Hazer Group Limited

Good morning everybody and welcome to Hazel Group's quarterly update webinar where CEO and Managing Director Glen Corey and Chief Technology Officer Tim Forbes will be on the call to discuss the highlights of Q4 FY24 and do a small presentation for you. Once we conclude the presentation we will move on to a Q&A portion We have received some questions in advance, but please do feel welcome to answer any questions you have. And please use the Q&A button at the bottom of your screen. To avoid repetition, I may combine or amalgamate questions together just to save time. But thank you very much again for joining. I'll now hand over to you, Glyn.

Thanks, Hannah. Hello, everyone, and welcome to our Q4 results investor briefing. Thank you for dialing into the call. Joining me today is Tim Forbes, our chief technology officer. As Hannah said, the slide materials are released today on the ASX, and they're available on our website if you'd like to download them. We'll spend the next 20 minutes on the presentation, and then we'll open up the floor for some Q&A. Our agenda is as follows. Firstly, I'll talk to the headlines from our quarterly results. Tim will then provide an update on our commercial demonstration plant, our CDP, and all the good progress that we're making there. Thirdly, we'll bring you up to speed on our commercial projects and our partnerships. And before we open up the call for Q&A, I'd like to close with a bit of a corporate update and reiterate our strategic priorities and our activity plan for the coming 12 months. Let's dive straight in. Our Q4 highlights, you will have seen these come out on Monday. We brought our CDP online in January of this year. We've used the last quarter to advance the technology performance test program and concurrently driving forward our commercialization strategy. Firstly, at the CDP, we've achieved a record 182 hours of hot operations. That's over seven days. of production operations. It's three times what we've achieved quarter on quarter. It's a major success and a significant milestone for a first of a kind technology. Secondly, we are continuing to leverage the performance of our CDP into commercial partnerships. We've made a major step forward with Canada. We've signed a binding agreement with them to consolidate our partnership and build a commercial scale facility. It's our first commercial facility with a very large customer. Importantly, we have now agreed the commercial framework. Hazer will be the technology licensor and the license terms should be in place before the end of this year. More recently, we have signed a very transformational deal with Posco It's one of the world's largest steelmaking firms. We'll integrate Hayes' technology into this clean steelmaking process. It's a full endorsement of Hayes' technology, and it's a privilege to be working alongside POSCO, developing the scale-up of our technology into the key market of steelmaking. Finally, we're underpinned as a company and corporately by a very robust funding position, solid cash balance, low and flexible cash earned, an extended runway through significant technology and commercial milestones, and importantly, some very significant non-dilutive inflows, including an R&D rebate that we receive annually, further arena funding milestones that will unlock as we deliver CDP performance, and in addition to that, some early revenue from our project in Canada. At this stage, I'll hand over to Tim for an update on the CDP.

Thanks very much, Glenn. Good morning, everyone. Great to be here again. As Glenn has said, we've had a fairly productive quarter, so really happy to be sharing some of those results here today. As always, we need a balance sharing information, the technical and commercially sensitive information. and protecting that with giving shareholders an update. And I think everyone's very curious. So really, we strive to get that balance right. And it's about protecting shareholder value. And we'll always share what we can and what we deem relevant. So brief recap on the CDP test program. So the CDP, as a reminder, it's located in Munster, south of Perth. 100 tonne per annum hydrogen production nameplate capacity, and it processes biogas from the wastewater treatment plant there. So carbon negative process all in all. It's over a one foot or 300 centimetre diameter reactor, so it's a commercially relevant flow regime for predicting larger scale performance. In terms of the test program, where we're at and what we're trying to achieve. So first objective, just demonstrate the technology continuously. So prior to the demonstration plant, pilot plant runs were limited due to design to in the order of 24 hours. As Glenn mentioned, we've gone beyond that already. So continuous operation for extended duration and demonstrate that the core technology works But from the first run, we're producing hydrogen and graphite in line with expectations. It's not quantitatively validated yet, but a green light in terms of the ability for the technology to perform. So we're calling that a pass at this point on our test program. The next attribute there is producing larger volumes of graphite to enable the next phase of product qualification. So while we've substantially increased our inventory, we're still early on in the operation and we're looking to confirm stable product quality with extended stable operations before we launch into the next phase of product testing. But in general, hydrogen graphite production is proceeding well. Extended continuous operation, so we've run it for 24 hours. We've now run it for more than 100 hours. We're looking to continue to extend that further and get more data on how the plant will perform in a large-scale commercial setting and inform the reliability you'd get out of a large-scale commercial plant. So while we've given ourselves a green tick on completing our key objectives there, we'll continue to push and try and optimize and enhance reliability of our continuous operation. Similarly, solids handling demonstration. Some of our equipment and our solids materials, being the graphite, are a little bit abnormal. So one of the objectives of the test plan was to demonstrate the performance of that equipment. And at this point, while we want to see more extended operation, cyclones, filters, screw conveyors, et cetera, all that equipment is working as anticipated, potentially even better than anticipated and no real issues flagged. We just wanna see further demonstration of that before we call that one complete. And then lastly, scale up performance validation. So what this one's about is validating the level of methane conversion, hydrogen production for a given set of operating conditions that we'll see at the large scale. And then also demonstrating graphite purity at a given catalyst consumption and gas conversion. So while all indications are positive there, we haven't yet optimised our operation and we're holding back on calling that one complete at this point in time. But initial indications are positive and we're on track to complete the test program this year. So we do have strong commercial interest. We've got a strong base technology and a good test plan. The focus at this point is execute the test plan to then secure the commercial investment. And as you can see, the list on the right is growing. There's a lot more going on in the background. So we're well placed with the commercial interest. Glenn, would you be able to go to the next slide, please? So in terms of some of the key results, The chart on the right, as you can show, the progressive increase in operational runtime with each run shows that we're learning each time. As most of you probably know, starting up any plant, even existing technology, or even an existing plant after downtime is challenging. The first couple of runs, we're largely sorting out commissioning, startup issues, things like tuning control loops, sequencing of valves, et cetera. In the third run, we got things under control, stable operations, and then had some challenges injecting catalyst with a catalyst injection system fault. And then by run four, we achieved much more stable operation, got the catalyst injection going, and were largely under control We had a few external interruptions with power supply, compressor faults, et cetera. But I'd say the key message here is the core tech is looking good. We continue to learn and deliver improved runtimes. And in the background, we're leveraging that data to enhance our technical understanding and support the project development work that's going on. In terms of our next run, we're nearing works completion to enter run five. We've done some minor mechanical modifications to improve reliability. And so they're not really process related, but we're confident in our ability to improve again going forward. We're looking forward to reporting back on some more positive results in the near future. Thanks very much. I'll hand back to Glenn.