5E Advanced Materials Inc. (NASDAQ: FEAM) completed a preliminary economic assessment for lithium carbonate recovery at its planned Fort Cady facility in Southern California, according to a company statement.

The study, conducted by Fluor Corporation, evaluated lithium extraction methods from brine streams generated during boron production. The assessment identified direct concentration as the preferred process over direct lithium extraction based on economics and operational factors.

The direct concentration method would produce approximately 523 short tons of lithium carbonate annually with a capital cost of $9.8 million, compared to $25.3 million for the direct lithium extraction alternative. The study projects annual revenue of approximately $9.5 million from lithium carbonate production, assuming a price of $18,000 per ton.

The assessment shows a pre-tax net present value of $56.7 million and internal rate of return of 51.6% for the direct concentration approach, with capital payback estimated at two to three years from first production.

"The direct concentration process offers a commercially proven, capital-efficient and economically attractive pathway to recover additional value from our existing brine streams," said Paul Weibel, chief executive officer of 5E Advanced Materials.

The company indicated that existing equipment from its small-scale facility could potentially reduce incremental capital requirements for the lithium production process. The direct concentration flowsheet would integrate with the planned boron operations, using solar evaporation to concentrate lithium from calcium chloride-rich effluent streams.

5E Advanced Materials focuses on boron production and processing, with Fort Cady designated as critical infrastructure by the U.S. Department of Homeland Security. The company plans to continue engineering studies and optimization work for the Fort Cady large-scale facility development.