5E Advanced Materials(US:FEAM)2025-11-13 21:06Project Feasibility and Production - The Preliminary Feasibility Study (PFS) established 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 [105]. - The capital estimate for the Project is approximately $435 million, which includes a 15% contingency of approximately $55 million and owner's costs of approximately $13 million [106]. - The company plans to reach initial commercial production from Phase 1 in the second half of calendar year 2028 [107]. - Boron was added to the U.S. Department of the Interior's 2025 Critical Minerals List, enhancing eligibility for government funding programs [100]. - The company shipped 20 tons of boric acid for a large-scale specialty glass trial and 1,000 pounds for domestic boron carbide production, marking significant milestones towards commercial production [99]. - The company completed an equity offering in August 2025, resulting in net proceeds of approximately $7.4 million after deducting underwriting expenses [116]. - The company applied for a $10 million loan through the Engineering Multiplier Program to fund engineering costs for the proposed commercial-scale facility [101]. - The PFS demonstrated a world-class resource and management's understanding of the business, positioning the company to achieve profitability and generate cash flow [103]. Financial Position and Cash Flow - The company reported a net cash position of approximately $7.7 million from the August 2025 Equity Offering, but substantial doubt exists regarding its ability to continue as a going concern without additional financing [117]. - As of September 30, 2025, the company had cash and cash equivalents of $5.5 million and a working capital deficit of $1.5 million [135]. - The company extinguished all outstanding indebtedness under the Convertible Notes in exchange for equity interest in March 2025, eliminating the financial covenant for a minimum cash balance [136]. - The company completed the August 2025 Equity Issuance to strengthen its balance sheet and fund mining and SSF operations [137]. - Cash used for operating activities was $4.3 million, a decrease of approximately $2.1 million or 33% compared to the prior fiscal year [141]. - Cash used for investing activities increased to $1.4 million, an increase of approximately $1.0 million or 262% compared to the prior fiscal year [142]. - Cash flows from financing activities included approximately $7.7 million of net proceeds from the August 2025 Equity Offering [143]. - Future cash requirements include $2.3 million primarily for raw materials and engineering services related to the proposed commercial-scale facility [145]. - Additional financing will be needed within the next twelve months to meet ongoing obligations and continue operations [147]. - There is substantial doubt regarding the company's ability to continue as a going concern without additional financing [149]. Cost Management and Expenses - Total costs and expenses for the three months ended September 30, 2025, decreased by $2.2 million, or 17%, compared to the same period in 2024, totaling $10.7 million [121]. - Project expenses decreased by $398 thousand, or 26%, primarily due to reductions in site-related and insurance costs [122]. - Small-scale facility operating costs decreased by $754 thousand, or 48%, mainly from reduced salaries, raw materials, and maintenance costs [123]. - General and administrative expenses decreased by $1.4 million, or 28%, driven by lower incentive compensation, professional fees, and cost-cutting measures [125]. - Interest income increased by $32 thousand, or 139%, due to improved management of idle funds and interest from a reclamation bond deposit [127]. - Net cash used in operating activities decreased by $2.1 million, or 33%, from $6.4 million in 2024 to $4.3 million in 2025 [139]. Future Plans and Regulatory Changes - The company plans to progress FEL-3 and optimize well-field design to reduce future capital and operational expenditures [146]. - The company is exploring various financing strategies, including equity or debt financing and government funding [148]. - The company plans to adopt ASU 2023-09 for the fiscal year ending June 30, 2026, to improve income tax disclosures [151]. - ASU 2024-03 will require disaggregation of certain expenses in financial statements, effective after December 15, 2026 [152].