5E Advanced Materials Inc. (NASDAQ:FEAM) Q4 2023 Earnings Call Transcript

Susan Brennan: J.T, do you want to take that and also talk maybe about the government implications, too?

J.T Starzecki: Yes, definitely. Good to talk to you, Ben. Thanks again for joining. From a customer sort of evolution perspective, what we are seeing is very clear signs of customers that we are in discussions with wanting to diversify their supply base. So, there are some, what we’ll call, product quality issues just from a transportation taking perspective, depending on where the product comes from around the globe. But one of the clear signs that anybody that we have engaged in conversations with, and it is very ongoing dialogue is, their need to diversify, to not be tied into one supplier or even two suppliers, just given the inherent risk of both product availability and from a pricing perspective. So, I would say, that’s the single most definitive characteristic that we’ve seen in these commercial discussions, so far this year.

Ben Kallo: And Susan — thank you. When I look at the cash position — management, like the multipronged figure, be that — Romeo, you saw, all the people doing deposits for sales, while they are very short. Is there a way to, like, structure or something like that with a partner where they help with the capital?

Susan Brennan: Yes. No, Ben, that’s an excellent point. As we have talked about the deficit, I guess, the clear answer is, yes. And the opportunity to sell ahead similar to the sell dynamic is definitely something that we are exploring.

Ben Kallo: Okay. And then just finally, you say you had — said you had all the necessary permits. But then I think you, Susan, you said that, you did some kind of EPA sign off for the injection wells. So, could you just clarify that for me? And thank you guys very much.

Susan Brennan: Yes. And thank you for asking that question, because we get it often, and I want to make sure we are really clear. There is a permit in place. That permit has conditions. And because this is an orebody that has been — as we said had experimental work done in the past, we are — those condition includes work we have done as well as closing out work from the past. So, we need to meet the conditions need from the EPA. And once we’ve given them the data and the assurances, then we’ll be able to look forward. So it’s not the permit we are working on, it’s really releasing the conditions on that permit.

Operator: Thank you. Our next question comes from Matthew Key with B. Riley.

Matthew Key: Hi. Thank you for taking my questions. I was wondering if you could maybe just go into some greater detail on the potential timing of the government financing route. And assuming everything is successful there, could you maybe just share on some — how much you could potentially receive from the DPA Title III program, especially?

Susan Brennan: Yes. J.T, do you want to take that one?

J.T Starzecki: Sure. Good to talk to you, Matt. Thanks for joining the call. So, I think, it’s probably best if I sort of break it down into two buckets. And as you rightfully hit on, there are really — there is the DPA Title III Act, which sits under the Department of Defense. So, let me start with that. Really, the key mechanism there is an attachment to various components that go into either military, technology or supply chains that go into the production of that technology. The application for funding initiatives is a little bit more straightforward with the DOD. You essentially develop a white paper and you go through a series of discussions with the Department of Defense directly. And then, as you’ve made your case, you put in your request for funds, and that gets written into an appropriations bill.