Good morning, everyone. There's a big difference. Okay, now I can kind of bring this lower. Thank you all for coming. As per tradition, I usually open up the first company in Track 1. We're celebrating, I mean, I'd like to say that I started in 1996 and it's now 2025. The first event was back.
Alrighty, good morning everyone, welcome. I'd like to present our first speaker today. This is Paul Weibel with 5E Advanced Materials.
Good morning. My name is Paul Weibel. I'm the CEO of 5E Advanced Materials. Ticker is F-E-A-M, FEAM. 5E is a development stage exploration project focused on boron. We'll talk through what is boron. We'll talk about the supply and demand. FEAM ultimately sits on the third largest deposit of boron in the world. We're located about three hours north of here in the central Mojave Desert. We just completed a pre-feasibility study this August. Robust economics for first phase of production, $725 million NPV. We have about 22 million shares outstanding, so what we're seeing is stock accrete to that NPV value. We're about pre-PFS, we were $75 million. Post-PFS, we're now $150 million market cap. As we work to bring this project online, my expectation is we accrete up to that.
There's tremendous tailwinds on the back of Trump right now and making more in America and the U.S. mining space. We are very well positioned. We have a pilot plant that's been operating for over two years. We just sent 20 tons of product to Taipei, Taiwan, for large-scale tank testing, and we have a $285 million letter of interest from the U.S. Export-Import Bank that'll basically underpin the project debt finance to actually build this facility at commercial scale. Just really important to note, we are the only pure play way to play boron in the U.S. stock market. We'll get into why that is and why boron is inherently rare. I often get asked, what is boron? It's the fifth element on the periodic table. It is very much, I use the analogy if Tony Stark were to build an Iron Man suit, it's a boron-based suit.
It's light, it's heat-resistant, energy-dense, antimicrobial, and very much makes life as we know it exist. Boron goes into over 300 applications from really boring stuff such as cleaning supplies. When I was at college, I would wash my clothes with a solid-based detergent. That is boron. It goes into all forms of glass, whether it's Pyrex, textile fiberglass, or LCD glass. It goes into really cool high-tech materials, B4C, which is boron carbide. That's the third hardest material on planet Earth. That's what the U.S. DOD uses to make Kevlar and tank armor. There's a ton of attention on rare earths and the permanent magnets that drive AI as well as electric vehicles. Those magnets are Nd for neodymium.
FeB, albeit there's only about 2% of the magnet is actual boron, but if you look at the CAGRs attributable to that space, we're going to need a lot more boron. The really interesting aspect is that when you peel back the layers of the onion and you look at the value in use, ultimately what gives those permanent magnets its high-strength application and high-performance application is the boron. We see the boron market growing at about a 5 to 5.5% CAGR per year. What's interesting is I equate everyone here is going to have a portfolio of stocks, probably 100 names. Why do you have 100 names? Because it's a diversification. Similarly, from a product placement, this market will grow because it's so diversified. It goes into housing, it goes into high-tech applications, it's critical for nuclear.
As a result, because it's so diversified and there's very few replacements for boron, it will continue to grow over the course of time. Right now we're seeing a contraction given some of the tariff regimes in China, but that'll get solved. China will pick back up, it'll grow. At the same time, we're seeing good demand in the U.S. We completed a market study over the course of time. We see this market growing at a CAGR of 5 to 5.5%. On the supply side, really interesting dynamic. This market is a global oligopoly. Two companies control 85% of global supply. The first, it's the Turkish government. It's a state-owned mining enterprise called Eti Maden. The second is Rio Tinto's US Borax. What's really interesting about Rio Tinto, and especially over the last six to eight weeks, is they had a new CEO change.
Rio Tinto, their Borax business, it actually sits maybe four hours north of here, up 395 in the southern side of the eastern Sierra Nevadas in a town called Boron, California. That mine has been operating for 100 years. When Rio Tinto put its new CEO in place, they've announced that their industrial minerals business, specifically their borates business, is up for strategic review. Why? Because they've now streamlined their business such that it is aluminum and lithium, iron, ore, and copper. Anything in their industrial minerals business will, we think, will more than likely be sold. Their cost is up 60%. Why? Open pit mine, end of life. The biggest factor driving cost increases is ultimately grade. As you mine down and deplete that reserve, ultimately that creates a higher cost profile. You're sending lower grade ore to your mill, and that is why costs go up.
What's interesting about the whole boron space and why this is great for 5E is that you have a poolside demand, CAGR pulling prices higher, demand's growing, and on the supply side, you have the second largest global producer has an escalating cost profile, and so you have a demand pool and a cost push phenomenon. Additionally, there's only five sizable deposits of boron globally across the world. Three of them are based in Serbia, two are the United States, two have permits, one has a pilot plant, and that's 5E. This is just an overview of the way we see pricing going. Ultimately, what we're seeing in 2025 here is actually a precipice where demand is outpacing supply. For many, many years, there was extra capacity in the system. That is being fully absorbed, and it's driven by higher performance applications such as magnets from EVs or defense applications.
Let's talk criticality. Boron does sit as a critical mineral by the UK. It sits as a critical mineral by the EU. The United States has three lists of critical materials. The first, Department of Defense. Boron sits as a critical mineral on their list. Why? Because boron is pervasive across all different defense applications, from munitions to coatings to armor to semiconductors. You cannot operate RDOD or Department of War without boron. Second, DOE. They did a critical minerals list about two and a half years ago. Boron, or you needed to score, they did this quantitative assessment. You needed to have a score of a 22 out of 30 to make their list. Boron scored a 21. There was an RFP for public comments this summer. We met with DOE about two months ago in DC.
Feel very good about our prospect to get that on the DOE's critical mineral list next time around. The last list is the USGS critical minerals list. This list has historically meant to kind of identify which countries have the most reserves. The United States does have reserves. We're probably third. Are we a producer? Yes, we are. USGS has not really identified that boron is critical. We've had a really strong education campaign where we've educated DC, and they came out with their draft list in August, about a week after Rio Tinto announced that US Borax is up for strategic review. Boron, and I was not surprised, was not on the list.
We had met with DOI, and they said this summer, we don't know if it's going to be on the list, but if it isn't, the pathway to get it on the list is ultimately the public comment period. Those public comments were due September 25th. Three years ago, we were the only company that submitted a public comment to DOI. We were the kind of lone wolf in the room. This time around, nine public comments. 5E was one of them. National Mining Association was another. AEMA was another. 3M was there, highlighting boron's criticality in nuclear, as well as the Fertilizer Institute talking about boron's criticality on micronutrients. There was Telecoms Industry talking about its use in fiberglass, and another company highlighting boron carbide, and that 85% of boron carbide comes from China.
I think, lo and behold, alarm bells have been rung, and I do think this is a really good right-tail scenario where boron gets flagged on the final U.S. critical mineral, which I think has the potential to double the stock overnight. Our project sits, let's talk a little bit about the project. We sit about three, three and a half hours north here, about halfway to Vegas in central Mojave Desert. If you take Interstate 15 all the way up to a town called Barstow, you go on Interstate 40, it'll take you all the way, actually, if you keep driving to Nashville, Tennessee, about 30 miles down the highway past Barstow, we sit two miles off the highway. Very, very large multi-generational deposit of colemanite. There are four types of minerals where boron is common: colemanite, yellow oxide, tincal, and kernite.
Coincidentally, kernite is Kern County, which is where Rio is. The thing to just highlight is that the colemanite is ultimately a calcium-based boron mineral. It's viewed as the Mercedes-Benz of boron mineralization. Very easy to leach. Technically, you can drop out the borates, and we are really the only known colemanite in North America today. Our mine life initially is 39 years, but there's enough resource there, so our reserves are 40 years. There's enough resource to be 100 plus years. As you think about whoever's going to buy US Borax as it's available for sale, there's an interesting phenomenon where we become an acquisition target on ultimately an extension of mine life, as you can essentially look to, as Rio Tinto depletes down, you can then look to scale 5E Advanced Materials and potentially have both projects 70 miles away in the portfolio.
We do have all of our major mining permits. We've been operating a pilot plant for about two years now. The immediate focus here is we've qualified about 14 or 15 customers. Let's paper these up and put the off-take agreements in place. From a team perspective, we have the right team. Lonnie was at Albemarle. Josh is out of oil and gas. There's a lot of similarities to the way we mine versus oil and gas. Mark Zamek worked for US Borax for about 20 years, and Rod MacLean's built projects all over the globe. From a board perspective, it's lean and mean. We keep it very simplified, and you can actually tie each director's skill set back to almost our flow sheet and our business objectives. Bryn is more out of solution mining. Graham, chemical plant.
Barry on the financing side, and Kurt was previously the Chairman of the Federal Energy Regulatory Commission under Bush and Obama. For perspective, his daughter is Secretary of Energy, Chris Wright, Scheduler, and his sister is David Bernhardt, who is the 53rd Secretary of the Interior. Highly plugged into D.C., and he's been a critical team member contributing to kind of educating D.C. and ensuring we get boron put on the critical minerals list. I think what's interesting to note on this slide is you can see right where that blue line says gas line, and that's Interstate 40. We're literally two miles off of that. We do have a megawatt of shore power today. We have 400,000 gallons a minute of water. We have real property, State of California. We own the property, and then all around us is BLM.
Our deposit is actually bound by faults, and then outside of that deposit, we have ample water that we have the load, we have the mill site claims for, so we have permission to use that water. Additionally, the wells are included in our plan of operations. That natural gas pipeline is owned by Kinder Morgan, and that runs all the way down to West Texas and the Permian Basin. We have, from a power capacity at large scale, very, very reliable power, and I think the punchline here is, from an infrastructure perspective, we're set up to succeed. Let's just quick talk flow sheet here. Our deposit sits 1,300 to 1,500 feet underground. We inject a very dilute hydrochloric acid, about 5% hydrochloric acid, 95% water. We increase temperature. We'll go down at about 150 to 170 degrees F. We inject about 48 hours later.
That solution, about what was 5% HCl, is maybe about 0.3% HCl and is now 6 to 7% boron in solution. We send that solution. We cool it down to crystallize out the boron. That gets filtered, dried, and goes right into supersacs. That'll get dispersed in the western United States or sent over to Asia for LCD glass manufacturing. You then take the remaining solution stream that's been filtered through. It basically includes deleterious elements such as magnesium, aluminum, and iron, and there's nothing scary like arsenic in our solution. We hit that solution with lime that elevates pH to about eight or nine, precipitates all metals out as hydroxide, and then the last step of the process is you have this calcium-rich solution. We put sulfuric acid into that solution. That does two things.
It aqueously regenerates hydrochloric acid with makeup water, goes back down hole, so it's actually like this closed loop recycled, very ESG-friendly mining process. It precipitates out gypsum, which is a key ingredient in cement manufacturing, and you have Cal Portland Cement and Cemex, who are 50 miles down the road and use a massive amount of cement in the LA urban area. We know who we're going to sell to, and it's a very good, from a mining perspective, very low impact on the actual environment. We've been public in the United States for about four years now. I came in as CEO in June of 2024, and prior to my appointment, there was a lot of over-promises under-delivers, and the U.S. markets can be absolutely brutal. We've been incredibly focused on whatever we say we're going to do, we're going to do it, we're going to follow through.
The main emphasis on this slide has been we focus on accretive economics for commercial scale, increasing IRRs and NPVs, and ultimately doing exactly what we say we're going to do. At a commercial scale, this is kind of talking about, this highlights some of our economic potential. The price of boron is about $1,000 to $1,100 per ton today. We forecast that going about to $1,250 a ton. It is incredibly driven by supply and demand, which is very tight as we see it right now. You can take $1,250 a ton times the 130,000 tons we are permitted to produce. A cost profile is $600 a ton. That kind of is how you can back into that $190 to $100 million a year EBITDA. What's important to note, this is only phase one. This is kind of core business.
We have a lithium, we do have lithium in solution. It's albeit small, but it's, you know, we have 130,000 tons of boron, 130,000 tons of gypsum, and maybe 400 or 500 tons of lithium, but it's there. We can focus on those metal impurities we'll drop out. Could we refine them, sell them? They're an expense in the model now. We can always go bigger, or we can go down the boron supply chain to various derivative products. There's optionality that's baked in once we ultimately get up for commercial scale. Closing here, the focus here is we need to do a little bit more de-risking on our well field. We drill with horizontal wells today. They've been performing very, very well. We're engaged with all companies out of oil and gas, and we're working on papering up and stitching up the off-take agreements. We will apply for U.S.
I need EXIM, I need the government to reopen here because we have an application ready to submit for a $10 million debt facility that'll cover all of our FEED engineering, another catalyst in the pipeline. You know, we're on kind of our path to FID and actually becoming the newest commercial boron manufacturer in the United States. That concludes my presentation, and I'm happy to pause for any questions the audience may have. Go ahead.
You said that your permit was, was it $100,000 or I didn't quite get it?
Yeah, so we're permitted for actually 160,000 tons of boric acid, and technically 90,000 tons of boron oxide. So boric acid is 56% oxide. So we're permitted for 90,000 tons of oxide. We have three major mining permits. We have a record of decision with the BLM. We have a conditional use permit and approved reclamation plan with the Department of Conservation in San Bernardino County. The last permit we have is an underground injection control permit with Region 9 of the U.S. EPA.
Is there a possibility to get additional or contract?
Yeah, San Bernardino County is the lead agency. Our tax base, like we're going to be many millions of dollars of tax revenue to the county. We're going to bring 130 jobs to kind of, we'll be pulling from Victorville and Barstow, which are areas of high unemployment and poverty in the state of California. Operators will make anywhere from about $72,000 all the way to supervisors about $105,000 a year. It's really good high-paying jobs. Once you get that up and running and you can say, "Hey, we can turn this into 300," there's going to be no pushback from regulators. Go ahead.
Do you have a future package in your projects?
We don't.
If you do, do you get it?
Not on the actual boron. The boron market has traditionally been this very opaque market that really trades on contracts. It's very similar to where the lithium was 10 years ago, where everything's on a contract-by-contract basis. We have explored potential tokenization of our reserves, which would create a touchpoint and a market on the boron market. You actually really only get every, so Rio Tinto reports their revenue, their EBITDA, and their asset in their segment information every year. You get a little peek into what their business is doing. Mind you, their US Borax business is 0.1% of Rio Tinto's overall EBITDA. It is incredibly non-core to the overall Rio Tinto business. Their revenue is up like 35%. They're on pace for $830 million a year revenue, which would be a record quarter, but costs are up more in that same time period.
When Rio Tinto reports their annuals and their semi-annuals, you'll actually get a snippet into what the boron market's doing. Go ahead.
Could you go sort of understand the strategic importance of your mine, just in terms of the rare earths discussion and the new rare earths capacity in the region here? How does it help self-supplying the boron investors?
Great question. There’s very, when you actually look at the gamut, like the United States has historically been strong in gold and silver. You can date that back to the 1800s. From actually like rare earths, lithium, you have US Borax, but outside of that, not much. There’s now, through Trump, and I think this is, it’s important, is there’s an emphasis on making more in America. I think what you saw with MP and the Department of War’s investment through using the Office of Strategic Capital was pretty powerful. I do think that you’re going to see similar investments. You saw it with Thacker Pass. There’s whispers, Standard Lithium’s kind of on the list as well. I think for us, it’s really important that we get boron designated as a critical mineral.
That sort of opens the door for pathways to then say, "Hey, you know, Rio’s going away." We have talked to MP. I’ve talked to their CFO, Ryan. If we can, for us, we need to focus on getting the feedstock out, the boric acid. From there, as we de-risk that, can we take boric acid to boron oxide or a ferroboron? In that way, like there is no one providing ferroboron in the United States. It’s a bit of a hole in the magnet supply chain where the ferroboron for those magnets is not sourced in the United States. That’s an opportunity for us.
Is it sourced from Turkey or where is it sourced?
Most of the ferroboron runs through China as well. It's a pretty thermal-intensive process.