Hazer Group Limited

Good morning, everyone, and thank you for joining us today. On behalf of Paisley Group, I'd like to welcome you to this September quarter investor webinar. Today's session is in listen mode only. If you have any questions at any point, please type them into the chat box and we'll aim to address them at the end of the presentation. Presenting today is Hazy Group's MD and CEO, Glenn Corrie, and COO, Tom Coolican, who will take you through the September quarterly report and provide an update on the recent operational and commercial progress. I'll now hand over to Glenn and the team to run through the presentation.

Wonderful. Thank you, Simon. and a very good day to everybody and welcome to our quarterly webinar. Thanks for dialing in. Our report went out yesterday. Hopefully you've had the time to look at some of the highlights in that, but we'll go through some of the headlines through the call. I think this will take about 20 minutes or so because we've had a few questions come through overnight. Quite keen to get onto those and any questions that folks from the participants from the call want to add through our portal. Tom and I, thanks Tom for joining as well. We'll both take you through our quarterly results. We'll provide an update on our commercialization strategy. And I would just say up front that it was an important quarter for Hayes as we continue to drive forward our strategy and build the momentum across all of the pillars of our business. So let's dive straight in. If we can just go down to slide three, please. Look, I know many of you are aware of our tech, big picture. Simplistically, we are transforming natural gas or any methane-rich gas into two products that the world needs. Clean and affordable hydrogen and very high pure form of carbon in the form of a graphite. We don't have any direct process emissions in the process itself and the X factor that we like to talk about or the secret source or secret solid is an iron ore catalyst. And we have, over the last 15 or 20 years, developed Hazer into a world-leading proprietary solution that is now gaining global recognition with big corporations and big think tanks around the world. And that's a place that we're very excited about with our tech and the market. Our competitive advantages are clear. You'll see those on the left-hand side of this chart. We win on cost and emissions, and I'll talk to that shortly. We win on the production of a premium, high-grade form of carbon graphite as a co-product. And we also, importantly, through some proprietary aspects of our hot equipment and reactor, we win on scalability. So some pretty important components to our technology. So just drilling down on our cost picture... You've seen this slide before, but our cost advantage is very compelling and it continues to strengthen for reasons I'll explain very shortly. But Hazer is capable of delivering one of the lowest cost hydrogen pathways into the market today. And that's evident from the chart. What is driving that cost advantage is several factors. Our proprietary catalyst that I talked about, The capital efficiency, and we've been working now with KBR for nine months on developing the design package, and that is reinforcing our cost advantage and our capital advantage in terms of a capital stack. Thirdly, our low energy consumption. At scale, we are driving down the energy consumption to under 10 kilowatt hours per kilogram of hydrogen, and I'll explain what that means in terms of emission shortly. and of course we've got that valuable graphite co-product. So they're the major constituents of our competitive advantage and they all come together in terms of that turquoise wedge there on the chart on the left. And if you then look at the chart and the orange line, we are on cost parity with conventional steam methane reforming, which is almost the entire, the majority of the market today, the hydrogen market, and that's the incumbent, dirty, carbon-intensive process that we are trying to disrupt, and that's the bar in the middle. So we're a third of the cost of that process plus carbon capture and storage, if it's available, and it's not always available. And you'll see relative to the bar on the right, electrolyzers, we're easily or comfortably a seventh of the cost of electrolytic-produced hydrogen or green hydrogen, as I like to refer to, where we know the energy intensity chemistry-wise is at least 7x on Hazer. Probably more in most instances but theoretically that's the chemistry and that's the difference between us and electrolyzers. So you see we undercut SMR and carbon capture and we undercut 7X on electrolytic produced hydrogen. So this advantage, we can deliver a clean hydrogen product stream into industries, potentially removing the majority of the green premium in steel, in ammonia, in liquid fuels and other industries like refining and data centres and power and other effectively industries that require a hydrogen product stream. So shifting to emissions, it's the first time we've shown this, but we do it with industry-beating emissions. So there's a lot in here, but let me try and unpack it for you. So positively, our customer and client engagements and discussions are now moving beyond cost to also emissions, which is a really positive step for the engagements that we talk about on the global stage. So let's just jump straight to the chart. SMR is that bar in the middle that we referred to in the previous chart. And we know that's a very carbon intensive process because it combines gas with steam and water. So every ton of hydrogen produced is is associated with 10 tonnes of CO2. That's the ratio of that process. That's today's industry, and that's where we are trying to disrupt. So that's a really important comparison with Hazer on the left. Now, because we have two product streams, hydrogen and graphite, we are able to allocate our emissions across to... share the emissions across those products. And even on a relatively dirty grid... we can reduce the emissions of SMR by over 80%. Okay, that's just connected to grid. Of course, we can be even cleaner on a renewable or a much cleaner power grid, which we foresee in the future. But on today's relatively dirty grid, that's the sort of comparison that we can achieve. And then relative to the right, the orange little line, we can also undercut electrolysers that are plugged into the cleanest of cleanest grids. And that would be one where you'd expect to see something in the order of 80% renewables, which is, you know, it's a big ask, but that's, you know, fairly forward-leaning for electrolysers. But you can see immediately that we are equivalent on the dirtiest grid to one of the cleanest options for electrolysers. So we're very, very competitively positioned from an emissions perspective as well. And the reason for that is electrolysers are very power-hungry. They're 55 kilowatt hours per kilogramme. relative to our 8 to 10. So you can see immediately the benefit of the chemistry there. Now we share this with government and other groups in Australia but also internationally and we are starting to see policy changing. We've seen that literally in the last few weeks with the GOES scheme in Australia. It is now starting to encompass pyrolysis and methane pyrolysis as a viable pathway in Australia. in the hydrogen pathway system. So if you can't win the game, we're trying to change the rules around the policy, and that's a big area that we're trying to spend time at the moment. So just turning to our highlights on slide seven, you've seen the report that went out yesterday. But I would say it's a very good quarter. We continue to strengthen the foundations of our global licensing platform. I won't go through all of these. We'll talk about them in detail shortly. but we are approaching a real inflection point. We've got a de-risk, world-leading technology. We're getting market traction. You can see that coming through. The strategic alliance with KBR is delivering real value. We've locked in their first originated deal in Japan, and there's more on the pipeline behind that. We've got a strong global project portfolio that is growing. We've got that expanding pipeline of material opportunities that are now coming through. We're kicking goals on graphite, which Tom will refer to shortly, but we're validated across steel, asphalt, bitumen, concrete, cement, and we're now testing in batteries. So we've come a really long way in graphite. And we're starting to see the tailwinds of the hydrogen market strengthen as well, and that is positioning us as a leader in this space, which you'll see shortly, and we're being recognised by some of the biggest and best think tanks and corporations for what we can do with the hydrogen pathway. On funding, we had a couple of questions on funding that came through overnight. We finished the quarter with just shy under a $13 million fund position. That provides us with a very extended runway through significant commercial milestones ahead. That was strengthened last week by the receipt of $2.3 million that we received for our R&D rebate. Neil and the team have done a very good job there because we're also receiving, probably in the next quarter, a rebate for our international expenditures. So there's more flows coming there. We've got that $2.3 million grant from WA that's still to be earned. If you saw in our annual report, we've lowered cash burn 30% year on year. So you'll see that our cash burn on any given quarter is between $2 and $2.3 million. So you can immediately see that we've got that 12-month to over runway in terms of our commercial pathway, heading into a new revenue cycle with some of the projects that Tom will share shortly, more grants, and we're targeting on maintaining that robust funding position on a fully discretionary business.

Turning to Wyala, there was quite a lot of news on Wyala during the quarter.