Century Aluminum (CENX) Q3 2026 Earnings Call Transcript

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DATE

Thursday, Nov. 5, 2026

CALL PARTICIPANTS

• Vice President, Finance and Treasurer - Chad Rigg
• President and Chief Executive Officer - Jesse E. Gary
• Executive Vice President and Chief Financial Officer - Peter A. Trpkovski

TAKEAWAYS

• Net Sales -- $961.2 million, driven by a 33% sequential increase in shipments following the restart of Line 2 in Iceland.
• Adjusted EBITDA -- $331.6 million, reflecting higher realized metal prices and increased production volume from the Mt. Holly expansion.
• Shipments -- 173,483 tonnes, representing the return of the company's assets to full capacity for the first time in over one decade.
• Q4 Adjusted EBITDA Guidance -- $275 million to $300 million, reflecting lower expected realized LME prices and rising raw material costs.
• Adjusted Net Income -- $271.6 million, which excludes $31 million in net exceptional items including unrealized derivative gains.
• Cash and Equivalents -- $713.0 million, supported by $365 million in quarterly cash flow conversion and government tax credits.
• Section 45X Tax Credits -- $94 million, received in cash during the quarter for the fiscal 2025 period.
• Realized LME Price -- $3,400 per ton, an increase of approximately $150 per ton compared to the second quarter.
• Midwest Premium -- $1.11 per pound, compared to $1.12 per pound in the prior quarter.
• U.S. Primary Aluminum Sales -- $580.0 million, supported by shipments of 98,183 tonnes as production instability at Mt. Holly was resolved.
• Iceland Primary Aluminum Sales -- $316.9 million, reflecting 75,300 tonnes in shipments following the return of Line 2 to near full capacity.
• Capital Expenditures -- $38 million, primarily focused on transformer replacements in Iceland and new power turbines in Jamaica.
• Total Debt -- $480.3 million, resulting in a net cash position as the company holds more cash than total debt.
• Oklahoma GDP Impact -- $1.5 billion per year, which represents nearly 1% of the state's total economic output according to a new study.
• Oklahoma Employment -- 1,000 permanent direct jobs, planned for the new smelter project to support regional workforce development.
• Fluoride Emission Reduction -- 37%, committed under a new environmental plan to address community and regulatory concerns.
• Insurance Proceeds -- $19 million, recovered for equipment failure and business interruption losses at the Iceland facility.
• Average Power Costs -- $60 per megawatt hour, driven by seasonal high temperatures impacting Indiana hub prices at the Sebree facility.
• Working Capital Release -- $40 million, reflecting the shipment of inventory built up during previous plant expansions.
• Q4 Pricing Headwind -- $35 million to $45 million, anticipated sequential reduction in adjusted EBITDA due to lower lagged LME prices and regional premiums.
• Raw Material Headwind -- $5 million to $10 million, expected in the fourth quarter because of elevated coke and heavy fuel oil prices.
• Liquidity -- $1.16 billion, consisting of cash on hand and $406.9 million in combined borrowing availability.
• Hedge Settlements -- $24 million, representing realized cash payments on derivative contracts during the period.
• Income Tax Expense -- $11.6 million, incurred during the third quarter as the company returned to profitability.

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RISKS

• Gary stated, "The team continues to work through the bauxite quality issue we first discussed in May," noting that a revised mine plan will take several quarters to fully implement.
• Trpkovski warned that pricing changes are expected to "reduce adjusted EBITDA by $35 million to $45 million sequentially" in the fourth quarter due to lower lagged LME prices and premiums.
• Gary indicated that the company is addressing concerns raised by state regulators and the community regarding the new Oklahoma smelter project.

SUMMARY

Century Aluminum Company (NASDAQ:CENX) reported a return to full capacity across its global assets for the first time in over one decade, generating substantial cash flow during the third quarter. Management stated that the company achieved a net cash position as a result of strong operating performance and the receipt of Section 45X tax credits. The company is advancing its strategic Oklahoma smelter project, which is expected to double domestic primary aluminum production upon completion. Management reported that pricing conditions remain constructive despite seasonal energy headwinds and anticipated sequential pricing adjustments in the fourth quarter.

• Jesse Gary stated, "Three of our four replacement transformers have now arrived in Iceland, with the first new transformer already installed," as the plant works toward full nameplate production.
• Management reported that the Jamalco refinery online TG4 power turbine allows the facility to avoid purchasing energy from the Jamaican grid.
• Peter Trpkovski indicated that the company expects to receive $80 million in outstanding fiscal 2023 tax credits in 2027.
• The company maintains a 6.8% interest in a TeraWulf data center project, which Gary noted has secured investment-grade credit support from Google.
• Management indicated that the Oklahoma project committed to reducing permitted fluoride emissions by 37% to address community and regulatory concerns.
• Gary stated that shareholder returns will be prioritized after the company reaches a final investment decision on the Oklahoma smelter project.

INDUSTRY GLOSSARY

• LME: London Metal Exchange, the global center for industrial metals trading that sets benchmark prices.
• Midwest Premium: A surcharge paid for the delivery of aluminum to the Midwestern United States, reflecting local supply and demand.
• FID: Final Investment Decision, the point in a capital project where the decision is made to proceed with execution.
• 45X Tax Credit: A production tax credit under the Inflation Reduction Act for clean energy and advanced manufacturing components produced in the United States.
• Bauxite: A sedimentary rock with a high aluminum content that serves as the primary ore for aluminum production.
• Alumina: Aluminum oxide, a white powder produced from bauxite that is the immediate precursor to primary aluminum.
• EBITDA: Earnings before interest, taxes, depreciation, and amortization.
• Pod: A group of electrolysis cells used in the primary aluminum smelting process.
• Amperage: The strength of an electric current, which directly affects the production rate in aluminum smelting.

Full Conference Call Transcript

Operator: Hello everyone. Thank you for joining us and welcome to the Century Aluminum Company Third Quarter 26 Earnings Conference Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Chad Rigg, vice president, finance and treasurer. Please go ahead.

Chad Rigg: Thank you, operator. Good afternoon, everyone. And welcome to the third conference call. I am joined here today by Jesse E. Gary, Century's President and Chief Executive Officer. And Peter A. Trpkovski, Executive Vice President and chief financial officer. After our prepared comments, will take your questions. As a reminder, today's presentation is available on our website. At www.centuryaluminum.com. We use our website as a means of disclosing material information about the company, and for complying with Regulation FD. Turning to slide 2, please take a moment to review the cautionary statements with respect to forward looking statements and non GAAP financial measures in today's discussions. And with that, I will hand the call to Jesse.

Jesse E. Gary: Thanks, Chad. Thanks to everyone for joining. I will start today with our third quarter results then walk through our operations and give you an update on the Oklahoma smelter project. Before turning to the great market conditions we continue to operate in today. Peter will then take you through the quarter in detail and our fourth quarter outlook. To begin, I want to thank our teams across our locations for another strong quarter of safety performance. We had the hot summer temperatures and a lot of new employees across the asset due to restarts, and our team remained dedicated and focused. Turning to page 4.

Our excellent third quarter performance was enabled by the return to full capacity across our assets for the first time in over a decade. Combined with strong demand and pricing in our US and European markets, our assets generated net sales in the quarter of nearly $1 billion and adjusted EBITDA of $332 million Staying with page 4 on operations. At Mount Holly, the production instability we flagged in August has been resolved. This instability was not unusual following a restart of that size, and the team did a good job taking action to resolve it despite record high summer temperatures in South Carolina. With the instability behind us, the plant should return to full volume and normalized production mix.

Across the fourth quarter. At Grundartangi, the smelter had an excellent production quarter after returning to full pod complement in July. 3 of our 4 replacement transformers have now arrived in Iceland, with the first new transformer already installed another being placed in service this month, and the remaining 2 expected to be installed over the next several months. As the additional transformers come online, we can bring line 2 amperage up from the reduced levels we have been running since the restart and returned the plant to its full nameplate production. We anticipate the return to full average should take place over the course of Q1, and we will give you additional details on the Q4 call in February.

The team has done a really good job returning the line to over 6 months sooner than we originally expected. At Jamalco, the team continues to work through the bauxite quality issue we first discussed in May. The revised mine plan is being implemented, and we are making progress But as I have said, the new plan will take a few quarters to implement. Separately, we brought our new power generation turbine, TG4, online in August, and it is producing, which is Allowing us to avoid buying energy from the expensive Jamaican grid. Finally, Sebree had another excellent quarter operationally and financially. Sebree is setting the standard for the rest of the century portfolio and only continues to improve.

Great work again by that team. To return to market conditions, let me give you a quick update on Oklahoma. Along with our partners at EGA, we made good progress on our new smelter project in the third quarter. Financing discussions have advanced with material terms largely agreed and on track to be ready for FID. We also made good progress on our power contract in the quarter. Progressing towards final documentation with our supplier. At the same time, we continue to work with Bechtel and the EGA team on our detailed engineering plan which will continue in earnest in the fourth quarter.

We are working with state regulators in the community to advance the project and address concerns that have been raised. In September, we submitted a new environmental plan to the Oklahoma Department of Environmental Quality under which the project committed to reduce permitted fluoride emissions by 37%. Placing the new smelter amongst the best in the world. We also published a new economic impact study which found that the new smelter is expected to increase Oklahoma's GDP almost $1.5 billion per year, representing nearly 1% of the state's total GDP.

To the same end, we had begun working with Tulsa Innovation Lab, on workforce development as the smelter should ultimately create over 1 thousand permanent direct jobs and 5 thousand indirect and induced jobs. While this dialogue with regulators and the community is ongoing, we believe we have made progress in addressing remaining concerns. Finally, we were pleased to see Mike Mazie elected this past Tuesday to be the next governor of Oklahoma. Mike, along with the current governor, Levi Stitt, have been great supporters of the project, and we look forward to working with them over the coming months to reach FID.

Once built, the Oklahoma smelter will roughly double total US primary aluminum production and restore domestic production of military-grade high-purity When complete, it will be amongst the most efficient and advanced smelters in the world. And a crown jewel of the US industrial base. Okay. Let's spend a few minutes on the market starting on page 5. Market conditions remain robust with supply still constrained by Middle East disruption and a slow return of curtailed production in the region. Demand in our US and European markets remain strong, driven by data center and power system build out, and good automotive demand. Other bright spots include commercial aerospace, defense, and rearmament, and the reshoring of US domestic manufacturing demand.

Our position as a reliable supplier with short flexible supply lines into both The US and European markets have only been enhanced by the recent disruptions in production elsewhere in the world. All of this is reflected in historically low global inventory shown on page 6. Leaving a very constructive pricing environment with spot LME of approximately $3.17 thousand per ton Midwest premium of approximately $1.12 per pound, and the European duty paid premium of approximately $575 per ton. We also expect strong value added product demand in 2027. We are in the middle of the contracting season now, and we will provide you guidance 2027 value added premiums on our Q4 call.

On the cost side of things shown on page 7, you can see the impact of the high summer temperatures on Indiana Hub power prices at Sebree, but we have seen those prices moderate nicely as we have returned to normal temperatures over the past couple of weeks. Coke and heavy fuel oil prices remain elevated given continued high oil prices resulting from the conflict in the Middle East. Peter will now take you through our third quarter results and fourth quarter outlook.

Peter A. Trpkovski: Thank you, Jesse. I will review our third quarter results, cash flow and financial position then turn to our fourth quarter outlook. Third quarter shipments were approximately 174 thousand tons, up 33% sequentially, reflecting the Mt. Holly return to full capacity and the restart of line 2 at Grundartangi. Net sales increased $209 million sequentially to nearly $1 billion driven primarily by higher realized LME prices and shipments. Net income was $303 million, or $2.89 per share Adjusted net income was $272 million or $2.58 per share, excluding exceptional items. Exceptional items primarily included unrealized gains on derivative contracts and business interruption losses in Iceland.

Adjusted EBITDA was $332 million supported by higher LME prices, regional premiums, and volumes following the Mt. Holly expansion. During the quarter, we converted $332 million of adjusted EBITDA into $365 million of cash flow. Ending the quarter with $755 million in cash on the balance sheet. Turning to slide 9. Adjusted EBITDA increased $5 million sequentially to $332 million Realized LME increased approximately $150 to $3.4 thousand per ton. The US Midwest premium declined $30 to $2.45 thousand per ton or $1.11 per pound. While the European premium rose approximately $70, to $520 per ton. Together, pricing contributed an incremental $9 million versus the prior quarter. As expected, energy costs were a seasonal headwind.

With MISO Indiana hub prices averaging approximately $60 per megawatt hour for Sebree. Volume and sales mix contributed an additional $19 million sequentially, reflecting the Mt. Holly expansion and shipment timing. Operating expenses increased following some initial instability at Mt. Holly after the expansion. Turning to slide 10. We began the quarter with $390 million in cash, and delivered strong operating cash flow. First, we received $94 million in cash for our fiscal 25 section 45 x tax credit and continue to accrue credits quarterly. We also expect to receive the outstanding $80 million from our fiscal 23 credit in 2027. Next, in Iceland, hotline 2 returned to near full production.

We received $19 million in insurance proceeds during the quarter, and expect to continue to receive additional recoveries on a lag basis in Q4 and into 2027. CapEx totaled $38 million About $18 million of this was investment spend related to the Iceland transformer replacements. But the overwhelming majority of this investment spend on restarts and new power turbine in Jamaica is now behind us. Cash interest and taxes totaled approximately $16 million This primarily reflects the semiannual interest payment on our senior notes. Hedge settlements totaled $24 million Working capital also released nearly $40 million in cash as inventory built following the Mt. Holly expansion shipped as expected.

We closed the quarter with $755 million in cash no revolving credit borrowings, more cash than total debt, and more than $1 billion in liquidity. We expect strong cash conversion to continue. Supported by additional 45x tax credits and Grundartangi insurance recoveries. Let's turn to slide 11 and review our fourth quarter outlook. We expect lagged LME of $3.15 thousand per ton. Down approximately $250 from Q3 realized prices. The lagged US Midwest premium is expected to be $1.10 per pound. Down a penny. While the European duty paid premium is expected to rise to $550 per ton. Together, these pricing changes are expected to reduce adjusted EBITDA by $35 million to $45 million sequentially.

We expect energy costs to improve flat to $5 million sequentially as MISO Indiana hub prices are expected to improve by approximately $10 per megawatt hour versus the prior quarter. Higher raw material costs are expected to create a $5 million to $10 million sequential headwind. We expect operating expenses to increase approximately $5 million sequentially. Volume and sales mix are expected to improve by $5 million to $10 million driven by higher production and shipments at Mt. Holly. Some off spec material from the earlier instability will weigh on a bit on Q4 sales mix. Taken together, we expect Q4 adjusted EBITDA of $275 million to $300 million at expected realized prices.

For modeling purposes, we expect realized hedge settlements of $20 million to $25 million and tax expense of $10 million to $15 million. Both will affect Q4 adjusted net income and adjusted earnings per share. With that, I will hand the call back to Jesse.

Jesse E. Gary: Just before we turn the call over for questions, I would like to take a quick minute to highlight the excellent cash flow performance of the business and the strength of our balance sheet. As Pete discussed, in the third quarter, we converted $332 million of adjusted EBITDA into $365 million of cash flow in the quarter, and ended September with $755 million of cash against only $486 million in debt. Century is converting its earnings into cash at a very high rate right now, and we see that continuing. Our major investment CapEx programs to restore production at Mount Holly and Grundartangi and install TG4 at Jamalco are now complete.

Those projects represented about $125 million of investment capital spend this year that is now finished and will not repeat. From here, we expect to return to more normalized CapEx levels, leaving room for substantially higher cash flow conversion going forward. In addition, we still have additional cash payments relating to previous quarters that we expect to receive in 2027. Namely the 45X tax credits from the 2023 and 2026 tax years and the remainder of our Grundartangi insurance recoveries.

We also still retain our 6.8% interest in the TeraWulf data center being built at Hawesville, with the right to put that interest to TeraWulf for $300 million after the data center is operating, to sell it to a third party if we can achieve a higher value. On that front, TeraWulf has announced very good progress on the project. Hiring Flor to do the EPC build and securing investment grade credit support from Google to back the financing. Please remember, our 6.8% interest is in the completed data center, and we do not have any obligation to contribute more capital.

All told, we expect our already strong cash position to continue to improve in the coming quarters as we reap the benefits of our investments that return Grundartangi and Mt. Holly to full capacity and strong market conditions. We expect to use the strong cash position first to fund our share of the Oklahoma project once we reach FID. Once that decision is completed, we plan to provide you with further guidance on potential additional high return investments and shareholder returns.

Please remember that the Oklahoma project will benefit from the import-incentive program that we discussed last quarter, which should allow us to import primary aluminum up to our share of the annual production in Oklahoma at a reduced tariff rate of 25%. Versus the 50% rate that otherwise applies. No company is investing more to restore American primary aluminum production than Century. We are the largest producer of aluminum in the United States, We employ more American primary aluminum workers than any other company, and we are planning to invest billions more into new production in Oklahoma. We remain laser focused on execution and look forward to speaking to you about our 2027 plan on our February call.

Thank you for your time, and we look forward to taking your questions.

Operator: We will now begin the question-and-answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question from the line of Nick Giles of B. Riley Securities. Your line is open. Please go ahead.

Nick Giles: Yes. Thank you, operator. Evening, guys. Nick to see the progress here. I guess just on your last point there, Jesse, you mentioned that you want to build enough cash to have the equity check for the Oklahoma project. But I have to imagine that a lot of the CapEx spend might occur more so in 2028 than 2027. So there is potentially a bit of a timing mismatch where you could have excess cash on the balance sheet What do you plan to do with that cash, and would you be willing to look into shareholder returns earlier than expected, just given that the stock has been, under pressure? Thank you.

Jesse E. Gary: Yes. Thanks, Nick. We have had a little technical difficulties on our end. Can everyone hear us fine? Your line is open. Great. Thanks, Nick. Good question. Obviously, we are very happy with the performance and the cash flow we have seen this quarter, and we expect to see for quarters to come. And I would largely agree with you that stock definitely seems underpriced where we are here today. As we think about it, given the significance and scale of the Oklahoma project to Century and really to the entire US industry, we believe it is prudent to wait on shareholder returns until we reach FID.

This allows us to finish the financing and structuring of import incentives and see the quantum and shape of our equity requirements beyond just total amount of the equity requirements, which is how that spend may play out over the period. Before making other capital allocation decisions. In the meantime, as you say, we will continue to be responsible stewards of the cash. And we will move as quickly as possible to FID. Given the significant cash flow of the business, we will continue to assess the situation So. And if we do continue to generate significant cash as we expect we do, we will just watch the timing of FID, watch that cash bill.

Build, and if we do see a opportunity, we will come back and let everyone know.

Nick Giles: Understood, Jesse. No. that is that is very helpful color. I just wanted to ask about kind of the overall power strategy in Oklahoma. Would you expect that power will be will be hedged And then, you know, what are what are kind of the key gating items as it relates to the power agreement, specifically?

Jesse E. Gary: Yeah. Good question. Obviously, at Century, we do purchase power in many different ways across our assets. And in Oklahoma, we will be buying from the utility. Directly rather than from the market like you see at Sebree. Or, with a LME percentage type of arrangement like you would see in, in Iceland. So it will look more like the structure you are used to seeing from us in South Carolina, although we will have its own structuring within that we will get to you once we reach that FID decision. But, hopefully, that gives you a sense of the type of contract that we are talking about at least. And then to your second part of your question Great.

We have really made. Continue to make good progress on that. Nick, with our counterparty. And as I said, we are sort of moving into the final documentation phase here. So things are moving on that front.

Nick Giles: Okay. Well, good to hear. Appreciate the update. And, yeah, again, nice work. Thank you. Thank you.

Operator: Your next question from the line of Matthew Key of Texas Capital. Your line is open. Please go ahead.

Matthew Key: Good afternoon, and thanks for taking my questions. I wanted to talk about just the progress being made on the ground in Oklahoma. Was the community debate around the project mostly tied to concerns around fluoride emissions? Were there any other potential areas of concern around the project And just. I am trying to get a sense if there is any risk kind of in your view that, you know, areas where this could be potentially dragged out from a permanent standpoint? Or do you think you are, you know, essentially dealing with it effectively kind of over the over the last couple months?

Jesse E. Gary: Yeah. So that is a good And, obviously, when you are dealing with both regulators and community members both, There are a variety of issues and concerns that are out there. And we have been trying to address those as responsibly as we can. So that involves everything from the voluntary cutback in our fluoride emissions, like I mentioned in my prepared remarks. To holding town halls, and addressing questions 1-on-1 with community members who come. I will say that we continue to have very, very strong support from the state and federal level. Really good communications with the regulators in Oklahoma as we try to continue to push forward and address the concerns that have come up.

So I would say we are making good progress. We are trying to address and answer questions as they come up. And keep the project on track and moving forward.

Matthew Key: Got it. that is that is very helpful. Thank you. And I wanted to ask about the import-arb opportunity. Once you make a final like, an FID in Oklahoma, how soon could you take advantage of that program, and how does the application process work there?

Jesse E. Gary: Yeah. So we are engaged actively engaged with the Department of Commerce on all of those details. With really good back and forth as we. As just the exact mechanics of how that will work. Are ironed out. I would say we are making very good progress. Very aligned with the Department of Commerce on that, and they have been very helpful in moving that forward. So I fully expect that we will be able to take advantage of that program very quickly if not coincident with FID. Got it. that is that is awesome, and I appreciate the time, and best of luck going forward.

Matthew Key: Thanks, man.

Operator: Your next question from the line of Katja Jancic of BMO Capital Markets. Your line is open. Please go ahead.

Katja Jancic: Hi. Thank you for taking my questions. I think you previously talked about having or looking at several promising financing options for the Oklahoma smelter. what is the status of that? And then the midterm election changed the opportunity set in any way?

Operator: On the first part of your question, Katja, we continue as I said in my remarks, to move that financing along.

Jesse E. Gary: And we are making very good progress. I think pretty much all of the material terms have been agreed there, and should be-- we fully expect it to be ready to go once we make and reach FID. So I really do not see any issues on the financing side. I continue to believe it will be very attractive financing package. We are really excited about it. On your second question, on the midterms, I mean, we are a couple of days in here. So we will have to see exactly what the new congress looks to move from a legislative perspective.

But what I would just say generally is that broadly speaking, reindustrialization of US manufacturing is really 1 of the few bipartisan issues out there. And we have received a lot of support both through Democratic Congress, Republican Congress, and with the current administration, on this project. So we would expect, no matter what happens, to continue to have that sort of broad based support. across the aisle. Okay. Thank you.

Operator: Your next question from the line of Richard Garchitorena of Barclays. Your line is open. Please go ahead.

Analyst: Thanks. Good evening, everybody. First question, I just want to ask on the guidance for 4Q EBITDA. Just on the production side, I think you mentioned about that it should improve versus third quarter. There is some instability, I guess. Did that impact 3Q volumes and also related to that, I think, when they were talking to you, line 2 running near full production, is that gonna be 100% in the fourth quarter as well in your assumptions?

Peter A. Trpkovski: Yeah. Hi, Richard. Thanks for your question. We talked about the instability at Mt. Holly That was resolved in the third quarter. So that is in the results. And if you think about what we said in our remarks, how the instability was resolved in the third quarter, and we are going to spend the time in the fourth quarter to bring the volume back to full production. You will see the impact of those units coming online throughout the fourth quarter. And that estimate of those units is in our Q4 outlook. So no further adjustments there.

And I do recall I do recall you have to outline to, like, at Grundartangi For what we have done is we have adjusted back the losses from the business interruption in the prior quarter. So really, from outlook perspective, there is no further adjustments required as well for Iceland.

Jesse E. Gary: And just to piggyback on that, Richard, you will see a I said this in my remarks, start to ramp that amperage back up. In Q1. So there are additional Grundartangi units to come starting in Q1 as we bring that back up. Then you will also have in Q1 the full benefit of the Mount Holly tons being back on. That we are ramping up over Q4. Okay. Great. Thank you. And then maybe if I could follow-up on Oklahoma. You know, nearing completion, I think, is what you have characterized the contract discussions on the power and also on the financing.

In terms of, you know, the current environment there, is there anything that would potentially delay or slow down the process? Or can you sort of move forward with the financing power contracts? So those are separate discussions from what you are doing. The community and that type of thing. Yeah. that is a good question, Richard. Obviously, what we will seek to do is to line up all of those work streams really at once. That we have all the information and all the parts of the project. Ready to go when we make that final investment decision.

And to do that, you know, while we are working to address to the community concerns and working with the regulators, on the permitting We are also continuing to work on the engineering and we are fully allowed to do all those sort of preconstruction activities that we need to do for the site. During this period. So we are really moving forward on all fronts. And the idea is we will be to align those all at once so we have all the information we need to make that final investment decision. Great. Thank you.

Operator: Your next question from the line of John Tumazos of Very Independent Research. Your line is open. Please go ahead.

John Tumazos: Thank you for taking my question. So I calculated a $0.33 a pound cost improvement over the last 2 quarters. After the cost had risen $0.60 to 3 quarters prior to March 31. With the improvements continuing at 3 of the 4 locations, except for Sebree. Should we expect all those costs to come back in the December and the March quarters?

Jesse E. Gary: No. A lot of what you are seeing, John, is the benefit of returning the smelters to full production level. You are seeing fixed cost absorption more efficient power usage, more efficient labor usage, And so that this cost structure you are seeing now and really probably a little bit more improvement to come should continue into 2027 and beyond.

John Tumazos: If I could ask 1 more. Sure. Business is good. Maybe the cash goes up. Almost as much Maybe you do not need all of the financing. You only need in the December quarter, half of it. Why pay the fees and borrow the money? When you are doing so good, and you have the money?

Jesse E. Gary: that is a good question, John. We always want to have the most efficient capital structure that we have. We do think the financing arrangements we are looking at are very, very attractive. Rates and structure and so. But, of course, when we reach FID there, we will make that decision. But I would expect, given what we know about the financing today, both in terms of cost, rates, and structure, you will see us look to fully utilize that. Thank you.

Operator: There are no further questions at this time.

Jesse E. Gary: Thank you very much for everyone for joining the call. We may have 1 late breaking question here from Timna. I would like to give her a chance if we can.

Operator: Your next question comes from the line of Timna Tanners of Wells Fargo. Your line is open. Please go ahead.

Timna Tanners: Thank you, guys. it is pretty remarkable after all these years to see net cash. So I have to follow-up on some of the earlier questions. I heard you mention that you would update us in the future about potential additional shareholder returns and projects. I thought in the past, you have talked about pretty modest projects like at Jamalco, but is there anything that could be more material And along with the cash uses, again, at this pace, I mean, could you not have your hand forced to think about some other use in the next couple quarters?

Jesse E. Gary: Because it is piling up so nicely. Yeah. Timna, you are right. it is a very good problem to have. We are excited to have it. I mean, we are proud of where the business has come and proud of what the team has accomplished. So I do think. And as I said, we will continue to look at what the best use of that cash is. You are right that we have previously said, that there are not a lot of projects that look like the Mount Holly restart. Available to us. Some products at Jamalco on the cost side.

And but as you might imagine, we continue to try to generate new ideas and new projects and new ways to improve the business as we move forward. So we are really just allowing room for that to happen. The teams are always working hard on that. And they will continue to. After that, should conditions continue like this? We do think we will be in a very good spot both to be able to fund our share of the Oklahoma project and to fund either additional good projects or shareholder returns.

Timna Tanners: Okay. Thank you for that. And I wanted to follow-up on since the last time that we had this opportunity to catch up on a conference call, we have seen the progress on potential trade agreements with Canada and Mexico in this case. Canada, there was some chatter of potential carve out on the aluminum and steel tariffs, and that kind of flew in the face of what we had thought could happen And I am curious with your connections to the administration, if you have any further insights on how they are thinking about aluminum tariffs in particular with Canada.

Jesse E. Gary: Good question. I cannot speak directly to the negotiations, of course, since I have I have not been involved. But what I can say is the government clearly understands that the Section 232 program is working as it was designed I mean, just since the program, and then during the president's term, we have seen Mount Holly restart, which increased US production by 10%. They restarted the New Madrid smelter in Missouri should be restarting imminently, which should increase US production by another 10%. And then, of course, we continue to get closer to FID for our Oklahoma smelter project that will double US capacity.

So I think the administration is very clear that the program's working as intended and as it is designed delivering the desired outcome, which is reindustrialization and becoming self sufficient in terms of US aluminum production. And they have been very consistent. I mean, there is been a lot of chatter, as you say, but there really have been no changes. The program continues to be in place. With no exemptions and no exceptions. So that is sort of where we think things go, Timna. And, of course, we listen and watch but we are quite confident the government understands and is pleased with the progress the industry is making. Okay. Thank you so much for the color.

Timna Tanners: Best of luck.

Jesse E. Gary: Thanks, Timna.

Operator: There are no further questions at this time. I will now turn the call back to Jesse E. Gary for closing remarks.

Jesse E. Gary: Okay. Thanks everyone for joining, and we will look forward to talking to you in February.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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