Company: FEAV
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0000950170-25-019943
Chunk: 28

Company: 5E Advanced Materials, Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Item 8
Chunk 28
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 Facility (the “SSF”). Such efforts have resulted in operating cost reductions and an improvement in the quality and consistency of our boric acid production. We continued to maintain production of boric acid at one short ton per day with continuous improvement in production rates and product specification at the facility at a level designed to meet volumetric needs for expanded customer qualification and testing needs for our commercial strategy, while minimizing liquidity impacts.

Commercial Scale Facility

We have made the critical strategic decision to pursue calcium chloride as our byproduct and have now begun incorporating this decision into our commercial basis of design for the commercial scale facility (the “Commercial Scale Facility”) and are working towards partnership and offtake of our potential calcium chloride stream with multiple strategic players. We believe that the pursuit of calcium chloride for our by-production alongside boric acid has the potential to ultimately yield a significant decrease in the capital expenditures needed for our Commercial Scale Facility while simplifying its design, to meaningfully improve the Project’s rate of return. 

We also continued to progress FEL-2 engineering for Phase 1 of the Commercial Scale Facility. We anticipate that Fluor, our EPC contractor, will provide a capital estimate for Phase 1 no later than Spring 2025. We continued to focus our efforts during FEL-2 on ensuring the project is appropriately scoped and of high quality to position the Company for success as we move toward FEL-3. We anticipate that FEL-3 engineering will be a seven-to-eight-month process which allows us to target a final investment decision in late 2025.

Commercial Strategy

We have advanced our commercial strategy, and during the quarter, we met a key milestone in our timeline through the delivery of our first truckload of boric acid super sacks to a U.S. customer. In October 2024, we added two seasoned borates sales and marketing professionals who have already driven important advancements in translating customer engagement to initial off-take discussions. We are currently in the process of negotiating contracts for a portion of our initial boric acid production in commercial Phase 1. Additionally, we have expanded the geographic reach of our commercial program to the Asia-Pacific region, with coverage over more than 80% of the global borates demand as we look to high-grade the margin profile of our commercial scale production through targeted industry segmentation.

Reduction in Work Force

During November 2024, we undertook a strategic reduction in work force, which reduced our company-wide headcount by approximately 40% with the goal of optimizing our team, reducing fixed