Q4 2025 5E Advanced Materials Inc Earnings Call

Company's filings with the Securities and Exchange Commission.

Operator: Participants are currently in a listen-only mode. After the prepared remarks, we will open the call for questions and answer session. Please note today's call is being recorded. Before we begin, I would like to remind everyone that today's discussion will include forward-looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially. For more information on these risks, please refer to the company's filings with the Securities and Exchange Commission. 5E Advanced Materials, Inc. undertakes no obligation to update or revise any forward-looking statements. At this time, I would now like to turn the call over to Paul Weibel, Chief Executive Officer of 5E Advanced Materials, Inc. Paul, please go ahead.

<unk> advanced materials undertakes no obligation to update or revise any forward looking statements.

At this time I would now like to turn the call over to Paul Wigle, Chief Executive Officer of <unk> Advanced materials. Paul. Please go ahead.

Good afternoon, and thank you for joining us today.

Fiscal year 2025 has been a transformative year as we move from development to commercial readiness.

We achieved broad validation across our project from the SK <unk> hundred pre feasibility study to customer qualifications and supply chain milestones.

Before I go into detail, let me summarize the key achievements from fiscal year 2025.

Paul Weibel: Good afternoon, and thank you for joining us today. Fiscal year 2025 has been a transformative year as we move from development to commercial readiness. We achieved broad validation across our project from the SK1300 pre-feasibility study to customer qualifications and supply chain milestones. Before I go into detail, let me summarize the key achievements from fiscal year 2025. Strong project economics have been validated. A recently published pre-feasibility study for phase one only confirms a 39.5 year mine life with a robust after-tax NPV of $725 million and a 19% project IRR. On the commercial front, we have successfully qualified our high-purity boric acid with 14 customers across multiple segments and have now advanced to full-scale production testing with a tier one specialty glass manufacturer.

Strong project economics have been validated our recently published pre feasibility study for phase one only confirms a 39 year mine life.

With a robust after tax NPV of $725 million and a 19%.

<unk> IRR.

Commercial front, we have successfully qualified.

Our high purity <unk> acid with 14 customers across multiple segments and have now advanced to full scale production testing with a tier one specialty glass manufacturer.

On the financing front, we received a nonbinding LOI from U S X M for a potential 285 million dollar project debt facility.

A major step towards securing funding for phase one construction.

Okay.

And in regards to on track for being.

Towards the project.

We now have milestones and are well positioned to advance towards feed engineering and a final investment decision in mid 2026.

Paul Weibel: On the financing front, we received the non-binding LOI from USXM for a potential $285 million project debt facility, a major step towards securing funding for phase one construction. In regards to being on track for the project FID, we now have milestones and are well positioned to advance towards feed engineering and a final investment decision in mid-2026. Today, I will cover these four areas in more detail and discuss the upcoming fiscal year 2026. First, the recently published SK1300 pre-feasibility study provides a strong validation of the scale, economics, and longevity of our forecasted resource and reserve. This study covers phase one only, not including future expansions or higher value boron derivatives. The results underscore the strength of our project fundamentals. The project shows a pre-tax NPV of approximately $725 million with a 19% project IRR. The after-tax NPV is about $469 million with a 16% project IRR.

Today I will cover these four areas in more detail and discuss the upcoming fiscal year 2026.

First the recently published <unk> hundred PFS provides a strong validation of the scale economics and longevity of our four caddie resource and reserve.

This study covers phase one only.

Not including future expansion or higher value blonde derivatives.

Underscore the strength of our project fundamentals.

The project shows a pretax NPV of approximately $725 million with a 19% project IRR.

After tax NPV.

About $469 million with a 16% project IRR.

We estimate free cash flow over the life of mine have roughly $3 7 billion pretax with an after tax payback of just under six years.

The study outlines a 39 and a half year mine life supported by 4.5 point 4 million short tons Bork asset reserves.

Phase one target of 130000 short tons per year of bork acid, which we believe has a strong need in today's global market.

Paul Weibel: We estimate free cash flow over the life of mine at roughly $3.7 billion pre-tax, with an after-tax payback of just under six years. The study outlines a 39.5 year mine life supported by 5.4 million short tons of boric acid reserves. Phase one targets 130,000 short tons per year of boric acid, which we believe has a strong need in today's global market. On the cost front, all-in sustaining costs are estimated at $555 per ton, with initial capital at about $435 million. This is inclusive of contingency and a gas cogent facility. These results are underpinned by real-world operating data from our small-scale facility, which confirmed our expected recovery and efficiencies. Thus far, we have received highly favorable feedback from analysts, prospective customers, and the investment community. Next, I'd like to turn our attention to our traction with customers, where we see growing validation.

On the cost front all in sustaining costs are estimated at $555 per ton with initial capital at about $435 million. This is inclusive of contingency.

In our gas co Gen facility.

These results are underpinned by real World operating data from our small scale facility, which confirmed our expected recovery and efficiencies thus.

Thus far we have received highly favorable feedback from analysts.

Back with customers and the investment community.

Next I'd like to turn our attention.

Attention to our traction with customers, where we see growing validation.

Earlier this year 14 customers successfully qualified our board asked it.

They span a wide range of industries that includes specialty glass.

Fiberglass ceramics installation.

Cultural.

Defense and chemicals.

We continue to see accelerating demand for our high purity U S based boron supply and additional customers arent advanced testing phases.

Paul Weibel: Earlier this year, 14 customers successfully qualified our boric acid. They span a wide range of industries that include specialty glass, fiberglass, ceramics, insulation, agricultural, defense, and chemicals. We continue to see accelerating demand for a high-purity U.S.-based boron supply, and additional customers are in advanced testing phases. As we move from breadth to depth, we recently hit a significant milestone with a tier one specialty glass manufacturer. We completed a full logistics and handling trial, shipping two tons of product from the California port of LA to Taiwan. This trip took approximately 20 days, and the material passed all on-site handling tests, including successful deployment in a glass furnace. As a result, we have received a green light to advance to full-scale product testing within this future customer's production system. As it currently stands, the product for the full-scale product test is produced and sits ready to ship.

As we move from breadth depth, we recently hit a significant milestone with a tier one specialty glass manufacturer.

We completed a full logistics and handling trial shipping two tons of product from the California Port of L. A to Taiwan.

This trip took approximately 20 days.

And the material past, all onsite handling test, including successful deployment and a glass furnace.

As a result.

We have received a green light to advance to full scale product testing within this feature customers production system.

As it currently stands.

For the full scale product test is produced and sits ready to ship.

We are coordinating their shipping T O and the shipment of 20 tons of high quality blurry product.

Imminently expected.

The next trial is expected to take two to three weeks to ship overseas and approximately five weeks to test and our commercial glass furnace.

Furthermore, our team has begun producing the next batch of high quality Board that will go to other large LCD glass manufacturers, who are waiting in queue to implement a similar test.

Paul Weibel: We are coordinating the shipping PO, and the shipment of 20 tons of high-quality boric product is eminently expected. The next trial is expected to take two to three weeks to ship overseas and approximately five weeks to test in a commercial glass furnace. Furthermore, our team has begun producing the next batch of high-quality boric that will go to other large LCD glass manufacturers who are waiting in queue to implement a similar test. Our operation is proven, scalable, and consistently meeting the strictest global quality standards. With these successful milestones being delivered, we have formally entered into long-term offtake discussions and have had two formal presentations, with the most recent being a presentation of specific offtake terms.

Our operation is proven scale.

Scalable.

And consistently meeting the strict this global quality standards.

With these successful milestones being delivered we have formally entered into long term offtake discussions.

I have had two formal presentations with the most recent being a presentation of specific offtake terms.

Most recently, our forecast of supply and demand has been resonating with our future customers.

On the industry dynamics are creating a clear opportunity for <unk>.

Particularly in light of recent announcements from one of the two major producer.

Producers.

<unk> and our stakeholders believe there is a fundamental need and requirement for new market producer to reduce supply chain risks and our method and approach thus far has reinforced confidence.

Paul Weibel: Most recently, our forecast of supply and demand has been resonating with our future customers, and industry dynamics are creating a clear opportunity for 5E Advanced Materials, Inc., particularly in light of recent announcements from one of the two major boric producers. 5E Advanced Materials, Inc. and our stakeholders believe there is a fundamental need and requirement for a new market producer to reduce supply chain risks, and our method and approach thus far has reinforced confidence and strengthened trust within the boric market and investor communities. Finally, I'll cover our roadmap to FID and financing. We remain on the path towards an FID by mid-2026. We have commenced early feed engineering activities, with 5E targeting the formally staged gate to feed engineering before year-end.

Strengthening trust within the borate market and Investor communities.

Finally, I'll cover our roadmap to F I D and financing.

We remain on the path towards an RFID by.

By mid 2026.

We have commenced early feed engineering activities with Bobby targeting the formerly stage gate to feed engineering before year end.

We have prepared or not application or the X M engineering multiplier program and target eight and a half to $10 million and our loan facility that will provide the capital and liquidity to fully fund feed engineering.

Once stage gate stage gated to feed we expect that process to take approximately eight to nine months to complete which leads to mid.

Paul Weibel: We have prepared an application for the XM Engineering Multiplier Program and target $8.5 to $10 million in a loan facility that will provide the capital and liquidity to fully fund feed engineering. Once stage-gated to feed, we expect that process to take approximately eight to nine months to complete, which leads to FID in mid-2026. Last week, we submitted a formal response to the USGS draft critical minerals list, where we strongly believe boron has a place on the list. The draft list was released prior to the second largest boric manufacturer, citing that their business is under strategic review. As it currently stands, we believe the United States has a single point of failure in the boric market. Per publicly available financial results, the second largest boric producer and single point of failure in the U.S.

Mid 2026.

Last week, we submitted a formal response to the U S. G. S draught critical minerals list or we strongly believe boron has a place on the list.

The draft list was released prior to the second largest borate manufactured.

Citing that their business is under strategic review.

As it currently stands we believe the United States has a single point of failure and the board market for publicly available financial results. The second largest pork producer and single point of failure in the United States supply chain I've seen their costs increase approximately 60% for 2017 on a b two or three.

Basis.

Given the material announcements at the largest U S producer.

There are 2018 reserve downgrade.

We believe our weakening business fundamentals there is a need had boron to the proposed critical minerals left.

Paul Weibel: supply chain have seen their cost increase approximately 60% from 2017 on a B2O3 basis. Given the material announcement at the largest U.S. boric producer, their 2018 reserve downgrade, and what we believe are weakening business fundamentals, there is a need to add boron to the proposed critical minerals list. Without this producer, the United States would lose its position as the second largest producer, and as a nation, we would transition from a net exporter to a net importer. The boron market is an oligopoly. The United States has a single point of failure, and without further investment in new boric projects, the United States will be reliant on Turkey for boron and China for its critical advanced boron materials.

Without this producer.

States with Lee its position as the second largest producer and as a nation, we would transition from a net exporter to in that importer.

The bond market is an oligopoly the United States has a single point of failure without further investment in new borate projects, the United States will be reliant on Turkey for boron in China for its critical advanced <unk> materials.

We view 2025, as an inflection year for boron.

As independent analysis shows supply shortfalls.

Beginning in 2026, which we believe supports the fundamental need for new market producer.

Looking ahead, we are focused on several key catalysts in the upcoming quarters.

These include progressing full scale testing with multiple specialty glass manufacturers.

Paul Weibel: We view 2025 as an inflection year for boron, as independent analysis shows supply shortfalls beginning in 2026, which we believe supports the fundamental need for a new market producer. Looking ahead, we are focused on several key catalysts in the upcoming quarters. These include progressing full-scale testing with multiple specialty glass manufacturers, securing additional qualifications and initial offtake agreements, securing a small XM loan to cover feed engineering costs, completing feed-ready engineering deliverables, advancing the larger project finance and XM loan process, finalization of our mine plan in connection with our horizontal well trials, and lastly, the potential opportunity for USGS to do the right thing and add boron to the final critical minerals list. In closing, I want to thank our employees and partners for their dedication.

Securing additional qualifications and initial offtake agreements.

Securing a small XM loan to cover feed engineering cost.

<unk> feed ready engineering deliverables.

Advancing the larger project finance and XM loan process.

Finalization of our mine plan in connection with our horizontal well trials and lastly, the potential opportunity for U S. G. S to do the right thing and add boron to the final critical minerals west.

In closing I want to thank our employees and partners for their dedication.

With the achievements from fiscal year 2025, we are well positioned to advance towards the mid 2026 and build long term value for our shareholders and our stakeholders.

Thank you and I look forward to your questions.

Thank you at this time it will be conducting a question and answer session.

If you would like to ask a question. Please press star one on your telephone keypad.

Paul Weibel: With the achievements from fiscal year 2025, we are well positioned to advance towards FID in mid-2026 and build long-term value for our shareholders and our stakeholders. Thank you, and I look forward to your questions.

A confirmation tone will indicate your line is in the question queue.

You May press star two if he would like to remove your question from the queue.

For participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.

Once again, please press star one on your phone at this time.

Operator: Thank you. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, please press star one on your phone at this time if you wish to ask a question, and please hold while we pull for questions. Once again, that will be star one on your phone at this time if you wish to ask a question. Okay, it looks like the apologies.

Wish to ask a question.

Please hold while we poll for questions.

Yeah.

Once again that will be a star one on your phone at this time, if you wish to ask a question.

Yeah.

Okay, and it looks like that.

Apologies just about to hand, it back to you Paul but we did get a question coming in from Tate Sullivan from Maxim Group. Your line is live.

Hi, Thank you. Thanks, Paul can you can you review the comments you had about the disruption to the California bar online what was the specific announcements.

That you cited.

Yeah, No I 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 streamline their business historically has been broken up into four different business segments and on a go forward basis, Theyre now structured where they have.

Operator: I was just about to hand it back to you, Paul, but we did get a question coming in from Tate Sullivan from Maxim Group. Tate, your line is live.

[Analyst]: Hi, thank you. Thanks, Paul. Can you review the comments you had about the disruption to the California boron mine? What was the specific announcement that you cited?

Paul Weibel: Hey, Tate. Yeah, no, appreciate you, Donald, and thanks for the question. 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 four different business segments, and on a go-forward basis, they're now structured where they have three business segments, which is one, iron ore, two, copper, and three, aluminum and lithium. Essentially, the industrial minerals, which I believe that's where their diamonds, borates, and titanium business sat, are now with the Office of the Chief Commercial Officer per the release, and they are up for strategic review.

Our three business segments, which is one iron ore to copper and three aluminum lithium and essentially the industrial minerals, which I believe that's where their diamonds for rates and titanium business.

That.

Our essentially.

Up for.

Well they now sit with the team the author Chief commercial officer further release and there they are up for strategic review.

Okay. Thank you for that background, and then to get boron on the U S. U S. G. S. Critical mineral list is it up.

Three six month process or what needs to happen in terms of their review.

Great question. So we were in D. C. I was down there and met with interior in July.

Got it.

The word on the street.

[Analyst]: Okay, thank you for that background. To get boron on the USGS critical mineral list, is it a, I mean, three, six-month process or what needs to happen in terms of the review?

Was that sometime this fall the draft could come out.

And there was no comment on it boron would or would not make the list, but the essentially appropriate measure to.

Paul Weibel: Great question. We were in Washington, D.C. I was down there and met with Interior in July. The word on the street was that sometime this fall, the draft list would come out, and there was no comment on if boron would or would not make the list, but the essentially appropriate measure to get boron added to the list is essentially to submit public comments. My kind of gut told me at the time I should expect to see a draft list by October. I was pleasantly surprised. That came in ahead, and I think it was maybe the first week of September or last week of August that 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, I believe, eight other groups.

Get boron added to the list is essentially to submit public comments.

My kind of gut told me at the time I should expect to see a draft glass by October.

Was it was pleasantly surprised.

That kind of came in ahead and I think it was maybe the first week of September or last week.

August.

The draft, which 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 it other groups.

But you can search for borate on the Federal Register under the comments and they're all there was 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.

Uh huh.

Kind of ringing the bell.

Supply chain concerns there in this market.

Okay. Thank you very much.

Paul Weibel: You can search for borate on the Federal Register under the comments, and they're all there. I was pleased that there were some well-known groups that did apply, and we're not now the only one in the room ringing the bell that there are supply chain concerns there in this market.

Thank you.

And there were no other questions at this time I will now turn the call back over to Paul liable for any closing remarks.

Great. Thank you I appreciate the Q&A during today's call.

As noted we believe <unk> has the right resource.

And now it's the right time.

[Analyst]: Okay, thank you very much.

We are committed to building a strong and resilient supply chain that underpins the U S industrial base for many generations to come.

Operator: Thank you. There were no other questions at this time. I will now turn the call back over to Paul Weibel for any closing remarks.

We look forward to fiscal year, 2026, and delivering on our expected milestones.

Paul Weibel: Great, thank you. I appreciate the Q&A during today's call. As noted, we believe 5E Advanced Materials, Inc. has the right resource, and now it's the right time. We are committed to building a strong and resilient borate supply chain that underpins the U.S. industrial base for many generations to come. We look forward to fiscal year 2026 and delivering on our expected milestones as we go into 2026. Thank you.

As we go into 2026, thank you.

Okay.

Yeah.

Thank you and this does conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.

Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.