5E Advanced Materials Inc. Q4 FY2024 earnings call

• Capital Raise: Announced a $10 million capital raise, including $4 million direct common equity and $6 million convertible notes to fund first phase of commercial engineering, small scale facility operation, offtake agreements pursuit, and government initiatives.
• Small Scale Facility: Zero safety incidents, had plant downtime due to maintenance issues (leak at heat exchanger, screw conveyor design revision, sifter installation), current production rate 1 short ton per day. Optimized commercial design with changes in crystallization method (from evaporative to chilled crystallization) and mine water injection temperature, expecting 60% reduction in natural gas consumption and lower capital costs.
• Commercial and Government Programs: Launched customer qualification program, progress on Federal government funding applications (DoD, DoE, EXIM Bank), and efforts to get boron added to the 2025 USGS Critical Minerals list, which would unlock additional funding opportunities.

No specific product segments with revenue contribution percentages discussed; focus on overall business operations and small scale facility performance. Small scale facility achieved 5.5%-6% boric acid in solution, current production rate is 1 short ton per day.

• Expect to complete the first phase of engineering for the 90,000 ton boric acid commercial facility by December or January 2025.
• Continue with customer qualification program and pursuit of offtake agreements.
• Aim to increase boric acid head grade and optimize production processes, including exploring partnerships for byproducts.

• Plant downtime due to maintenance issues such as heat exchanger leaks and conveyor design revisions.
• Uncertainty in government funding timelines for appropriations and grant applications.
• Dependence on successful completion of engineering phases and securing firm offtake agreements for project finance.

Q: Update on spot market pricing and issues with other producers A: Still hearing instances of other producers struggling with caking issues in markets, spot pricing for boric acid is in the range of $1,100 to $1,250 per ton Q: Balance sheet and cash burn A: Recent capital injection will get the company through the first phase of FEL-2 Engineering into early 2025 Q: Customer qualification program details A: Customers have specific specs regarding moisture content, impurity profile, and particle size; started with KD samples, next step is material handling with 1-2 tons, 1 ton per day is adequate for qualification Q: Lithium byproduct recovery A: Currently evaluating recovery methods, lithium concentrations in solution are 40-60 ppm, ongoing testing to determine optimal recovery technology Q: Funding applications A: Applied for $285 million EXIM Bank credit back guarantee, significant grant applications to DoD and DoE, multiple funding avenues available through appropriations and DPA Title III Q: 10-K filing and USGS list benefits A: 10-K expected to be filed first thing next week; being on the USGS Critical Minerals list unlocks additional funding opportunities in Department of Energy Loan Program Office Q: Production-based revenues in 2025 A: Aim to build inventory of on-spec product and sell excess product for production credits Q: Risks in FEL-2 Engineering A: Uncertainty with calcium stream and need to assess partnership opportunities for byproduct recovery to optimize project economics