leads to updated instability in the short term. Taking a snapshot of just one quarter is challenging during this ramp. Behind those headline numbers are real proof points of progress that will show up better in Q1, but Mike, any other specifics you'd add?

One other thing to add is that as part of some of the shutdowns, we have to de-inventory part of the circuit. We need to rebuild that whip to some extent when we restart. Overall, we're seeing better uptime, as I mentioned in the prepared remarks, and we expect that to continue. As we stabilize, we look to increase throughput, and I expect that to take more effect in the first quarter. As we address one issue, previously underappreciated challenges emerge and we address those, but we're very confident that as we enter the new year, we'll see new highs.

Our next question will come from Greg Jones with BMO.

Hi, good afternoon, everyone. Can you hear me? Great. So I had two questions. The first is regarding the 45X Production Tax Credit. Obviously, understanding the finalized rules were just recently announced, but do you have a view on what the potential annual dollar amount of the credit could be as you move into next year and beyond?

Sure, Greg, I'll take that. The short answer is significant, but the details are important, obviously. One of the critical elements of this is unique: we need to utilize our tax cost of goods sold in the calculation, not our book cost of goods sold. There are many nuances that often are not calculated until a certain period of time. High-level, we estimate that the impact with the preliminary regulations would effectively cut the impact in half versus what the ultimate sort of 10% of production costs should look like. Since we're not providing a COGS estimate or outlook right now, the simple answer is we expect it to be just about 10% of our cost of goods sold for the fully integrated operations of qualified products, i.e., NdPr oxide. This production tax credit incentivizes many of the advancements Jim spoke about previously. We're hopeful that as we move into a new Congress, there should be more incentives for new production to continue driving these rewards for scaled producers like us.

That's great, thank you. Then the second question, more of a macro one. There have been media reports around events happening in Myanmar and some of the issues there that seem to be impacting supply chains and exports from the country. Do you see or experience any impact on your business or the potential for higher prices or increased demand for MP’s products as a result?

Sure, Greg. To level set, Myanmar represents a significant supply that moves from the border region of Myanmar into China. Reports indicate that some mining there has been shut down. An opposition group to the military now controls that territory. There is noise around that, and any supply impact could create volatility. I think this is more of a medium to longer-term situation because, of course, in terms of near-term prices, commodities prices can be unpredictable. That said, given that the area is more controlled by its local populace, there will be a push for better environmental production. Google the production in that area, and you'll find it has caused serious health problems with little oversight. Local control may naturally restrict supply, particularly the illegal production that harms communities. Therefore, I believe this situation may present upward pressure on pricing, ultimately normalizing for real production costs over time. Lastly, it underlines the importance of supply chain security once again.

Our next question will come from Bill Peterson with JPMorgan.

Yes, hi, good afternoon, and thanks for taking my questions. Maybe on the flip side of supply, wondering if you can walk us through some of what you're seeing on the end markets in terms of demand. I guess the backdrop is that pricing on NdPr has kind of been flat for about two months now. We've heard of some green shoots and then restocking, de-stocking, trying to get a sense of where you're seeing in terms of end market demands.

Yes. Just as a reminder, when we think about demand in the space, remember that roughly 30% of demand is high growth electrification, such as EVs and hybrids, while the remaining 70% is tied to traditional industries linked to Chinese manufacturing like power tools and HVAC. The Chinese macro situation has been very tough over the last 18 months. Recently, prices have remained stable for a while, 'bouncing around the bottom' for a number of months. The recent Chinese stimulus could change that. It’s too soon to gauge the impact, but if it works through the system over the coming months, we could see a volatile upward reaction. That said, we have observed a few recent inquiries hinting at an uptick in demand, but again, it's anecdotal for now. We're hopeful for higher prices.

Yes, thanks for that. I wanted to double-click on a comment you made earlier about the number of customers requesting products from your Midstream side. Can you quantify where these customers are requesting samples, what geographies they're coming from, what markets they represent, and importantly, are most of these engagements with customers outside of China?

So great question. You may have heard us mention that we now sell effectively directly to three of the five largest OEMs in the world, non-Chinese. Think of household names you know. This was a significant development in recent months, as back when we went public there were questions about whether OEMs would rely on us amid COVID supply chain issues. Now we have real relationships with major OEMs, which is substantial. Given industry downcycles, this development is promising for future demand in sectors like electrification, hybrids, and ultimately robotics.

Our next question will come from Ben Kallo with Baird.

Congratulations on all the progress. Jim, when you talk about having initial production at the magnet facility and then being able to provide samples, I'm a bit confused. I thought everything was sold to GM. Is it going to others or just samples of several different types of magnets being sent to GM, or are you looking for other customers as well?

Hey, Ben, it's Ryan. I'll take that. I think we've been clear that the preponderance of our volumes is indeed spoken for at this point, so our main focus is executing for our foundational customer, which is General Motors. However, there are ongoing conversations across various industries, not just automotive. While our primary focus is on General Motors for now, we have many potential customers we're engaging with.

And adding on to that, Ben, since we're not currently receiving credit for the business, our foremost focus remains executing for GM. In the longer term, as trends in robotics and national security intensify next year, we hope to produce for more customers as we grow.

Thank you. And Jim, on the policy front, you mentioned not being on a level playing field. As you talk to representatives in the administration, what is kind of on your wish list or how do you want to try to get on a level playing field if you had your wish? Thank you.

Sure, yes, sure. That's a difficult question because regardless of the wish, there will be many iterations as this plays out regarding tariffs and tax credits. To answer your question more directly, for example, competing against a rival globally that lacks a cost of capital is challenging. In separation, if our competitor lacks a cost of reagents, that's also a challenge. Thus, it depends on where in the production chain we compete. Enhancing tax credits, tariff-related policy, or defense policy will greatly benefit us starting January 1 of ‘27, as we are likely one of the only sources for much of the defense supply chain under new mandates. A mix of policies should accelerate our business, but I cannot specify what it will involve yet.

This concludes the question and answer portion of today's call. I will now hand the call back to Mr. Litinsky for closing remarks.

Thank you. Well, thank you, everyone. Obviously, as the execution results show, this was just an outstanding quarter across the business. I'm really proud of the team, and so we will get back to work and look forward to seeing you all next quarter.