Hazer Group Limited

and Chief Commercial Officer Luke Cox, who will take you through the June quarterly report and provide an update on recent operational and commercial progress. I'll now hand over to the team to run through the presentation.

All right. Thanks, Simon, for the introduction. Good morning, everyone. Great to have you on board and welcome to our Q4 webinar. Joined on the call, as Simon said, by Tom Kulikin, our Chief Operating Officer, and Luke Cox, our Chief Commercial Officer. And together, we're going to take you through our quarterly results and we'll provide an update on our key developments across our business and all the progress that we're making towards commercial deployment. It was an important quarter for Hazen as we continue to execute on our strategy and build momentum across all of the aspects of our business. We're running and chewing gum at the same time. We're focused on scale up. The commercial projects that you'll see this morning, we're obviously expanding our project pipeline, advancing that important graphite commercialization phase, and then strengthening our business at the corporate level. If we just jump to our vision, I know you're aware of our vision. We are transforming natural gas into clean energy in the form of hydrogen and a critical mineral in the form of graphite. We're doing this with no direct process emissions. Why is this important? It's important because we're serving industries as a technology and as a process that are amongst the hardest to decarbonize and the most difficult to electrify. There are industries like steel, chemical industries, the refining industry, ammonia, petrochem, data centers, power, and that portfolio is expanding. And they're all industries that need an affordable, practical, clean solution today and not decades from now. Why Hazer wins? It's worth reiterating some of the very core strengths of our process. We're a truly unique, world-leading proprietary solution. I often refer to it as one process that serves two very valuable markets. We produce two strategic projects, the world products that the world needs. Our competitive advantages you can see on the left, they're very clear. We win on cost. we win on emissions, we win on producing a very premium graphite co-product and importantly we win on scalability and all of this is driven by proprietary aspects of our process like the catalyst and our reactor and driving out very low energy intensities that allow us to effectively produce some of the lowest cost hydrogen in the world today. If we just jump to the next slide, it's worth reiterating that cost advantage. It's an extremely compelling competitive advantage for the company. We believe, based on economics and all of our work that we've done on the scale up that Hazer delivers one of the lowest cost hydrogen, clean hydrogen production pathways in the market today. It's underpinned by almost two decades of scale up work. It's underpinned by $140 million of capital deployed, robust engineering definition, low energy intensities, valuable graphite. And if you look at that chart on the right, you can see that at scale, Hazer is on cost parity with conventional steam methane reforming, that's SMR. That's the incumbent to dirty carbon intensive process that the world is using today. And you can see that this is a significant point because customers can switch to Hazer without paying a green premium or a cost premium. And that puts us in a very, very strong position. Comparatively, if you cast your eyes on the chart, you can see how we compare against some of the clean hydrogen pathways where a third of the cost of blue hydrogen which is SMR plus carbon capture and we're comfortably a seventh of the cost of green hydrogen which is prohibitively expensive and this was underlined by Orica's recent announcement on their green hydrogen FID, which based on publicly disclosed capex and government funding numbers, we estimate their hydrogen cost to be around $15 a kilogram. So you can see $15 for green as a real price point in Australia versus Hazer, $1 to $2 in Australia. So an extremely competitive position for us. So in summary, the potential for us is to remove the green premium in steel, ammonia, SAF and other industries. And it's why our tech is so attractive for projects like YLR Liquid Fuels and other industries where customers don't want to penalty switch across to a clean solution. If we just jump into our highlights, we posted a solid quarter of performance. We continue to build on those important foundations of our global licensing platform. A really important major milestone during the quarter, we completed our process design package, or PDP as we refer to it. There's been months of work with KBR to get a commercial design package ready to put in front of customers that is a commercially ready solution. that is now accelerating our market engagement with existing and new clients. So Tom will talk to that shortly. Secondly, our strategic projects continue to progress with momentum across Canada, in Korea with POSCO, in the UK with EPP. They're all advancing towards the next commercial execution milestone. We continue to see strong momentum and traction in steel. Hazer unlocks. the commercial viability of green steel economically. We see it in the YLN numbers, we see it in POSCO, in Korea with POSCO, and we have other collaborations in steel that are underway that are confidential at this stage. But we're absolutely convinced that the synergies of hazer and steel are a compelling combination that will be unmatched in the market. Graphite is a serious differentiator and I can know you will start to see that through all of the graphite work that we're doing and the commercialisation strategy for that is taking shape. We're now converting qualification and all of that R&D work, we're converting that into commercial, tangible value for the company. You've seen our deal with Green Steel that is a $30M off-take deal. The Hallett deal last quarter was a good example of this and Tom will speak to that shortly as well. And finally, our pipeline continues to expand We've got strong engagement across liquid fuels, data centres, clean ammonia, other sectors, ourselves with KBR. We're very encouraged by the level of engagement. They're bleak players. They take time to get into a commercial shape and we'll provide more insights into this very shortly. Corporately, you can see the numbers for yourself. We ended the quarter with a strong funding position of $13 million. That's that very extended runway now through some significant commercial milestones ahead. It's underpinned and reflects a low operating cash burn of well under $2 million a quarter. and strong financial stewardship, but we're still investing in growth. We're a small team, but we put and allocate the capital towards the projects and the opportunities and the work that effectively will turn the needle for Hazer. Looking ahead, I'd expect that liquidity to be maintained, more R&D rebates coming in in the next quarter, more grant funding, as you can see, $2 million to $3 million there still to be unlocked. I'd expect more revenues to come through as we start to now execute some of these new projects. And of course, we've got that KBR funding contribution of up to $5 million. So overall, a quarter that's been very important for us to move beyond technology into commercial scale up, strengthening in that customer confidence and positioning Hazer for global licensing and deployment. I think this is a good point for me to hand over to Tom to update you on our commercial design package as well as some of the key projects. Over to you, Tom.

Thanks very much, Glenn. Good morning, everyone. Great to see so many of you online. This is a very good turnout for us. It's a pleasure to be here today and to run you through what Glenn has as the highlights there and break them down a little bit into more detail. We'll start with the design package. So a PDP as Glen called it, the process design package. That's the core blueprint for any technology provider. We always have to have this core blueprint that we can then use as the guiding document that sits behind and it's actually a package of drawings, equipment lists, details and advisory to engineering so that they can then build out the project from there. So when we develop a technology to that large scale, one of the first things we do is put together a design basis or a process design package, which is what it's called. So our PDP that we worked on, we worked that in conjunction with KBR. That provides a standardised 30,000 tonne per annum hydrogen production plant. It confirms that it's scalable. It confirms the economic viability of the Hazer process. And in conjunction with KBR, we take all those process, mechanical, electrical designers and design input, and we combine that with our experience running the CDP and the Hazer operations to develop a safe, reliable and low capex facility. So we get to do a lot of that optimisation before we have to sit in front of customers and we're not wasting their time optimising our process. We've actually got pretty good handle on the fundamentals there. So KBR Sustainable Technology Solutions President Jay Ibrahim actually commented on this when we announced the PDP completion. He's very complimentary about the maturity of the technology at this stage and it really does help KBR launch straight into those customer engagements. Having KBR behind the PDP gives us large credibility, so large project credibility, and it allows the Hazer plant design, it's a major de-risking step for clients because they're not just looking at the Hazer Company as the one who's producing this technology now at an industrial scale, but some of the largest engineering houses in the world are now involved. So it de-risks that financial investment decision when they're going through their project. Importantly, it does strengthen our commercial readiness and supports the global licensing opportunities. It drives increased engagement and we are actually seeing that we're engaging with potential projects. We get to customise that design package then to their particular needs. They'll have their own power configuration, their own gas supply. They'll have different purity requirements for the hydrogen and graphite and they'll also have their own specific capacity. So we put all of that into our base PDP and then actually customise it for the client. So this is a pretty standard process. When developing a project at the assess select phase, you would always want that design package to understand what the heart of your process looks like, and then you'd build out your whole facility around that. So it goes right through to engineering, financial investment decision, and then on into execute as well. Next slide, please, Simon. I'm talking a bit here for our R&D and our CTO, Tim Forbes, who heads up this excellent work we're doing on proving the chemistry up. So this quarter we made significant progress in the reactor scale-up and design validation. We've achieved a lot in the area of actually physically validating through experiments, what our models have been showing us and what we've done at the CDP as well. So it's all cross-referenced back to that demonstration work that we've done. Some of the photos here, that's a lot of technical equipment, but this actually shows process rigs we have around Australia. So one in Sydney, one out in Glen Innes and here at our Woodman Point CDP as well. The CDP is still a really key asset for us. Our folks are down there every day. We showcase the hazer plant regularly and we have people coming through all the time, but also our R&D folks are down there and they're actually constantly implementing new experiments in fluidisation, especially on the graphite. It gives them a really good indication and visualisation of how the graphite behaves in the system. So we prevent one of the key risks that sits around methane paralysis of fouling and We've got that fairly well under control. We've also been working in the same space with PSRI in Chicago, who are the world's experts. Their expertise has supported more than 10 successful fluid bed technology scale-ups. So we do feel like we're in the right hands with the global experts working on that. So we've actually completed advanced fluidisation, entrainment and mass transfer testing with those guys. This is actually fundamental. And it's also really enhanced our kinetic modelling, which has just moved in leaps and bounds. It improves the rigour of our commercial design basis. So when folks ask us for a design, for a size and for an equipment spec, it gives us a lot more confidence in that scale up and supports the commercial readiness as well. All right, moving to Canada. We have a solid quarter of progress with the project advancing on several fronts in Canada. So KBR is now engaged with us in expediting their engineering works and for site location. Development work is focused on the 2,500 tonne commercial facility. In parallel, development engineering work, including costing estimation, is being done to support economics. So we're looking at exploring alternative economics. And we're defining the process basis with our new PDP and assessing site-specific requirements and evaluating the pathways for engineering. FortisBC has actually expanded the engagement with Hayes, strengthened by KBR, and we're now looking at development activities across a broader range of project scenarios. So there's a lot happening behind the scenes. As we get technical and commercial discussions finalised, we'll brief the market on that as well. Canada and North America more broadly remains a very attractive jurisdiction for Hazer. It's low-cost gas, quite clean power, especially in Canada with all of the hydro. A clean power grid means a very low CO2 footprint for the Hazer process itself. It supports, it's got very supportive government. So the provincial government in BC have been fantastic. The federal government are also really good. And Fortis remains a very supportive partner. There's a clear commitment to continue progressing this work forward and getting to the long-term project success. They have a very big vision for what they see as the Hazer deployment in Canada and more broadly in North America. EPP, Glenn mentioned as well, so Energy Pathways, they're developing that large-scale infrastructure project. So I guess our engagement with EPP has really deepened as well. It's the first commercial project to progress under the KBR Alliance, so that's a paid concept study for EPP's proposed facility there in the UK. And it demonstrates confidence that project developers are actually looking at the Hazer process as being one of the unlocking capacities for these project developments. It does do large scale, low emissions hydrogen production. So the concept study sits within that broader Marram Energy Storage Hub, the MESH project, which you can see the pictorial of there. And the UK government has designated that as a nationally significant energy development. So it's definitely getting a lot of notice in the UK. Sites identified with associated British ports. So the port of Barrow in Cumbria, which is near the Lake District, sort of on the northwest of the UK, which is just near the offshore fields that they need to be working with, is sort of identified as the best opportunity for the site. So it's quite a big milestone for them to have that. And working with the MESH team, you can see in the pictorial there, we're actually looking at integrating the hydrogen into the supply chain where they can produce a low carbon hydrogen, the high quality graphite for domestic and for international applications. And critically, some of that hydrogen will be used for low carbon ammonia. So it's a real integration here where we've got hydrogen and ammonia working together. This is an excellent application for the integration with our partner KBR. They license over 50% of the world's ammonia production. So it links in really well. I think at this point, I'll pass over to Luke, if that's okay, Luke, for some updates.

Thank you, Tom. Good morning, everyone. Thank you for joining us this morning and thank you for your ongoing support in what we do at Hazer. Shifting to Wayala, mentioned by Glenn already in the intros. In December 25, we announced that we've teamed up with M Resources, an Australian company, to strengthen their bid for the acquisition of the Wayala Steelworks and the associated mines in South Australia. M Resources is currently confirmed as one of the two final bidders in the government-led sales process of the assets, and Hazer makes the M Resources bid very compelling, in particular because of the favourable economics, as Glenn explained in the beginning of this webinar. It's expected that the final decision will be announced by the administrators and the government later on in this year. In recent weeks, there's been significant media attention on this project, which included also statements by Matt Lattimore, the founder of M Resources, that they have compiled an A-team, as Matt called it, of world-class steelmakers, technical advisors, and partners that have built collectively 30 electric arc furnaces around the world. So, as Hazer, we are super excited to be working with M Resources and its partners on this project. To point out the obvious, it would be an absolute game changer for Hazer to secure this project in the consortium. Next slide, maybe, Simon? On the topic of steelmaking, we announced last year that we extended the collaboration with POSCO from Korea for the integration of the HAZER process in POSCO's existing steelmaking facilities in Pohang, Korea. Fosco is advancing its own technology for hydrogen-based reduction of iron ore, which is called Hyrex. So hydrogen reduction is in their key focus strategically to implement in their operations globally. Since the announcement of the extension of the collaboration, there's been good progress, particularly in the space of testing of haze and graphite across several potential applications in Korea, including iron and steel, obviously, with POSCO being a steel market. That's the core interest. POSCO overall remains on track with its commercialization of the Hirex facility in Korea to have that operational by 2030. Recently, and we did also write this out in the quarterly update, the South Korea, the government of Korea, I should say, the Ministry of Land, Infrastructure and Transport has recently approved the amendments to the Pohang National Industrial Complex to enable the site development for POSCO's next step in that journey. So this is moving, it's getting very, very real, and it's a very exciting journey to be part of with POSCO. It also confirms our synergies with iron and steel making, as Glenn said. That's really a really hot area for us in the last couple of years, actually. Maybe next slide, Simon. We have a very strong pipeline. You've heard us talk about this in previous webinars. What we decided to do today is to give you some insight in a number of strategic pursuits that are live at the current moment. Our portfolio, more broadly, well beyond what you see on this slide here, covers, it's about 40, I think we're close to hitting 50 at the moment actually, active pursuits at various levels of maturity, covers a number of sectors focused on liquid fuels, chemicals, and iron and steel making, with the majority of these applications being focused on the use of hydrogen as a feedstock for industrial uses, and securing local production. We've definitely seen a shift in terms of energy demands shifting towards security of supply of products more globally due to the geopolitical situation across the world that everyone is very aware of. This slide shows a number of those key strategic pursuits. Maybe just to clarify the LNG super majors that refers to very large players in the LNG space, global operators that are very familiar with LNG and the potential of molecules and are very interested in HAZR as a technology to decarbonize those molecules where they're required. So not shipping molecules, it's actually using the existing supply chains of LNG, of methane, and producing the products locally where they're required. Again, also tying into that sovereign aspect that I mentioned before. Also national oil companies. So that's not the LNG supermajors, but it's national oil companies across the world that are very strong in the oil and gas space historically. strong interest from those players. Also relevant to note that the demand for the solution that Hazer provides continues to grow. As Tom explained also in the PDP, collectively with KPI decided to use 30,000 tons per annum of capacity in hydrogen as the for the PDP, for the design package. And that turned out to be a really good decision because now we see in the market also the demand is there for 30,000 and well beyond, which could mean multiples of 30,000 in trains or a very large single or double train reactor. It's all doable now. We now have all the information required to meaningfully engage with those customers looking for very large applications. So very excited with where we are. I'd like to draw particular attention also, again, to the iron and steel producers mentioned before, particularly whole segments, no pun intended. Hazer, we have ongoing discussions, some of them are confidential, so we can't identify them explicitly, with very high profile project proponents, including steel makers, both in Australia and overseas. and with that I'll pass over to Glenn to take up the next slide on the market.

All right, thanks, Luke. No, I think, and we want to continuously try to provide ways of giving you insight into our pipeline, our portfolio. I wish we could say everything about what we're doing. We're not unfortunately able to do that, but there are some really material discussions going on, and I'm confident that over time and in due course, we'll be able to provide more details on that. More broadly on the market, I mean, the market continues to evolve. It's big and with a big problem. I've always said that. I was obviously with the geopolitical uncertainty and the market volatility. We've actually seen a real reinforcement in the need for a hazer solution earlier in the year. I was a little bit concerned that the demand for hydrogen might soften. In fact, in reality, we've actually seen quite the opposite. We're getting really serious engagement in really serious sectors. And as you know, does not survive without hydrogen for ammonia, refining, methanol, steel, fertilizer, food. So it's at the center of what we require. And it's become a real priority for customers. And there's increasing focus, as Luke said, on secure, affordable, low emission energy solutions that are domestic. We're seeing strong signals across target markets. All of those announced projects are progressing. Ammonia fertiliser in particular is worth shouting out. This remains a very active discussion where many economies are looking to strengthen their domestic production of ammonia and fertiliser. And we see this at home in Australia. So we're going to absolutely see and KBR has reinforced this macro picture that there will be further investment in new ammonia capacity. And that's driven by what we've seen playing out in the Middle East. We've talked a lot about steel. There is a lot of momentum in steel more broadly across the globe. Low emission steel, there's big projects. Stegra is one that's worth calling out in Europe. That's just had multi-billion dollar of funding thrown into it from the Singapore government. We've got at least five steel discussions going on at the moment, active ones. And so you can just see how the synergies of steel of Hazer in many aspects, hydrogen, graphite, hot hydrogen, the iron ore catalyst. It's everything that comes together for us. So we're excited about this space and I think the industry is demonstrating that. We're seeing renewable diesel, sustainable liquid fuels. Hydrogen is an enabler for these fuels. One of those technologies in particular, 50% of their feedstock is hydrogen. so you do not create sustainable fuels more broadly without a hydrogen feedstock. So the common theme is across all of these markets, customers are not just looking for a clean hydrogen solution, they're looking for a commercially viable pathway that removes that green premium and that's where exactly Hazer is uniquely positioned. Moving on to graphite, I think before we start to open up the call for Q&A, perhaps, Tom, if you wouldn't mind talking to this one and the next one, and then we'll close out with the corporate update.

Sure, Glenn, no worries. Thanks. Yeah, graphite is really coming to the fore as the... the enabler for not only the hydrogen LCOH, but also in its own right, the enabler to reduce the CO2 emissions of what the current incumbent carbon products are. The markets, as you can see there, the total addressable market size that we're looking at here, which is the carbon product within these markets, is absolutely massive. So we don't only look at graphite itself, but we also look at any type of carbon where our material has a similarity to it or could be used in that place so iron and steel manufacturing you know they use carbon all through the process I mean they use they gasify raw coal as it comes in they use pure anthracite for carbon steel and basically our product really does compare and and stand up against those as a low emissions co-product when you're using hydrogen as well so in a steel plant, you can really do it all. Steelmaking, asphalt, concrete, major drop-in ready solutions. We don't have to do anything. The product that's produced comes out of the process and it's ready to actually be used in these applications straight away. Critical applications, defence, battery, graphites and carbon more generally require a lot of post-processing and they've got a much longer qualification process, but they really have so many uses for carbon throughout the industry. So I'll start just steelmaking, obviously, we'll just continue the story and we have signed our first off-take LOI in steelmaking. So that's a strong indicator that the steel industry is a natural fit for the HASER process. Concrete has taken big steps with qualifications. Structural and marine concretes now, as a performance additive, haser actually outshines any of the other performance additives you can use for structural concrete. The unique part about the haser material in the graphite, specifically for concrete, is that the particle size is such that it can fit in the porosity of the concrete and it prevents water ingress, salt ingress, concrete rot, but also it actually strengthens the concrete as well and it improves its curing time. Now curing time could actually have a significant impact on project schedules. I also need to mention as well it conducts heat. So where you have concretes that require working in cold climates or concretes that are actually going to be thermally conductive, this is a product, this is probably one of the few products in the world that you can add as an additive which improves its heat transfer. Now this also works in data centres and major HV power cables that are underground. we've actually tested it as a fluidised thermal backfill. So what that does is you bury those big power cables in concrete for security, but the power cables, if they start to get too hot, will actually get derated. By using our additive in the concrete, you can wick that heat away and run those power cables higher, so you actually get more efficiency out of the power. So for a data centre, this is a massive energy saving and I think it's actually one of the future opportunities for hazer concrete as well. And we're seeing commercial pathways in the concrete and cement space already. And the recent Hallett announcement I think is part of that. So I'll talk to that a little later. In asphalt, we've had excellent results where the graphite is improving the strength and lifespan of roads. So our testing has been completed. We have actually tested mid-grade and high-grade asphalt, and we actually are providing improving in rutting resistance, improving in cracking, improving in resilience. So yeah, if you add this product to your asphalt mixes, it will actually improve the roads. So we've got that. We see, look, permanent sequestration of carbon in asphalt is one of the largest and probably one of the primary outlets we see for haze graphite globally. And there's asphalt plants in every city, which brings you back to the same concept that Luke was talking about, about sovereign access. um asphalt value and use testing is underway at the moment this is going to determine our global price points and our co2 emissions benefits for replacing the incumbent materials both the solids and the binder as well in asphalt so very exciting space thermal energy storage is graphite blocks it's a future-facing technology we see a lot of opportunity there and it's got a great market size too water treatment continues to provide research opportunities but it's mid-term and mid-scale and we're actually prioritizing other things at the moment we think water treatment isn't going to be the centre of our world in the next sort of graphite development space. We have actually had a question already ahead of the call from Mr Lewis about hazer carbon electric arc furnaces. And it's something that we actually have been doing some research with our collaboration partners on. So we can use the hazer graphite and we have tried it as an additive in the electrodes themselves for the arc furnaces. It's providing great strength results. There's some very interesting results coming out of that. and it looks like one of the future technologies where you could see the application of hazer graphite. Additional to that, in an arc furnace you inject a lot of carbon to sort of get the carbon level correct for carbon steel and we have actually done some testing there with promising results with some of our steel making partners as well. So great question and I think it's actually an area where we see a lot of opportunity in arc furnaces and steel making more generally. Finally, just on that as well, we'll update the graphite monetisation strategy too, but we have done palletisation this quarter. So that's actually pretty key because that improves handling and transport. It minimises the risk of dust and powders. It improves steelmaking applicability. You can strongly bind the product and actually make it exactly the right size to be injected into the steelmaking process.

So that was a really good result for us. I think Tom's on mute there. Tom, you've gone on the mute.

Oh, apologies. Hopefully you heard the last one about pelletisation.

Yeah, we got that.

I was just flicking notes. Sorry, I need to use my notes, otherwise we'll get lost. So the graphite monetisation strategy, as you can see there, we're looking at the high volume drop in applications first and trying to get some really big markets to take it away. We look at the growth opportunities in adjacent high value markets where some treatment is required. And then we look at the high end markets, including batteries. And although it was at the end of the quarter, I think it's worth highlighting. We're pretty excited about the external independent confirmation that hazel graphite can be upgraded to 99.99% purity and that allows us to do some testing in battery applications. So we've got a series of tests now planned for the second half of the year in battery applications for performance. Now that we've got a base feed product, it can be done. Now we actually want to see how it performs and where it actually has the value. But we recognise that it's a small market and the upgrading and qualification hurdles and the timelines are huge. but it's something we think is complementary to the large-scale drop-in applications and our product, the graphite that's produced is quite unique. It's nanotube rich, it's got a composition which is actually different to anything else and this could lead to new technology breakthroughs in the battery applications so we're pretty excited to keep working in that space as well. Thanks Simon. One last note on the Hallett partnership. Look, Hallett's the largest supplier of concrete and building materials in South Australia. They've been in the industry for more than 40 years and this is an example of how we took our product, our graphite, we produced some, we sent it off to Borrell MTS for testing, we actually engaged experts to do the qualification and then found it had some positive results. Once we had those results, we engaged with the best off-takers and the highest calibre off-takers and Hallett's clearly one of those. So they've got extensive technology capabilities. They're very strong in South Australia as well as nationally. They've got a great facility up in Port Augusta and they work in that region really, really well. They're part of the Australian cement and concrete industry and the industry has set a net zero carbon cement and concrete by 2050 mandate. So we feel that Hazer is a real enabler for them to actually reduce that CO2 footprint of concrete.

Back to you, Glenn. No, that's great, Tom, and love what the Hallett team are doing. They're really shaking up. and decarbonising cement and concrete. And we're really proud to be working with such a large industrial group. I think they're one of the largest suppliers of industrial materials and concrete in South Australia. And so we're going to hear a lot more about them. Just on graphite, just pull out a few numbers because I was reading the Critical Minerals Outlook overnight, which has just been published by the IEA 2000. If you've got time, go and have a look at it. Graphite just comes to the top again. It's at the forefront of energy and national security. It ranks as one of the most exposed to the supply chain risk. We didn't talk about that in great detail here today, but China, of course, controls almost 90% of the supply chain for graphite. It's hot in defence, aerospace and ultra-high purity applications. So I think it's a great milestone for us to be able to demonstrate that hazer graphite now gets to 99.99%. and it can be absolutely used across multiple aspects of applications across industry and it also contributes to the lower cost aspect of our hydrogen and that's one of the key aspects of why we continue to talk about it and advance this strategy because it continues to drive down the cost of our hydrogen as an offset and it's a low emissions product as well. I think we're almost finished, but if we just turn to our outlook for the next six months, our priorities remain unchanged. This is the same slide that we've been using now for several months. We've got momentum, as Tom said, behind that commercial design package. Our focus is clearly on commercial execution and licensing, and we're now able to do that with a very credible partner and package and design behind us. So important catalyst to look out for amongst all of that stuff that we talked about this morning. Why other progress? There's a decision there imminent. Further updates on Canada, as Tom alluded to. New material opportunities now that we've got these substantive discussions going with some of these large players. we continue to advance that graphite qualification and convert that into tangible value as we have been with Hallett. I think we'll take it to the next phase there with them, but also Green Steel WA, that $30M offtake agreement there. There's going to be more of those because I think we have this ongoing engagement with graphite that is just getting very exciting. And our partnership with KBR is deepening and it's expanding. beyond engineering. It's a broad strategic relationship now from the working level all the way to the top and we're really excited about what it's going to yield for the company. We'll finish there. There's a few corporate access points for people. I'm presenting at the Tactic Conference in Port Augusta next week. That's going to be a really well attended South Australian event. There's the October Hydrogen Summit in Adelaide. That's another South Australian event, one of the biggest in Australia. So we're presenting there. I'll probably hold an investor coffee or something for folks in Adelaide. If you're around, drop us a note and we'll get you involved in that. I'm attending GasTech in October in Asia. That's one of the biggest gatherings worldwide for gas players. So obviously there's strong synergies with gas and hazer. So there's another opportunity there to engage with new and existing customers. And I'll probably be on the road in Sydney, Melbourne and Brisbane at some stage between now and October. So plenty of opportunity to engage. The building blocks for Hazer really are coming into place. We're focused on conversion. We're going to drive that momentum forward on those commercial outcomes, projects, licensing revenues. And ultimately that should lead, we hope, to greater shareholder value for Hazer. for our investors. So thank you for today. I think it's a good time to open up the call for Q&A if we can. Simon, please.

Yep. Yep, absolutely. Look, there was quite a few that came through yesterday and the day before. So we've hopefully already answered those. So we'll just go to the ones that have come through. Yep. Probably the first one. Did Orica consider Hazer for their process? That's from Oliver.

Yeah. We'll be honest, Oliver, yes. I mean, I think we've had discussions with Orica and we will continue to have it with Orica. We see, again, strong synergies of what they're doing. They've gone down that green hydrogen pathway for now with strong government funding support. But they're one of many in Australia that see the strengths of what Hazer can do. And again, I think our pipeline in this country has expanded enormously. relative to the rest of the world, and it's certainly against what I'd expected. But again, ammonia-based techs, explosives, fertiliser, sustainable aviation fuel, liquid fuels, there's many opportunities. So Orica is one of those. We'll continue talking with Orica and others, but there's a wonderful opportunity for us to have a bigger presence in Australia, as you have seen as we start to... You know, Wyala's a great example. Whatever direction that heads for Hazer, it is a wonderful validation of Hazer's involvement in large-scale commercial projects where a low hydrogen cost can be a game changer for industries. And I'm convinced that more and more of these customers are going to switch across to what Hazer can offer.

All right. The next one was from Steven. Is the Hazer Hydrogen Demonstration Plant still operational? If not, why not? Could you produce a revenue? Could it produce a revenue?

Yeah, good question. I think it's a valid question, Steven. It's an expensive piece of kit to run. So we're in what we've, I think we've been open about this. We're in what we call warm stack. It's effectively in a situation where we don't run it all the time because it's an expensive piece of equipment to service on a monthly basis. But what we have got, of course, is around that. We've got our lab in Sydney. We've got a test rig that is down at at site as well. They're lower cost ways of achieving almost similar results. Our CDP was very successful. We ran it for over 12 months. We had continuous operations there for almost 1500 hours and we achieved um everything out of that and more that support that supported bringing KBR on board for the scale up and the commercialization and the next opportunity for for us to operate that will as you say be a revenue operating opportunity for for the company um and and that's our commercial demonstration plant. As Tom said, we use it a lot for showcasing. There's many aspects of that that we feed into all of the modelling and the engineering and the R&D work that we constantly are running. And if you've had the opportunity to visit our CDP, we've got a wonderful test rig alongside that that we use almost every day to look at some of the more detailed aspects of the technology.

Alright, next one from Atosha. The LCOH figures assume the US Henry Hub gas around $2 as the Aus and Asian markets seem to be LNG backed. Do the And these have jumped since the closure of the HMUS. Does the Santos offtake insulate the Wyala case from a global volatility point of view, I guess?

Yeah, it's a great, I think, Atosha, I get your question. And you saw our cost chart in the US at Henry Hub, $2 to $3. Hazer drives out or produces hydrogen around $1 a kilogram. Okay, so that's an extremely low cost. for hydrogen at those gas prices. If you jump then to LNG net back prices closer to what we're seeing in Asia as well as Australia, Australia is probably slightly lower than Asia Pacific. because of the LNG, but the domestic gas supply here. But if you assume prices sort of in the order of, or gas prices in the order of $10 to $12 per mm BTU, then Hazer is closer to $2 a kilogram. But it is extremely low cost, still relative to Orica's cost and relative to Green Hydrogen of $7. And that's simply driven by the fact that splitting a gas molecule is $7 times lower in energy than splitting a water molecule. That's chemistry. You'll never change the outcome, but it's not linear between gas prices and hazers cost, and that will fluctuate. That USD$1 to USD$2 that we see has still got downward pressure potential because of scale-up benefits, because of graphite pricing upside, and other opportunities like carbon offset. So we measure, we effectively calculate costs conservatively, but we see upside beyond the $2, at least in Australia. And as gas prices move up and down, I think we're still maintaining very competitive hydrogen costs.

All right. Look, I'm going to try and group a couple of these. I know Tom and Kapil have sort of asked about What are the economics of each deal and when will the company be in a position to forecast break even based on the pipeline? I know that's not that straightforward, but maybe a bit of colour on that.

Yeah, we're not spending much. And you can see from our cash burn, it's mostly people. And we've got the strong support of KBR behind us in terms of the scale up and the next phase of commercialisation. So we spent $140. We're now over the main hump. in terms of going forward. Every deal here depends, but we've been public on the numbers in the past, but every license here of around 30 to 50,000 could be between 50 and 70, even a hundred million dollars of of revenue for Hazer. That's the scale of each of these projects. So that's what we're driving towards to give visibility on what these licences look like in those phases as we move into FID for these projects where licence agreements are signed. There'll be revenues through engineering services and fees, contracts and other things to get to FID where we will ultimately have a licence agreement that we're able to... that we're able to bring out and share with the market. In terms of cash neutrality, it only takes three or four of these projects through even the engineering service side for us to be almost covering our costs. So it's a low cash burn business. We call it CapEx Lite as we move into that license phase. So as we continue to multiply the revenues from phase. Both of those have been revenue generating projects and as we bring more of these projects like POSCO and a win in YALA will certainly get us much closer to cash neutrality.

I probably think we have time for one more and the others will answer via email afterwards. Wayne has asked how will Hazer earn the graphite revenues? Is it a licence fee of what Yep, Tom or Luke, would you mind taking that one? Go ahead, Luke.

Do you want me to go first? Sure. In principle, the Hazer business model is focused on licensing. So there'll be a percentage or however the commercials are finally negotiated with the owner of the asset. We're open to considering all sorts of models, also in collaboration with Mitsui, our partner for the graphite marketing specifically. Thomas, anything you wanted to add there?

Yeah, I think that I agree with everything that Luke said. I think that is definitely the engagement we have. We also have the ability to look at other alternatives for discharging that client's graphite as well. So if we do need to set up our own ability to either market it on their behalf or actually move it, then we have all of those options available to us. So I think that... the risk around not being able to discharge the graphite has materially reduced. We have definitely large outlets for it these days.

I mean, we're seeing it as upside as well, guys, aren't we? And not every customer... wants graphite. And we talked about supermajors and big LNG players that don't necessarily want or need graphite. We'll work with them, as we have been, and some of them are asking detailed questions around offtake and pathways to market. And it's worth mentioning that we have a strong strategic collaboration with Mitsui, who are one of the largest traders of carbon products. So we're working all avenues here. If a customer doesn't necessarily want the graphite, it might actually be quite valuable for Hazer to take it. I think we've already come out with price discovery around steel where at USD$400 a tonne, you can see that even small amounts of graphite can be a USD$30M offtake contract for Hazer. And then if you start layering on Hallett and other applications, then there's a scenario here where we'd love to have some of the carbon and the graphite where we are confident not in the offtake. And that's why we've spent so much time working through the graphite market and understanding it, not with just external parties, but off our own back. So price discovery, market applications, and I think you're starting to see that we are tapping into all applications, not just drop-in, but longer-term battery applications, which are getting pretty hot. Simon, I think there's some repetition in the question, so it might actually be a good time to wrap up.

There's probably one more, though, Glenn, sorry, that I've found that I thought was probably worth answering on the call, if you're happy to.

Okay.

All right. The CPD is a different design than the larger KBR design. Does this mean that the future customers will require seeing a larger scale plant working successfully before committee?

Tom, do you want to... address that one?

Yeah, our scale-up design basically works through the CDP and then into our process design package. So when we talk about scale-up, we talk about the fact that the CDP demonstrated continuous process of methane pyrolysis using the Hazer process. That basically unlocked our ability to go bigger. Now what we're looking at is the process design package that we've built is basically takes the core chemistry of the Hades process and then deploys it in different hardware. So there's a lot of different ways to actually get that hardware to do the job. But that process design package has fixed us on a specific way of doing it. So when we present to the clients about scale-up strategy, it really is, we've got the chemistry locked, we've modelled the size and shape of what happens, we've then rechecked that against the CDP to make sure the scale-up is linear and it does work. and then we demonstrate the new processes. So, yeah, I think that it's a good area to understand and it's a common question we get, but it's part of the scale-up strategy, I think. So the CDP is fundamental to underpinning the chemistry for the scale-up.

Pretty sure, yeah. All right, Simon, that's probably a great time to draw it to a close. Just in terms of closing remarks, I think... Look, we're transitioning from a tech developer into a commercial execution model. And I know you can see that through all of the commercial projects, the design package, the pipeline that's now expanding. It's a very important value creation phase for us as we move into this phase. From my perspective, it's the most exciting part of what we've been doing, developing tech and now actually selling it to a customer. Our counterparties are very large. These are very large industries. They are very large problems that we're trying to solve and that's why we have a diversified and large portfolio of projects and opportunities and deal flow because all of these negotiations all run at different pace and we don't necessarily control that all the time. That said, any of these projects have the potential to drop at any time and re-rate the company in terms of the value creation that they're going to bring to us and the validation that brings for the company. But the first and the second, they're always the hardest, but we're getting close to now execution. milestones on many of these and we're really excited about the next phase. Thank you for your support to the company and joining today and we look forward to giving you further good news in the not too distant future. Thank you very much indeed.

Thanks guys.