5E Advanced Materials Inc

Fort Cady Project (AKA 5E Boron Americas Project)

The Project is located in the Mojave Desert region in eastern San Bernardino County, California, approximately 36 miles east of Barstow, near the town of Newberry Springs and two miles south of I-40. The Project lies approximately 118 miles northeast of Los Angeles, California, or approximately half-way between Los Angeles and Las Vegas, Nevada. Access to the Project is eastbound from Barstow on I-40 to the exit for Newberry Springs. From the exit of Newberry Springs, travel continues south on County Road 20796 for 2.2 miles to an unnamed dirt road bearing east for another 1.1 miles to the mine office and plant site at the Project.

The Project area operates with electricity and is well served by other infrastructure, including I-40 and the main Burlington Northern Santa Fe (“BNSF”) rail line serving Los Angeles, California running immediately north alongside I-40. There are three main natural gas transmission lines along the I-40. The two southern transmission lines are owned and operated by SCE, while the northern transmission line is owned and operated by Kinder Morgan. The port of Los Angeles and its sister port, the port of Long Beach, are in relatively close proximity. The Project will likely attract personnel from the Barstow-Victorville area.

The Project deposit is in a prospective area for borate and lithium mineralization and is fundamental to our strategy to become a globally integrated supplier of boric acid, lithium carbonate and advanced boron derivatives. The deposit mineralization is colemanite and the Project has a similar geological setting as RTB’s Boron open-pit mine and Nirma Limited’s Searles Lake operations, situated approximately 75 miles west- northwest and 90 miles northwest of Project, respectively.

Mineral Title

We own fee simple (private) lands in Sections 25 and 36 of Township 8 North, Range 5 East of the San Bernardino Principal Meridian. An electrical transmission corridor, operated by SCE, tracts from the northeast to the southwest through the fee lands with SCE having surface and subsurface control to a depth of 500 feet, affecting approximately 91 acres of surface lands in the two sections. While this limits surface access to the land, mineralization remains accessible as the ore body occurs at depths more than 1,000 feet.

We currently hold two unpatented lode claims and 117 unpatented placer claims with the BLM within the U.S. Department of the Interior. Both lode claims were originally filed by Duval Corporation (“Duval”) in 1978. Placer claims were filed between October 29, 2016, and February 24, 2017. A review of the BLM Mineral & Land Record System database shows claim status as filed with next assessment fees due annually on September 1. These lode and placer claims do not sit over the mineral resource.

Lastly, 272 acres of land located in Section 36 of Township 8 North, Range 5 East of the San Bernardino Principal Meridian, are split estate, with the surface estate owned by us and the mineral estate is owned by the State of California. These lands are available to us through a mineral lease from the California State Lands Commission. We own the remaining lands, with the minerals underlying the transmission line available subsurface.

Overview of Mining Locations

Fort Cady History

Discovery of the Project borate deposit occurred in 1964 when Congdon and Carey Minerals Exploration Company found several zones of colemanite, a calcium borate mineral, between the depths of 1,330 feet to 1,570 feet below ground surface in Section 26. In September 1977, Duval initiated land acquisition and exploration activities near Hector, California. By March 1981, Duval had completed 34 exploration holes, plus one potential water well. After evaluation of the exploration holes, Duval considered several mining methods. Subsequent studies and tests performed by Duval indicated that in-situ mining technology was feasible. Duval commenced limited testing and pilot-scale solution mining operations in June 1981.

Mountain States Mineral Enterprises, Inc. (“MSME”) purchased the project from Duval in 1985 and, in 1986, conducted an additional series of tests. MSME eventually sold the project to Fort Cady Mineral Corporation (“FCMC”) in 1989. A Plan of Operations (“PoO”) was submitted in 1990, which triggered the permitting review process under the NEPA and California Environmental Quality Act (“CEQA”). At the time, the Project was located on both public and private lands. The public lands are managed by the BLM under NEPA and the private lands are administered by San Bernardino County Land Use Planning (“SBC - LUP”) under CEQA. Based upon the activities described in the PoO, under the NEPA regulations, the BLM determined that an EIS was required while CEQA and SBC - LUP determined that an Environmental Impact Report (“EIR”) was required. Under a Memorandum of Understanding, the two agencies completed a joint EIS and EIR. The EIS and EIR process followed clearly defined requirements for public participation in studies, such as threatened and endangered species, cultural resources, light, noise, and impacts to local communities. The studies were completed, as was the public participation process, which resulted in a 1994 ROD from the BLM and approval from San Bernardino County, the California lead agency.

Duval commenced limited-scale solution mining tests in June 1981. Between 1981 and 2001, subsequent owners drilled an additional 17 wells, which were used for a series of injection testing and pilot-scale operations. In July 1986, tests were conducted by MSME, where dilute hydrochloric acid solution was injected into the ore body. The acid dissolved the colemanite and was then withdrawn from the same well.

The first phase of pilot plant operations was conducted between 1987 and 1988. Approximately 550 short tons of boric acid were produced. The test results were positive; thus, the Project was viewed as commercially viable. In preparation for the permitting process, feasibility studies, detailed engineering and test works were completed with FCMC receiving the required permits for a commercial-scale operation. Final approval for commercial-scale solution mining and processing was attained in 1994.

A second phase of pilot plant operations occurred between 1996 and 2001, during which approximately 2,200 tons of a synthetic colemanite product, marketed as CadyCal 100, were produced. Commercial-scale operations were not commissioned due to low product prices and other priorities of the controlling entity. For many years, boron was used in traditional applications such as cleaning supplies and ceramics, which never formulated in a strong pull-side demand investment thesis where pricing justified further development of the Project.

In 2017, a group of Australian investors identified the Project and formed the investment thesis that the boron market had similar dynamics to the lithium market a decade earlier. Like the lithium market ten years prior, the market was dominated by a few companies with a compelling pull-side demand growth story fueled by future-facing applications targeting decarbonization and critical materials. Prior to lithium-ion batteries and electric vehicles, lithium was used in traditional everyday applications like boron’s use in recent years. As a result of the investment thesis that boron is the next lithium, the group of Australian investors formed ABR and issued shares to Atlas Precious Metals in exchange for Fort Cady (California) Corporation, the entity holding the mineral and property rights of the Project. In 2017, ABR underwent an initial public offering on the ASX and progressed exploration and development of the Project. In September 2021, ABR created a subsidiary, 5E Advanced Materials, Inc., and through a scheme of arrangement, which is a court order process of law, reorganized the Company which placed the Company at the top of the corporate structure. Upon 5E Advanced Materials, Inc. becoming the parent company of the organization, in March 2022, we direct listed on the Nasdaq and became an SEC issuer.

Access and Infrastructure

We continue to develop operating infrastructure for the Project in support of extraction and processing activities. A manned gate is located on the Project access road and provides required site-specific safety briefings and monitors personnel entry and exit to the site. Personnel is predominantly sourced from the surrounding area including Barstow, California and Victorville, California.

The Union Pacific rail line from Las Vegas, Nevada to Los Angeles, California runs adjacent to I-15, and a BNSF rail line, which connect to the Union Pacific rail line runs subparallel to I-40 and adjacent to the Project. A rail loadout is located approximately 1.2 miles north of the National Trails Highway on a road that bears north and located 0.4 miles west of San Bernardino County Road 20796. San Bernardino County operates six general aviation airports with the closest airport to the Project being the Barstow-Daggett Airport located approximately 23 miles west of the Project on the National Trails Highway. Commercial flight service is available through five airports in the greater Los Angeles area and in Las Vegas, Nevada. A dedicated cargo service airport is located approximately 65 miles southwest of the Project.

Construction of the SSF was performed by contractors in the Los Angeles, California metro area with additional local resources supporting contracting, construction materials, energy sources, employees, and housing. The Project has good access to I-40 which connects it to numerous sizable communities between Barstow, California and the greater Los Angeles area offering excellent access to transportation, construction materials, labor, and housing. The Project currently has limited electrical service that is sufficient for mine office and storage facilities on site but will require upgrade for plant and wellfield facilities. The SSF is operating on liquid natural gas and we are currently exploring options for upgrading electrical services to the Project. An electrical transmission corridor operated by SCE extends northeastward through the eastern part of the Project. The Project has two water wells located nearby to support in-situ leaching operations. Currently no natural gas connects to the Project, but we are negotiating services with two suppliers in the region with three natural gas transmission pipelines running along I-40 near the Project.

The plant site currently has a 1,600 square foot mine office building, a control room, storage buildings, an analytical laboratory, an approximately 20-acre production facility called the Small-Scale Facility, four production wells, and an intended gypsum storage area occupying 17 acres. Gypsum is a byproduct of past pilot plant production and is intended to be a future byproduct that can be sold to the regional market.

Project Permits

We currently have the following Project permits in place:

The MDAQCD has issued Authorization to Construct (“ATC”) permits for up to 270,000 tons per year boric acid and 80,000 tons per year sulphate of potash. Upon final review and inspection of equipment and operations by MDAQCD, the ATC will be replaced with an Operating Permit (“OP”). The permits have been renewed annually. Any modifications to or replacement of process equipment may require a modification to the existing permit. All modifications must meet National Ambient Air Quality Standards and MDAQCD requirements. There is no reclamation or closure requirement under MDAQCD.

The LRWQC issued the current Order Permit in 1988. The Permit includes all existing surface impoundments. We remain compliant with the permit by complying with the monitoring requirements and submitting quarterly reports. A Final Permanent Closure Plan has been submitted to LRWQCB for closure of the existing impoundments. There is a reclamation and closure requirement by LRWQCB. The bond amount to close the ponds is included in San Bernardino County Land Use Planning Financial Assurance Cost Estimate. This is currently a cash bond.

The LRWQCB also issued a NONA, verifying that the Project does not require a stormwater permit for either construction or operations. The NONA was issued as the Project is in a closed basin with no stormwater discharge. There is no reclamation or bonding requirement associated with the NONA.

SBC - LUP issued the Mining and Reclamation Permit in 1994, based upon the 1990 PoO and subsequent EIR. The PoO was amended, and the permit was modified in 2019 to address changes such as relocation of the process plant, elimination of a highway rail crossing and additional rights to water. The Project is not located within a water district with adjudicated water rights. Therefore, water rights are granted by SBC - LUP through the Mining and Reclamation Permit. The Mining and Reclamation Permit includes Condition of Approval requirements for engineering and planning, as well as requirements to eliminate impacts to desert tortoises. We will be modifying the PoO to 270,000 tons per year of boric acid, which will require a modification to the Mining and Reclamation Plan. The Company has submitted and maintains a cash bond with the California State Mining and Reclamation Agency, as administered by SBC – LUP. The financial assurance cost estimate (“FACE”) is updated annually. The FACE includes demolition of all existing structures, regrading, and revegetation of all disturbance on private lands. This bond also includes plugging and abandonment of all wells located outside the EPA UIC purview.

The BLM issued a ROD in 1994, establishing the EIS boundary. The ROD authorizes mining of borates at a rate of 90,000 tons per year. The ROD also has requirements for company activities to eliminate adverse impacts to desert tortoises and cultural resources. We have submitted and maintains a cash bond with the BLM for grading and reclamation of disturbance on public lands.

The EPA retains primacy for Class III solution mining UIC permits in the State of California. The EPA issued the UIC permit for the Project in August 2020. The permit defines the Area of Review (“AOR”) boundary. All subsurface solution mining activities, including monitoring wells and injection wells, are located within the AOR boundary.

SSF Update

During November 2023, the EPA provided authorization to begin in-situ mining operations pursuant to a UIC permit and in January 2024, we began well-field injection and began extracting valuable minerals from the Project in the form of PLS. In April 2024, we commenced commercial operations of the SSF, began to process the PLS and ultimately produced our first batch of boric acid from the SSF. The SSF is designed to initially produce up to 2,000 short tons of boric acid annually and targets initial production of lithium carbonate, with optionality built in to scale up to a run rate of 9,000 short tons and commensurate increased lithium production with an incremental capital investment. Our operations team is currently working towards our next production target of three short tons of boric acid per day while we optimize product quality and production rates. The initial high-quality run-of-mine head grade of boric acid provided validation of our initial operational assumptions which we hope will facilitate discussions with stakeholders around funding options for the Phase 1 of the commercial facility and securing commercial contracts for our future products. We plan to continue to run the SSF to refine our operations, more effectively optimize detail engineering of our proposed large-scale complex, estimate capital expenditures required to build our proposed large-scale complex and to produce boric acid for customer qualification. Upon successful customer qualification, we plan to deliver larger volumes of boric acid from the SSF to customer production facilities for product validation.

Amended Initial Assessment Report

During the 2023 fiscal year, we released our Amended Initial Assessment Report, prepared in accordance with Regulation S-K 1300. We believe the report demonstrates a world-class resource, management’s firm understanding and direction for the business, and a phased approach to scale production, which can position the Company to achieve profitability, generate cash flow, and reduce risk. The Amended Initial Assessment Report includes a revised mineral resource estimate for boric acid and lithium carbonate, estimates for capital costs and operating expenses, and a bottoms-up economic analysis based on a phased approach to scaling production. The financial model for the economic analysis includes preliminary market studies and independent pricing forecasts for boric acid and lithium carbonate. As part of our Amended Initial Assessment Report, we engaged two external EPC firms to assist management with our capital cost estimate, which we utilized as the basis to stage a formal process to request proposals for detail design of the proposed large-scale complex, which was ultimately awarded to Fluor in January 2024.

The Amended Initial Assessment Report outlines three phases for the larger-scale facility:

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Phase 1 targets production of 90,000 short tons of boric acid and 1,100 short tons of lithium carbonate. Given the permitting hurdles and time to obtain final EPA approval and resource constraints in fiscal year 2024, we are now targeting to reach initial commercial production in the second half of calendar year 2026 or first half of calendar year 2027.

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Phase 2 and Phase 3 targets incremental production increases of 180,000 short tons of boric acid and 2,200 short tons of lithium carbonate in each phase.

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Full operation includes targeting production of 450,000 short tons of boric acid and 5,500 short tons of lithium carbonate per annum.

Plan of Operations

Upon successful development of the Project, we expect to mine and process colemanite and lithium rich minerals to produce boric acid, lithium carbonate, and gypsum. The boric acid produced is planned to be further produced into second, third and fourth boron derivatives. Initially, we expect to derive revenue principally from the sale of boric acid, lithium carbonate, and gypsum. As our advanced materials strategy develops, we intend to produce revenue from boron specialty and advanced materials further enabling decarbonization and defense applications.

The Project deposit is planned to be mined via in-situ leaching solution mining to recover borate and lithium from the mineralized horizons, which is a technique that has been utilized for several decades in the production of uranium, salt, bromine, potash and soda ash. The use of in-situ technology for boron extraction was developed on the Project property in the 1980s. In-situ solution mining depends on void spaces and porosity, permeability, ore zone thickness, transmissivity, storage coefficient, piezometric surface, and hydraulic gradient as well as reaction and extraction method efficiencies. There are various ways of developing the wellfield for in-situ leaching, including a “push-pull” mechanism where wells function as both injection and recovery wells; line drive; and multiple spot patterns. In addition to the vertical wells, horizontal drilling for well development is also being evaluated as a potential option for the Project. The mine wellfield development and the pattern will ultimately depend on the hydrogeologic model and the cost benefit analysis of various patterns and options as well as inputs on optimization efforts expected to be obtained from the continued operation of the SSF.

The recovery of boron from the colemanite mineral at the Project is currently occurring through in-situ mining and boric acid is being produced at the SSF. The in-situ mining method includes injecting a weak hydrochloric acid (“HCl”) solution (containing <5% HCl in substantially recycled water solution with regenerated HCl) through wells drilled into the colemanite ore body. The injected acid remains in the formation for a limited period of time to allow reaction with the alkaline ore body and leach the colemanite ore. Boric acid, lithium carbonate, and calcium chloride are then withdrawn from the wells as products of the chemical reaction.

The extracted solution is pumped to the processing facility where boric acid is crystallized from the solution to produce boric acid. The crystallized boric acid is dried, sized, and bagged as final product. Other boron products are expected to be prepared for market, as required, by end-use customers. Lithium and gypsum are expected to be recovered from the remaining solution after boric acid processing with the final solution being substantially recycled back into the resource deposit. Lithium is expected to be produced via conversion to lithium carbonate, while by-product gypsum after precipitation will either be dried and sold or stored in the gypsum storage facility for later sale. Within the processing facility, some HCl is regenerated from the gypsum precipitation process as a result of the sulfuric acid acidification of the process recycle stream. The weak HCl solution is combined with recycled water to produce the make-up solution for reinjection into the formation. The process operates a zero liquid discharge evaporator and produces no liquid waste.

Mineral Resource Estimate

In December of 2018, Mr. Louis Fourie of Terra Modeling Services (“TMS”) completed an updated JORC resource report for the Project. That report identified a Measured plus Indicated mineral resource estimate of 52.7 million tonnes (Mt) containing an average grade of 6.02% B 2 O 3 and 367 ppm of Li. This was followed in 2021 by an initial assessment report (the "Initial Assessment Report") prepared in accordance with Regulation S-K 1300 which utilized and verified the previous reporting, as there were no significant exploration activities undertaken on the Project between 2018 and 2021, although changes in the Mineral holdings did occur, and the mineral Resource was subsequently updated. Since 2021, there have been 13 additional wells drilled as part of a monitoring well and testing program. One well, IR2-01-01, was cored and assayed at the Saskatchewan Research Council (“SRC”), following the same methodologies as before. The data from this drill hole was quality assessed, and subsequently added to this Resource update, which has also been modified with changes in the mineral holdings as described in Section 3, as well as cut-off grade as described below. In May 2023, we updated and released an amendment to our initial assessment report with our mineral resources pursuant to the requirements of Regulation S-K 1300. Incorporated by reference as Exhibit 96.1 to this filing is a further amended and restated technical report, with a revised report date of February 2, 2024, report date of May 11, 2023, and report effective date of April 1, 2023 (the “Amended Initial Assessment Report”). The report was prepared by QPs including Company management and third-party independent companies TMS, Confluence Water Resources, LLC, Barr Engineering Co., Escalante Geological Services LLC, and Mike Rockandel Consulting LLC. All QPs have the necessary experience per Regulation S-K 1300 and material assumptions and information pertaining to the disclosure of our mineral resources, including material assumptions relating to all modifying factors, price estimates, and scientific and technical information, as described in the Amended Initial Assessment Report, remain current as of June 30, 2024.

Mineral Resources

Regulation S-K 1300 defines a “mineral resource” as a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, considering relevant factors such as cut-off grade, likely mining dimensions, location, or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.

A “measured mineral resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.

An “indicated mineral resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.

An “inferred mineral resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource considered when assessing the economic viability of a mining project must be presented along with economic viability excluding inferred resources and may not be converted to a mineral reserve.

Resource Assumptions

Key assumptions used in the economic assessment include in-situ leading mining operation delivering 7% boric acid in solution (head grade) to an above ground processing plant; cash operating costs of $686 per ton of boric acid produced; 92% conversion of boric acid in solution to saleable boric acid powder (recovery rate); 81.9% recovery of in-situ boron (extraction ratio), based upon a Hazen Research analytical report and a sales price of boric acid based on a forward-looking model from regression of historical pricing. A detailed financial model using a discount rate of 8% delivered a positive net present value to support the cut-off grade and more broadly the resulting mineral resource estimation.

Resource Methodology

The database used for resource estimate includes 34 holes completed by Duval, three holes completed by FCMC, and 15 holes we completed for a cumulative total of 52 drill holes and a cumulative sampled length of 82,994 feet. The database has been updated with the data from hole IR2-01-01 and is current. Drilling coordinates in the database are in UTM NAD 83-11, and depths and elevations are reported in meters. Borate is listed as weight percent (%) B 2 O 3 and Li as ppm. The drilling database contains 5,920 analytical values for B 2 O 3 and 5,082 analytical values for Li.

Core recovery for the 2017 drilling program ranged from 93% to 100% with an overall average of 97.60%. Core recovery records for earlier drilling conducted by Duval and FCMC are not available, but based on missing intervals in the drilling database, core recovery likely exceeded 90% in the core drilling. The QP, Mr. Louie Fourie, completed a thorough review and verification of the drilling database and found that reasonable care was taken to collect and dispatch samples for analysis and the database is of sufficient quality to support a mineral resource estimate.

TMS developed a gridded geologic model of the Project using Vulcan™ software. The mineralization does not correlate to lithological markers as the entire sequence is predominantly lacustrine mudstone. However, detailed examination of the analytical results reveals distinct mineralized horizons. The deposit was delineated based on these patterns of mineralization into four mineralized horizons, two non-mineralized or weakly mineralized interbeds and two non-mineralized horizons bounding the deposit. The grid model was constructed across the deposit area, with a grid cell size of 25 meters by 25 meters. Grids represent the bounding elevation surfaces of key horizons, thicknesses, and analytical grades. Mineral horizon grids were interpolated using an Inverse Distance Squared (“ID2”) algorithm. Mineralization is spatially defined by a resource boundary using 150 meters from the last intersection of mineralization in a drill hole. Grids are masked to the outside of the resource boundary.

Using composites for each mineralized horizon, variograph was successful for B 2 O 3 grades for the Major Mineralized Horizon ("MMH"), Intermediate Mineralized Horizon (“IMH”), and the Lower Mineralized Horizon (“LMH”). Variogram modeling was unsuccessful for the Upper Mineralized Horizon and with Li in all horizons. Grids representing B 2 O 3 grades for the MMH, IMH, and LMH were constructed using Ordinary Kriging using the constructed variograms. ID2 interpolation was used with all remaining grade grids using the same spatial limits established with the horizon grids.

Cut-off Grade

A 5.0% B 2 O 3 cut-off grade was previously established by Duval and was carried forth by TMS in their JORC resource reporting, as well as for the previous initial assessment. In the previous initial assessment, the QP indicated that the then-cut-off grade is conservative and that effective recovery along with detailed economic analysis will be needed for reserve estimation.

An in-depth assessment of cut-off grade was undertaken in the Amended Initial Assessment Report, incorporating the result of leaching tests, mining and processing costs, and commodity pricing. Elevated boric acid pricing has allowed for a re-evaluation of grade cutoff and the ability to address lower grade areas in the ore body. This assessment is based on assumptions in the financial model detailed in Section 19 on the Amended Initial Assessment Report (see Exhibit 96.1). The sales price for boric acid had increased to the upper $1,400’s per short ton as of June 30, 2023, and current forecasts and market studies are indicative of this pricing when the Project achieves commercial production. For this evaluation, boric acid pricing of $1,400 per short ton was used along with price forecasting based on work by an independent third-party. A similar methodology was applied for lithium carbonate prices and forecasts. The result of this exercise is a 2.0% financially viable driven grade cutoff, where the costs are near the forecasted price for boric acid. The geologic model used the 2% B 2 O 3 cutoff which has a Boric Acid equivalent cutoff of 3.55% H 3 BO 3.

Fort Cady Mineral Resource Estimate as of April 1, 2023

Results of the mineral resource estimation are shown in the table below. The resource estimate contains a combined 74.31 million short tons of Measured plus Indicated resources with an average grade of 4.15% B 2 O 3 and 356 ppm Li, using a 2% cut-off grade for B 2 O 3. Independent market research assessed the spot price of boric acid and technical grade lithium carbonate to be $909 and $9,979 per short ton, respectively, as of June 30, 2024. In August 2024, Fastmarkets relaunched its coverage of boric acid spot pricing, which indicated a July 2024 pricing midpoint of $1,065 per short ton. Our Amended Initial Assessment estimates prices for boric acid and lithium carbonate of $1,726 and $30,316 per short ton in the first year of production as discussed in further detail of Section 16 and 19.3.1 of our Amended Initial Assessment Report filed as Exhibit 96.1. The mineral resource estimate also identifies 96.90 million short tons of Inferred resources under mineral control by the Company with an average grade of 4.75% B 2 O 3 and 321 ppm Li. At this time, we have not yet established mineral reserves. Our Amended Initial Assessment Report assumes a metallurgical recovery factor of 81.9% for boric acid and 44.3% for lithium carbonate, and the reference point for the resource is in-situ prior to mining losses and processing losses. It is noted that these numbers are substantially different to previous reports, which is ascribed to the change in cut-off grade as detailed in the Amended Initial Assessment. Regulation S-K 1300 requires a current economic assessment to be completed which provides a reasonable basis for establishing the prospects of economic extraction of the mineral resource estimation.

Commodity Pricing Assumptions

Our Amended Initial Assessment Report includes an economic analysis, and we obtained extensive market studies for boric acid and lithium carbonate. The market studies include an assessment of future supply and demand analysis as well as forecasted future price assumptions, as further detailed in Sections 16 and 19.3.1 of our Amended Initial Assessment Report, which is incorporated by reference as Exhibit 96.1. Our Amended Initial Assessment Report estimates the price for boric acid to be $1,726 per short ton in the initial year of commercial production, escalating to $2,305 per short ton in 2031 due to demand outpacing supply of boric acid, and then increasing at a compounded annual growth rate of 3% thereafter when supply and demand for boric acid are expected to normalize. Our Amended Initial Assessment Report estimates the price for technical grade lithium carbonate to be $30,316 per short ton in the initial year of commercial production, decreasing to $23,770 in 2040 based on independent price forecasts through such year, and then increasing at a compounded annual growth rate of 3% thereafter. Refer to the tables below for a summary of the prices utilized in our economic analysis included in our Amended Initial Assessment Report.

The Amended Initial Assessment Report was prepared based primarily on information available at the time of preparation, is subject to assumptions, conditions and is qualified by various limitations. The foregoing summary description of the Amended Initial Assessment Report is qualified by the full Amended Initial Assessment Report, which is included as an exhibit.

Internal Controls Disclosure

The Amended Initial Assessment Report indicates that the quality assurance and quality control (“QA/QC”) procedures for the Duval and FCMC drill holes are unknown though the work products compiled during these historic drilling campaigns, suggests they were carried out by competent geologists following procedures considered standard practice at those times. Discussions held with the exploration geologist for Duval at the time of drilling and sampling indicate that Duval had internal QA/QC procedures in place to ensure that assay results were accurate. Geochemical analyses were carried out using X-Ray Fluorescence Spectrometry (“XRF”). XRF results were reportedly checked against logging and assay data.

For the database of drill holes, entire core hole sequences were sampled and dispatched by commercial carrier to the SRC for geochemical analysis. As part of the QA/QC procedures, internationally recognized standards, blanks and duplicates were inserted into the sample batches prior to submitting to SRC. SRC has been accredited by the Standards Council of Canada and conforms with the requirements of ISO/IEC 17025.2005. Upon receipt of samples, SRC completed an inventory of samples received, completing chain of custody documentation, and providing a ledger system tracking samples received and steps in process for sample preparation and analysis. Core samples were dried in their original sample bags, then jaw crushed. A subsample was split out using a sample riffler. The subsample was then pulverized with a jaw and ring grinding mill. The grinding mill was cleaned between each sample using steel wool and compressed air or by silica sand. The resulting pulp sample was then transferred to a barcode labeled plastic vial for analysis. All samples underwent a multi-element Inductively Coupled Plasma Optical Emission Spectroscopy (“ICP-OES”), using a multi-acid digestion for a range of elements. Boron was also analyzed by ICP-OES but underwent a separate digestion where an aliquot of the sample was fused in a mixture of NaO 2/NaCO 3 in a muffle oven, then dissolved in deionized water, prior to analysis. Major oxides were reported in weight percent. Minor, trace, and rare earth elements were reported in ppm. The detection limit for boron was 2 ppm and 1 ppm for lithium.

For the database of drill holes, a total of 2,118 core samples and 415 control samples were submitted for multi-element analysis to SRC. We submitted control samples, in the form of certified standards, blanks and coarse duplicates (bags with sample identification supplied for SRC to make duplicate samples). In addition to these control samples, SRC also submitted their own internal control samples in the form of standards and pulp duplicates. Certified standards, prepared by the National Institute of Standards and Technology, were submitted as part of our QA/QC procedures. No two standards in any single batch submission were more than two standard deviations from the analyzed mean, implying an acceptable level of precision of SRC instrumentation. SRC assayed two different standards, for its own QA/QC protocol and the QP found that the analytical precision for analysis of both standards was reasonable, with no two standards in any single batch submission being more than two standard deviations from the analyzed mean.

Blank samples inserted consisting of non-mineralized marble. One hundred and thirty-five blank samples were submitted, all of which had assay results of less than 73 ppm boron. The level of boron detected in the blanks was likely sourced from pharmaceutical (borosilicate) glass used during sample digestion. These boron concentrations are considered immaterial in relation to the boron levels detected in the colemanite mineralization and do not appear to represent carryover contamination from sample preparation. Lithium levels in the blank samples were also at acceptable levels with the majority of assays less than 15 ppm lithium. The four highest lithium levels in the blanks immediately followed samples that contained relatively high lithium concentrations. Overall, the concentration of the primary elements of interest (boron and lithium) in the blank samples were at levels considered to be acceptable, implying a reasonable performance for sample preparation.

A total of 136 duplicate samples were submitted to the SRC. SRC composed coarse duplicate samples using a Boyd rotary splitter. There was a good correlation between original and duplicate samples with a reasonable level of precision maintained in the results.

In the Amended Initial Assessment Report, the QPs made the following recommendations:

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Geochemistry: Completion of a long-term leach test with associated thin section mineralogy evaluation which will provide characterization, determine chemical variability, and aid in process feed chemistry.

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Geophysics: Additional geophysics (seismic, resistivity, gamma) and interpretation to determine 2D and 3D faults to assess risk and complexity of the deposit.

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Exploration and in-fill drilling: Drill six to ten holes in Section 25 and 26 to expand inferred resource and reclassify existing inferred resource to measured and indicated.

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Water expansion: Drill additional wells to further establish storativity east of Fault B and west of the Pisgah fault.

We expect to address these recommendations, as needed, as operation of the SSF and the proposed large-scale complex progresses.

Salt Wells Projects

In addition to the Project, we have an Earn-in Agreement with Great Basin Resources Inc. (“Great Basin”) which allows us to acquire a 100% interest in the Salt Wells Projects in the State of Nevada if we incur project related expenditures described below. The Earn-in Agreement with Great Basin provides for a 3% revenue royalty if concentrates or ore of minerals are sold in the future. The Salt Wells Projects cover an area of 14 square miles and are considered prospective for borates and lithium in the sediments and lithium in the brines within the project area. The Salt Wells Projects are located in Churchill County, Nevada, 15.5 miles southeast on Route 50 from the town of Fallon, Nevada. The Salt Wells Projects are within close proximity to the Interstate 80 corridor, which provides ample access to infrastructure including rail and ports. The town of Fallon has a population of over 9,000 according to the 2020 United State Census Bureau as well as a municipal airport. The Salt Wells North project consists of 171 mineral claims and the Salt Wells South project consists of 105 mineral claims, with each claim being 20 acres.

Surface salt samples collected by us from the Salt Wells North project area were assayed in April 2018 and showed elevated levels of both lithium and boron with several results of over 500 ppm lithium and over 1% boric acid equivalent. With our focus on the Project in California, we assigned our Earn-in Agreement with Great Basin to Osmond Resources Limited (“Osmond”), an ASX listed exploration company. The agreement with Osmond provided optionality for us to retain an interest in the Salt Wells Project while deferring additional spending requirements to Osmond in the near term. On April 16, 2024, Osmond provided us with notice of their withdrawal from the Salt Wells Project. To date, the Company has spent approximately $544,000 on exploration activities.

Available Information

We make available free of charge on our website, www.5eadvancedmaterials.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to the Exchange Act, as soon as reasonably practicable after we electronically file such information with, or furnish it to, the SEC. These documents are also available on the SEC’s website atwww.sec.gov. The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any of our other filings with the SEC.