5E Advanced Materials, Inc.

The company, 5E Advanced Materials, Inc., is a development stage entity focused on becoming a vertically integrated global leader and supplier of refined borates and advanced boron derivative materials. Its mission is to enable decarbonization, increase food security, and ensure domestic supply of critical materials. The business strategy involves developing capabilities from upstream extraction and product sales of borates, calcium-based co-products, and potentially other byproducts like lithium carbonate, to downstream advanced boron material processing and development. The company's vision is to safely process borates and other industrial materials through sustainable best practices and a continuous improvement mindset. All of the company's operations and assets are located in the United States, specifically at the 5E Boron Americas (Fort Cady) Complex in southern California ¹.

The company holds 100% of the rights to the Fort Cady Complex through ownership and lode claims filed with the United States Bureau of Land Management. The Project is underpinned by a mineral resource that includes boron and lithium, with boron contained in colemanite, which the company believes is one of the largest known new conventional boron deposits globally. In 2022, the facility was designated as Critical Infrastructure by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency. The company currently operates a Small-Scale Facility (SSF) at the Project to gather data for a commercial-scale facility. The Preliminary Feasibility Study (PFS) estimates a combined 5.3 million short tons (MST) of boric acid (H3BO3) proven and probable reserves for Phase 1 of the Project, and 169 thousand short tons of measured plus indicated mineral resource of lithium carbonate equivalent. The mineral resource estimate also identified 0.5 million short tons of inferred mineral resource of boric acid (H3BO3) and 5 thousand short tons of lithium carbonate equivalent. All reserve and mineral resource estimates were prepared using a 2.0% cut-off grade ².

The core business model revolves around developing and commercializing the Fort Cady Project to produce an economical and secure supply of boron, focusing on an environmentally friendly in-situ extraction process. The SSF, operational since April 2024, has validated the technical merits of the planned in-situ mining techniques and provides product samples for customer qualification. The company aims to establish competitive market positions in high-value, high-margin markets for refined borates and advanced boron materials that address decarbonization, food security, national security, and defense. Revenue is initially expected from the sale of boric acid, calcium chloride, and gypsum, with plans to expand into advanced boron materials over time. The company also seeks to sign offtake agreements and develop commercial partnerships to expand high-performance boron capabilities and embed itself in customer supply chains ³.

The company's primary product focus is on borates, specifically boric acid, which is produced at the SSF. The SSF commenced operations in April 2024 and produces approximately one short ton per day of boric acid ⁴. This boric acid is used for customer qualification and to refine the production process for proposed byproducts. The company also plans to produce calcium-based co-products, calcium chloride and gypsum, from the remaining solution after boric acid processing. Samples of a 38% calcium chloride solution and a calcium-based product have been produced and provided to potential customers ⁵. The long-term strategy includes developing downstream advanced boron materials capabilities for higher technology applications in semiconductors, life sciences, aerospace, military, energy, and automotive markets. Lithium carbonate is also identified as a potential economically accretive byproduct ⁶.

For the fiscal year ended June 30, 2025, the company reported a net loss of $31.555 million ⁷, an improvement from a net loss of $62.013 million in the prior fiscal year ⁸. Total operating expenses increased by 22% to $43.719 million from $35.860 million in the prior year ⁹. This was primarily driven by a 286% increase in depreciation and amortization expense to $19.947 million from $5.170 million ¹⁰, and a 201% increase in Small-scale facility operating costs to $4.330 million from $1.437 million ¹¹. General and administrative expenses decreased by 37% to $14.443 million from $22.875 million ¹². The company had cash and cash equivalents of $3.836 million as of June 30, 2025, compared to $4.896 million as of June 30, 2024 ¹³. Total liabilities were $7.539 million as of June 30, 2025, significantly down from $78.798 million as of June 30, 2024 ¹⁴, largely due to a debt extinguishment. The company reported an accumulated deficit of $231.556 million as of June 30, 2025, compared to $200.001 million as of June 30, 2024 ¹⁵. Net cash used in operating activities was $23.640 million for the year ended June 30, 2025 ¹⁶.

Year-over-year, Project expenses decreased by $1.3 million, or 21%, to $4.999 million ¹⁷, primarily due to reduced environmental compliance costs and testing. Small-scale facility operating costs increased by $2.9 million, or 201%, to $4.330 million ¹⁸, reflecting a full year of SSF operations in fiscal year 2025 compared to one quarter in fiscal year 2024. General and administrative expenses decreased by $8.4 million, or 37%, to $14.443 million ¹⁹, mainly due to a reduction in headcount, including a Reduction in Force, and lower incentive compensation. Research and development expenses decreased by 100% to $0 ²⁰, as both research agreements were completed in the prior fiscal year. Depreciation and amortization expense increased by $14.8 million, or 286%, to $19.947 million ²¹, due to the SSF and related assets being placed into service. A significant non-operating development was a gain on extinguishment of debt of $17.333 million in fiscal year 2025 ²², compared to a loss of $20.953 million in fiscal year 2024 ²³, resulting from the Exchange Transaction.

During the fiscal year, the company achieved several operational milestones. In November 2023, the U.S. Environmental Protection Agency (EPA) authorized in-situ mining operations, and in January 2024, well-field injection with acid began, extracting Pregnant Leach Solution (PLS). The SSF commenced operations in April 2024, producing its first batch of boric acid. By September 2025, approximately 14 customers in 8 diverse market segments had successfully qualified the boric acid ²⁴. In January 2024, Fluor Enterprises, Inc. was selected as the Engineering, Procurement and Construction Management Firm (EPC) service provider for the FEL-2 engineering program, which was completed in August 2025, culminating in the PFS. The PFS included a capital estimate of approximately $435 million to construct the commercial-scale facility ²⁵. In July 2025, two vertical Injection/Recovery Wells (IR Wells) were converted to horizontal-side tracks, extending approximately 1,500 feet laterally ²⁶. The company also undertook a strategic reduction in workforce in November 2024, reducing headcount by approximately 40% and saving an estimated $1.1 million in operating expenditure in the second half of fiscal year 2025 ²⁷.

Management is targeting to reach initial commercial production from Phase 1 of the Fort Cady Project in the second-half of calendar year 2028 ²⁸. The Preliminary Feasibility Study (PFS) outlines a capital estimate of approximately $435 million for the proposed commercial-scale facility, inclusive of $55 million for contingency and approximately $13 million of owner's costs ²⁹. The estimated accuracy range for this capital estimate is ±25%, consistent with industry standards for an Association for Advancement of Cost Engineering Class 4 estimate for projects at the PFS stage ³⁰. The PFS also projects the price for boric acid to be $1,248 per short ton in the initial year of commercial production, escalating to $1,364 per short ton in 2033, and then held flat ³¹. Prices for calcium chloride and gypsum are estimated at $174 and $33 per short ton, respectively, in the initial year of commercial production, and held flat thereafter ³².

A major growth area for the company is the development and commercialization of the Fort Cady Project to produce an economical and secure supply of boron, utilizing a more environmentally friendly in-situ extraction process. The SSF, which commenced operations in April 2024, has proven the technical merits of the planned in-situ mining techniques and serves as the foundation for future design, engineering, and cost optimization of the planned commercial-scale complex. The PFS projects approximately 5.3 million short tons of boric acid reserves with an average grade of 8.03% (B2O3) and an initial 39.5-year life of mine ³³. The company aims to become one of the largest suppliers of borates in the domestic U.S. and international markets upon successful commercial completion of the proposed commercial-scale facility.

Another significant growth vector is the establishment of competitive market positions in high-value, high-margin markets for refined borates and advanced boron materials that address decarbonization, food security, national security, and defense. The company believes that sectors such as electric vehicle manufacturing, clean energy infrastructure, food and fertilizers, and domestic security will experience significant growth, requiring secure and substantial new supplies of boron. Over time, the company plans to develop downstream advanced boron materials capabilities to convert borates into advanced boron materials for higher technology applications across semiconductors, life sciences, aerospace, military, energy, and automotive markets. This strategy is expected to allow the company to extract greater value from its processes and supply chain ³⁴.

Operationally, the company plans to continue operating the SSF to refine its operations, optimize detailed engineering of the proposed commercial-scale facility, and produce boric acid for customer qualification. The SSF is expected to cease operation and be decommissioned once the company advances to the commercial construction stage for the proposed commercial-scale facility ³⁵. The company is also focused on optimizing well-field design and operating methods, including through the operation of newly drilled horizontal injection recovery wells, to reduce future mining capital and operational expenditures ³⁶. The PFS includes cash operating costs of approximately $563 per ton of boric acid produced ³⁷.

The company's planned capital allocation includes significant investments in the Project. The PFS estimates a total capital expenditure of approximately $435 million for Phase 1 of the commercial-scale facility ³⁸. This includes anticipated costs for a natural gas Combined Heat & Power (CHP) COGEN facility that will power Phase 1 ³⁹. The company also plans to invest in research and development initiatives to support customer product development and create intellectual property for advanced boron materials ⁴⁰.

Management explicitly flagged several structural headwinds and execution risks to the growth plan. There is substantial doubt regarding the company's ability to continue as a going concern, as it will need to raise substantial additional funding, which may not be available on acceptable terms, if at all ⁴¹. The company has incurred significant net operating losses since its inception and anticipates continued losses for the foreseeable future ⁴². The inability to continue operating the SSF or complete further technical and economic studies may materially impact the Project ⁴³. The company depends on a single mining project, the Fort Cady Project, making it vulnerable to any adverse developments affecting it ⁴⁴. The long-term success depends on achieving and maintaining profitability and developing positive cash flow from proposed operating activities, which is uncertain ⁴⁵.

Geographic, regulatory, and macro factors identified as constraints include the Project's location in the Mojave Desert, which may be impacted by extreme heat in the summer and flash flooding during significant rain ⁴⁶. The company is subject to numerous and extensive federal, state, and local laws and regulations applicable to the mining and mineral processing industry, including those pertaining to environmental protection, water usage, and waste management. Compliance with these regulations is costly and time-consuming, and changes or stricter interpretations could result in unanticipated capital expenditures or restrictions on operations ⁴⁷. Changes in U.S. trade policies, including the imposition of tariffs, could materially increase the cost of constructing the proposed commercial-scale facility ⁴⁸.

The company faces substantial doubt regarding its ability to continue as a going concern, necessitating significant additional financing that may not be available on acceptable terms ⁴¹. It has incurred substantial net operating losses and anticipates continued losses, with no material revenues from mineral product sales to date. The business is highly capital intensive, with over $156 million already spent on the Project ⁴⁹, and the PFS estimates approximately $435 million for Phase 1 construction ²⁹. The company is dependent on a single mining project, the Fort Cady Complex, making it vulnerable to any adverse developments, including unexpected problems and delays during development, construction, and mine start-up. Mineral resource and reserve estimates are inherently uncertain and subject to significant change, with actual volumes and grades potentially differing materially from current estimates. The mining industry is highly competitive, dominated by two major players, Rio Tinto Borates and Eti Maden, who together supply approximately 85% of global boron demand ⁵⁰, potentially putting the company at a significant disadvantage in obtaining materials, supplies, labor, and equipment. Fluctuations in the value of the United States dollar relative to other currencies could adversely affect the business by making imported products cheaper or exports more expensive. The company is subject to extensive federal, state, and local environmental and government regulations, including CERCLA, RCRA, CAA, CWA, and SDWA, with compliance requiring significant expenditures and posing risks of fines, penalties, and operational restrictions. The Project's location in the Mojave Desert exposes it to risks from extreme heat and flash flooding. Changes in U.S. trade policies, such as tariffs, could materially increase construction costs for the proposed commercial-scale facility. Supply chain disruptions and shortages of equipment or raw materials, particularly bulk chemicals, could adversely affect operations and increase costs. New or evolving sustainability and climate-related disclosure obligations, such as California's CCDAA and CRFRA, could result in additional compliance costs, restrictions on capital access, and increased litigation and reputational risk.

Management's overall tone emphasizes a strategic, multi-phased approach to developing the Fort Cady Project, aiming to become a vertically integrated global leader in refined borates and advanced boron derivative materials. They highlight the Project's designation as Critical Infrastructure by the Department of Homeland Security as a testament to its potential importance as a U.S.-based source of critical materials. A key strategic priority is the continued operation of the Small-Scale Facility (SSF) to provide essential data for the design, engineering, and cost optimization of the proposed commercial-scale facility, while simultaneously advancing customer qualification efforts. Management is targeting to reach initial commercial production from Phase 1 in the second-half of calendar year 2028 ²⁸. Another strategic priority is to progress FEL-3 engineering, which is expected to provide the necessary estimates for a final feasibility study and a final investment and construction decision for Phase 1 of the proposed commercial-scale complex during the middle of calendar year 2026 ⁵¹. The third strategic priority involves securing additional financing, as management explicitly states the need for additional funding within the next twelve months to maintain operations and that there exists substantial doubt regarding the company's ability to continue as a going concern ⁴¹. They are exploring various financing strategies, including equity or debt financing, government funding or grants, private capital, royalty agreements, customer prepayments, or other strategic alliances.