Hazer Group Limited

Good morning, everybody, and thank you for joining Hazel Group's Q1 FY25 shareholder update webinar. Presenting on the call today, we have CEO and MD Glen Corey and CTO Tim Forbes, who will run through the highlights of the most recent quarter. Following the short presentation, there will be time for a Q&A, which we will begin with the questions that we've received in advance. We do expect there to be quite a high number of questions today, so some may be consolidated just to avoid repetition. As a reminder, if you would like to ask a question, you're most welcome to do so, and please use the Q&A button at the bottom of your screen, and we will endeavor to answer as many as we possibly can. So with that, I'll hand over to Glenn to kick off.

Thanks, Hannah. Good morning, everyone. Great to be here. I'm Glenn, the CEO of Hazer. I'm joined on the call by Tim our Chief Technology Officer. Together, we're going to present some of the highlights from our investor webinar from our results, which were released to the ASX on Monday. In terms of our agenda, we'll hit the headlines up front. Tim will provide an update on our commercial demonstration plant. I'll circle back and then talk about our commercial partnerships, our competitive positioning, and then I'll give a brief update corporately before we open the lines for Q&A. I'll jump straight in in terms of our headlines. We've had really strong CDP performance. We're delivering on our operational milestones. We're driving towards tech readiness towards the end of this year. Tim will talk to that very shortly. Very pleased to now be reporting that we're receiving payments under our engineering service agreement with FortisBC for our project in Canada. This is a model for the future and a really important milestone for our business. Thirdly, we've hit some key milestones on intellectual property. I want to talk to that very shortly. We're strengthening our IP, our protection, our depth, our coverage globally. And that's a really important place for us to be as we move into commercialization. And then finally, I've spent a little bit of time globally with investors, energy groups, and at some conferences, and it's becoming really apparent that we have got a very unique technology. It's got a very strong competitive advantage, and we are a real viable alternative to green hydrogen. So a really important place for us to be as a business. In summary, a very strong quarter, and we're building the foundations for our commercialization. So Tim, maybe that's a good place to hand over to you for an update on our CDP.

Yeah, thanks very much, Glenn. And if you can jump to the next slide, that'd be great. So great to be here, everyone, and provide an update. Thought I'd just start with a bit of a reminder about what the CDP is about. So a demonstration plant down at the Watercourt, south of Perth, 100 tonne per annum hydrogen nameplate capacity. We achieved first hydrogen and graphite in the beginning of the year. And then since then, we've been progressing well through our structured So we have a series of specific tests with specific objectives to enable learning about the technology and help demonstrate that we're ready for commercial deployment. That test campaign is progressing well and indeed nearing completion. And I just want to highlight that a couple of aspects of this demonstration plant that are really pretty important. One, the continuous operation. So it really is a different thing to operate a plant. continuously end-to-end technology. That's what you need to do to commercialize the technology. That's very different to running things in a lab scale. So continuous operation. And then add a scale that's large enough that de-risks the large-scale commercial performance predictions. So when you're running a pilot scale, there are... scale up, scale down factors that result in optimistic predictions or can do. And so operating at this scale is a substantial de-risking factor before we progress on to the large commercial scale testing. And just lastly on the CDP, so for a reminder, this is processing biogas. So this is a fully renewable feedstock and hence well supported by ARENA with the funding there. If we go to the next slide, please, Glenn. So in terms of a couple of the key highlights this quarter on the operational performance, more than 360 hours, continuous operations, stable production is a really big milestone for us, demonstrating that we're in control of the process and the technology and giving us insights into what ongoing commercial performance we can expect. So during these 360 hours, we had a very high uptime, and indeed the downtime was related largely due to external factors and non-core technology issues. So we had a series of minor blips, whether they were power supply interruptions, feed supply interruptions, regular commissioning issues, and we're very pleased to report that we're able to restart the technology quickly. So sometimes back online within five or 10 minutes and producing hydrogen and graphite, as well as the process being resilient to those trips. So that's a really positive outcome from this year. Also on the operations front, we've undergone our first planned inspection campaign from a materials integrity perspective. The process that we're running is in a challenging environment. High pressure, high temperature and hydrogen is challenging. We're pleased to report that there's no adverse results or findings in our first inspection campaign. So very pleased with those strong results there. On the technology front, I'll talk a little bit more on the next slide, but just want to remind people that fluid bed technology is not new. it's reliable, resilient, and scalable. So we're deploying a known quantity there. And with the chemistry that is new, we're achieving conversion in line with expectation and supporting our large commercial scale design basis. So again, on the tech, things are looking very good. And then lastly, on the graphite, We've already produced substantial quantities of graphite. We are in the process of optimizing the quality to ensure that when we move into our product development and qualification, that we've got the right properties there and we can really extract the maximum value from our graphite co-product. So in summary, a lot of progress and big highlights this year. strong results and we're feeling confident and nearing the completion of our test campaign. Next slide, please, Glenn. So in terms of what is the test program achieving, we see three key areas where we need to deliver results on in order to be ready for commercial deployment and drive our commercial projects to the next phase. One, we need sufficient continuous operation to demonstrate that we're in control of the process and that we're going to get reliable and predictable results in the largest scale units. We've already achieved our results there with the 360 plus hours. The other aspect of this one is also solids handling equipment. So our graphite product properties are a little different. And so it is the first time where Tim Jones- Moving the graphite around the plant with with conventional technology screw feeders and and. Tim Jones- cyclones filtration systems, etc, so we're pleased to report as well that we don't have any concerns on those and they're working as expected on the continuous operation front, where we are complete with our initial phase test Program. Gareth J. On the scale up validation we're nearing completion here. Gareth J. The conversion results and hydrogen production results we've achieved are in line with our large commercial scale design basis, as is our catalyst consumption. The one that we're still in the process of demonstrating is our graphite purity, and then putting a bow around all the analysis that can substantiate this. But we're getting very close to claiming success on the scale up validation here. Then on the hydrogen graphite production, Again, we've achieved adequate hydrogen production and graphite production rates to be confident that we have completed the test program. Where we're still working on is getting the high volumes of graphite at the high purity to move our product qualification work into the next phase. But at this point, strong results, very happy with the efforts of the team to deliver these this year. and on track for completion of the test program by the end of the year to take our commercial projects to the next phase. Thanks, Glenn.

Very good. And I just want to remind, I think, just reiterate what Tim said that we've only had the plant on since January of this year. So some really exceptional results that's really driving not just the technology development, but also our commercialization strategy. And I'll talk to that very shortly. thanks tim so just moving on in terms of our commercial partnerships as i've said very pleased to now have received a number of payments under our engineering service agreement with fortis bc for our project in canada it's the first of our commercial units so a really exciting and important project for us under the pda the development agreement that we signed it's a binding agreement that we signed earlier this year We're entitled to up to around $2 million of payments. I'd probably expect that to probably go up given the amount of work that we are doing to support that project. It is our first and it's a very important one that we're very close to. And those payments will continue on through to final investment decision, which is scheduled for next year. So Look, it is a really important milestone. I think this, although they're not big numbers, they reflect the maturity of our partnership. They reflect the maturity of the technology and they also reflect the maturity of our business. And as I've said, I'd expect that this is the model that we'll take forward for the future with our existing customer base, but also the future customer base. I will also mention here we were very pleased to also welcome some of the senior executive group from FortisBC as well as the project team to Perth a couple of weeks ago to look at the CDP and all the great performance that's going on there, as well as talk about schedule and the line on the way forward for the project. So again, a really important meeting and milestone for us as a company and as a project team. Moving on to our development projects, I just wanted to show this up again. It's just a snapshot of where we are from in terms of our commercialization. The tech's developing, as Tim has said, and we continue to build the customer base around the tech. Very important validation for us. blue chip partners, tier one partners in what we call first mover advantage, globally, North America, Asia, in Japan, as well as in Korea, and Europe in France with the giant utility on G. Very excited about our partnership with POSCO. There's more to come on this. Big partner, big industry, big problem. We're excited to be integrating Hazer technology into the steelmaking process. It really is where everything for hazer comes together, the catalyst, the hydrogen, the graphite, All of that really is a key components of steelmaking and our technology fits wonderfully into that. It has enabled more deal flow on the steelmaking front. So it's an industry we're very excited about. As I've said, I think in the past, it emits about 8% of the world's CO2. POSCO is the sixth largest. I think they're the largest outside of China. So big partner, big industry, big problem. And, you know, we've got a big solution for the decarbonization of, of that industry. I will just move on to competitive positioning. Uh, we put a few slides in here that, um, that just show how Hazer is positioned as a technology. Um, I've spent quite a bit of time on the road in the last couple of months. We were invited to a big energy tech venture forum in Houston, Texas, that was coordinated by one of the leading universities on climate tech. We were also invited to speak at GasTech, which is the world's largest energy conference for at least gas and LNG. So a lot of exposure showcasing Hazer worldwide. We've got a lot of feedback on the technology and it's becoming very clear that Hazer is in a very leading position. Some key themes coming out of all this. Green hydrogen, I'm sure you've seen the news flow, but it is losing a lot of its sizzle. We'll come to the differences between us and green shortly. It's high cost. It's challenges with transportation and developing this supply chain. Gas is really key to the energy mix. And that is very apparent. A third of the world's primary energy is gas. So it's not something we can walk away from today. Gas is the enabling agent for decarbonisation that positions us very well using gas as a feedstock. to decarbonize gas and decarbonize industry. And hydrogen is really set to play a crucial role in decarbonizing some of those really hard to abate sectors that I spoke about and that are difficult to electrify. So what is our position? We're clearly a front runner in the methane policy space. That's clear. I've spoken to industry peers and other players. We've got to de-risk technology and operate operability track record, as Tim has just explained. There's a growing customer base. We're a low-cost alternative to green hydrogen. Graphite, there's more to come in the coming months, but graphite is standing out as a real value differentiator for Hayes' technology. We're the only one in this space that is producing graphite as opposed to carbon black. So a lot of application and a huge amount of potential upside value for us. And as Tim described, the fluid bed reactor, which is at the core of our process, has Proven scale-up potential, and that puts us in a very strong position relative to the peer group and the competition. You've seen a lot of the news flow recently. You've probably read some of the articles that we've got there in front of you. Origin, Fortescue, Shell, Woodside, they're all winding back. They're green hydrogen plans, you know, for the very reasons that it's high energy intensity, it's complex value chains and supply chains and it's very high cost. And this is actually opening up a very big opportunity for Hazer. hazer is not green hydrogen we are decarbonizing gas and we are accelerating that pathway to clean hydrogen much faster and more affordably than any available technology that is in the world today okay and i think there's a very good chart there in front of you on the bottom right which depicts the cost differentials between hazer for example in the us where we can deliver clean hydrogen for a dollar a kilogram which is a third of the cost of blue hydrogen which is steam methane reforming plus the carbon capture component and it's comfortably very conservatively conservatively a sixth to a seventh of the cost of green hydrogen excluding any transportation so we're in a very strong position as one of the lowest cost technologies on the cost curve available today for deployment into an industry where green hydrogen is being pulled back and hazer can plug in and effectively provide a very viable economic solution for industry tim maybe um you you could talk to this one in terms of just dispelling some of the differences between hazer and smr as well as green hydrogen yeah thanks very much glenn so

To build on Glenn's comments around cost, I'd like to explain some of the technical details that will make those cost results make sense. So starting with steam methane reforming or SMR, which is the incumbent technology producing grey hydrogen without carbon capture or blue with carbon capture. So SMR is highly polluting as a grey hydrogen source. It's the reason for the need for electrolysis and technologies like hazer group to try and clean things up. So, um, in the order of 10 or 11 kilogram CO2 per kilogram hydrogen at about a hundred million tons a year, hydrogen being produced today, um, you know, hydrogen today is a, is a big emissions problem with, with SMR as, as the basis in order to clean that up, you'll need a carbon capture. which in some places is not available, in other places you need to scale millions and tons of hydrogen CO2 a year to make it viable. So some places that's simply not an option, in other places it's not economic. Then if we look at electrolysis, which is often marketed as green hydrogen, one of the key things here is the reason that there's interest in hydrogen as a fuel is it releases a lot of energy upon combustion. What electrolysis is doing is the reverse of that. So it is extremely energy intense to produce about 50 to 55 kilowatt hour per kilogram hydrogen. So whatever way you look at it, at perfect efficiency, electrolysis is hard to do. Because of that high energy intensity, if you plug that into a grid today, it's gonna be looking two to three times as polluting as SMR, the thing that has the pollution problem. So electrolysis into the grid is not green at all. And then if you do put it, if you power it with green power, it's not economic as Glenn showed on the prior slides. Now, all of that is before you consider that typically you're gonna wanna produce green hydrogen in a location with plentiful renewable power and move it to a power deficient location. So there are substantial additional challenges and complexity with conversion to ammonia, liquefaction, building the supply chains, and then reconversion, regassing at the other end. So we see long timelines, high complexity, high cost, and potentially even highly polluting if they don't have around the clock 24 seven green power. So if you compare that to hazer, it's fundamentally easier to split a methane molecule than water. Eight times easier, that's thermodynamics, that's a fact. So with that lower energy intensity, hazer can come in at eight to 10 kilowatt hour per kilogram hydrogen and be producing, cutting emissions versus SMR in half today, plugging into a dirty grid. Now this is today's numbers dropping it in. We don't have to worry about the transport because the molecules are already moving in the form of methane. And then as grids clean up around the globe, that number will come down five times faster than electrolysis. So we see HAZR as affordable, scalable with a fluid bed reactor, And potentially even cleaner than green if you're in a green electron constrained world, which with the magnitude of challenge we have in front of us, I think most people would agree we are constrained. So I think that paints a picture that Hayes is well positioned now that folks are realizing the challenges around the thermodynamics of electrolysis. And we're seeing an increase in commercial interests on the back of that realisation that it's really hard to make green hydrogen economically. I'll pass back to Glenn now to give a few more updates. Thanks.

Thanks, Tim. Very good summary. And we talk about the size of the market all the time. Today's hydrogen industry is almost 100 million tonnes. That's almost exclusively supplied by steam ethane reforming. The wonderful thing about hazer is the switching cost and the disruption to go from today's incumbent technology, steam methane reforming, to hazer is small. And that's very important for industry to consider when some of these industries are low margins. We use the same feedstock as today's incumbent tech without the CO2 output. So a very unique situation for hazer to be in. Just jumping forward in terms of the corporate update, you've seen an announcement that we put out earlier in the quarter in respect of our intellectual property position. Very pleased to say that WIPO, which is the World Intellectual Property Organization, which is a specialist body of the UN, has now confirmed that our process and certain aspects of our process, in particular around the reactor and control of all that, has satisfied patentability requirements for catalyst-based pyrolysis. What does all that mean? It means that it's very, very hard to copy what Hayes is doing. We've been at this now for 17 years, slightly longer. We've deployed over $120 Australian dollars into the technology over that time, five successful scale-ups. We've got a great track record of developing this tech. Of course, we're putting as much intellectual property around this as possible. It's deeper, it's broader. We've now got over 70 patents worldwide and applications across five important technologies in 30 odd jurisdictions around the world. So a really important technology, intellectual property portfolio protection strategy that we've been working for many, many years. We're almost there. In terms of key activities, we've had a great year. We've got a transformational year ahead of us. Tim talked to some of those brilliant milestones on the CDP and just remind everyone we've been operating since January, 100 hours, 240 hours. 360 hours and versions are really moving towards the design of the facility and we're driving towards commercial readiness this year that's going to be a really important milestone for us as we move into the commercial scale up phase. Fortis and our project in Canada, I spoke to the license frameworks in place, the revenues, at least the payments are now through the door. And we're again seeking to hit the FID final investment decision in 2025. Japan, we've ticked off feasibility. The numbers coming out of that are very attractive economically. as well as from a capital perspective, we're into pre-feed and we'd expect to be putting license terms in place during the feed phase as well as next year. POSCO, new addition to the commercial portfolio, somewhere in the order of 20 to 25 commercial conversations going on at the moment as the CDP enables those discussions, lots of visitors, lots of dialogue. validating our continuously validating the technology. I'd be disappointed if we don't have further customer base jump on board over the next 12 months. Mitsui, I haven't spoken a lot about graphite. We will do in the coming months. Really excited about graphite. You will have seen that we've extended our partnership with Mitsui, which was a week or so ago. Very excited about that partnership. The feedback that's coming back from the market as that strategy develops is very positive. We see broad ranging application. in industries where we could see graphite prices over $500 a tonne, potentially over $1,000 a tonne. So a real value kicker for Hazer and our technology, which is one technology that serves two markets, the hydrogen market and the critical mineral market at the same time. So a really unique technology. Corporately, we continue to kick goals there. We are really well funded at this stage. We're not going to be in the market at any stage soon. Our inflows are going up, money coming in from Canada. We've got an R&D rebate due very shortly. We've got other grant funding on the way, in particular around Arena in the new year, and our outflows are going down. Lower headcount, we've got lower operating costs at the CDP, and we're not building anything. So we're in a really strong position corporately and financially, and that's enabling us to have a very strong runway through some significant milestones next year. Hannah, I think Sorry, I will just say I'm on the road next week. I've got a high net worth investor lunch in Melbourne. There is the micro cap investor conference for those folks that are in Melbourne. You're very welcome to attend. And if you're in Perth or if you can't be in Perth, you can join our hybrid format for our AGM on the 22nd of this month. I will just wrap up and just say, look, a really exciting phase for our company and our business. We're at the tipping point now with our technology, as Tim has described. We're a low cost, clean hydrogen technology, very unique, strong competitive advantage. We're ready today. We co-locate and drop into any infrastructure utilizing existing supply chains. We're a CapEx light model. We don't spend any CapEx doing anything. We license the tech. that draws out early cash flows for our business as we move into into the commercialization phase we're getting more and more interest we're signing up more tier one blue chip customers around the world we've got the tailwinds of a really exciting industry that needs decarbonizing i think we're in a really sweet spot as a technology and as a company uh thank you very much i think we can open up the lines for questions

Thanks very much, Glenn. To everyone on the call, if you do have a question, please use the Q&A button at the bottom of your screen. And while you do that, Glenn, we do have a few that came in in advance that I'll just read out. The first one is, how are you progressing with regards to developing a project in Australia by collaborating with industry or governments?

Yep. Very good. Yeah, we have lots of conversations going on in Australia. Lots of gas, lots of industry that is set on reducing carbon emissions. I can't speak to specific names that we're talking to, but there is big industry players here. We're talking to some of the largest and, you know, we're excited about the market here. There's quite a bit of support around, but there is an inherent ability or an inherent driver to reduce emissions in an industry. So watch the space around Australia. as we continue that dialogue. We're lucky that we've got the CDP based in Australia. So we're enabling at least visitors and companies and corporations and groups to come and visit the tech. Most people that turn up here at the technology at the CDP in Perth go, wow, we didn't appreciate how big this is, how real this is and how exciting this is. So we're able to showcase the tech real time to folks in Australia and that is enabling a lot of the discussions.

All right, thanks, Glenn. The next one is, well, actually, there are a few questions on this, and it was about the next generation reactor. What is the update on that?

Tim, can I throw that over to you?

Yeah, so fabrication is progressing well. What I would say is that the existing reactor is, you know, demonstrating most of the technology, it's demonstrating the chemistry, the hydrodynamics, the scale. The next generation reactor will be a demonstration of the heating system that we'll deploy commercially. It's already a commercially available piece of equipment. So fabrication progressing well, expect to be installing that next year. Don't see that as a bigger de-risking step as the current test program and operations that are nearing completion.

All right, thanks very much, Tim. Perhaps another one here for you, which is what grade iron ore do you use as a catalyst and does it require any further processing by hazer before use?

Yeah, so the process is fairly resilient. We absolutely have know-how and there are some qualities that we need to look for, but generally speaking, iron ores that meet those qualities are broadly available. and it requires fairly minimal processing, getting the right particle size, which is important in a fluid bed reactor. What we see is that that doesn't really, we don't see concerns around supply and it doesn't drive the economics or the emissions intensity. It's a minor component.

All right, thanks, Tim. And then next one, is the power to heat the reactor coming from the grid? And if so, what portion is from renewable energy?

Yes, I'll take that one as well. So generally speaking, yes, the power will come from the grid. And that's one of the benefits of of haze over electrolysis. So we can take power from a grid that's moderately dirty in Western Australia and cut emissions in half relative to the incumbent SMR technology. And that's because splitting a methane molecule is eight times easier than splitting a water molecule. I don't know what the specific renewables content in Western Australia is, but the grid's about 0.5 kilograms CO2 per kilowatt hour, moderately dirty. As it gets cleaner, Hazer gets really clean and really competitive on emissions. So we're really well placed there relative to electrolysis.

All right. Thanks, Tim. There was just one final question, Glenn, but I think you covered it. And it was just about... large enterprises, most recently Origin, pulling back investment in green hydrogen. If you don't have anything more to add on here, then we'll move on to the last question.

Yeah, look, I won't say much. I think we've covered a lot of that. The challenges of green hydrogen are apparent. You know, this is a journey to net zero. Yeah, we're going from coal to oil to gas to hydrogen to renewables. That's the pathway that most countries are on. Hazer is in a wonderful position to decarbonize gas, which is a readily available fuel today, and supplying a third of the world's energy. So it's a faster way to get to hydrogen than green hydrogen. And that's one of the uniquenesses of our technology. There's a couple of questions here, Hannah, that I do want to address that came up on the Q&A deck. James has asked a question around the cost comparison and the IRA in the US. I think it's a really good question. Thanks, James, because the IRA is very supportive policy for technologies, at least that are operating in the US. It is... It is something that we're very actively looking at. Probably half of our pipeline today is sitting in the US. And so it's not if, it's when. We have a large scale presence in North America. It's an area that we're actively focused on as a key market. And with the IRA support behind both the hydrogen as well as the graphite, It's a really important market for us to take part in. So those numbers you see there, James, are real. Our techno-economic model has been worked over the last two years to develop that. Those numbers actually don't include any subsidy. So with subsidy... you'll see our dollar a kilogram in the US actually come down. So there's more upside there. We're trying to be a bit conservative, but we're looking at all aspects of the numbers. I will just jump down whilst we're on the US. I think Sean has asked a question on Monolith. We don't talk about the peers probably enough. Monolith is one of the largest peers for us. They're... They're quite a different technology. They use plasma technology, which is hotter and harder to operate. I think they're probably tapped out a little bit on scale. But I think the important comparison is we're probably able to scale better. We've got graphite relative to a carbon black. So I think all round our tech is probably slightly more valuable. They're on a billion dollar valuation. So that's the pathway for us. We're sitting there at $100 million, slightly under market cap. But the size of the prize out there the market, as well as what the peers are getting in North America, is massive. That's 10 times of where we are today. That's the excitement of what we're trying to build. I love the vision of this company, and I also love the fact that we're not there yet because that's what's driving us and these markers out there that continue to validate the underlying value of our company. It's where we're striving to be. Graphite, I think, James, you had another question there on graphite. Look, I will come out a little bit more in the future on graphite because there's a lot to talk about on graphite, isn't there, Tim, in terms of the quality, the market that is out there, the partnership that we've got with Mitsui. That's just been renewed and evergreen now. So that's another strong validation of what we're doing. And I think we can show investors the potential size of the prize on graphite. Tim, did you want to add any sort of initial comments on graphite? And we'll certainly provide investors with a bit more in the coming months.

Just that we can continue to see a lot of potential there. Larger scale volumes for product testing are going to be really important. And a lot of that interest is also coming in externally. So folks that we're talking to, the interest is growing as others learn about our process and our product.

Very good, I saw a question on more grant funding, which I thought was also a good one. i'll just reiterate we're in a really robust funding position yeah. We've got a decent cash position. As I've said, the inflows are going up, the outflows are going down. So we're able to push well into next year. We're not out-raising at all in the near term. And we're also in the running. There's a lot of grant funding opportunities for Hazer, not just on the hydrogen side or the tech side, but also on the carbon and the graphite side. So we're continually looking at what is available there. We've got our hat in the ring on a number of them and we're pretty confident that at some stage we're going to be successful on that front to continue to shore up our funding and liquidity position as we go into next year. All right. I'm just looking at some of these questions. Where is the hydrogen being produced and where is it going at the moment? Tim, it's a demo plant, isn't it? I mean, Did you want to take that one?

Yeah. So, I mean, the purpose of the plant is we talked about it with the demonstration test program. So it's to gather the data to show that the kit will work reliably at scale as well as produce the graphite. The hydrogen currently being produced is being burnt. It's... more beneficial for us to focus on the data collection and the graphite than it is utilization of that hydrogen at this point in time.

Yep. Very good. There's a question here on our kind of business model and revenue streams. I'd like to break it down into three parts. Fortis is a great example. We're now receiving payments for engineering services. That's the early stage aspects of a project prior to FID. As we go into FID, we'd expect license fees then to be payable. So that's the second phase of our revenue model. And then as we go into production on facilities or customers go into production on facilities, that is when the royalty streams kick in. So we progressively build up the revenues for each project as we advance them. But each phase of those projects has an increasing level of revenues coming through the door. That's the business cycle. That's the revenue model for us. We're not contributing capital to projects. So that accelerates the free cash flow for our business. And, you know, our cash flows effectively are just simply inflows that are coming in from each project.

Then we've only got time really for one more question. And I've actually just received one on email. If you don't mind, I'll just read it out. And it says, with the POSCO collaboration, How does this partnership fit into Hayes' broader strategy for entering the steelmaking market? And are these tight partnerships planned for other industries?

Yeah. Yeah, it's a great one. Look, POSCO, this is a massive deal for us because steelmaking is, as I've said, a big industry with a big problem. 8% of the world's carbon emissions. POSCO is the sixth largest. They're the world's largest outside of China. So it's a really big partner. We're excited about it. We're integrating our technology into their green steel process. Green metals and green steel is a really hot topic at the moment just because of the emissions profile. It is enabling that deal in particular has enabled the deal flow. It's got a lot of people looking at Hayes's tech. And the nice thing about it is the corner points of our tech come together. We use iron ore as a catalyst, and of course that's the big feedstock for steelmaking. We produce hydrogen, which can be used predominantly in the DRI and the electric arc furnace process, and we produce graphite as a co-product alongside the hydrogen, and there's at least seven, if not more, applications for carbon and our graphite in steelmaking across both the blast furnace pathway as well as the DRI and the electric arc furnace pathway. It is everything that comes together in our tech in one industry, low emissions, graphite, clean hydrogen and iron ore and that is really the enabler for for clean steel at low cost so i'd expect more on this front it is a industry and a strategy that we're pursuing actively in asia as well as in north america and and as well as in the middle east um and there are a lot of steel makers around the world that are looking for clean hydrogen solutions and with the pullback of green um you know so it's a wonderful window of opportunity for us

All right. Thank you very much, Glenn. And thank you, Tim. That's all we do have time for today. The call is being recorded and will be available on our website shortly. If you didn't get a chance to ask your question or we didn't get to come back to you, we apologise. Please email us. The contact details are at the bottom of the announcement and we'll come back to you as soon as possible. Before we close the call, do you have any last remarks, Glenn?

Just to thank everybody for joining the call. We value the interest in the company. We value and we appreciate the ongoing support from our existing shareholders and all those that are considering investing in Hazer. at a tipping point, a really important point in our technology's future. We're on the cusp of commercialization, as one analyst put it recently. Our tech is de-risking. Our commercial portfolio is established and it's growing, which is validating our tech. We're running and chewing gum at the same time. The industry is ripe for disruption. And we are very well positioned as a disruptive technology and we're really excited about the next phase. So, you know, thank you very much for joining today and we'll look forward to speaking with you soon.

Thank you, Glenn. And thank you everyone for joining. We look forward to updating you in the future. Goodbye.