Company: FEAV
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0000950170-25-019943
Chunk: 118

Company: 5E Advanced Materials, Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Item 2
Chunk 118
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 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 and variable operating costs and increasing our efficiency at current production level at the SSF. We estimate that this initiative could allow us to save approximately $2.2 million in operating expenditures during calendar year 2025. 

Financing Highlights

Refer to the discussion above under the headings Recent Developments – Restructuring Support Agreement and Related Agreements, and January 2025 Notes.

Financing Transactions — Liquidity Considerations

Although the January 2025 Notes improved our cash position by providing an aggregate of $5.0 million of proceeds to the Company prior to recognition of issuance costs