UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On August 30, 2023, 5E Advanced Materials, Inc. (the “Company”) announced its financial results for the full year ended June 30, 2023. A copy of the press release issued by the Company is attached as Exhibit 99.1 and is incorporated herein by reference.
The information in this current report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such Section nor shall it be incorporated by reference into a filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
5E Advanced Materials, Inc. (the “Company”) has prepared an earnings call presentation, a copy of which is furnished as Exhibit 99.2 hereto. The presentation will also be available on the Company’s website located at www.5eadvancedmaterials.com under the Investors tab in the Events and Presentations section. None of the other information on our website is incorporated by reference into, or a part of, this Current Report on Form 8-K.
FORWARD-LOOKING STATEMENTS
The information in this Presentation includes “forward looking statements”. All statements other than statements of historical fact included in this Presentation regarding our business strategy, plans, goals and objectives are forward looking statements. When used in this Presentation, the words “believe”, “project”, “expect”, “anticipate”, “estimate”, “intend”, “budget”, “target”, “aim”, “strategy”, “estimate”, “plan”, “guidance”, “outlook”, “intend”, “may”, “should”, “could”, “will”, “would”, “will be”, “will continue”, “will likely result” and similar expressions are intended to identify forward looking statements, although not all forward looking statements contain such identifying words. These forward looking statements are based on 5E’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. We caution you that these forward looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the extraction of the critical materials we intend to produce and advanced materials production and development. These risks include, but are not limited to: our limited operating history in the borates and lithium industries and the fact that we have not yet realized any revenue from our proposed extraction operations at our properties; our need for substantial additional financing to execute our business plan and our ability to access capital and the financial markets; our status as an exploration stage company dependent on a single project with no known Regulation S-K 1300 mineral reserves and the inherent uncertainty in estimates of mineral resources; our lack of history in mineral production and the significant risks associated with achieving our business strategies, including our downstream processing ambitions; our ability to obtain, maintain, and renew governmental and environmental permits in order to conduct development and mining operations in a timely manner; our incurrence of significant net operating losses to date and expectations to incur continued losses for the foreseeable future; risks and uncertainties relating to the development of the 5E Boron Americas Complex, including our ability to timely and successfully complete Phase 1 of our 5E Boron Americas Complex; our ability to obtain, maintain and renew required governmental permits for our development activities, including satisfying all mandated conditions to any such permits; and other risks. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward looking statements. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein.
For additional information regarding these various risks and uncertainties, you should carefully review the risk factors and other disclosures in our Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) on August 30, 2023. Additional risks are also disclosed by 5E in its filings with the Securities and Exchange Commission throughout the year, as well as its filings under the Australian Securities Exchange.
The information referenced herein is being furnished pursuant to Item 7.01 of Form 8-K and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of such Section.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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99.1 |
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99.2 |
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104 |
Cover Page Interactive Data File (embedded with the Inline XBLR document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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5E Advanced Materials, Inc. |
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Date: |
August 30, 2023 |
By: |
/s/ Paul Weibel |
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Paul Weibel, Chief Financial Officer |
Exhibit 99.1
PRESS RELEASE
August 30th 2023
5E ADVANCED MATERIALS REPORTS FULL YEAR 2023 RESULTS
Company provides updates on project progress and details forward-looking strategic priorities
HESPERIA, CA., August 30, 2023 (GLOBE NEWSWIRE) - 5E Advanced Materials, Inc. (Nasdaq: FEAM) (ASX: 5EA) (“5E” or the “Company”), a boron and lithium company with U.S. government Critical Infrastructure designation for its 5E Boron Americas (Fort Cady) Complex, today announced its financial results for its 2023 fiscal year ended June 30, 2023.
HIGHLIGHTS
“Fiscal 2023 was a pivotal year for 5E as our team made significant progress towards advancing the Company to commercial operations,” said Susan Brennan, Chief Executive Officer of 5E Advanced Materials. “With the final construction of our Fort Cady boron facility nearing completion, 5E is positioned to be a significant player in the global market for boric acid, boron derivatives and lithium carbonate, which will allow us to capitalize on megatrends such as vehicle electrification, renewable energy development, and global food security. When fully operational, Fort Cady will be one of the largest boron operations in the world and one of the largest lithium operations in the U.S.”
Brennan continued, “In terms of an update on our EPA process, we have all the requisite permits in place and have submitted all the materials that we believe are required. We are ready to receive authorization to perform step rate testing in the coming weeks and should be able to provide the results of that work to the EPA within approximately 10 to 14 days after completion. The results of the step rate testing are the final deliverable required by the EPA for them to authorize 5E to commence mining. Until that time, we will continue to optimize the efficiency of our operations, control costs, prioritize liquidity, and strategically prepare for the future. Our journey has only just begun, and we are dually excited and motivated to execute on our vision and translate that execution into value creation.”
Corporate Strategy Update
5E is positioned to become a vertically integrated, global leader in boric acid and lithium carbonate. 5E’s resource quality, domestic supply source, and commitment to developing an integrated boron derivative supply chain will provide a competitive advantage given end products anticipated to be produced, scarcity of resource, and current reliance on unstable, international supply chains that are in a production decline.
The Company’s primary focus has been on the construction and commissioning of its 2,000stpa Small-Scale Boron Facility (SSBF) in Newberry Springs, California. With the completion of the SSBF, 5E is set to become the newest domestic producer of boric acid and lithium carbonate. The SSBF will allow the organization to advance its business strategy by looking for ways to optimize the production of boric acid and lithium carbonate, provide product for off-take agreements, and serve as a model for the commercial phases of the overall complex.
In May 2023, 5E released the results of its Technical Report Summary detailing out the three phases of construction designed to ultimately bring 450,000stpa of boric acid and 5,500stpa of lithium carbonate in the U.S. and global markets. This multi-phased, de-risked approach provides the Company with a manageable capital expenditures program and construction timeline, with commercial boric acid and lithium production targeted to come on-line by the second half of 2026. This report underscored the Company’s commitment to transparency and accountability, validated the economic viability of the project, and highlighted the criticality of 5E in meeting the growing demands for boric acid and lithium supply to the broader market.
5E Boron Americas Complex Update
Over the past year, 5E has achieved key milestones on its SSBF in Newberry Springs, California. The facility’s PLS and Utility areas are mechanically complete, commissioned and ready for operation. Mechanical completion and commissioning of the Wellfield hinges on the final clearance by the EPA to commence mining. While working closely with the EPA to get final authorization, the Company has also focused on several optimization initiatives:
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5E Boron Americas Complex Photos
September 23, 2022
December 22, 2022
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March 17, 2023
July 25, 2023
Government Affairs Update
In January 2023, 5E engaged partners to help procure U.S. Government-backed funding initiatives as part of the Company’s overall capital funding strategy. The Company has since been briefing various federal departments, agencies, and policy makers on the criticality of boron in both energy and defense applications and highlighting the growing gap in supply versus demand.
5E identified two primary governmental funding programs, in which it believes it is eligible to participate. The first is the DPA Title III program in the Department of Defense. Boron and boron advanced materials have direct links into armor-related applications, fuel and rocket propulsion, as well as advanced ceramics, all of which are supported under this program.
Second, the Department of Energy and its Loan Programs Office have a program that provides funding for renewable energy and energy transition related projects and materials. To become eligible under
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this program, the Company is directly connecting the use of boron, or more specifically boric acid, in applications such as fiberglass for wind blades generating wind power and into ferroboron for permanent magnets. The inclusion of boric acid into turbine blades, and rare-earth magnets (neodymium ferroboron) are a key component into the global energy transition currently taking place.
5E believes it has a very strong business case for both funding opportunities and is currently pursuing both as part of its long-term capital needs to execute the first phase of its 5E Boron Americas Complex in Newberry Springs, CA.
Commercial Update
5E has taken several steps to further its commercial agenda, including the commissioning of several key market studies focusing on its primary product of boric acid and derivatives, and byproducts lithium carbonate and gypsum. As described in the Technical Report Summary and verified through third parties, the boric acid market is experiencing shortfalls of supply, and demand growth is expected to outpace supply growth in years to come. The Company’s entry to the boric acid market will occur as pricing is expected to shift higher due to these market dynamics.
To this end, 5E successfully added letters of intent with Estes Energetics and Orbital Composites, which compliments its previously announced agreements with Corning International and others. The Company now has multiple signed non-binding letters of intent and/or proposal letters with clear objectives agreed in principle, which confirms the view that customer demand for boric acid or advanced materials are unsatisfied by the incumbent market. To further these agreements and others, 5E has discussed the qualification processes with anticipated customers and expects to begin qualification shortly after production from the SSBF.
In addition to the Company’s work around boric acid, 5E has discussed a lithium carbonate offtake with several interested parties and has had early-stage discussions for gypsum off-take. Through fiscal year end, the Company continued to refresh and renew its intellectual property strategy and mature the advanced materials strategy, working to identify ideal market synergies and competitive dynamics to improve its entry plan into these markets.
Discussions have continued with several partners to use all or part of the production volume from the SSBF to produce boron specialties and advanced derivatives to accelerate market entry and profitability. These discussions have been secondary to our primary focus on the boric acid market but continue to mature and set the stage for future growth.
Fiscal Year 2023 Financial Highlights
As of the fiscal year end, 5E maintained a cash balance of $20.3 million. Construction in progress was $67.5 million compared to $25.6 million in the prior year.
For the year ended June 30, 2023, project expenses decreased 23% and costs incurred during the current year were predominantly driven by plugging and abandoning historic drill wells per the Company’s permit requirements ($4.5 million), permit compliance ($1 million), and construction related insurance ($0.76 million).
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General and administrative expenses decreased 54% to $25.3 million of which $4.9 million was attributed to share based compensation expense. 5E is committed to continuing to reduce general and administrative expenses.
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Year Ended June 30, |
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Variance |
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2023 |
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2022 |
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$ |
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% |
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COSTS AND EXPENSES |
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Project expenses |
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$ |
9,988 |
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$ |
12,902 |
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$ |
2,914 |
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23 |
% |
General and administrative |
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25,365 |
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54,684 |
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29,319 |
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54 |
% |
Research and development |
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262 |
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133 |
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(129 |
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-97 |
% |
Impairment |
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908 |
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— |
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(908 |
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N/A |
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Depreciation and amortization expense |
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184 |
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112 |
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(72 |
) |
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-64 |
% |
Total costs and expenses |
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36,707 |
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67,831 |
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31,124 |
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46 |
% |
LOSS FROM OPERATIONS |
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(36,707 |
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(67,831 |
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31,124 |
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-46 |
% |
NON-OPERATING INCOME (EXPENSE) |
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Other income |
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62 |
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65 |
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(3 |
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-5 |
% |
Interest income |
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1,147 |
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3 |
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1,144 |
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* |
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Derivative gain (loss) |
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11,743 |
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— |
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11,743 |
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N/A |
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Interest expense |
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(6,854 |
) |
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(6 |
) |
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(6,848 |
) |
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* |
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Net foreign exchange gain (loss) |
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(15 |
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1,056 |
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(1,071 |
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-101 |
% |
Total non-operating income (expense) |
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6,083 |
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1,118 |
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4,965 |
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* |
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NET INCOME (LOSS) |
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$ |
(30,624 |
) |
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$ |
(66,713 |
) |
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$ |
36,089 |
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-54 |
% |
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* Represents a percentage change greater than +/- 300% |
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About 5E Advanced Materials, Inc.
5E Advanced Materials, Inc. (Nasdaq: FEAM) (ASX: 5EA) is focused on becoming a vertically integrated global leader and supplier of boron specialty and advanced materials, complemented by lithium byproduct production. The Company’s mission is to become a supplier of these critical materials to industries addressing global decarbonization, food and domestic security. Boron and lithium products will target applications in the fields of electric transportation, clean energy infrastructure, such as solar and wind power, fertilizers, and domestic security. The business strategy and objectives are to develop capabilities ranging from upstream extraction and product sales of boric acid, lithium carbonate and potentially other byproducts, to downstream boron advanced material processing and development. The business is based on our large domestic boron and lithium resource, which is in southern California and designated as Critical Infrastructure by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency.
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About 5E Advanced Materials, Inc.
5E Advanced Materials, Inc. (Nasdaq: FEAM) (ASX: 5EA) is focused on becoming a vertically integrated global leader and supplier of boron specialty and advanced materials, complemented by lithium byproduct production. The Company’s mission is to become a supplier of these critical materials to industries addressing global decarbonization, food and domestic security. Boron and lithium products will target applications in the fields of electric transportation, clean energy infrastructure, such as solar and wind power, fertilizers, and domestic security. The business strategy and objectives are to develop capabilities ranging from upstream extraction and product sales of boric acid, lithium carbonate and potentially other byproducts, to downstream boron advanced material processing and development. The business is based on our large domestic boron and lithium resource, which is in southern California and designated as Critical Infrastructure by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency.
Forward-Looking Statements and Disclosures
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements other than statements of historical fact included in this press release regarding our business strategy, plans, goal, and objectives are forward-looking statements. When used in this press release, the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “budget,” “target,” “aim,” “strategy,” “estimate,” “plan,” “guidance,” “outlook,” “intent,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on 5E’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the extraction of the critical materials we intend to produce and advanced materials production and development. These risks include, but are not limited to: our limited operating history in the borates and lithium industries and no revenue from our proposed extraction operations at our properties; our need for substantial additional financing to execute our business plan and our ability to access capital and the financial markets; our status as an exploration stage company dependant on a single project with no known Regulation S-K 1300 mineral reserves and the inherent uncertainty in estimates of mineral resources; our lack of history in mineral production and the significant risks associated with achieving our business strategies, including our downstream processing ambitions; our incurrence of significant net operating losses to date and plans to incur continued losses for the foreseeable future; risks and uncertainties relating to the development of the Fort Cady project, including our ability to timely and successfully complete our Small Scale Boron Facility; our ability to obtain, maintain and renew required governmental permits for our development activities, including satisfying all mandated conditions to any such permits; and other risks. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. No representation or warranty (express or implied) is made as to, and no reliance should be place on, any information, including projections, estimates, targets, and opinions contained herein, and no liability whatsoever is accepted as to any errors, omissions, or misstatements contained herein. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as to the date of this press release.
For additional information regarding these various factors, you should carefully review the risk factors and other disclosures in the Company’s Form 10-K filed on August 30, 2023. Additional risks are also disclosed by 5E in its filings with the U.S. Securities and Exchange Commission throughout the year, including its Form 10-K, Form 10-Qs and Form 8-Ks, as well as in its filings under the Australian Securities Exchange. Any forward-looking statements are given only as of the date hereof. Except as required by law, 5E expressly disclaims any obligation to update or revise any such forward-looking statements. Additionally, 5E undertakes no obligation to comment on third party analyses or statements regarding 5E’s actual or expected financial or operating results or its securities.
For further information contact:
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Davis Snyder or Joseph Caminiti Alpha IR Group FEAM@alpha-ir.com Ph: +1 (312) 445-2870 |
J.T. Starzecki Chief Marketing Officer jstarzecki@5eadvancedmaterials.com Ph: +1 (612) 719-5076 |
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Fourth Quarter & Full Year 2023 Results Call Enabling America’s Clean Energy Economy August 30, 2023 : FEAM 5E Advanced Materials : 5EA Exhibit 99.2
Disclaimer FORWARD-LOOKING STATEMENTS The information in this Presentation includes “forward looking statements”. All statements other than statements of historical fact included in this Presentation regarding our business strategy, plans, goals and objectives are forward looking statements. When used in this Presentation, the words “believe”, “project”, “expect”, “anticipate”, “estimate”, “intend”, “budget”, “target”, “aim”, “strategy”, “estimate”, “plan”, “guidance”, “outlook”, “intend”, “may”, “should”, “could”, “will”, “would”, “will be”, “will continue”, “will likely result” and similar expressions are intended to identify forward looking statements, although not all forward looking statements contain such identifying words. These forward looking statements are based on 5E’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. We caution you that these forward looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the extraction of the critical materials we intend to produce and advanced materials production and development. These risks include, but are not limited to: our limited operating history in the borates and lithium industries and the fact that we have not yet realized any revenue from our proposed extraction operations at our properties; our need for substantial additional financing to execute our business plan and our ability to access capital and the financial markets; our status as an exploration stage company dependent on a single project with no known Regulation S-K 1300 mineral reserves and the inherent uncertainty in estimates of mineral resources; our lack of history in mineral production and the significant risks associated with achieving our business strategies, including our downstream processing ambitions; our ability to obtain, maintain, and renew governmental and environmental permits in order to conduct development and mining operations in a timely manner; our incurrence of significant net operating losses to date and expectations to incur continued losses for the foreseeable future; risks and uncertainties relating to the development of the 5E Boron Americas Complex, including our ability to timely and successfully complete Phase 1 of our 5E Boron Americas Complex; our ability to obtain, maintain and renew required governmental permits for our development activities, including satisfying all mandated conditions to any such permits; and other risks. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward looking statements. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein. You are cautioned not to place undue reliance on any forward looking statements, which speak only as of the date of this Presentation. Except as otherwise required by applicable law, we disclaim any duty to update and do not intend to update any forward looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Presentation. MARKET AND INDUSTRY DATA This Presentation has been prepared by 5E and includes market data and other statistical information from third party sources, including independent industry publications, government publications or other published independent sources. Although 5E believes these third party sources are reliable as of their respective dates for the purposes used herein, neither we nor any of our affiliates, directors, officers, employees, members, partners, shareholders or agents make any representation or warranty with respect to the accuracy or completeness of such information. Although we believe the sources are reliable, we have not independently verified the accuracy or completeness of data from such sources. Some data is also based on 5E’s good faith estimates, which are derived from our review of internal sources as well as the third party sources described above. Additionally, descriptions herein of market conditions and opportunities are presented for informational purposes only there can be no assurance that such conditions will actually occur or result in positive returns. CAUTIONARY NOTE REGARDING RESERVES Unless otherwise indicated, all mineral resource estimates included in this Presentation have been prepared in accordance with, and are based on the relevant definitions set forth in, the SEC’s Mining Disclosure Rules and Regulation S-K 1300 (each as defined below). Mining disclosure in the United States was previously required to comply with SEC Industry Guide 7 under the Exchange Act (“SEC Industry Guide 7”). In accordance with the SEC’s Final Rule 13-10570, Modernization of Property Disclosure for Mining Registrant, the SEC has adopted final rules, effective February 25, 2019, to replace SEC Industry Guide 7 with new mining disclosure rules (the “Mining Disclosure Rules”) under sub-part 1300 of Regulation S-K of the Securities Act of 1933, as amended (the “Securities Act”) (“Regulation S-K 1300”). Regulation S-K 1300 replaces the historical property disclosure requirements included in SEC Industry Guide 7. Regulation S-K 1300 uses the Committee for Mineral Reserves International Reporting Standards (“CRIRSCO”) - based classification system for mineral resources and mineral reserves and accordingly, under Regulation S-K 1300, the SEC now recognizes estimates of “Measured Mineral Resources”, “Indicated Mineral Resources” and “Inferred Mineral Resources”, and require SEC-registered mining companies to disclose in their SEC filings specified information concerning their mineral resources, in addition to mineral reserves. In addition, the SEC has amended its definitions of “Proven Mineral Reserves” and “Probable Mineral Reserves” to be substantially similar to international standards. The SEC Mining Disclosure Rules more closely align SEC disclosure requirements and policies for mining properties with current industry and global regulatory practices and standards, including the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, referred to as the “JORC Code”. While the SEC now recognizes “Measured Mineral Resources”, “Indicated Mineral Resources” and “Inferred Mineral Resources” under the SEC Mining Disclosure Rules, investors should not assume that any part or all of the mineral deposits in these categories will be converted into a higher category of mineral resources or into mineral reserves. For additional information regarding these various risks and uncertainties, you should carefully review the risk factors and other disclosures in our Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) on September 28, 2022, as amended by our Form 10-K/A filed on October 31, 2022, as well as our Form 10-Qs filed on November 10, 2022 and February 9, 2023. Additional risks are also disclosed by 5E in its filings with the Securities and Exchange Commission throughout the year, as well as its filings under the Australian Securities Exchange.
Introducing Susan Brennan, CEO Took over as CEO in late April 2023 Extensive global leadership background Particularly in battery technology and EV industries at Romeo Power & Bloom Energy Prior senior positions at Ford Motor Company & Hoechst Celanese Immediate Focus Areas Focus on Fundamentals Taking on final commissioning activities ourselves EPA Process Completion Providing all the information required Third party review complete, waiting for response Cash & Cost Optimization In sourcing some of optimization work Right sized position and roles, too early Preparing for the Future Aligning numerous commercial, capital and other strategic activities to accelerate post EPA conclusion
5E Boron Americas Complex
We Are the Near-Term Global Producer Exploration Study Permitted Construction Producer STAGE 1000+ 501-1000 301-500 51-300 0-50 PROJECT OUTPUT / SIZE (M TONS) Salt Wells 5E is the nearest Boron producer
2 Staged Execution and Value Delivery Initial Facility Online Q4 CY2023 10ktpa Resource Well Field Established PHASE 1 ECONOMICS (Q2 CY2026) CAPEX (US$) $373 million ANNUAL PRODUCTION BORIC ACID90,000 short tons LITHIUM CARBONATE1,100 short tons EBITDA (US$) $101.2 million PHASE 2 ECONOMICS (Q4 CY2028) CAPEX (US$) $620 million ANNUAL PRODUCTION BORIC ACID270,000 short tons LITHIUM CARBONATE3,300 short tons EBITDA (US$) $370 million PHASE 3 ECONOMICS (Q2 CY2031) CAPEX (US$) $947 million ANNUAL PRODUCTION BORIC ACID450,000 short tons LITHIUM CARBONATE5,500 short tons EBITDA (US$) $621.9 million BUILT, AT COMMISSIONING STAGE ANNUAL PRODUCTION BORIC ACID9,000 short tons LITHIUM CARBONATE110 short tons Customer demonstration, product qualification and $101.2 million
Cash Position Management Minimizing Fixed Costs Negotiating Supplier Contracts Streamlining Operations and Footprint Controlled Corporate Hiring and Salaries Prioritizing Essential Expenditures Deferring Non-Essential Spending until Operation Commencement Multi-Pronged Capital Preservation Strategies 6/30/23 Cash Balance $20.3M
EXAMPLE COMPOSITION Gov. Debt & Project Finance Project Partner(s) Customer Offtake / PrePay Traditional Equity FUNDING SOURCE OPTIONS Government Debt & Project Finance Equity, Non-Dilutive Equity PHASE 1 ECONOMICS (Q2 CY2026) TOTAL CAPEX(1) $373 million (1) Total CAPEX required for all Phases 1-3 is $1,709 billion represents cumulative totals across all three proposed phases. CAPEX derived from Company’s SK-1300 technical report. See Company Press Release date May 11, 2023. Phase 1 Funding Other Debt Instruments Royalty Rights 2024 2025 2026 $37.3 $149.8 $201.8 ANNUAL PRODUCTION BORIC ACID90,000 short tons LITHIUM CARBONATE1,100 short tons EBITDA (US$) $101.2 million *2024: Modest Capital Need (US$)
Commercial and Government Affairs Activities ~$55 Trillion “Green” Energy Infrastructure Investment (2016-2050) ~145M Global Electric Vehicle Growth (2020-2030) ~30% CAGR Global Electric Vehicle Stock Growth (2020-2030) 5.8% CAGR Global Installed Wind & Solar Capacity (2019-2050) Department of Energy (DOE) ATVM / Loan Program Office Department of Defense (DOD) Defense Production Act, DPA Title III U.S. Department of Agriculture (USDA) Inflation Reduction Act Potential Customer Relationships Government Relationships
Boron Market Emerging Boron Markets1 Traditional Boron Markets1 1.6M tons of new demand expected from future industries 1 Global Market Insights, Inc. Wide Range of Traditional Applications, with Limited Substitutability
Boron Market Demand Growth Expected Driven by Key Decarbonization Sectors Continued Supply Constraints Bringing the BORON Supply Gap into Focus Boron Demand Growth1 Boric Acid Price Forecast2 x2 Growth x10 Growth (Millions of tonnes; boric acid equivalent) . . . . . . . . . . . . 50 (1) Source: Credit Suisse Equity Research. (2) Source: Boric Acid Price – Kline & Company’s Management Consulting.
Upcoming Project Milestones – Schedule CY Indicative Schedule 1H23 2H23 1H24 2H24 1H25 2H25 1H26 2H26 *EPA Authorization to Inject Wellfield Commissioning Boric Acid/Gypsum Commissioning Initial Plant Operation / Data Collection FEL-2 Engineering design FEL-3 Engineering design Detailed Engineering & Construction Commission of Phase 1 - 90ktpa Boric Acid Start Up Plant for Phase 1 Initial Plant Phase 1 Operations *Timing based on best expectation of EPA data review
Upcoming Project Milestones – Schedule Based on SSBF start-up by mid-Q1 2024: Feb. 2024 – Jun. 2024 FEL – 2 Engineering design July 2024 Pre-Feasibility Study August 2024 Board approval September 2024 Order long lead equipment Jul. 2024 – Jan. 2025 FEL – 3 Engineering design Jan. 2025 – Dec. 2026 Detailed Engineering / Construction / Startup of Phase 1 CY Indicative Schedule 1H23 2H23 1H24 2H24 1H25 2H25 1H26 2H26 FEL-2 Engineering design Pre-Feasibility Board Approval Order Long Lead Equipment FEL-3 Engineering design Detailed Engineering & Construction
Investment Highlights Exposure to critical materials Boron and Lithium Project is designated Critical Infrastructure by the U.S. Government with broader focus through defense, clean energy and EV markets Initial facility built with near-term production Materials important to U.S. Reshoring, Decarbonization, and Domestic Production required for the Clean Energy Economy Staged Execution and Value Delivery model Globally significant business with forecast annual US$682M EBITDA profile in full production
Investor Contacts: Alpha IR Group Davis Snyder or Joseph Caminiti FEAM@alpha-ir.com (312) 445-2870 Thank You 15
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