5E Advanced Materials Announces Restructuring and Equity Capital Boost

Restructuring Agreement and Equity Infusion for Boric Acid and Lithium Production

5E Advanced Materials, a boron and lithium company, has entered into a Restructuring Support Agreement (RSA) with its primary lender, BEP Special Situations IV, and new strategic investors. This agreement aims to restructure the company's capital and secure up to $35 million of new equity capital. This funding will enable the commencement of initial mining operations and production of boric acid and lithium at its 5E Boron Americas Complex.

Key Highlights of the Agreement

• The new investors will commit up to $25 million USD under the transaction.
• Terms of the company's existing senior secured convertible notes will be amended to reduce the conversion rate, extend the maturity date by one year, and increase the paid-in-kind interest rate to 10%.
• Bluescape Special Situations IV has provided an option to invest an additional $10 million USD.
• New investors will acquire 50% of the outstanding principal amount of the convertible notes from the lender.
• The lender has agreed to reduce the minimum required cash covenant in the notes to zero until June 28, 2024, and then increase to $7.5 million USD.

Impact on Operations

This transaction strengthens the company's capital structure and balance sheet, supporting the extraction of boric acid and lithium at its 5E Boron Americas complex. It follows the recent authorization from the Environmental Protection Agency (EPA) for 5E to begin In-Situ mining operations.

Board of Directors and Stockholder Vote

Stefan Selig has been added to the board of directors, effective December 5, 2023. The transaction is unanimously supported by the Board of Directors and is subject to stockholder approval at an upcoming special meeting.

CEO's Outlook

Susan Brennan, Chief Executive Officer of 5E Advanced Materials, expressed optimism about the company's transformational year ahead, with the recent EPA authorization and the new agreement bolstering the company's position for initial mining operations of boric acid and lithium.