5E Advanced Materials posts pre-feasibility technical study for Fort Cady Project, California
5E Advanced Materials, Inc. [Nasdaq: FEAM; ASX: 5EA], a boron and lithium company designated as Critical Infrastructure by the U.S. Department of Homeland Security, is developing one of the world’s largest new conventional boron deposits through a vertically integrated platform, reported the completion of the Preliminary Feasibility Study for the company’s Fort Cady Project located in the Mojave Desert, near the town of Newberry Springs, California.
The project underpins 5E’s strategy to become a vertically integrated global supplier of critical and industrial materials through in-situ extraction of colemanite, from which the company intends to produce boron and calcium-based products which will support global electrification, energy, food security, and critical defense applications.
Highlights of the Pre-Feasibility Study: Technical Report is specifically focused on Phase 1 of the Project, converting 41% of the resource into 5.4M tons of boric acid (H3BO3) reserves yielding 39.5-year life of mine.
Total Mineral Reserves of 5.4M tons boric acid with grade of 8.03% (B2O3). Technical Report only includes Phase 1 production and presents robust economics with forecasted pre-tax net present value (NPV7) of US$724.8 million and 19.2% unlevered IRR.
The project retains optionality for future expansion phases of additional production tonnage and value-added boron derivatives. The initial Phase 1 plant targets delivery of 130,000 tons per year of boric acid production, approximately ~11% of global boric acid demand today.
Mining permits are in place with the colemanite reserve mined using an in-situ leaching (ISL) method, thereby minimizing the surface land disturbance required for the Project facilities.
The expected initial project capital cost (inclusive of a gas COGEN facility) is US$367M for Phase 1 plus US$55M contingency (15%) and US$13M of owner’s cost.
By-product mix includes calcium chloride and gypsum with expected all-in sustaining cash (including logistics) of US$554.80/ton of boric acid. Market study indicates tight supply with demand forecasted to exceed supply in 2026 driving boric acid prices higher.
Revenue from production will primarily be derived from boric acid sales, approximately 94% of total revenue, while by-products of calcium chloride and gypsum will provide approximately 6% of total revenue.
The Technical Report, which outlines an initial mine life of 39.5 years, confirms the strong economics of an ISL operation that would initially produce 130,000 short tons per year of boric acid along with calcium-based by-products; calcium chloride and gypsum. This Technical Report only includes Phase 1 of the project, with optionality for phased expansion of additional tonnage and value-added boron derivatives.
The company began mining operations in January 2024 and currently has a small-scale facility (SSF) that began operation in April 2024, which has provided invaluable operational data that has been incorporated into the basis of design for the Project. The SSF has achieved a steady state of production for boric acid and gypsum in addition to qualifying 14 customers who have set the stage for continued offtake negotiations. Most recently, two injection-recovery wells were converted to horizontal wells intercepting approximately 3,000 feet of high-grade colemanite.
“This technical report validates the economic strength and strategic importance of the Fort Cady Project,” stated Paul Weibel, CEO. “With strong projected economics underpinned by meticulous technical work, we are now positioned to move into definitive feasibility planning, FEED-engineering and long-term project financing with the right team who have been critical in reaching this point in the development cycle. I am very pleased with 5E’s team and partners work to deliver this report. We have mined and processed for the last 18 months and have qualified product with over 14 large global end users. As we target large-scale commercial production in 2028, we look toward the economic potential of the Project, which we expect will provide high paying jobs in California and be a significant long-term U.S. producer of boron to maintain the security of the boron supply chain in the United States.”
The project is located halfway between Las Vegas, Nevada and Los Angeles, California and includes both private and federal land. The project is located approximately 2 miles south of Interstate 40 and approximately 25 miles east of Barstow, California. The site is connected to approximately 1 megawatt of grid power and is approximately 2 miles from major natural gas transmission lines and the BNSF rail line.
The Technical Report defines both Mineral Resources and Mineral Reserves for the Project. The Mineral Resources on lands under 5E’s mineral control include 23.5 million short tons of Measured ore containing 3.26 million short tons of in-situ boric acid, with an average grade of 7.91% BΓééOΓéâ. The Indicated category comprises 85.6 million short tons of ore containing 11.8 million short tons of in-situ boric acid, with an average grade of 7.89% BΓééOΓéâ. Mineral resources were estimated using a 2.0% B2O3 cut-off grade and Table 2 summarizes the mineral resources.
Mining Method: The project will employ in-situ leaching as its mining method to recover borates from the mineralized horizons. The depth and grade of the deposit precludes conventional mining techniques such as open pit and underground mining. With ISL mining, there is no stripping of waste rock or underground development required for the Project. ISL activities include drilling and constructing of injection/recovery wells, installing pumping or airlifting extraction equipment on the wells, and piping to transport barren leach solutions to the wellfield and Pregnant Leach Solution (“PLS”) back to the chemical plant for processing.
Based on the results of operating the SSF injection, recovery wells and work completed by 5E, the Large-scale Boron Facility (LSBF) calls for the installation of 27 directional wells targeting the upper mineralized horizon (UMH), major mineralized horizon (MMH), and lower mineralized horizon (LMH) spaced at 200-ft horizontal offset and 120-180-ft vertical spacing. The operating strategy of the wells will focus on high-grade mineralization zone cavern development through continuous injection and cyclic push-pull mechanics.
In 2020, a Class 3 Underground Injection Control (UIC) permit was issued by the United States Environmental Protection Agency (EPA). The EPA retains primacy for Class 3 solution mining UIC permits. In November 2023, the EPA approved the commencement of mining operations under this permit. These regulatory approvals form the foundation for Phase 1 development, which aligns with the previously authorized project scope.
Capital cost expectations for a 130,000 short ton per annum boric acid plant (inclusive of co-product processing and COGEN power) were determined to be $367M for the first stage plus a contingency of $55M and owner’s cost estimate of $13M for a total capital estimate of $435M.
5E Advanced Materials is focused on becoming a vertically integrated global leader and supplier of boron specialty and advanced materials, complemented by lithium co-product production.
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