Hazer Group Limited

Good morning and thank you for joining us. Today we are joined by Glenn Corrie, MD of Hazer Group, and Luke Cox, Chief Commercial Officer, who will provide a brief update following the release of Hazer's June quarter results. You are in listen mode only, but feel free to submit any questions in the Q&A box. We'll attempt to address them at the end of the session.

Glenn, over to you. Thanks, Simon. Good morning, everyone. Welcome to our webinar. Joined on the call, as Simon said, by Luke. Our chief commercial officer together will present our results and some other highlights. So in terms of our agenda for today, we want to talk highlights. Obviously, our strategy update provide the latest on the global hydrogen market as well as the outlook. Luke's going to present an update on the KBR deal and all the good work that's being done there. We want to come back and talk graphite. It's the other side of our tech. There's a lot going on in the market there. And we want to provide details of Hazer's graphite as well as our marketing strategy. Then turn to progress on our commercial projects, a bit more insight into our sales and our customer pipeline. Come back and finish with a corporate update, recap on our 2025 priorities, and then open up the call for Q&A. So just jumping down then, Simon, to our highlights page, just diving straight in. Look, Q4 was a very transformational quarter for us, arguably one of our strongest and most strategic yet. It was dominated by our strategic deal with KBR, a global engineering giant to form what we believe is a very powerful alliance that supercharges our commercialization and licensing of our technology. More details very shortly on that. But I'm very confident this partnership will unlock substantial value in our company as well as our technology. I have met with very senior leaders of KBR almost at the very top of the company. They visited our site and our company in Perth. And what I can say is we're aligned on strategy. We're aligned on what success looks like for this alliance. We're aligned on what the target markets in the pipeline look like. And we're also very aligned on getting early wins and early runs on the board. So very encouraged by the early work that's being done there and very encouraged by the collaboration between the two organizations. On other highlights, you can see we worked hard on our scale-up. We partnered with PSRI, our industry leader in fluidization, to accelerate the process development. That complements a lot of the work that KBR is doing in terms of the reactor and the fluidization, in particular the scale-up to very large levels. We also achieved a very major milestone in Japan. Chubu, Chioda Corp have successfully completed their PFS or their pre-feasibility study. They've actually selected site and they have very confidently confirmed a very strong economic case. And that is very good progress for our Japanese project. And we're very excited about the pathway that that is on. Corporately, we successfully raised during the quarter, in fact, a little bit trickled over into this quarter of almost $11 million with very strong backing from strategic, institutional, as well as retail investors. Thank you to everybody that participated and supported the company through that process. We now have a very extended runway through some very significant milestones, licensing milestones, project development milestones. and technology development milestones. Our register is filling out very nicely. I think at last look, we were somewhere between 15 and 20% institutional holding. That's come a long way in two years. So we continue to see strong growth in the quality of our register and the attraction of some larger institutions. A couple of other highlights there. You can see we unlocked further government grant funding. Specifically, this was to our graphite product and our market development. Graphite's getting hot. We want to share more of that very shortly. There's a lot of dynamics going in the market that are very advantageous for Hazer. and then we kick some more goals with our IP protection strategy, which protects our first mover advantage. So overall, strong momentum as the market opens up for a very practical, low-cost hydrogen solution that can decarbonise industry today. In terms of strategy, our staircase, We remain on track. We continue to move up that staircase. We're very confident now in our commercial readiness. That follows the successful CDP test program that we've been through, all that successful and subsequent testing and modelling that Tim and the team have been doing. Our tech is market ready. Our project pipeline is building very nicely. So moving up into scale up, we're making very good progress there. We've locked in a very important strategic partnership to support us getting bigger and doing it faster. Our first revenues have been flowing now in Canada, and that's a very strong signpost of our commercial project and reinforces that low-cost licensing business model that we have developed. Of course, there's more to be done as we move towards the top step of our staircase. We're targeting commercial rollout, getting our technology to market at scale as quickly as possible. We've always said get 10 of these projects into the market over 10 years. I'm very confident we're going to exceed that and we've got everything in front of us to be successful. The size of the prize, the pipeline, the partnerships are all getting momentum. So if we move down to the next one, please, Simon, in terms of our customer pipeline, we made really good progress through the quarter on building out our pipeline. We're giving a lot more detail here in terms of where and potentially who is interested in our technology. We see our pipeline expanding rapidly. Our target markets are obviously North America, It's Europe, it's Asia Pacific and to some extent, more recently, the Middle East. Australia, as you can see, is building out very nicely. We've got seven live opportunities that are being pursued there and you can see the size of the bubble. that we have annotated there relates to the potential capacity of a Hazer facility. So the larger ones are over 80,000, the smaller ones are between 20 and 80,000. So the scale is there on the bottom left for you to reference. During the quarter, we started, in fact, we started the quarter with 45 global leads, and most of those are shown on the map across multiple industries, traditional industries of petrochem's refining ammonia, but also new industries, sustainable aviation fuel, steelmaking to some extent as well. So the majority of them, as you can see, are large scale opportunities, and that is also helping us inform the way we think about the scale up of the technology. With KBR, we potentially add hundreds of opportunities in ammonia and methanol. And from our last webinar, you may recall that there is something in the order of 450 ammonia plants worldwide. That's the green dots. And of this, 260 are facilities or ammonia facilities are KBR technology. So they today hold a dominant market share over 50% of the ammonia and the methanol market. So a very important strategic partner for our technology. So pipeline now extremely large, active with an opportunity set of potentially over 300 deals. Moving on to then the next slide. So the question then is, how do you put a value on this? What is each one of these bubbles or dots worth to Hazer? On the right hand side, you can see that we've worked the Hazer cash flows under a licensing model for a single 50,000 tonne per annum hydrogen facility. The key features of that cash flow is in the table on the left. It's a licensing model. First of all, there's no capex associated with that. You can see that it drives early revenues and free cash. Importantly, those revenues start to come in pre-FID. That's the Canada model. Canada is in year one of that model and we are receiving revenues from FortisBC. So it is our strategy in action. And then importantly, the key number there is a single plant for Hazer delivers a net present value over 20 years of $115M on licensing value alone. So every bubble on that previous chart is valued at over $100M for Hazer. With that deep pipeline of 45 active discussions, a much larger prize, potentially over 300, you can clearly see that Hazer has the potential to be a multi-billion dollar platform. And that's been the vision of the company to get this tech to market into the hands of the industrial players that need a decarbonisation solution. So 10 projects is a billion dollars, 20 projects is 2 billion and so forth. And that's relatively consistent with the analysts that have got valuations on us. I think there's one, I think the Euros Hartley's report is out there with an unrisked valuation of around $2.50 a share. And most of them seem to be coming in at that level at the moment. So moving then down into the hydrogen market. So there's a window of opportunity opening up. As we go left to right across the slide here, we've got an enormous market with an enormous problem. Green hydrogen using electrolysers to split water has failed to deliver that solution. Why? It's very energy intensive. It's about seven or eight times the energy that Hazer requires, therefore making it very costly. You've seen overnight that Fortescue, I think, have dropped two green hydrogen projects, Woodside earlier in the week and other green hydrogen projects. So we see this industry shift. that just continues to open up opportunities for Hazer's low-cost, ready-today solution. We've got a proven tech, it's viable, it's a low-cost alternative. We decarbonise gas, we plug in and we utilise existing infrastructure to deliver a very clean, affordable hydrogen solution with no CO2. but with this graphite, very valuable graphite co-product, which is substantial upside for the technology. The time is now, the market's opening up, the industry and policy in particular is shifting. We see gas coming back onto the agenda in a big way globally, and we've got that partnership in place now and enabling us to scale up with global corporations to deliver that solution today. Next one down, you'll just see again, There's never any downside in reiterating the size of the market here. The current demand top left, the consumption in the market today is 97Mt per annum. It's valued at over USD$200Bn. In context, that is approaching the size of the iron ore market. I always talk about the fact that it's third going to a half of the LNG market. It's a big market with a big problem. Production today is concentrated in three industries, as you can see on that bar chart, refining ammonia and methanol and a little bit of steelmaking. The problem for this market is that 95% of that 97 million tonnes is produced with steam methane reforming, which emits a massive amount of CO2. It's 10 times the amount of hydrogen that's produced. Every tonne is 10 tonnes of CO2. That's our disruption. Hazes target markets is disrupt, is really targeting those industries that need that replacement and that clean alternative affordable solution. And that is arguably our addressable market. So if we jumped down to the next one, how do we naturally compare then with steam methane reforming that dirty source of hydrogen? Well, actually quite well without the CO2. Steam methane reforming, basically dominates the industry. It's 95% of global production today. There is somewhere in the order of over 1500 SMR plants. So if you look at the table on the left, we're similar in energy intensity. We have the same gas feedstock. So we integrate very nicely into existing supply chains and infrastructure. But advantageously, we have no Scope 1 CO2 emissions relative to their 9 to 12. So you can see immediately that we're an amazing replacement technology without the CO2, but with a graphite co-product. So very comparable, but without the emissions footprint. Chart on the right, we've used many times before. Haze is very well positioned, very competitively um costed in fact we're cost parity with smr we're a third of the cost of blue hydrogen and we're conservatively a seventh of the cost of green i think we're being generous there we see green hydrogen projects sometimes well in excess of ten dollars a kilogram so you can just see how very cost competitive um haze technology um is To complete the market side, how does Hazer fit within the market? There are a lot of peers out there that are developing a technology in methane paralysis. We're clearly leading the pack of all of those peers. We're a front-runner in the space. We do a lot of work on competitor analysis. We've looked at plasma. As a technology, we looked at molten beds 10-years ago. We just figured out that those weren't the way to scale. We've got several X factors here that really set Hazer apart that drive our competitive edge over emerging players. Just to call out a few, low energy intensity and high value graphite co-product delivers us a very low cost pathway to clean hydrogen. But above all, scalability, that second bottom line, scalability is a absolute critical success factor for a technology. The use or our use, of a fluidized bed reactor technology is our major differentiator. It's proven industrial scalability. It's a technology that we've adopted from the refining sector and the metallurgical industry. And that enables us to go big, go more efficiently up to very large scale deployments, even on a modularized basis. So it's a very well position technology with almost all proven aspects of it incorporating the major aspects of the process. Work doesn't stop here for us. We're confident that we can see upside with energy. We've got some excess heat that we think we can use to even bring that energy intensity down further. And we're absolutely confident that we can bring down costs. We've got KBR looking at our costs and telling us that they think they can go cheaper on certain aspects of it. So there's certainly economies of scale that can be built into this. And there's also massive upside with our graphite. So we win on cost. We went on scale, we went on carbon quality, and we're leveraging this with KBR to secure important first mover advantage in key markets where we have done already with existing projects as well as new projects. Right, so Luke, I might just hand it over to you here to talk about our recent KBR deal and the progress that's being made there.

Thank you, Glenn. Good morning, everyone. Building on Glenn's previous slide, all those aspects are also the reasons why KBI chose Hazer. So we've spoken in a previous webinar about the deal. This is just a reiteration of the highlights of that deal. Important to note that KBI has committed to exclusivity with Hazer, so they will not market any of the other competitive methamphetols that technologies for the reasons that Glenn just spoke to. Those are all the key reasons why Hazer is different, why KBR chose Hazer. So exclusivity in ammonia and methanol, we have the optionality to bring other projects in the non-exclusive markets to KBR. Also important to note, I think, for investors, existing shareholders, We've carved out the existing portfolio. So all the projects that we have developed to date as Hazer, we can bring them to KBR, but we don't have to. If the client KBR and Hazer think it's a good idea, we can develop them jointly. And that's definitely adding to the momentum in our pipeline. Relevant to mention as well, scale going up, the market demand is big, as Glenn pointed out. KBI is committed to a contribution to the work program financially. So that will also help us in terms of our runway going forward, preservation of cash and spending our money wisely. Financial contribution by KBI is very important and greatly appreciated by us all. The market position, Glenn already mentioned, exclusivity ammonia and methanol, more than 50% of the current hydrogen demand. KBI has a serious position in that market, more than 50% of that 50%. So, yeah, a beautiful strategy to have access to that market with a very serious global partner. What is not on this slide and one of the terms that you can't negotiate is cultural fit. As Glenn mentioned, in the recent weeks, we've had the opportunity to engage at very senior levels with KBR and the alignment is super strong. Target markets, path to market, how Hazer fits in the KBR portfolio and in the global markets. It's really a nice and strong alignment on all those aspects. So maybe go to the next slide. I think I need to make up a little bit of time so I can go a bit faster. Technical work is in progress. The process design package for larger scale solutions is ongoing. Go-to-market strategy is being formulated. In parallel, and it maybe should be brought forward, the market engagement is ongoing. We're already talking to people together. We're exchanging leads, we're exchanging market intel on a daily basis. There's a lot. And it's really exciting to be part of a proper partnership as well. We call it a strategic alliance, and that also comes through in the day-to-day interactions. It's a proper partnership on an equal basis, equal terms. be working with that kind of partner. Maybe move on to the next one, Simon, please. On to graphite. The next slide, please. I think many of you would have been aware that there's a lot going on in the world around the supply chains. Graphite comes to the fore quite regularly. Terrorists are being considered, put in place sometimes. Graphite is a critical mineral. For many countries, it's on the critical minerals list. So what that does is that there's a heightened awareness of sovereign risk and sovereign risk around supply chains. So a lot of companies, a lot of countries are very interested in producing graphite locally rather than being dependent on international supply chains and being exposed to the economic and supply risk that those existing supply chains have with them. Maybe move on to the next one. What it all does, what it all means, to state the obvious, is that it for hydrogen, but now also for graphite. So this is a visualization of the key markets that we're focusing on in terms of key applications. A lot of work has been been done in this in this space in the last six to 12 months. In no specific order, concrete and asphalt is something that is right up there in terms of potential applications. As you may recall, with our finance, Tubu Electric and Chioda Corporation put a project in Nagoya that is one of the key focuses is to sequester the carbon. in asphalt and bitumen, not as a gas, so it's not CO2 storage, but it's sequestering the carbon in a solid form, which has many advantages, especially in jurisdictions or in countries where you don't have access to gas fields to store the CO2 as a gas. Through the haze process, you can store it and actually make economic value out of the carbon product as it comes out of our process. Another one to mention is the iron and steel making. Obviously, as many of you would be aware, we've got a partnership with POSCO in the market. The interest for steel making is in both the hydrogen as well as the graphite product that Hazer produces. We also have an ongoing partnership with Mitsui that I'll address in a second. But in steelmaking is where a lot of things come together. As you may recall, we use iron ore as a catalyst. So we have a low emissions graphite product with an inclusion of iron ore, which is very attractive for steelmaking. A lot of traction in that industry globally. Other ones to note, water treatment, PFAS removal, a very interesting topic. PFAS is quite important. It's a carcinogenic substance found in water across the world, major concern for water utilities. We've got some potential angles there and are developing a serious partnership in that space. Next slide, please. So coming to that strategy, and this is quite an important slide, I think, to focus on. So what we do in terms of our market development and product placement in the market, we're focusing on three things. We're maximizing certainty by reducing the risk around supply chains. So we have a partnership with Mitsui, as I mentioned just then. We've been working with Mitsui since 2022. specifically on the placement of graphite, haze graphite globally. For Mitsubishi, that's a scope three play. They want to help their buyers of existing commodities, petroleum, coke, naturally occurring graphite, other CO2 intensive products. They want to replace that with haze graphite, which is a low emissions product. Strong demand there. a serious pipeline leading to good positions for future off-tank deals through Mitsui and also in parallel, Hazel is also doing a direct pathway. So we've de-risked that aspect of the marketing strategy as well. Indirect and direct optionality also in terms of pricing. The other two important legs of the strategy are volumes because we're seeing significant volume demand for graphite and of course maximizing the price. The call-out box in the bottom left there is an illustration. As Glenn mentioned earlier in the presentation, if you take a nominal 50,000 tons per annum hydrogen production plant for a facility, which is where we're now focusing in terms of capacity, the market demand is there, that produces approximately 150,000 tons per annum of graphite. If you times that by a conservative price, that for one project would generate $45 million per annum for a single plant. So that's for one plant. I want to emphasize that all the numbers that Glenn has been mentioning is a single plant location projection. I think that's the most important bits of this slide. So next slide, please. Excellent. Yeah, earlier in the, or after the quarter on July 15th, we announced a partnership with Energy Pathways in the UK, referred to that announcement for further detail. What is important to note is, I think, three things. It's a very clever project in terms of the strategic positioning in the UK. It's a facility potentially of 20,000 tons per annum of a hazer production capacity for hydrogen. And what is very important is the UK policy is very explicitly supportive of methane pyrolysis. And I mention that because Europe is a bit complicated in terms of regulatory environment. A lot of focus on electrolysis. Economics aren't there. As Glenn mentioned, we see projects falling over left, right and center. That's why we think this is a potentially quite exciting partnership in the UK. Also strategically to get a foothold in the UK market as Hazen. Next slide, please. Our existing business development pipeline, we've shown this before. We've spoken about it a couple of times. Maybe just to reiterate, our existing portfolio, as Glenn mentioned, it's solid. It's been solid. It's growing every year. week or two we add a serious uh proponent to the into the pipeline um we are very selective in terms of who we speak with and who we progress with simply because there's a there's a lot of demand so we have to be selective and only work with those people that really are ready to to work with us so um so it's a good thing overall the um if you add it all up the existing portfolio adds up to just over 1 million tonnes per annum of capacity in total, which is only, it's less than a percent of the current global hydrogen demand as Glenn focused on earlier. So with our existing position, very confident that our 10 in 10 objectives or 10 plants in 10 years is realistic and achievable.

And with that,

Thanks, Luke.

That's great. I would just say we're very constructive on graphite at the moment. That market dynamic is definitely moving in our favor. We also see quite a bit of inbound from governments. There is a sovereign risk component to all this with China effectively controlling almost all of the graphite supply markets. So that plus the tariffs is really forcing governments to think about how they shore up their supply side for graphite as a critical mineral. On other projects, I will just address Canada here. We continue to speak with our colleagues or at least our counterparts at FortisBC as late as this week. Their commercial discussions on their preferred site are ongoing. We believe they're going well. It's taking a little bit longer than we'd like, of course, but those discussions also do include offtake. So those discussions are always going to be a little bit lengthier when you're talking not just site but also potential offtake for customers. hydrogen pricing and also graphite. I don't really want to be drawn into a time on it, but it could happen fast once those terms are agreed. So we continue to keep the dialogue live with With Canada, some of our team will probably be up there this quarter to continue the discussions on the project development as they approach FID. We do see KBR's involvement here as an enabler. In fact, all parties see that. That brings a completely new dimension to the project, in particular performance guarantees for the customer and so forth. So once site is selected, We think this could run fairly quickly. So we'll keep investors and shareholders up to date as we get progress from that project. Japan as well, we had that major milestone achieved during the quarter. The PFS is completed, site is selected, and there's a strong economic case. Graphite has a home as well, and that testing is underway. And they're now speaking with governments on approvals and funding. And we recently hosted them at the CDP. So Simon, if I could just turn to the corporate update, I think it's 25. So just rounding out, maybe just one slide back up. That's right. No, to the 25, which is the corporate execution. Yeah, there we go. So just to finish off, we continue to strengthen the company across all of our functions. We maintain that robust funding position over $16 million of current funding, which is recently bolstered by that near on $11 million capital raise, 10.7. So thank you again to all the existing and new investors that supported us. If you include our annual R&D rebate, which is due in the Q4 of this year, which is circa $4 to $5 million, that brings our total liquidity and pot to over $20 million. So that's a really strong pot of funding that this company needs for an extended runway to get through some of those very important, what we think is major inflections for the company in terms of licensing. On top of all this, of course, there's more sources from grant funding milestones that are due over the next 12-months and we are actively pursuing further State and Federal-level grant opportunities, including on the graphite side, that are various levels of engagement. I think we're in a good position, never comfortable, but actually got that extremely strong runway. On the cost side, we continue to streamline our operations. The costs are coming down, With the CDP now placed into the cold stack mode, we don't see any further testing anticipated in the short term. Operating costs are going to be significantly reduced. Contractor cost headcount is down 30%. So we see substantially lower cash burn going forward. With all of those sources and uses outlook, That extended runway gets us through some key commercial milestones on current trajectory. Our goal is, of course, to always extend that towards self-funding. We see that revenues are starting to flow in through at least our first project, and it is our objective to try and replicate that and bring this business to a point of self-funding as soon as possible. possible, especially with now potential for near-term paid studies through our alliance with KBR. Our strategic focus is centered on strategic projects, pipeline, leveraging our tech into the commercialization and the licensing world, all aimed at unlocking that billion-dollar platform that we talked about earlier. So to wrap up on our remaining strategic priorities for the year, the next one, please, Simon. It's a catalyst-rich period. We've got a de-risk tech. We're rapidly expanding that pipeline. We've got that strong and robust funding position. We've got that powerful alliance to deliver multiple license opportunities on an annual basis. And the market, of course, is becoming much savvier to the advantages of methane paralysis relative to green hydrogen and electrolyzers. We're that global leader in this space and we're well positioned. This year, the reign of this year, is all about licensing, commercialisation and unlocking that potentially high-value graphite product stream. So that's our focus. We've got the right partnerships now in place to do that and it's all guns blazing towards those objectives. Simon, I might just stop there and maybe we can open up the line to Q&A before we wrap up.

Yep. Thanks, Glenn and Luke. I will just quickly remind everyone that if you've got questions now, the time to type them into the Q&A box and we'll work, well, we'll work through as many as we can. We've already had quite a few come through over the last couple of days. So I'm going to sort of, I'm going to start with those. The first one, Glenn, is why did Hazer decide to defer the next phase of the commercial demonstration plant testing?

Yeah, so we've seen a few questions on that. I think we tried to address that in the quarterly this week. Look, frankly, we don't see any requirement for any more testing. We've done a lot. It's been over 12 months of really intensive testing on the process as well as the reactor concept. I think we partly underestimated how good the program was, the testing program. I think now that we've had the benefit of looking at all the data, Tim and the technical team, technology team have really interrogated all that data and really found that actually we have got a very good concept and very good reactor already in terms of our potential to scale up. I will just remind everyone we're using a fluid bed reactor. I'm not taking anything away from the technical team, but fluidized bed reactors are proven. So we've come out of this testing program with the information, the data and the knowledge that actually our reactor works, coupled with KBR's expertise as global experts in fluidized bed systems, We're confident in our reactor concept. How we heat it is really just a nuance of scaling, and that's what we're currently working on at the moment. Demand at the same time has crept up to larger facilities, and we're working on, as Luke said, facilities and potential plants of over 50,000 tonnes per annum. So we think we're in a good position. We don't see any need to do any more testing at the moment. All of that good data from the CDP We also had some excellent data from Canada through the reactor testing on the ground there and all the modeling that has essentially has come out of that. And we are in a place where we think we've got already a commercially viable solution for large scale facilities. It does also reduce our CapEx and OpEx. Of course, running a plant is OpEx intensive and that aligns, of course, with our business model. So that's kind of where we got to with the reactor and the CDP.

Thanks, Glenn. That probably leads into the next couple of questions pretty well. When will meaningful revenue be generated by the company? How long till this point?

Yeah, very good question. Revenues are flowing already. We've already in year one of the Canada revenue cycle. So that's our licensing model already in action. It's not a lot, but of course, it all adds up. And that really, more importantly, symbolically, that's the model that works. I don't really want to be drawn into revenue forecasts, but that said, I think it's a fair target that we have several paid feasibility studies on revenue generating projects this year. And that's the objective of what we're targeting. We're aligned with this, with KBR. and also our existing portfolio. We're confident in the customer base and we know it's there and we're bringing focus now to the high priority customers that will effectively sign up to early stage feasibilities that will lead into feed and then into licenses. So that's the model that we've got. We're proving it with Canada at the moment. But again, I would be very disappointed if we don't start to see this year

um of several paid feasibility studies with large players that are are very interested in our technology nice uh and then probably really again loads into the next one what's the current status of haze's funding and cash plan do you have enough runway to reach commercial deals

Yeah, so I think I just think covered most of that. Well, look, we're well funded. The liquidity is there. We've got that $20 million or more pot of liquidity, as I like to say, more grant funding, more state and federal government grants in flight. KBR is throwing in also $3 million to support the work program. So that also offsets and cash burn is going down with the CDP and cold stack SGA, SG&A reductions down 30%. So on a net basis, we're in a very good position to be probably spending in the order of on a net basis, a million and a half, a quarter. So you can see what runway we've got. I like to think it's going to be over two to three years. That is significant for us to get through some very important inflection points, as we talked about. And, of course, the target is always to stretch that as far as we can to as close as possible, if not beyond the position that we can be self-funding with those near-term paid studies come through as we expect them to do.

Excellent. Thank you. The next one, are Hazer and KB looking to move quickly to take advantage of the 45P extension in the USA?

Yeah, I saw that one come up, Simon. I think that's a very good question in terms of the US. We always see the US and North America more generally as a target market. We're not 100% exposed to it, which is important. We've got that global diversified portfolio, as Luke highlighted. Notwithstanding, the US has got very cheap gas, very big industry and deep pockets. So there is a lot of value in having a position there. The 45V, for those that are not familiar with it, is a part of the IRA, the Inflation Reduction Act, that is potentially under threat. And I guess one of the benefits and the advantages of Hazer is that we are already low cost. Being a dollar a kilogram for hydrogen is extremely low. We would always take subsidies, but we are being low on the cost curve means that we rely significantly less on the requirement for subsidies and being cost parity with SMR puts us in a very strong competitive position for a switching technology that relies less on subsidies. So The more interesting aspect of the US side is the 45Q, which relates to carbon capture and graphite. We've got lots of ongoing dialogue with the DOE in the US and You know, my, I guess, summary of all this, it looks like that the 45Q is there to stay as a long-term policy support mechanism to methane paralysis. So generally speaking, US target market looks like policy is shifting a little bit there, but I think it's going to have less impact on Hayes' ability to secure projects on the ground.

Thanks, Glenn. Look, I'm just going to try, there's a couple of ones here on graphite, so I'll just sort of ask them both together and you can answer it holistically, I guess. So is graphite, is using graphite to produce graphene part of the plan? Do you have a... Update on pricing on the graphite. Are you going to upgrade it to battery grade? Have you looked into the price to make it spherical graphite? So I guess it's about upgrading.

Yeah, very good. Luke, do you mind, if you're still online, would you mind trying to address those?

Yeah, definitely. Definitely still online. Simon, if you don't mind, if you have the slide deck still at hand, maybe pull up slide 19.

Yep.

What is important to emphasize is that in the ongoing marketing strategy for the graphite, especially on the back of the success with the CDP, we produced significant commercial scale samples, which have been shipped out to our project partners. potential offtake partners for graphite and other industry experts to further solidify that position, the placement potential of the graphite product. The graphene question I'd love to focus on for a minute. We get that question a lot. It comes back into market volumes and pricing. Yes, the pricing potential for graphene is significant. Graphene has the real substantial potential to to change uh how we how we use our electronic devices um so price potential yes the market volume however is close to zero today but no one is buying a graphene at a at a meaningful uh volumes so longer term uh yes today we're not focusing on it because there's no uh no one's buying it it's only for research purposes at the moment we get a question also i'd like to address it head on please um otherwise um I think it's the pricing point. Maybe it's the next slide, Simon, that probably articulates that best. Yep. This was the testing and then the pricing point. We're conservative. We are also regularly being told that we're conservative with graphite. As Glenn mentioned, the sovereign risk is a real thing. The unique properties of hazer graphite are definitely a value driver, potential premium over competitive products. and then the low emissions aspect, which could also attract a premium value. We're being conservative in our modeling, so there's pricing upside. We model in ranges between 300 and 700, and we are regularly being told by some of our potential partners that also model the commercial aspects of Hazer that we're being too conservative, but that's a good place to be. There's volume. pricing upside um and as i mentioned in the in the presentation volume is also really important because you can focus on on premium value only but if you saturate a market or a market segment and the market is not going to accept that so we need volume and pricing combined yeah and certainty

I'll just build on that, Luke. That's excellent. We're focused on, as Luke said, high-volume, high-confidence markets. There's a lot of graphite that comes out of our process, but I like to see it as cream on the jam. Even at $300 a tonne there, you can see the revenue that's generated from a project up to $45M just at $300, which we think is a very low price. But I think ultimately there's going to be a blended price for various applications that are probably going to be in excess of that. But again, market's the right place to be at the moment. It's a critical mineral. We see various industries looking to secure large volume sources of graphite. So it puts us in a very strong position.

Maybe also to add to that, also in the product development space, we also have objectives in our product development work streams where we focus on that functionalization or post-processing, in particular for higher value markets and mid to long term. So we have the current positions now and value upside in the future. Good place to be.

All right, excellent. I reckon we've got a couple more that we can get through. With Fortescue, BHP, et cetera, looking to produce green iron in Australia for export to China, is this an opportunity for Hazer to partner with these companies?

Absolutely. I think as Luke said, I'll let you jump in here, Luke. I think steelmaking and green iron is absolutely where it hits every corner point of Hazer's technology industry. an iron ore catalyst, of course, it's a feedstock into the steel manufacturing process, cheap and affordable clean hydrogen and a carbon product. So everything fits together in steelmaking. That's the direction that steel is heading. It's responsible for 8% to 10% of the world's CO2 emissions. I think you will have seen on our pipeline chart that we're in discussions with over five global steel makers, all of them see potential in a hazer technology. So we're very excited about this as our KBR, as a high priority segment, not just internationally, but in Australia, everybody is aware that there's several big green iron and green steel projects that are being developed in the country. We are having dialogue with several of those as well. Luke, would you like to add to that?

Yes, please. Thank you. Yeah, exactly. Some of the names that came up in the questions are very familiar to us. They're also very familiar with Hazen. What I maybe should refer to is also a partnership with POSCO, which is public. They chose Hazer for a reason, right? They get it. They have told us they've looked at everything. Ammonia import export for energy, not for fertilizer, but for the energy aspect. Compressed hydrogen, all the other forms and carriers. They said for them that doesn't make economic sense. Methion paralysis does, so that's why we're engaged and working with them. It is a very interesting sector, very interesting potential, and we know And also on electrolysis. And as we've already highlighted a number of times this morning, electrolysis has a economic problem today. And Hazer can definitely make those business cases work. I'm really very confident. And yeah, it's a matter of the market, figuring it out and moving. Post-COVID first mover, there'll be others in that space, no doubt.

Yeah. So I'm just seeing a couple of questions here on the paid studies. Maybe I'll just address those if it's okay. Andrew, thanks for your questions on paid studies. I would say they're additive to the top line in the first instance because they are obviously revenue generating activities. We've always seen that as the business model. So early paid studies is part of that model, as we've talked about in the initial stages, like we see in Canada at this stage. They will be an important component of it. And that's what we're trying to get into very quickly. That brings in revenues that effectively covers our costs and moves us towards feed and then into licensing. So they're the first step in what we consider to be the licensing model that goes into a feed. And then it goes ultimately into an FID and a license. So they're very important aspects of it. And we see that as Canada is the benchmark for that. And they're not high cash burn because they're effectively revenue generating activities that the client is paying for. And that's the model that KBR is very familiar with. And that's the one that we're adopting for Hazer. Jason had a question on 50,000 tonne per annum plants. We'd love to be there as soon as possible, Jason, is the short answer. What we are seeing is plants getting bigger, demand getting bigger. If you think about ammonia, a 3,000 tonne per day ammonia facility requires 200,000 tonnes per annum of hydrogen. They don't need 10,000, 20,000 tonnes per annum. They need multiples of that. And that's the pathway that we're on. These are big industries that need big volumes. And that is the absolute focus for where we're heading. Of course, there's always going to be smaller projects. Our tech can be scaled up and scaled down. That's the wonderful thing about the fluidised bed reactor. And it can go down to as low as a few thousand, but up to potentially over 150,000 tonnes per annum. And that's a real differentiator for Hazer relative to the competitors in this space. And being so advanced in that and with a strong partner that's got expertise, we're very confident that 50,000 is a very achievable target.

Maybe to add to that, Glenn, if I can, in the quarterly update, in the written document that we issued earlier to the market earlier this week, we also included some numbers and some analysis there. If you look at our existing portfolio, 96% of our existing projects in the portfolio pipeline are bigger than 20,000 times per annum. So that is a very, very clear signal from the market where we need to be in terms of scale. It's 20 onwards, 20 to 80, 80 onwards. It's big and it's there.

I think we'll probably just finish up with one final question. What are the major catalysts investors should look out for in the coming six to 12 months?

It's really several things. Thank you. It's licensing commercialisation, those paid studies, those feasibility studies that are going to come through and continue to validate the strength of the tech and the marketability of it. Of course, graphite is a key topic that we're actively pursuing at the moment. So there's a lot of milestones and we think catalysts around the graphite market. And grant funding and other strategic opportunities that we're pursuing are absolutely near-term catalysts for us as we drive towards getting our tech to market. So it's a catalyst-rich 12 months. We've got that runway now. We've got that partnership. I'm absolutely confident that we will continue to deliver what we think is big inflections for this company as our tech is ready. It's proven effective. It's ready for licensing with a strong partner. We're low cost over green. We've got parity with SMR and those dual revenue streams. So I would stay tuned. It's a very exciting journey that we're on. And we have a very exciting pathway ahead of us in the next six to 12 months.

That wraps up today's session. Glenn, would you just like to make a closing comment?

I think that's it. Simon, I think we've addressed everything. Like I say, we're on the fast track to get our technology to market. We've got the tech that operates and works. We've got the pipeline. We've got the funding. And we have the partnership to do that. And it is all about commercialize, commercialize, commercialize. I appreciate the first one is the key. In any first of a kind technology, the first one's the hardest. Once we get that, I'm very confident the dominoes will fall. We've got that pipeline that's ahead of us. Methane policies as an industry has shifted dramatically. We see that green hydrogen projects are falling over every day. That just continues to open up the opportunity for Hazer. Once that first project is in the bag, I'm confident that we will start to see a re-rating in the stock and start to uncover and unlock that deep value that is there towards that billion dollar valuation.