5E Advanced Materials Inc. Q4 FY2025 earnings call

• The SK-1300 PFS validates strong project fundamentals with a 39.5-year mine life, $725M pretax NPV, and 19% IRR.
• Successfully qualified high-purity boric acid with 14 customers across various industries and advanced to full-scale production testing with a Tier 1 specialty glass manufacturer.
• Received a nonbinding LOI from USXM for a potential $285 million project debt facility.
• On track to advance towards FEED engineering and FID in mid-2026, with milestones achieved.

The SK-1300 PFS for Phase 1 of the Ford Cady resource and reserve shows a 39.5-year mine life supported by 5.4 million short tons of boric acid reserves. Phase 1 targets 130,000 short tons per year of boric acid. Pretax NPV is approximately $725 million with a 19% project IRR, and after-tax NPV is about $469 million with a 16% project IRR. All-in sustaining costs are estimated at $555 per ton with initial capital at about $435 million.

• Progress full-scale testing with multiple specialty glass manufacturers.
• Secure additional qualifications and initial offtake agreements.
• Secure a small XM loan to cover FEED engineering costs.
• Advance the larger project finance and XM loan process.
• Finalize the mine plan in connection with horizontal well trials.
• Potential for USGS to add boron to the critical minerals list.

• The boron market is an oligopoly, and the US has a single point of failure in the borate supply chain.
• The second largest US borate producer has seen cost increases and reserve downgrades, risking the US transitioning from a net exporter to importer.
• Reliance on Turkey for boron and China for advanced boron materials if no new projects are developed.

Q: Can you review the comments you had about the disruption to the California boron mine? What was the specific announcement that you cited?

A: Tate, yes. No, appreciate you dialing in and thanks for the question. So at the end of August, Rio, with the appointment of the new CEO, made announcements that they've streamlined their business. Historically, Rio has been broken up into 4 different business segments. And on a go-forward basis, they're now structured where they have 3 business segments, which is one, iron ore; two, copper; and three aluminum or lithium. And essentially, the industrial minerals, which I believe that's where their diamonds, borates and titanium business sat, are essentially up for -- well, they now sit with the chief -- the office of the Chief Commercial Officer for the release and they are up for a strategic review.

Q: To get boron on the USGS critical mineral list, is it a -- I mean 3, 6-month process or what needs to happen in terms of the review?

A: Great question. So we were in D.C., I was down there and met with Interior in July. Kind of the word on the Street was that sometime this fall, the draft list would come out. And there was no comment on it, boron would or would not make the list. But essentially, the appropriate measure to get boron added to the list is essentially to submit public comments. My kind of gut told me at a time, I should expect to see a draft list by October. Was pleasantly surprised that kind of came in ahead, and I think it was maybe the first week of September or last week of August the draft list was published, which essentially opened up a 30-day public comment window. All comments are available on the Federal Register. And we submitted our comment, as did believe 8 other groups, that you could search for borate on the Federal Register under the comments and they're all there. I was pleased that there was some well-known groups that did apply. And so we're not now the kind of the only one in the room kind of ringing the bell that there are supply chain concerns there in this market.