5E Advanced Materials Inc
For the period ended Jun 30, 2024. Filed Sep 9, 2024.
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FY2024 · Filed Sep 9, 2024
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4. Properties, Plant and Equipment, Net
- Properties, Plant and Equipment, Net
During the fourth fiscal quarter of 2024, the Company placed the SSF and its related injection and recovery wells, equipment and facilities into full commercial operation and therefore transferred approximately $75.9 million previously recorded as construction in progress to property plant and equipment. This amount represents the engineering services, equipment and construction costs related to the SSF and its related facilities, including any amounts of interest that were capitalized thereon. This amount was categorized into small-scale facility, injection and recovery wells, buildings and other plant and equipment, as appropriate. The Company intends to operate the SSF until the proposed commercial facility is placed into operation, and therefore assigned a corresponding useful life. The useful life of the injection and recovery wells was based on their estimated productive life and anticipated usage in the proposed commercial facility until the end of their productive lives. The other assets placed into service will be depreciated in accordance with the Company’s established estimated useful life policy.
Properties, plant and equipment, net consisted of the following at the end of each period presented.
| Depreciation | Estimated useful | June 30, | June 30, | |
|---|---|---|---|---|
| Asset category | method | life (in years) | 2024 | 2023 |
| (in thousands) | ||||
| Land | N/A | — | $1,533 | $1,533 |
| Small-scale facility — Plant | Straight-line | 3.75 | 69,619 | — |
| Injection and recovery wells | Straight-line | 5 | 6,134 | — |
| Buildings | Straight-line | 7-15 | 979 | 873 |
| Vehicles | Straight-line | 3-5 | 345 | 345 |
| Other plant and equipment | Straight-line | 5-10 | 729 | 623 |
| 79,339 | 3,374 | |||
| Less accumulated depreciation | (5,467) | (318) | ||
| Properties, plant and equipment, net | $73,872 | $3,056 | ||
The Company recognized depreciation expense of $5.2 million and $184 thousand for the years ended June 30, 2024 and 2023, respectively. Included in depreciation expense was amortization related to asset retirement costs (refer to Note 2—Mineral Rights and Properties, Net) of $21 thousand and $17 thousand for the years ended June 30, 2024 and 2023, respectively.
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