5E Advanced Materials Closes First Tranche of Equity Financing Following Special Meeting
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The recent closure of the first tranche of equity financing by 5E Advanced Materials, Inc. represents a significant infusion of capital, crucial for the company's progression towards initial production in the mining sector. The $10 million raised, shared between Ascend Global Investment Fund SPC and 5ECAP, LLC, underlines investor confidence in the company's future, particularly in the critical materials space. This is noteworthy given the current market conditions where investors are generally more cautious with their capital allocation, especially in industries with high capital expenditure requirements like mining.
The amendment and restatement of the note purchase agreement and the acquisition of convertible notes by Ascend and Meridian Investments Corporation could indicate a restructuring of debt that may lead to a more favorable interest expense profile for the company. This strategic financial maneuvering is aimed at improving the balance sheet and providing operational flexibility. The commitment to a second tranche of financing underscores the ongoing support from investors and the potential they see in the company's boron and lithium projects, which are commodities with increasing demand due to their applications in technology and energy sectors.
5E Advanced Materials' focus on boron and lithium is strategically significant, as these elements are critical to several burgeoning industries, including electric vehicles, electronics and renewable energy solutions. Boron, although less discussed than lithium, plays an essential role in glass and ceramics manufacturing, agriculture and even as a neutron absorber in nuclear reactors. Lithium's importance in battery production for electric vehicles and energy storage solutions is well-established. The designation of the company's 5E Boron Americas Complex as Critical Infrastructure by the U.S. government enhances the project's credibility and aligns with national interests in securing domestic supply chains for these strategic materials.
The timing of the mining operations commencement and additional capital deployment is pivotal, as it coincides with a global push for energy transition and supply chain resilience. This could position 5E Advanced Materials advantageously in the market, provided they can scale production efficiently and navigate the regulatory and environmental challenges inherent in the mining industry.
The investment in 5E Advanced Materials can be viewed as a microcosmic indicator of broader economic trends, where there is a heightened focus on securing supplies of critical minerals like boron and lithium. These materials are essential for various high-tech and green technologies, which are pillars of the contemporary economic shift towards sustainability. As governments and industries worldwide strive for energy independence and reduced carbon footprints, companies like 5E that can provide these materials may benefit from increased market demand and supportive regulatory environments.
However, the capital-intensive nature of mining operations and the long lead times to production require careful financial planning and risk management. The successful closure of this financing round demonstrates investor willingness to support such long-term strategic initiatives, which could be indicative of a wider trend of capital flow into sectors deemed critical for future economic stability and growth.
New capital expected to provide the necessary resources to advance mining operations and move towards first production
HESPERIA, Calif., Jan. 19, 2024 (GLOBE NEWSWIRE) -- 5E Advanced Materials, Inc. (Nasdaq: FEAM) (ASX: 5EA) (“5E” or the “Company”), a boron and lithium company with U.S. government Critical Infrastructure designation for its 5E Boron Americas Complex, today announced it has closed its first tranche of equity financing following a favorable vote from the Company’s stockholders at its special meeting held last week. The first closing included
The first tranche of closing also coincided with an amendment and restatement of the note purchase agreement related to the Company’s senior secured convertible notes held by Bluescape Special Situations IV, LLC, and in parallel, half of the outstanding convertible notes were acquired by Ascend and Meridian Investments Corporation. The second tranche of additional equity financing is expected to close at the end of January.
Paul Weibel, Chief Financial Officer of 5E Advanced Materials, stated, “We are pleased to complete the closing as these funds provide the runway to progress operations at our facility. We commenced mining at the start of the new year and now have additional capital in hand to deploy towards the execution of our strategy, value proposition, and first production.”
About 5E Advanced Materials, Inc.
5E Advanced Materials, Inc. (Nasdaq: FEAM) (ASX: 5EA) is focused on becoming a vertically integrated global leader and supplier of boron specialty and advanced materials, complemented by lithium co-product production. The Company’s mission is to become a supplier of these critical materials to industries addressing global decarbonization, food and domestic security. Boron and lithium products will target applications in the fields of electric transportation, clean energy infrastructure, such as solar and wind power, fertilizers, and domestic security. The business strategy and objectives are to develop capabilities ranging from upstream extraction and product sales of boric acid, lithium carbonate and potentially other co-products, to downstream boron advanced material processing and development. The business is based on our large domestic boron and lithium resource, which is located in Southern California and designated as Critical Infrastructure by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements other than statements of historical fact included in this press release regarding our business strategy, plans, goal, and objectives are forward-looking statements. When used in this press release, the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “budget,” “target,” “aim,” “strategy,” “plan,” “guidance,” “outlook,” “intent,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on the Company’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the extraction of the critical materials we intend to produce and advanced materials production and development. These risks include, but are not limited to: our limited operating history in the borates and lithium industries and no revenue from our proposed extraction operations at our properties; our need for substantial additional financing to execute our business plan and our ability to access capital and the financial markets; our status as an exploration stage company dependent on a single project with no known Regulation S-K 1300 mineral reserves and the inherent uncertainty in estimates of mineral resources; our lack of history in mineral production and the significant risks associated with achieving our business strategies, including our downstream processing ambitions; our incurrence of significant net operating losses to date and plans to incur continued losses for the foreseeable future; risks and uncertainties relating to the development of the Fort Cady project, including our ability to timely and successfully complete our Small Scale Boron Facility; our ability to obtain, maintain and renew required governmental permits for our development activities, including satisfying all mandated conditions to any such permits; our ability to successfully implement the out of court restructuring transaction and raise the maximum funding contemplated thereby; the implementation of and expected benefits from certain reduced spending measures, and other risks and uncertainties set forth in our filings with the U.S. Securities and Exchange Commission from time to time. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. These risks are not exhaustive and the information in this press release may be subject to additional risks. No representation or warranty (express or implied) is made as to, and no reliance should be place on, any information, including projections, estimates, targets, and opinions contained herein, and no liability whatsoever is accepted as to any errors, omissions, or misstatements contained herein. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as to the date of this press release.
For additional information regarding these various factors, you should carefully review the risk factors and other disclosures in the Company’s Form 10-K filed on August 30, 2023. Additional risks are also disclosed by 5E in its filings with the U.S. Securities and Exchange Commission throughout the year, including its Form 10-K, Form 10-Qs and Form 8-Ks, as well as in its filings under the Australian Securities Exchange. Any forward-looking statements are given only as of the date hereof. Except as required by law, 5E expressly disclaims any obligation to update or revise any such forward-looking statements. Additionally, 5E undertakes no obligation to comment on third party analyses or statements regarding 5E’s actual or expected financial or operating results or its securities.
For further information contact:
| Davis Snyder or Joseph Caminiti Alpha IR Group FEAM@alpha-ir.com Ph: +1 (312) 445-2870 | J.T. Starzecki Chief Marketing Officer jstarzecki@5eadvancedmaterials.com Ph: +1 (612) 719-5076 |
FAQ
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