Bluescape Invests $60 million in 5E Advanced Materials (FEAM)

Sep 15, 2022 | INVEST IN BORON, Company Profiles, MINING

FEAM Advanced Materials Receives Investment from Bluescape Energy Partners

Bluescape Energy Partners recently announced its definitive agreement with 5E Advanced Materials, Inc. (Nasdaq: FEAM), an exploration stage boron and lithium company, for a $60 million private placement of senior secured notes convertible into common stock of the company. The notes are interchangeable with FEAM shareholdings. At the Company’s choice, they will bear interest at an annualized rate of 4.50% if paid cash or at an annualized rate of 6.00% if compensated in additional notes.

Bluescape investment

Bluescape investment

The notes are interchangeable at an early conversion price of $17.60, a 10% premium over the base price of $16.00. The $16.00 base price is 1.45% higher than FEAM’s trailing 7-day VWAP expiring on August 10, 2022. These notes will mature on August 15, 2027, unless repurchased or converted prior to such date.

This investment demonstrates a strong belief in 5E Advanced Materials and its prospects. In addition, FEAM stated it is still targeting the mechanical completion of a small-scale boron facility (SSBF) in the fourth quarter of this year. Also, the company is advancing its customer contracting discussions for both lithium and boron after signing a letter of intent with Corning Incorporated, a Fortune 300 company and one of the largest technical glass manufacturers in the world. Compared to 2020 and 2021, average boric acid prices rose by more than 50% during the first calendar quarter of 2022.

“We are pleased to partner with Bluescape as they are a respected U.S. institutional investor that offers value to our Company far beyond that of a typical financial investment,” comments Henri Tausch, CEO of 5E Advanced Materials, Inc. “They are a well-resourced, strategic organization led by leaders in the power and energy transition sector, including their CEO, John Wilder. We look forward to working with Bluescape in creating value to all shareholders and view this Investment as an attractive source of capital that bolsters our balance sheet and project while serving as an indicator of the 5E value proposition.

We also continue to see tremendous team effort as we advance construction of our Small-Scale Boron Facility towards target CQ4 2022 mechanical completion. We are pleased to report significant progress to date as Fort Cady has become a beehive of activity with more than 54,000 hours logged this year. We are also pleased with our commercial progress as boron prices have increased meaningfully, and customer conversations are progressing after signing an LOI with an innovative leader in Corning Incorporated.”

5E Advanced Materials is steadily progressing towards mechanical completion of its  Small-Scale Boron Facility by CQ4 2022. 54,000 hours have already been logged at Fort Cady, boron prices have risen significantly, and consumer conversations are advancing following the signing of an LOI with Corning Incorporated.  As lithium and boron resources come under pressure, Bluescape aligns with 5E’s value proposition.

“We see tremendous value in 5E and their boron and lithium resource in Southern California. The asset aligns with many crucial issues today, including the onshoring of critical materials, decarbonization, and domestic security. We also have confidence in the 5E management team as they possess a diverse skillset that is capable of effectively commercializing this critical asset. We look forward to partnering with 5E as we merge skills and relationships to generate value for stakeholders.”

5E Advanced Materials addresses many crucial issues today, including onshoring of materials needed for manufacturing consumer goods at home, decarbonizing industries across the board by replacing fossil fuels with cleaner sources such as wind power, and lastly, domestic or homeland security.

About Bluescape

Bluescape is a U.S.-based organizational investment manager with extensive experience developing, functioning, and investing in real assets such as power plants or energy resources across various industries, including construction, manufacturing, and retail. Furthermore, the company intends to capitalize on its extensive experience and relationships with the U.S. shareholder base and the federal government.

Recognizing that a company’s long-term growth prospects are one of its most valuable assets, Bluescape accentuates defensive positions, emphasizing preserving capital and achieving scalability to build platforms for future success—partnering with strong management teams along the way.

About 5E Advanced Materials, Inc.

5E Advanced Materials, Inc. (Nasdaq: FEAM) (ASX: 5EA) is an exploration stage company focused on becoming a vertically integrated global leader and supplier of boron specialty and advanced materials, complemented by lithium production capabilities. Our mission is to become a supplier of these critical materials to industries addressing global decarbonization, food production, and domestic security. We anticipate 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.

Our 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. Our 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, and we intend to leverage this asset once commercially operational to internally supply our proposed downstream advanced material development activities over time.