5E Advanced Materials, Inc.

Good day and welcome to the 5e Advanced Materials Earnings Conference Call. All participants are currently in a listen-only mode. After the prepared remarks, we will open the call for a question 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 undertakes no obligation to update or revise any forward-looking statements. At this time, I would like to turn the call over to Paul Weibel, Chief Executive Officer of 5E Advanced Material. Paul, please go ahead.

Thank you and good afternoon, everyone, and thank you for joining us today. Fiscal 2026 is shaping up to be a pivotal year for 5E, a year defined by momentum, achievement, and meaningful progress toward establishing ourselves as a leading U.S. 4E producer. We've reached what is for us, the most significant moment in both domestic borate market and the evolution of supportive U.S. policy. Boron, the fifth element on the periodic table, is now officially recognized as a U.S. critical mineral. On November 7th, the U.S. Geological Survey and the Department of the Interior formally added boron to the final 2025 critical minerals list. That recognition, is a major validation of our strategy, confirming what we've long advocated, that boron is a cornerstone of America's energy policy, national defense, and high technology sectors, while also being essential to glass, ceramics, and agriculture. There is a clear necessity to secure and maintain a reliable domestic borage supply chain and for the U.S. to remain an important global exporter of high-quality borates. 5E is a proud leader in the effort to maintain the United States position of strength in the borates market. And with this designation, we believe it brings meaningful economic advantages that include expanded access to federal funding and financing, as well as strategic partnerships that will accelerate the development path for Fort Katy. Before I dive deeper into what this means for 5E, Let me summarize the quarter's key highlights. First and foremost is that boron was added to the U.S. critical minerals list, which confirms the importance of Fort Katie's positioning as the leading advanced stage boron project in the U.S. Two, the addition of boron to the list expands our eligibility for federal funding programs, including USXM, the Department of Energy's Loan Programs Office, Department of Wars, Office of Strategic Capital, and the International Development Finance Corporation. Three, continued customer validation with full-scale product testing underway with multiple Tier 1 specialty glass manufacturers. Four, progress on feed engineering supported by our application to the XM Engineering Multiplier Program for a $10 million loan facility. And finally, we remain on track towards final investment decision in 2026. These achievements build directly on what we discussed during our year-end 2025 call. Our foundation is strong, our milestones are stacking, and we're steadily moving towards construction readiness. Before turning to our progress, I want to briefly address the broader borates market because understanding that context helps highlight the opportunity 5E is stepping into. Legacy producers continue to face rising operating costs, decreasing grades, and depleting reserves that have created a market opportunity for 5E, a new generation boron company to be built on innovation, operating efficiency, and long-term resilience. Market research, insight, and customer discussions highlight a clear tightening of supply and demand in the borage market. with an expectation of demand outpacing supply. Demand for borate materials continues to accelerate across EVs, wind, nuclear energy, semiconductors, defense applications, ceramics, and specialty glass, exactly where boron's thermal, optical, density, and hardness properties are essential. 5E is uniquely sufficient to step in and fill the market deficit with a project that has logistical advantages and a flow sheet and process that is modern, low cost, and high value, underpinned by resilient domestic boron supply that supports both commercial and national priorities. Market participants are increasingly viewing 5E as a strategic partner for the future. When combined with the U.S. critical minerals designation, These market dynamics further strengthen 5E's position and reinforce Fort Cady's importance to the U.S. supply chain security. As the only pure play U.S. advanced stage domestic boron asset, Fort Cady now qualifies for several federal funding and grant programs designed to rebuild American mineral supply chains. These include the U.S. Export-Import Bank, where 5E already holds a $285 million letter of interest under the Make More in America initiative, a program specifically created to support U.S. manufacturing exports, infrastructure, and supply chains. XM's engineering multiplier program, where we have applied for a $10 million loan that has the possibility to finance a significant portion of our feed activities on a non-dilutive basis. The Office of Strategic Capital and the U.S. Development Finance Corporation, where Executive Order 14241 defines a mineral largely with reference to the USGS list. The Executive Order delegates the Defense Production Act lending and investment authority to the Secretary of War and the CEO of the DFC and requires the establishment of certain mineral funding mechanisms, including the Department of War, Office of Strategic Capital. The One Big Beautiful Bill Act of 2025 authorized $5 billion for investments in critical mineral supply chains, sorry, $5 billion for investments in critical mineral supply chains made pursuant to the industrial base fund and up to $100 billion in principal amounts of direct loans and guaranteed loans for critical minerals and relative industries and projects. The Department of Energy's loan program office, where in addition to Title 17, the innovative energy and innovative supply chain prongs are enhanced by this designation given the explicit reference to the statutory reference of critical minerals being the USGS list. 5E is ideally positioned to benefit as a shovel-ready advanced stage project aligned with national priorities. Access to these programs has the potential to strengthen our balance sheet reduce equity dilution, and accelerate execution. That's a direct result of the federal government recognizing what we've built and our strategic domestic resources and reserves ready to move into production. Operationally, our team continues to execute with precision, maintaining strong alignment with our milestones and reinforcing the quality of our technical and commercial foundation. As we discussed last quarter, A pre-feasibility study confirmed strong project economics, a 39-and-a-half-year mine life, a 19.2% pre-tax IRR, and a pre-tax MPV of $725 million for only phase one of the 4KD project. Those fundamentals continue to anchor our forward plan. We've now successfully qualified our high-purity boric acid with multiple customers across sectors, including specialty glass, fiberglass, ceramics, agriculture, defense, and advanced materials. Most notably, we have advanced to full-scale testing and furnace trials with a Tier 1 specialty glass manufacturer, following the successful shipment of 20 tons of boric acid from the Port of Los Angeles to Taiwan. I can confirm that as of last week, the shipment had arrived in Taiwan and will be deployed in a live testing environment in the near term. Additionally, we supplied an additional 1,000 pounds of boric acid to a domestic boron carbide manufacturer. China currently controls much of the boron carbide supply chain, and we're excited to do our part in reshoring domestic boron carbide production as it is critical to our national defense. On the back of the 20-ton shipment, we're also preparing additional product shipments for other LCD glass producers, reinforced forcing both the scalability and reliability of our operation. Each one of these milestones builds customer trust and advances us towards long-term offtake agreements, a key bridge between development and commercial operations. Looking at the market opportunity, the critical minerals designation aligns perfectly with broader U.S. industrial policy. Boron is essential to technologies that support advanced manufacturing and enable the energy policy objectives. Everything from permanent magnets, semiconductors, EVs, wind turbines, and defense armor systems to advanced glass and composites, which 5E positions as a strategic enabler within multiple national frameworks. From a development standpoint, our trajectory remains clear. We're nearing completion of feed-ready engineering deliverables, advancing strategic financing discussions, and negotiating off-tape terms. Each step brings us closer to our goal of a 2026 final investment decision. As we move through these milestones, our goal remains consistent with what I outlined in our previous call. To progress methodically, de-risk every stage and build a capital structure that supports long-term value creation. The remainder of fiscal year 2026 will be focused on three primary priorities. One, securing non-dilutive U.S. capital support through EXIM, OSC, DFC, and DOE programs. While skeptics may have heard this previously from 5E, the RSEIC designation is a major catalyst and milestone to having a much more broader and in-depth discussion on financing our project and providing access to larger pools of capital. Two, advancing customer agreements in commercial off-day contracts where we expect a more detailed negotiation to commence before year end. And three, executing a rigorous and diligently planned feed and pre-FID workstreams to ensure we are construction ready in 2026. Additionally, we have commenced the work stream to upgrade our mineral resource statement on the back of securing and recording the remaining federal load claims for the rest of the Colemanite mineralization of the deposit. Further, we have begun steps to build a portfolio of intellectual property on our proprietary mining techniques and processing solutions. These steps position 5E to cement our mineral tenure for the long term, become the premier ISL borate producer in the United States, and transition confidently into construction and ultimately commercial production, delivering long-term value for our shareholders and strengthening America's domestic mineral independence. In closing, this quarter truly represents an inflection point, one that underscores our growing momentum, validates our strategy, and sets the stage for sustained growth and value creation. The federal recognition of boron as a critical mineral validates years of technical work, market engagement, and policy advocacy. It affirms that what we're building at 4KD matters, not just commercially, but strategically. As I said on our last call, this is a story of proof, not potential. And now, with federal alignment and growing customer attraction, we're proving that 5E is positioned to become America's trusted borate supplier, of advanced materials. Thank you to our employees, partners, and shareholders for your continued commitment. We're building something rare and a foundation for America's energy and advanced materials future. With that, we'll open up the call to any questions.

Thank you, Paul. We will now begin the question and answer session. To ask a question, please press star 1 on your telephone keypad. To withdraw your question, please press star 2. We ask that you please limit yourself to one question and one follow-up, and then return to the queue if you have additional questions. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Tate Sullivan of the Maxim Group. Tate, your line is live.