5E Advanced Materials Market Update

0:04 Good morning, good afternoon or good evening, depending on where in the world you're logging in from. Many time zones represented today, so thanks for joining us from all across the world. I'm lucky enough today to be joined by Paul Wible, CEO of 5E Advanced Materials to discuss both recent developments with the company, but also give a view into the future for investors and prospective investors who are both here in the room and watching the replay. Paul, how are you today? I'm good. Glad to be here. Awesome. Let me do some quick housekeeping. This is how it's going to work today, just for the folks in the crowd. I've got some questions for Paul, based on both recent news and what's coming up. But it is an interactive event. I know some people have already submitted questions in advance over email. Appreciate that very much. But there is also a chat function at the bottom of the screen. Please do ask questions during the event, or you can also email them in. I'll keep an eye on those too.

0:50 If we don't get to your question for whatever reason, either we run out of time or it's a little off topic or doesn't quite fit, I'm still going to make sure that the theme team gets those questions afterwards, And they'll be sure to get back to you either on email or by phone, depending on what you put in during your registration. The only other 2 things I'll say is that this is being recorded and will be available for replay in the early, sorry, late afternoon, Eastern time, probably before end of day for folks on the East Coast. And also there's a request meeting button at the bottom of the screen. Please feel free to press that if you'd like to have an opportunity to meet with Paul or anyone from the 5E team. I'll make sure we connect those following this event. But Paul, let me get into the meat and potatoes here. The headline this quarter to me is the first off day of Keds agreement, a long-term deal with domestic industrial customer, 7,500 tons of boric acid a year with optionality all the way up to 10,000. So after years, I know you've gone through of qualification work, What does it mean to finally have a signed commercial commitment in hand? And why was this the right first customer to anchor your book?

1:55 Yeah, great to be here. It was good to get the monkey off the back. I bet. Yeah. Yeah, I think it's a major catalyst. The market likes offtake agreements. I think it's confirmation we're real. We've qualified multiple industry segments across various industries. I'd also say it was important, 1, because this is a large buyer of boric acid. There's more opportunity there. I think this is kind of the first what they felt comfortable. It also made logistical sense, just where we're based, cost to serve, relatively reasonable.

2:40 And so, you know, those factors went in and obviously there's a relationship aspect too, where our commercial team could get them comfortable. And I think it kind of sets the stage for more to come.

2:56 Oh, you're mute. I think you're still muted. I gotta embarrass myself once a day. It's like, It's the law of webinars. Once a day, you got to do it. But the structure I found notable of the deal, the fixed pricing with annual escalation, you got that five-year initial term and automatic renewal out to 10 years. So walk us through why you went for that shape rather than spot index link pricing, all these other options and what locked in revenue does for conversations with project lenders at this point? Yeah. So we have off-takes proposals of various shapes and sizes. The structure though, at its core, the principle is about bankability. The reality is, is you talk to lenders, they're going to say, how are you going to mitigate price and quantity in your off-kick agreements? How can we model revenue?

3:47 And so the simplest way is actually fixed pricing. And I think that comes in, you know, bankability comes in various shapes and sizes from at its simplest form of a fixed agreement, cost plus, or you can index to a certain benchmark with a floor or potentially collared that has a ceiling.

4:12 And so, for this customer, this industry, this made sense. It obviously has the annual escalation, which is good because obviously what you do see in reagents, especially, you know, hydrochloric acid and traditionally sulfuric though, that's been an interesting conversation in the market today, but they tend to go up in inflation. So you can lock in and really model and underpin a debt financing. One of the other proposals we have out there today is actually, you know, the boron market's very opaque. When we first started approaching customers, they would ask for market based contracts. And, you know, I'm like, well, what's the market?

4:59 Well, it's the proposal that the other 2 players in the oligopoly who have already spent their capital are offering. I'm like, yikes, that's not going to work. I mean, what China is to rare earths, Eddie Monning can beat Devoron. And so, you know, we need to mitigate price and quantity. And so what we've actually done too is we just, FastMarkets does provide a West Coast FOB benchmark price. We've kind of walked customers through that. We've vetted their price. It's pretty close And it's not gonna be perfect, but I think what they're gonna do a very good job of is capturing a trend. And sometimes maybe a customer's procurement team could do better or worse than that benchmark. But I think over time, it's gonna be relatively reasonable.

5:46 And the proposition we've kind of made to other customers, and this was a big theme of the roadshow, is kind of walking them through 5e and also like what we would envision a contract structure looking like, has been, listen, I think we would propose a fast markets benchmark. We talk about the trend, it'll capture that. In turn, what we would propose is to establish bankability as a floor price. And listen, if that floor price, if the price would go below that floor, they would have to pay that floor. But in exchange for that, we would offer a ceiling price. And listen, if boric acid prices go to 1,500, 1,400 a ton, 1,600, which supply and demand definitely is a big driver of pricing and utilization.

6:39 You have a great contract because you're capped at a ceiling price and relative to your competitors, you're gonna make a lot of money. And at the same time, you're going to introduce a third supplier into the market by giving us a bankable structure.

6:56 And kind of given what we're seeing in the market today from just actually a supply and demand that the deficits here, at least in the US, people say that's fairly reasonable. And so it's only been until kind of back of last year, kind of this year, that we've been able to really kind of soften ground and make that progress where people are amenable to these structures. Sure. Hey, it's been so long people talk about the incoming deficits, but they've arrived. You know, so it does make the conversations. Yeah. And I do want to talk about the roadshow that you were on in March. I'm going to ask you to do some crystal ball gazing here, so bear with me. I know you met with a dozen or more industrial Boron customers and distributors.

7:45 Where does the broader pipeline stand right now? And how many, again, ballpark, crystal ball gazing, how many of those conversations do you realistically see converting to binding offtake over the next year or so? Yeah, I call my commercial team daily. I'm like, what's the status? Yeah, where are we? What's up? Yeah, I think the first thing to know is like, there's general consensus. Customers want a third reliable US domestic supplier. Americans tend to be very reliable. And it's a very secure jurisdiction here. So that's a common theme and a trend we saw with all the customers. I think sometimes like always price does matter.

8:32 And we've been very good with thinking outside the box creatively on ways to bring value to each specific customer that all of a sudden says, that's a really good idea. That's something we should pursue. So I think, listen, there was 12 customers,

8:52 kind of a various shapes and sizes. We probably have 6 active proposals in the pipeline. Yes, it is 6. And I'd say 3 are very close. Like they're like, through legal review, like I'm waiting on nominated volume. So like, there's, we kind of are close to or I've had their proposal back where I'm like, I would really like this in there. And we have approved templates, we're kind of leading with that. And then listen, everyone has really kind of marked it up kind of for what's comfortable to them. And okay, we go back and forth and it's a negotiation. And we kind of get to a meeting in the minds, but there's 3 that are very close That you know, I continue to talk to him to mark and a commercial team and it's like alright like what do we need to do and I think it's They're coming this is gonna be a big theme for 2026 We knocked down the first and there's more to come. Mark was in Asia last week, out of the Asia trip.

10:02 Now we have a much more diverse portfolio of Bori products than just the tour gap. When we can talk about meta in a little bit. And, you know, I think 6 customers, here's what they ordered on the menu from a sample size, here's the contact, here's their phone number, here's the address, and let's get this out. So that'll kind of, listen, Asia's going to be a little slower. I think they'll, the commercial team went over there. Again, similar conversations to what they saw on the US trip, where again, one another supplier, there's concerns. And I think the plan will be another visit towards the back end of the summer after they've digested, done their analysis on those samples.

10:57 And then you can kind of hopefully expect a similar progression where, okay, March, mid-March, we were on the road. Mid-May, 2 months or so, you start knocking down some of the Asian customers. We also did engage one of Mark's former colleagues at Rio. It's actually, you know, it's more domestic base and we're calling North America, but it's a segment we actually have not targeted. Again, like I wish I could be more transparent from like, the customers in the industry, but we're trying to break into an oligopoly here. And you got to just kind of hold your cars to the vest, but progress is being made. And I think that that's a big industry segment because Mark's an industrial guy.

11:48 That's at Rio and Eddie, when he was there, that was his kind of bread and butter. And now one of his former colleagues has a whole different sector on the Boreit market that there's very large bankable customers as well as ultimately size. And I think we're just looking for a piece out of the gate. We don't need all supply. It's 130,000 tons in the model, it's 90,000 in year 1. So you can kind of see It doesn't take that many customers to start to build a substantial portfolio. I appreciate that. I want to kind of zoom out for a second and talk about Boron generally, because I know we've even discussed today, but I know you've spoken generally about the domestic boric acid market slipping into a pretty serious supply deficit. I'd love if you could just help investors in the room understand what's driving that first, and then how much of a tailwind, a kind of tightening U.S.

12:45 Market is for a domestic producer that isn't even in production yet. Yeah, really interesting time in the borate market. Obviously boron was added to the critical minerals list in November last year. We kind of foreshadowed that occurring.

13:06 Once it was added, you really had a couple interesting fundamental shifts. And I can say like, I do applaud the US government because relative to some of the other minerals, where they're adding things as critical and acting kind of on the back foot. At least on the boron side, like I would have loved to see it added 3 years ago and that would have gotten an A plus rating. I think you still get the B rating. Like it's still really good that it's added now. The deficit's kind of here and you got a 5E project that can be a near-term solution. And I think we're a bit more on the front foot than the back foot. So I think that was a big positive. But I think, all right, so you've always had, we talked about this oligopoly. And so the second largest global producer is for sale right now. That should conclude here, I don't know, in 2 months or so.

14:06 From what I hear, the process is moving along. That customer, they're not expanding. It's a depleting asset And they kind of are who we thought they were. They produce they're very, very great producer. They are 25 percent of global supply and they definitely and they produce their half 1 million tons of oxide. But there's no expansion coming. Right. That's 1 There's always been another much smaller producer in California on Borates. There's a soda hash primary producer. And listen, It's a shame that there was an earthquake damage and then ultimately COVID and just kind of a tale of unfortunate events and really compounded by the soda ash markets long and China supplying some very cheap soda ash. And that has caused them just they can't compete on a cost curve so they've they're restructuring the business in the sense that they've exited soda ash and then also boric acid they're gonna continue you know there's a couple of different refined borates sodium borates is one of them It's more of the commodity of the boards, but they'll produce that but not boric acid And that was about 55 to 60 000 tons and they were predominantly supplying in north america and This is all public and they they exited And we saw on our supply and demand

15:37 analysis, 2025 was kind of the year of parity. It was always like a little, because it's just such an opaque market, 24, 25, we're like teetering on, is there excess supply, excess demand, deficits?

15:52 And once they took their 60,000 tons out of the market, the full deficit was here. And what we saw was customers scrambling for challenging South America product or begging Eddie to supply them. And listen, I think it's like people scramble it. And in that point, it's like, well, what's the price? Like, cause there's really like, where's the bid and the offer. And when you're in a deficit, you know, price discovery is really interesting. And so I think that, you know, and what we've seen now is like, it's a little tight in Asia, but like, any of the large Asian customers are contracted, they really weren't buying from this domestic producer.

16:42 And so what the anticipation is, and this was really kind of strategic on why we sent Mark over to Asia now was that boric acid and boric contract negotiating season for 27 starting. And so massive like ripples and waves are hitting US markets while customers are scrambling, but Asia was kind of relatively insulated. And as you go and renegotiate and contracts are up, what's going to happen is those ripples are now going to hit the Asian markets because, listen, those existing producers, they're 60,000 tighter on utilization. Their utilization went up. And so that drives higher pricing, that drives a tighter supply and demand.

17:33 And so I think that bodes well for what we have going on in Asia. And so that that was the big driver that really pushed it to deficit. Also, you know, now you see Boron getting more coverage. Project Blue, which is actually like spun out of the Wood McKinsey-Roskill group. Okay. They actually do have a, they've reinitiated their Boron coverage. They had a fantastic 2015 report, like 350 page report, detailed it. And so we had a call with them recently and There's like and these are like some of the best market research teams and like the deficits here on their radar. So I'd say it's I think like it's it's definitely the year of Boron.

18:24 There you go. I want to zoom in on 1 thing because the meta Bork acid product for you guys seems to me come out of basically nowhere this year. Roughly 80% boric oxide equivalent with a provisional patent already filed. What's the customer pull on that material specifically? And how should we think about where it sits on the margin curve versus standard granular boric acid? Yeah, we're excited about that. And I think they're similar to the meta, like there'll be some more products that kind of come out of that technology package that we've been working on.

19:07 Listen, a lot of customers, and it's not all, but they strive, they seek higher B2O3. And so, just from a basic molecular level, boric acid is actually 3 hydrogens, a boron molecule, and 3 oxygens. Boron oxide is just B2O3. So when you look at a specification, Boric acid is actually quoted as 56.3% B2O3, and at the molecular level, there's additional water molecules with hydrogens and oxygens. The boron oxide is an anhydrous product, i.e. Less water molecules. Customers pay a premium for boron oxide, typically about 3 to maybe 4 times the price of boric acid.

19:57 They're compensated for additional capital spent to drive off the water. What certain industries do want, specifically LCD, textile, fiberglass, Pyrex, they want higher B203. But, again, they may be price sensitive in that they would like a higher B2O3, but they don't want to pay for it. And ultimately what we've seen is that, and this is a product that we created. We, we, there's some literature on it, but ultimately, we kind of questioned like, why isn't this in the market? And the reality is, is actually the 2 largest producers. They produce the bookends. They make boron oxide, which is pretty capital intensive and they also make Boric acid there's no reason to have an intermediary They can charge the higher price for customers that want the 97 98 percent b203 or our con boron oxide And so we've been able to get there to add a metaproduct, free-flowing, meet specs, and samples are out to customers.

20:59 And Listen, at a very minimal basis, there's a stoichiometric value. If a customer really wants the B203 content, they can in turn, if they procured an 80%, they can use less product. So in theory, there's a parity point on a B2O3 basis where they'll just pay a higher price because it's the same price as boric acid, relatively speaking, on a 80% basis.

21:34 They're buying less tons. So that provides a higher price point. Additionally, you're shipping more valuable boron, so your unit economics can get better on a shipping basis. Additionally, and so like you have actually 2 opportunities to convert customers. You have your traditional people that are buying boric acid but they would like a higher B2O3 product, fine. You know, you can come up with that stoichiometric price point On the low end coming up from boric acid, but then let's assume boric acid sells for 1000 dollars a ton Boron oxide will use a simple analysis where it sells for 3 times the price of boric acid. So $3,000 a ton. Someone who's buying boron oxide, maybe they would like an intermediary product, right?

22:29 They found out that their manufacturing process does better with higher B2O3, but there hasn't been this intermediary in the market. Also, maybe they're really sick of paying 3 times the price. So you can take 3000 times 0.8, right?

22:46 I don't have my calculator, but that is maybe $2,400. And all of a sudden you have a ceiling price for boron oxide customers. So now what you've done is you've taken boric acid at 1000, boron oxide at 3000, and you're maybe have a spread of 1400 to $2,400 where there's value potentially to these customers and you have higher price points, you can start to contract that. Really, really novel and innovative. And it was really important to file the patents too because we don't want anyone else to do this. And so, yeah, I think there's, I think that can kind of give you some indication on like what the margin is because you have some somewhat price points how I'm thinking about it. And yeah, there's going to be some incremental opex on the energy side, but Like, listen, we get the PFS and in the economic analysis, what is the biggest driver to the model is actually commodity price.

23:56 And so you creatively through this technology, get to a better product that gets us a higher price point. And it's going to be a creative economics. There you go. And then kind of other direction. I'll throw you for a second. I know a recent announcement highlighted a lithium PEA because your PFS included a LC lithium resource, but no reserve because it was not included in the economics. Can you help explain what drove the update for the lithium PEA, just for folks in the room?

24:29 Sure. Listen, we've always had a lithium chloride in our solution, and it ranges from 40 ppms up to 100 ppms in solution. And when you kind of when you extrapolate that on a mass and energy balance, it's about 500 tons a year at 130,000 tons of production. Obviously if you can hit some higher areas of lithium, maybe you get to 150 ppms, but that's the driver of your output in quantity. And so when we were starting the pre-feed engineering phase that led to the PFS, we actually had a very

25:13 good, robust discussion and intentional about, do we include lithium in the scope at the time? The reality is, you've got to produce about 130,000 tons of boric acid, 130,000 tons of gypsum, like serious logistic aspects. The 500 tons of lithium, man, this is interesting and it can be a creative economic, but like, that's not our core business out of the gate. And given we're dealing with aqueous chemistries, you can always add a valve or a slipstream and bolt that on the back end. And so, and also at the time, the lithium market got beat up, prices were $9 a kg, and it just was like, this isn't high priority. So fine. And now we're at a point where the business is simple and a lot of emphasis on the offtakes in the commercials.

26:08 And so our technical team had some capacity. One of the other things we did was we included some solar EVAP ponds in our design. We do have sodium, which is salt that is not very, listen, you can sell it, but it's just not a huge economic driver. And there was about $45 million in kind of our initial CapEx

26:31 for specifically evaporation or evaporator equipment and total installed costs for the sodium. And I'm like, guys, this is just, we can't be spending this, we gotta find another way. Listen, we're blessed that we're in high desert in California, which is very similar to the Atacama, that solar EVAP ponds are a very viable technology path. And so we included additional 5 ponds. Listen, there's nothing contentious about this. It's actually like the back end of our process. So you're really just removing salt water and just letting kind of the sun take out the sodium and where sun take out the water and so you get a remaining sodium and then that gave us some optionality to make a liquid calcium chloride. And so we put that into the design and so we came back now to floor and we said hey Okay, DLE technology has actually like made some strides from it just a technical readiness Perspective and we have this lithium chloride. Let's kind of do a trade-off of potentially 2 or 3 options. So it was DLE adding a sixth pond, pretty small too.

27:43 And then we also looked at potentially would we sell a liquid stream if we had a counterparty but that was a little bit more difficult the price and the focus really came in to the DLE versus the the solar evap and I mean it just made and we've kind of used the $18 a kg we're seeing today in the market

28:08 as kind of our base case. We have real prices on what we could procure commodities. We know the CapEx and listen, there, there, and that's what Florida did. And it's one additional pond plus some equipment to make a lithium carbonate. We think we have actually all the equipment predominantly today. While the CapEx is in there, it's already sunk because we can repurpose small-scale facility and it's a sixth pond. And really like inexpensive and very proven technologies. Listen, it's definitely not fast. You won't get it right away. There's kind of a 2 year period where you gotta build kind of flow in the ponds and let it build up and so you can evaporate. But it's how they do it in the Atacama and you ultimately are like a very low cost producer on that byproduct then.

28:58 And it kind of at $18 a kg kind of equates to a $50 per credit towards Bork asset at 130,000 tons. And that's nice. And it's really pretty nominal capital that we're going to have to deploy. So we kind of did it. It was pretty inexpensive before and was a bolt-on. And kind of similar to what we're, while we're kind of progressing commercials, really focusing on with

29:27 the meta and potentially Ferroboron. Yeah, and I actually, I wanted to get into Ferroboron actually, because I know that does have the market's attention to some degree. For people in the audience who know you as a boric acid story, can you explain what magnet-grade Ferroboron is and how it fits into the neodymium-iron-boron magnet supply chain? Just because I think most investors probably don't know that backstory. Sure. And so like 5E stands for the fifth element and advanced materials is ultimately from a boric acid product, you can make various boron derivatives. And it's always been a medium term, like a longer term vision of the business.

30:13 And we are at a point where the network's grown and we can start to do a little bit of R&D that's actually not very expensive. And, you know, the big, the first, so let's talk like the basics, a neodymium iron permanent magnet, i.e. What everyone in the government's talking about, the rare earth permanent magnets. Those magnets chemistries are ND for the neodymium, Fe for the iron and B for the boron. The rare earths are in the manufacturing process combined with the ferroboron. They don't take iron and they don't just take a boron. There's actually an intermediary step which kind of we're doing the r&d on and it's it's actually not that novel of a technology, well known to get the ferroboron, right?

31:11 And it's a aluminum or a carbon thoric reduction in an arc furnace. And that's how it's made. Now, we don't know the exact process, the baking time, the temperatures, and that's what we're fleshing out. But the reality is no 1 in the US makes ferroboron and that creates a supply vulnerability. In fact, most of it does come out of China and there is Japanese production, but this really kind of came on our radar as the commercial team was received an inbound from a Chinese ferroboron manufacturer and they're looking to scale up to 4,000 tons a month of boric acid.

31:58 I'm like, wow, that's a sizable contract. Vicious, yeah. And that's 48,000 tons a year boric acid. And I'm like, okay, we need to, we need to learn more here. And so we did. And then we were talking to a couple industry folks in the rare earth and magnet space. And they kind of said, like, listen, we can buy Japanese Ferroboron, or we can get Chinese Ferroboron. Like that's obviously frowned upon if you're looking to make secure magnets. And we have a need. And so I said, okay, like, so it was like, okay, this is, and we know it's growing.

32:44 It's, I can't go onto LinkedIn without seeing something about magnet taggers and supply concerns. And so we kind of went down that path. And as we started to also do additional homework and research,

32:57 the barrier to entry is actually, it's the B. So that's our core competency. And if you think about it, what I expect is ultimately if you can vertically integrate and this isn't like I think we need to do the R&D and then there's prospect to then kind of start from the bench in the lab and then go up to some level of pilot or make larger quantities. And we have multiple specs for the magnet grade. And the major difference is It's a lower carbon ferroboron to go into the magnet because also ferroboron goes to steel and that's the much bigger market but the magnets are very much growing. And so I think that, you know, long-term like our cash cost is our input cost into that workstream.

33:50 And so you can have a competitive advantage there. I don't know if we will compete. I need to do some, obviously, as we work through mass and energy balance and get those details, we can start to model it out and we'll do the market analysis to understand where people are on the cost provided by China. But I think the value proposition is what 5E can provide is a domestic reliable, fully mine to magnet on the Ferroboron piece, iron is readily available in the United States, and kind of round out the domestic supply chain and we can be a much more reliable supplier relative to the Chinese. And I think still like very competitive because it's our cost, our cash costs coming in on the import side.

34:42 And so I think that's exciting. And I also think there's whispers where, you know, I saw it from another CEO's, I was on his distribution list. There's kind of whispers China may just like cut off reverse. And I've heard whispers that that could also be the Fariborne side too. And so, you know, like there's a reason they got it right and they added Boron as a critical mineral. It just wasn't about boric acid. It was about some of the, definitely the derivatives that are in there as well and what China dominates. So yeah, I think It's a very interesting and exciting work stream we have going on. No, and I'm going to stick to Ferroboron because I think the strategic case is kind of obvious. Like you outlined, the US doesn't produce it domestically.

35:29 The supply chain all runs through China, which is tightening export controls. It seems like every month they're stopping the export of something new that America unfortunately has relied on. So I guess my question, just as an add-on to what you just went through, how quickly could 5E become a meaningful domestic source of ferroboron? Sure. And I have my government affairs team like pestering me to go take this to Department of War now. And, and like we've So we've done the testing in the sense that we've dialed in parameters. And this month, we will actually, like the lab space is rented, like we're gonna take those parameters and work on the reduction.

36:18 And so I think if we can provide successful samples Then you would look to in the fall Make a larger quantity that we could say you can put this in trial this in a magnet production, make a magnet with it. That's the goal. I would rather have the conversation with the department of war where here's my samples. Yeah. Take a look. Here's the spec we've met. That's a much more powerful, we've done the R&D because then I would expect, it's like, okay, wow, great. Can we, how can we help?

37:05 Yeah. No, Yeah, that's a good framing to come in with. So sorry, I appreciate you going on my flight of fancy with Ferro Bronze. I just found that element so interesting. I want to talk about the balance sheet for a second, because obviously you closed $36 million in February, more than 4 times oversubscribed, and then added Jonathan Siegler to your team, to the board. With his project finance background, and I know your ongoing interactions with Exum, what is his arrival, or What should it signal to investors about how you intend to fund a heavier capital phase at Fort Kady? And what do you expect to be debt? What role could federal financing play? Any information you can give on that? Yeah, listen, that last, the offering was 4 times over subscribed.

37:53 You know, it was an S1, so it was like, those are hard deals to get off when you're public. SEC has actually changed the rules that we could, you know, that would have no longer be the case if we did that now, which probably would have been better pricing. But I think like, listen, it definitely shored up our balance sheet, put us in a really good position. The goal is not to have to come back to the public markets. It's to really kind of focus on the debt piece and building the relationship with XM. And additionally, if there's non-dilutive aspects, other grants we've applied for, We can touch on that in a little bit if it makes sense. And this is why the offtakes are so important because the stronger they are and the more they mitigate price and quantity, the more we can actually take on debt. And ultimately, listen, I think that usually the 1 point when you talk to the lenders, it's kind of a 1.2 interest coverage ratio they're going to target to look at.

39:01 And to the perspective, you have a fixed price offtake or you have a floor price, you can really get a good sense of what the revenue is going to be like behind those contracts that ultimately can validate and get a lender comfortable on the coverage ratio. And so like, listen, XM can loan up to 80% of a project, but like the interest coverage ratio needs to make sense. So that's why, especially as we look at some of these higher priced products on the meta side, that's really important. And ultimately a potential lithium carbonate credit helps us get more competitive on the cash cost. So I think we would target as much debt as makes reasonable sense on we can maintain those coverage ratios and that's driven by the commercials.

39:53 And then, listen, I think what we're seeing today is the, like US governments are investing in companies. We submitted a grant application and there was a question that was like, would you be open to including the government on the capital stack? We do have, Listen, we've had proposals for royalties. I think what I'm very sensitive about is your royalty, if you're gonna do something. And especially having a lithium stream, you could potentially royalty off of that as well. But you would look at, you don't want to mess up your project finance because royalty tends to be a, you know, that'll get recorded in the county and it'll sit on your deeds or your BLM claims.

40:48 And you just sometimes the language of a royalty agreement can cause lenders to have pause. So I think we want to really progress on the debt side and in any kind of optionality as a last and top up on a potential royalty as well. Like there's an option for that. And then I think if there's any equity deficit, you would, you know, like we plan to have meetings with the OSC. I think we're waiting on a DOE grant. So, you know, that would open if we win that we would target like in the in the grant agreement, like have that conversation because it's it's it was in their know-how. And so I think, you know, the goal was to do a bigger race so we can mitigate the possibility of coming back to public markets.

41:35 And I think the goal would be the agency debt. It is a really cheap form of capital and we're building that relationship with XM and that's important. And it's ultimately cornerstone on the offtakes. Yeah, there you go. So I want to next just try to pull a lot of these threads together if you don't mind. So between the offtakes, the MetaBork asset, the Ferroboron program, the financing pieces, what to you are the specific boxes that still need to be checked before 5e can take that final decision on Fort Katie? Yeah, The business is pretty simple. The focus is commercials and a little de-risking on the wellfield side.

42:24 We're going to test a jet pump here. We've done it on the bench and it looks good and we'll put it down well. But it's really building the commercial pipeline to go into feed because if you're going to go into feed, you're going to build something. And Additionally, you need confidence that there's customers on the other side of feed. So if you raise the debt and you put steel in the ground, when that steel is constructed, you have a product that customers will buy. So that's, and candidly, like I had not, like Mark's fantastic, has great relationships, but a lot of the focus of the business previously was on a bit of the de-risking and capital raising at times. And that raise ultimately did open up the door that I can kind of go arm and arm with Mark and really focus on the commercial aspects of the business. And I, you know, so if you think about like, I started really focusing on this 3 months ago and like, we're, here we go. So we're, this is, this is the big, This is what needs to happen is the commercials. And I think they're massive validation and it's definitely great catalyst as well. Listen, the other thing is what's

43:56 interesting on the meta as well as potentially Fairblonde, but we got to progress that. It's not quite as far as meta. But, you need the toll. Like we have various samples out to customers now where they're being shipped after the Asia roadshow. And listen, I mean, you need a contract, you need supply, but there's traders out there. So there's actually potential. We're looking at more nearer term cash flow opportunities on some of the meta side. So that's something where we're lifting many stones.

44:42 Great. Last one for me and then we'll jump to some of the stuff that's coming from the audience, a lot of which we've already covered, so it should be pretty speedy. But I just wanted to zoom out and take a look at, you know, looking forward a little bit, because for an investor looking at 5E today, and I know there's some folks in the room, this is their first time looking at the 5E story. So today versus a year ago, what's the single biggest thing in your opinion that's changed about the risk profile of the story? And what catalysts can you point to that folks in the room should keep an eye on in the next 12 months? Like 2026 will be the year of offtakes. So that's the big catalyst on the horizon. Listen, we did apply for a DOE grant as part of Minds of the Future.

45:31 I mean, it's going to be competitive, but it was a sizable grant. We thought we'd know by the end of February. It's going a little slower, but I think it's definitely, we've kind of heard whispers it's under review. Don't know the exact status, but if that would be a major catalyst, it would be, It's a decent amount of non-dilutive funding. I was like a 60-page grant. I mean, we spent our Christmas writing. Yeah, and I think, listen, it's just a simpler business now. We know it's de-risked predominantly and it's been done at a decent size. And the market has turned. So there's a need for that reliable supplier. And it's taken us a little bit of time to get there, but it's here.

46:25 So I think next 12 months is a big focus on the commercials. Great. No, I appreciate that. Getting to some stuff that's been asked by the audience. 1, they asked about other federal or state grant applications or non-dilutive funding efforts. You've already touched on it, but if you've got any other additional comments on status of those or whether any awards are likely to materially reduce the need for equity financing. I'll let you give another go, but I know we've already kind of covered it. So just if you have anything else to add. That DOE award would potentially materially reduce any need. So that, I mean, super, it's a home run. I mean, we are monitoring other grant opportunities. There's actually 1 that got dropped yesterday. It's I mean, it's it's interesting.

47:13 It's a white papers would be due in 15 days, we can actually take our existing application and kind of repurpose that into that. And you would find out on your white paper pretty soon, and then you would have to submit a formal application. And if you get moved on from there, you get invited to pitch at a conference later this summer. Okay. And like Shark Tank. So it's an interesting way. It's a bit unorthodox. Sure. But interesting. So we'll see. I think we're going to, we'll apply and we'll go through that. So we're consistently working and I know Kurt's been in DC and will be in DC this week meeting with another agency that we're talking non-dilutive.

48:08 It's always on the radar. Great. Appreciate that. I just don't know if somebody asked, so good to reiterate. One person asked just a quick question and they can look up your disclosures and I'm sure that's the number you're about to quote. But somebody just asking current treasury of the company as far as last reporting. I think $25.3 million and listen, I think we target like having kind of burn, We're still operating in pilot, but we target 1 million dollars a month. So like the benefit, you know, there was a point where the small scale facility was operating 24-7 and like we're a much smaller team now. We kind of have adjusted. And so it's a much more reasonable burn rate today. I think, you know, our Maxim analysts, we surprised them with this last quarter and will continue to really, you know, kind of be stewards of capital on the burn.

49:07 I know I do see one question on the permits and like I get so we we got a record of decision in 1994 that basically gives us the ability to operate on the federal land that surrounds our real property. We have State of California and San Bernardino County approved a mining and reclamation plan and use permit. Also in 1994, that's how we operate today actually, and that's our licenses to operate. So the permits are very real. Obviously, you'll have some ancillary like, so those are 2 of the big permits. The other major permit is our underground injection control permit with EPA. We've received authorization to operate. And so like the demonstration plant we operate today is really licensed under those permits. Now, there's other like ancillary permits, not major mining permits, air permits.

49:54 We have all that. Again, we'll pull some additional permits. You don't do that till feed when you actually understand every piece of kit that's gonna go in there. And those specification kit, spec sheets on the kit has actually the NOx and the SOx emissions. And then in turn you will, you go apply for the permit, very high degree of, there's no reason we won't get them. And then obviously we included in the scope, solar EVAP ponds, we will, we've had conversations with them, with the water board. There's nothing contentious about this. Even the water we produce, it's actually a closed basin. It's brackish, like shaggy water. So like it's not going to any groundwater. We have, you know, water is adjudicated in California, like we've been demonstrating to you, so it's for us. And So like we'll put those solar EVAP ponds, not going to be a gating item. And, you know, that will actually now that we've included a sixth pond, the application will get updated and it's pretty much ready to go. And it's a couple of a couple months process.

51:00 It's you know, California gets a little bit of a bad rap, but I think when you're in San Bernardino County, it's a good county to be in. Sure, yeah. It seems like a pretty clear ride. Now, just before we get into the last 2 questions from the audience, just want to remind everybody, because I know there's a lot of you in the room, there's a request meeting button at the bottom. If you would like to meet with Paul or the 5e team, please do hit that button. I'll try to get you guys connected following today's event. Robert from the chat asks one of those questions that's tough to answer, but I'll throw it to you anyway. What's the anticipated average contract size? If you had to throw a number on it. Yeah, I think we target price points that are in our PFS. And so that that's obviously, we've had to think outside the box and kind of be creative with with some of that stuff. But that's that that's kind of look at the PFS and you can kind of see where we we need to be.

51:47 Because all the commercials are kind of all underpinned by like what's going to get us to FID. And listen, I think from we will, we're not going to be where we have like, you know, 2 or 3 or 4 customers, like we're going to have a portfolio of customers. And I could very realistically see a scenario where probably targets 25, maybe it's closer to 20 or it could be as up as 30. Some of the distributors are smaller, lower tonnage, but they're good, reliable customers. And so I think you would have this diverse portfolio across various industries, definitely meeting export nexus. And in turn, you're gonna have a diversification of a combination of various contracts that some are fixed, some are collared.

52:38 And then you would obviously have some portfolio in there for just spot market where you can take advantage of what we think is going to be a higher priced environment because that's driven off of supply and demand. I appreciate that. Last question, we've already touched on it, but also this is people's last opportunity to ask a final question if you'd like. Well, Paul answers this one. Todd just wants reiteration, what's the status of financing the exit loan? Yeah, so the big loan, for me, a large project finance, we'll have a check-in at about 25,000 tons under contract with counsel for project finance. And then for me, my gut says at 50,000 tons, that's when you should apply for a loan. So that's a KPI for us.

53:32 Perpetua just got their loan. We've been talking to XM to start to get them familiar with the project through a smaller EMP loan. Because I think there's a relationship aspect that's really important here. And also it gives people in XM the ability to familiarize themselves with the team, as well as the project and and kind of some of the technicals. So that that's, for me, that's like the target. Obviously, there's 7500 tons under like more is going to come. And I think that because that's those are kind of like what I have in my mind, but again, it could change. As you think about it, maybe it's less because like in first year production, you're really probably only going to produce 90,000 tons of 130, because you've got to kind of scale up and work into that.

54:27 And so, You know, I think you have some of, there's still obviously very large customers, specifically out of Asia that have multiple plants. And the way I'm thinking about it is that you could potentially, obviously you want to get closer to 130,000 tons. And as you're sequencing that, what we're talking to about for some of those customers is like, okay, in year 1, this plant, in year 2, I need that plant. And so you start to be very strategic on what's that kind of revenue lead sheet look like. Awesome. Well, Paul, thank you so much for letting me grill you on a recent history of the company and going through some of the recent news. Everybody in the audience, I know there are a lot of you, thanks so much for joining. If you do have additional questions, you think of the perfect one to ask right after the event ends, so often happens to me. Please do send it in, I'll make sure that the 5e team gets it and gets back to you. But Paul, thank you very much. I think this was very informative and thanks everybody for joining.