REC Silicon ASA

Okay, good morning and welcome to the Q4 results presentation for REC Silicon. I'm Kurt Levens, I'm the CEO and we'll be spending a little bit of time going through both the results as well as sort of framing in what our go forward is and where we're at on some of our projects. So in highlights wise, you look at our revenues were up over the previous quarter and our EBITDA itself was down. The main effects on the EBITDA were the fact that we were making a lot of product in Moses Lake that was not yet in finished condition because we had started at the plant. So we're carrying that as well as there being some poly shutdown crewels. We can talk a little bit about that later. If you look at that compared to the last Q4, you can see inclusive of the accruals that the underlying Butte performance had again improved over the Q4 of 22 performance. So we've been making steady gains in terms of how we were doing with regards to the underlying operational performance. We did start up in Moses Lake in November as we had said. And we're still on track to make our first delivery this quarter, in Q1 of 24, so this quarter. As most of you probably noted, we made a decision to exit a business line yesterday and announce that. It's something that will be accretive to our earnings and allow us to focus on even higher margin So at the end of the day, we are a company that makes products and sells products, and product management of our portfolio is something that we do over time. And so there's always gonna be some products we may be exiting, and other products we may be getting into. So I think that this, from our perspective, is just a natural evolution given the underlying electricity system where we're located in Montana. And then our ULIN-JV sale was completed in Q4, and our net proceeds were over what we had originally thought they were going to be. So I think that that was, something was very successful and important for us in terms of our go forward and flexibility. So I'm gonna talk a little bit before we get down to the last part of it, which is the financials. I'm hoping all of you We're able to see the pre-read and see what was in there. So just to talk numbers, you know, we can do later on. But I think what's maybe more important from a message I think that you want to hear is, you know, how do we go forward and what are we doing? I think there is a common kind of framed idea that we are in fact a solar company or that we are a poly company. And in reality, we are neither. We are certainly a play in the solar space. And we certainly do make poly that goes into the solar space now. But at the end of the day, we're a silicon materials company. We have multiple segments that we're able to create value in. And as we'll talk about a little bit later, Currently, there's three of those segments that are very, very important when looking at digitalization and the energy transition. The single largest thing that we make as a company is silane. It's not polysilicon. We make over 30,000 metric tons a year now of silane once everything is fully ramped. That is our capacity. From there, we're able to tap into these different segments driven by those megatrends that I mentioned. And it just becomes, how do you want to optimize that value stream? Do you put it into polysilicon? Do you put it into specialty gases or cellosilane itself? And all of these are driven by very strong tailwinds right now, both from a geopolitical as well as a localization, and there is some, in fact, administration support in the United States for investments in these areas. So I hit upon this, but generally what's happening is there's gonna be a lot of shifts in the industry, and we're already starting to see some. From our perspective, it's about de-risking ourselves out of China, which we've accomplished through the disposing of our assets in Yulin JV, as well as moving product sales out of China, facing them more towards the rest of the world, and specifically being able to tap into some of the advantages that come from our location in the United States, particular to the large amount of investments that are happening in semiconductor, silicon anode materials, as well as PV cell production. Sometimes it's a little known fact that, but silane consumption in a single cell fab of the latest technology can take, say, 50 metric tons a year of silane. So when you have multiple of these plants going in, say 10, that's an additional opportunity of 500 metric tons a year. 500 metric tons a year is material to us in terms of opportunity. And when you're the only producer within that geography, it means that you preferentially are positioned to be able to supply, even if it's not 100% as the majority supplier. So when you look at this, what we're trying to depict here is really what we're doing with our transformation. We've talked about the fact that for us, it all starts with Silane. Silane is our beating heart. Silane is our value creation driver. from silane, we can then move into these other value streams. If you go back in 23, yeah, we had idle capacity in Moses Lake. We also had in Butte where we were making semi-grade poly. As we move forward, we're going to be obviously making granular and are making high purity granular right now in Moses Lake and in Butte. we're going to be focusing more on our side lane opportunities and in our specialty gas opportunities that come off of our production platform. So as we migrate, you can see coming from where we were in 23 to where we expect to be 25 and beyond, shifting of our revenues from a larger focus on Chinese opportunities to more rest of the world focus and of course the United States given where we're located and given where there's all of that investment going on right now. With a focus in those particular mega trend areas that I discussed in digitalization, some of the pillars of the energy transition in terms of storage, as well as alternative energy. So I put this up here because, and I'm not saying this to be flippant at all. Trust me, I'm not a flippant person. But it seems like we've done a lot, and every time we do a lot, I'm not sure the market rewards us for doing a lot. So I just want to put this up here again and say, if you go back to where we were 16 months ago, and you look at what we said and what we've accomplished, we've been tracking. And we've been very focused on getting this done. Because this is important for us. because it's important for our shareholders. At the end of the day, if we don't do this, then we can sit up and we can talk all we want, we can proselytize, we can dream, but we're not actualizing and executing, and that's what we get paid to do. So we put our financing in place, and we do have some things that are still remaining in that. As soon as we make our first deliveries, we will also receive the remainder of our prepayment. Contracts executed. The restart happened, and it's ongoing. It's a process. But we have, to date, started, ran, optimized, working on a third of our reactors already. So I think we've made very good progress. And, you know, we have more to work through, obviously. But it is a process because we have a continuous chemical process with a continuous reaction process, with a continuous product finishing process and a continuous bagging and packaging process. It's a lot of moving parts, but, you know, we're going to continue to work through it. We made expansions and investments in Butte and this is helping to put us in a position where we're going to be able to take advantage of the upturn in the semiconductor industry and then the continued investment that's going on in the semiconductor industry. As I'll mention in a few other slides, we have definitely seen things have stabilized in the semi-demand, and we see that it's now, there starts being some replenishment in the supply chain, and you can see that in our shipment of gases. The ULINJV, as we mentioned, we exited, and I told you I wasn't gonna stand up here every quarter, and talk about how we had a dog quarter because of the energy situation in Butte. So first, we took some hedging positions. We increased the price quite tremendously. That stabilized the situation. But increasing the price to unsustainable sort of level, is something that's rather short term. Think about anybody when they buy something. If, okay, price is up, I'm gonna take this because I need it. But it's not long term. And when that cost doesn't come down, well, then you have decisions to make. So we did something to basically triage and stabilize the situation. From a longer term perspective, it ended up that it was gonna be better for financial performance, which should be directly reflected in our valuation as well, that we exit the polysilicon business. You see, it wasn't so much the difficulties that we've gone through in that business here since the electricity spiked, and I have a graph in here to show you. It was more about what's going forward, what's gonna happen mid-term to long-term with electricity in our region. because that's so important. Where we're at on the restart process, I think I hit on some of the major milestones. I just want to, again, drive home. We are making our first shipment this quarter, at which time we will get the remaining part of the prepayment. We are going to be starting up the second half of our side lane. in Q2, and these are things that before, if you recall, I had said that we were looking at ways we could accelerate the timeline, and this is the first phase of some of those accelerations off of where we were. So we're moving some things forward, and we're gonna be at full capacity in Q4. We will continue to try to optimize and move forward. I mean, we wanna make this happen as soon as possible. I want to point out one of the things with these FBR reactors is that unlike a Siemens reactor, a Siemens reactor is a batch process. So these guys fire it up, they run it for a week or a couple days depending upon their curves. They shut it down, they harvest, load it, fire it up again. The beauty of our reactors is that once you dial them in and once you got them going, they're gonna run. We had reactors before shutdown that ran for over a year. So it's much more efficient in that sense. However, on the front end, you need to make sure you have your operating conditions correct. And given the fact that these are upgraded and we have more, some different geometries, More things dealing with the higher purity levels that we're trying to get to We are being more cautious Our what we've calculated to be the best Course of attack is to not focus on volume volume volume But get to the point when we get out here It's going to be focusing on higher purity higher purity higher purity and the trade-off economically is The benefit for the company, the benefit for the shareholders is that we make more money at the higher end of the curve than relatively compared to making lower end product and more of it. That's really the challenge. So we'll have more to say about this. It is my intention in May to go ahead and be able to give a estimate of what we believe the production level for the entire year will be. At this point, I just think that I want to continue to work through for another couple months before we say something that then is not necessarily, didn't account for everything that may happen between now and then. It's a process, but we've done this before. We're doing it now. We were shut down for five years to have a process like that shut down and our chemical process shut down for five years in high pressure, high temperature, corrosive materials inside of the plant. And we were able to maintain it, but then more than that, we were able to get it up and going and deal with all of the challenges that happened. in a very short timeframe between the time we announced that we were going to restart and we actually started. In reality, that's a very short timeframe for something that has been sitting there for five years. So we're gonna continue to push on. I'm not patting ourselves on the back. I'm just telling you this is our reality. We have more work to do. I want to bring up something. You know, before we had talked about an MOU with Hanwha Corporation as a single channel for silane that goes to the silicon anode market. We determined in December that we have de-risked, I think, the company quite a bit with our financial performance, I mean, in terms of our ability to get our financing, and starting up the plant, and with the investments coming online as we had imagined, and pretty good cost control when it came to the project itself. At the time, it made sense, let's go for, we don't wanna take that risk, we're a smaller company, we have a lot of other risks, we have a very weak balance sheet, let's utilize this. But you know, when you do that, you give up some opportunities for value. It's a bond approach versus an equity approach in reality. However, for us now, You know, we made the decision that we are gonna go either direct with these companies or we also could use various distributors. It could be in the case if Hanwha has an opportunity that they're pursuing, but the other distributors that we work through as well, it all depends. The reason we did this is because we see a greater opportunity for us to create value through these sort of relationships. we'll still be able to, when we look at it, we're still going to be, because of the risk involved, we're still going to be collecting prepayments on these agreements. There's opportunities there obviously for us to have more control in the direct channel over what the eventual economic terms are gonna be of the agreement. So this is a change. This is a very positive change I think and glad that we're in the point where we can do this. I've put some pictures up here just to show you These are pretty fresh. They're three weeks old. That is the frozen tundra of Moses Lake, for those who haven't seen it. And the, let's see here. So Sela, if you're familiar with them, that's one of the companies. That's their building. And there's work going around on the other side. And that's G14. You can see our plant, and then in proximity to that, you can see their locations. Both are right across the street. We, just for your own references, we own all the property that goes down up to the road there, the blank property that you see. So, point is, yeah, that doesn't mean that they're gonna necessarily use us exclusively. But what it does mean is they're there for a reason, obviously. We are aligned in the fact that we want to be able to supply them silane. We have the capacity. We in fact have released even more capacity through our efforts in Butte now with exiting a product line here sometime in the middle of the year. So when you hear and when you talk about these anode opportunities and if you look at them in total and people talk about thousands of metric tons a year, we are gonna have that capacity to be able to take care of that. So I think this is something that we're now seeing. I used to be able to say I don't know But I can tell you now, I look at that, I drive by that every morning or when I'm there. It's real, it's being built. So at least for the near future, this is a very clear opportunity for us. And we're going to focus on being able to execute on this. So the Butte restructuring, I think I've already covered on some of the items that we had done previously. You know, we've been focused on investing in making sure that we have operational leverage, capacity leverage. Once things pick back up, if you go back a few years ago when things were going crazy in the semiconductor market, we were tapped out on our DCS capacity. We could not sell anymore because we were capacity limited. And then there was container limitations as well. So those things we've removed. And in fact, we were turning away hundreds of tons of business during that time period. So now we're gonna be in a position, as those things pick up, we expect then to grow along with it and not be constrained Of course, if it's an even more vigorous or if there's more disruptions to shipping or supply chains, I mean, that could affect it. But absent those, we're gonna have the right assets to be able to take care of the demand. And why did we exit Poly? As I said, we are at a core, even though we're a silicon materials business, but we make products. That's what we do. At any one time, we'll be investing in more products, investing in the same product, exiting products. It's all about managing our portfolio. So I was hoping that we were clear in terms of that, that hey, we are not, this plant is not shutting down. This is a very important part of our plan. we're just exiting a product line. And companies in our business, in chemical businesses, they come and go all the time depending upon the life cycle management of that particular product and where they're at. And that's all this is. There are some things, obviously, that drove that, right? And when we're able to increase our financial performance, that's important. That's important for our shareholders. That's important for our sustainability You know, going forward, we then have more money to be able to continue to invest and to be able to do other things which may create value. We do have some benefit in that there is some greenhouse gas emissions that we're going to be, you know, our footprint will be reduced. But that's not why we made this decision. That's just ancillary to it. I think the other important thing is it's going to allow management focus at that site to shift from the triage and troubleshooting of that situation created by the electricity to how do we then reduce costs in our silicon gases business, optimize, and drive that forward. We have a lot of opportunities there, as I said, not just the silicon anodes, semiconductor space, the PV cell space. In the United States alone, if you were to take, not talking about silicon anodes, but if you were just to look at opportunities created by the semiconductor and cell announcements, and all of them were to come up online over the next five years at this point, it could be up to 1,000 metric tons incremental demand. Just from that, not even talking about the other, of course, anodes, that's a whole other thing. So I think, you know, from my perspective, it's better that we focus on something where we have a clear, differentiated offering. We are the known market leader. We have market share advantage. We have scale advantage. We have location advantage. We have quality advantage. We have consistency advantage. That is where we need to focus. Not where, somewhere where again, we're relatively smaller in the scale of things. And it's in fact, an area where you're struggling because you can't move your asset, and the power is what it is. Unfortunately, it's a deregulated market in Montana, and they're investor-owned utilities, not public utilities like we have in Moses Lake, Washington. So there's no visibility. There's no transparency. That's okay. They're doing what they need to do for their investors. But that has nothing to do with what's best for our investors from their perspective. So it just means that that situation, you're a structurally short market. Supply exceeds demand several times. and as a whole it's structurally short, you can see price spikes that are incredible. So this is real, actually. These are real electricity prices in our region. And you can see what happened. We were in the money, we were well within the operating window through 21, and it made sense. Starting in 22, we started to see these spikes that dragged up the average. 23, of course, we talked all about that in the first part of the year, how we were affected fairly severely in Q1 last year. However, as a whole, the price kept going up. And now the price has kind of leveled off, of course, because we've taken hedging positions. But when you look at the forwards and where price is going, it's gonna stay up here. And that's why we make a decision that we make. So that's the logic, the strategic rationale behind why we're exiting that particular product line. We're gonna do so in a controlled manner. We have long relationships and of course the same people who may use gases also use the wafers that may contain our silicon. So we're doing this in a manner that's controlled and rational and we will honor our commitments and then we'll button up and move on. And that's gonna be the best sort of operating scheme as we go forward. Now, we'll talk a little bit about this. I think, you know, I've said if you look at these numbers from the past, from Q2 through Q4, you can see how we've recovered to a run rate that's more or less what it was before the downturn started. And what we expect is that going forward, It's still gonna run in this 750, 850 type of range. And obviously as we move towards the second half of the year, we're hoping that based upon market recovery that we're hearing from third party analysts and some of the semiconductor manufacturers, that we can then see some upturn. And I think when I look at the fundamental opportunity, It's still there. I showed you those pictures of what was happening with the anode manufacturers. I could show you pictures of semiconductor fabs going in the ground. And I can show you pictures of PV cell fabs going in the ground. These investments are on the way. These investments and these opportunities take years to bring online and years to develop. So sometimes I think if you look at the deal flow, so to speak, it could be glacial and maybe there's a long period of time before we say anything about it. And that's because we're working it and it takes, when you look at the funnel and how long it takes for these things to actualize, it can take a long time. It can be two years. And the plant itself being built can take three years or four years. So unfortunately, there's not a lot of quick turns in terms of what we do. It's more long-term based, and the cycle itself is relatively long-term to get to the point where you're starting the supply. Polysilicon. I mean, we've already covered this, and obviously we are going to be getting out of this business, but I wanna say that we have secured adequate pricing, and commitments on the volume that we have through the remaining part of our commitments. And these are what we're going to be satisfying. You can see the reason the volumes are down is because we optimized around making our highest quality product. Because that's what brought us the best revenue profile and the most amount of income in. So I think that market is still, the flow zone market is still good. There's still a lot of visibility in it. It didn't take the same downturn that CZ did. CZ or Czochralski is more related to the remaining part of the semiconductor. On solar polysilicon, which I suspect may also have some effects On us, when you look at how we're valued from time to time, now with Moses Lake starting up, you can see that in the pricing, it's stabilized after a long run down. In fact, over the past month, we have seen several small jumps. By small, I mean it's small. It's close to not material. One week it might be a percent, the next week a half percent, the next week 0.8 percent. But there is some upward pressure on it. There's indications right now that what's happening is that the, in fact, we know that some of the producers are going into extended shutdowns. extended maintenance periods, as they struggle to deal with the cost level that they're seeing. This is very reminiscent of what we've seen before several times. They overbuild, overcapacity, price craters. Eventually, capitalism works, even in China. People go away, price goes back up. I think that, you know, I don't know that they're at the point yet where price goes back up and they learn to kind of approach it in a more rational manner. But at the end of the day, you have a period where you're back in. But I think if you look at outside of China, you can see that that price and that delta is still holding. And we're still observing that. There's not additional capacity really coming on outside of China for solar except for us, what we brought online. And ours is spoken for fully under contract, under firm contract. So I think that it's not gonna get worse. Well, that's maybe... I don't expect that it would get worse than this, because when you look at where those companies are at, we know that it is below cash costs of a lot of the marginal Chinese. The larger Chinese are just bumping along. So that's no basis for reinvestment economics. We talked a little bit about this, but the main impacts on our EBITDA were related to accruals that we took for exiting the business and the fact that at Moses Lake, we started up We're making product that is not yet at a finished good. And in addition to that, there's costs involved that are non-capital costs that are involved in starting things up. Plus we've accelerated hiring for the next plant because we need to have people that we can train them while we're going through this process so that as it comes up here later in the year, than they have experience with how we're operating. Revenue-wise, I think the highlights here are the fact that number one, those increases that we did for polysilicon stuck and will stick for the remainder of the time that we're in that product line. Our silicon gas sales volume increased. And some of that is just due to timing effects. But still, we're in that area where we're going to be in that zone, I think, where we were before until things recover. What's noted here is that more of our higher value silicon gases have started to move again. So there's replenishment in the supply chain of those higher value silicon gases. I think here the big note I want to bring up is, of course, the proceeds from the ULINJV sale. And, you know, along with that, see our nominal debt, 354, and our nominal net debt at 183. So, in summary, We successfully restarted during the quarter and we're still on track for our first delivery. We closed on the ULINJV and we have the money in the bank. The silicon gas market is recovering, it's stable, and we see some increasing replenishment, particularly in our higher value molecules. As I said before, we would continue to work the problem in Butte which has a foundation for a very profitable business as if we go back a few years and you can see that. And you can see where the change is very related to the energy. So we're still, there's gonna be more optimization to do. We have to work through this so there will be a transition period. But then we see when we come out the other side, we expect it to be fully accretive to our earnings. And silicon anode opportunities, as you can see, are more than just announcements now. They are physical improvements in the ground. And there are customers who are going to require silane to make their silicon material. There is a mistake on here. And unfortunately, I did not catch it. Our reporting is on May 10th. not May 9th, and we understand May 9th is a holiday. So that will be for the next quarter. And that's it. Are there questions?

Thank you. I'm just a private investor and want to ask about the EBITDA. You provided guidance of 100 to 300 US dollars. Can you give an update on that?

Yeah, we are still guiding that being the EBITDA. Okay.

Can you give an update on how many employees you are now?

Yeah, we are close to 500, but not at 500. We're 495 at this moment.

Okay. And you know, Group 14 are planning to come online this fall, I believe. Yes. Do you believe that you are going to supply them this year or will it be next year?

Our ambition is... If you reach an agreement. Yeah, our ambition is to supply them when they come online, which they currently say is this year.

So, yes. And also, a few of the other Silicon Anode players mentioned RecSilicon, both Amperius, Sinata, and Scylla. They all are saying that... Rex silicon does not have the capacity for the long-term supply. Do you have any comments on that? I know you have land to increase the volume.

Okay, so the first thing is that it's a definition of what the long-term supply is. But look, whether we, who have now, and we've released more capacity by what we're doing at Butte, we're going to have enough capacity that should take them for a while here. If either we need to build a plant or they need to build a plant or somebody needs to build a plant, if it happens. So, I mean, that's clear. There's no reason why, if there's more opportunity for silane, we shouldn't be building a plant. We have more land in Moses Lake. We could build, you know, several more plants.

Good. I think that's okay. Okay.

I'm an investor as well, private. I have a question. As I see it, REC was a sinking ship, and you have repaired it, and now it's floating, and we're looking forward to selling goods. So the question is, when will REC come up with positive cash flow?

Yeah. Yeah.

In your eyes.

Yeah, I think what we've talked about before is that once we're up and fully running, and then, you know, once the situation here in the market has stabilized on semiconductor, that we expect to be in that position. So, you know, that is... Obviously, sooner we want to do that than later. But if you look at what we had guided before, we had talked about an EBITDA guidance that would start sometime in the 26 range, the year 2026. So obviously, our ambition is to have it done before that. That could be. Again, I'm I have an even more aggressive ambition, but I'm just saying I don't want to go on record on saying that. I think that that's what we've guided is that we expect an EBITDA once we're up and fully running in 26 of between 100 and 300.

My next question is does the management own shares in REC or are intended to acquire?

Yeah. I would say that some of the management own shares. That's true. I do not know if all of the management own shares. I mean, based upon the last disclosures, it did not appear that way.

What about yourself?

I own shares in REC, yes.

What about listing in the USA? Is that a question or toolkit?

Yeah. I think that that's a very good question. And it's certainly something that we hear from time to time, not just from you, but from others. That would require, obviously there's costs, but there's focus with that. I think at the end of the day, I could say, yes, our assets are there. The opportunities that we're talking about are there. would it make sense for us to be there, make sense for all of our shareholders? But I think that's not something that we can contemplate right now. Right now, I wanna have us, the plant running, full out, and everything resolved in Butte, and I think we have a much stronger, we're in a stronger situation, and then we can focus on other opportunities.

My next question is the last years we have seen that the shareholder's value has gone down, down, down, down. Which actions will be taken by the company to restore the shareholder's value?

I can only focus on what I can focus on. I'll say that. So what we have been trying to focus on is saying what we're going to do and then doing it. We have been communicating as we reach certain milestones. And as I've said before, I know we get feedback from time to time that we don't communicate enough. And we're communicating as we reach things that are worth communicating. So I would say that first and foremost, when people see When the market sees that we are achieving really financial progress in that sense, we're shipping material, things are improving, I think that's one way and probably the most important way that we're going to increase shareholder value is by having something tangible to value. I think that In terms of the softer aspects, now with some of the foundational things in place, and now that we're up and running and there's a lot more work to do, I will be participating in more public forums. We started this in the fall, but I mean, even this year, I'll be participating in more public forums, both in terms of media, as well as conferences put on by different investment groups, and we'll be announcing what some of those are, but already I've lined out four to five different appearances to talk and frame in our opportunity and where we're at. So I'm hoping that by doing that, we will get more traction for our shareholders in terms of the marketplace perceiving that we are a stock that they want to participate in.

Okay, my last question is, do you have some idea what is the sell-off price of Moses Lake and Butte in the market at the moment?

I'm sorry, I didn't quite understand that.

Okay. What is the sell-off price for the plants in Moses Lake and Butte?

You mean if we were to sell them?

Yeah.

Oh. Well, yeah, that's... I could just say that if you were to build something from a greenfield perspective, from a replacement perspective, that you were talking about $3 billion for them both. I mean, combined.

Right. At the moment, the shareholder's value is about 400, 500 million US dollars. And you say that it's 3,000. It could be the sell-off cost or price. Is that correct?

Yes, 3 billion US dollars.

Is it easy to sell it?

Yeah.

That's an interesting question I think that would increase the shareholders value Yeah, and you are working for for me and all these guys here all the management.

I mean working Well, that's not something that we've contemplated right now, but that's that's an issue I I understand that you may see it an issue. Obviously, you're sharing that with me. Thank you for sharing that. But that's not something that we're contemplating right now.

It's still a huge issue.

I understand what you're saying.

Thank you very much. Thank you.

I just wanted to ask two more questions really quick. The improvements in the FBR production quality in Moses Lake, is there a possibility to supply FBR to the semiconductor industry further down the line, you think?

Yeah, I think that that's a reality. I mean, you know, first we need to get up and running and make it, we're going to be targeting N-type polysilicon, which is going to be a very, very tight specification, which is pretty close to what's needed for the semiconductor. So there's no reason why, when we get to that point, if it's not something that we can do.

Are you supplying any anode companies today?

Yes, we do.

Directly or through?

Both. We supply some directly and others we supply through distributors.

Do you know how much approximately?

Yeah, I mean it's smaller amounts in reality. I would say that sum total of all is definitely less than 100 metric tons. Thank you.

Sure. Any other questions from the audience?

You just received some proceeds from Yulin, so you have cash in the bank, and you're also getting the prepayments from Hanwha, the second parts. When it goes to shareholder value, have you considered to do share buybacks?

At this time, we have not considered that. At this time, we think it's best to keep the money on our balance sheet while we work through starting up all the inherent risks that remain with that and that we get the company more stabilized. And then at such point, we will come back with what our strategy is in terms of what we're recommending in terms of employing that money.

Thank you.

some questions from the web. Starting up, you mentioned investment support. There are definitely quite a few opportunities from government funding in the US. Is this something you are considering applying for?

I would say that we are looking at all opportunities like that, yes.

Since the last presentation, potential silicon and oak customers like 1D has gone elsewhere to get supply from Cylon. Is it a risk that others like G14 and Silo Nano can get their material elsewhere or sufficient volumes for their production?

Yeah, I think there's a couple of things there. The first thing is that 1D itself has not gone elsewhere to get, 1D has come up with something that said we have a package that if you want to buy our technology, we can also give you a package that shows you how to build a plant. They're not building a plant themselves. They're just a equipment supplier. So they've teamed up with somebody. There's nothing that keeps the people from buying their equipment from contracting with us as well. So that's the thing with 1D. And then on the other issues, yes, absolutely, they could... get supply from somebody else. But I think that when I look at it from a realistic standpoint, we believe that because of where our assets are, because of how we're positioned, our cost position, what we have in terms of the fleet, that we're going to be part of that mix. I mean, of course, if we can't come to agreement commercially, then they can go somewhere else. But I think that when you look at the hard facts are, when you look at the volume as well as the risk of bringing that from, say, China in with everything else that's involved with that, that's probably not gonna be their first preference. There's always alternatives. I don't kid myself to that. And I would never go on record as saying, They have no other choice but me because that's not how things work. Capitalism works.

Okay. Some questions about the cost level or potential production cost in Moses Lake, both in relation to the energy cost in Moses Lake in Moses Lake, Washington. Could you elaborate a bit on that and also expect it, if possible, on cash costs in Moses Lake when fully up and running?

Yeah. So on the cash costs, we're not guiding on that yet. What we have said is that we fully expect that our sales level will be above what our cash costs are in terms of ASP. If you go back to when we did disclose where it was, and we were making a different product, it was a lower purity product, then when you look at that time period, you have to take into account, I mean, if you want to estimate it, you can take into account the fact that there's been inflationary factors between now and between then. But in all cases, we fully expect that our costs will still be leading cost in the West, and it will still be below what our acquired sales price is.

The guiding on $100 to $300 million in EBTA, doesn't the shutdown of the Poli in Butte have any impact on that guiding? And secondly, the results seen in the recent quarters from Butte, will that be approximately the same levels in the coming quarters?

Yeah, on the second question... I would say that the results in Butte should approximate what they've been for these last few quarters. Going forward, the answer is no. When we gave that guidance, what we're saying in reality is that by doing this, we're still able to maintain our viewpoint of that guidance versus shortfalling.

And some questions on this Highland Gas MOU. Was it you or was it Hanwha terminating that contract? It was us.

And I want to say that, you know, arm's length is arm's length. And we've conducted ourselves that way in all cases with all of the agreements that we've had. I think that's just an example of the fact that that works. Something needed to move forward and everything has kind of a lifespan when it comes to agreements or potential agreements.

So how much silicon gas can you sell from Butte after the shutdown of the Poly production?

Yeah, I mean, we could sell, without doing anything, you know, I would just say, or with minor investments, you know, we could sell another four to 44,500 metric tons. That's not something that we disclose.

That is correct.

That is the target of the output of our high purity granular from the Moses Lake facility. N-type and then into eventually top con type cells.

In one of your previous quarterly reports, you mentioned the potential sideline contract of 180 million. Can you elaborate on the status of this?

Yes. I would have to go back and check on the values that we were discussing. I thought what we had discussed is that what we had released was that we had entered into some agreements that had a total value of $180 million. Then subsequent to that, we disclosed that we were negotiating another one. And that's very close to being done.

Are these actual contracts or is it more like frame agreements? And could you elaborate a bit on the timeline for... The time span for the contracts?

Yeah, this particular one is an actual contract, and it is multi-years.

There's also quite a few questions on the communication, particularly what happened yesterday. But in general... The perception is that the communication from the company is not sufficient supporting shareholder values. You mentioned part of it now in plans of being more proactive, but in the aftermath, what could have been done different? One thing is yesterday and looking behind in your communication and other things than being active in different media platforms. What is your strategy as a CEO when it comes to communication to the market?

Yeah, I mean, first and foremost, we need to work on having something to communicate. And that's what we'll continue to work on. Then beyond that, I think we need to be more proactive. We will be more proactive now that we have items in place that will allow us to talk and frame about the opportunity. and discuss with a wider range of shareholders. What happened yesterday, I don't know. The release itself was rather to the point. And in fact, we discussed why and the positive aspects of it. So I don't... you know, know why, obviously. I mean, that's dynamics and that's not my field of expertise in terms of that. But I would, am curious as to why, that's for sure.

One final question on earnings. Could you tell us more behind the assumptions on the $10 to $13 million in cost savings from shutting down? And would this suggest that new normalized EBITDA in 2023 face plus $10 to $13 suggesting an EBITDA in the $25 to $30 million range?

Once we have worked through all of the changes, yes. But obviously, as I said, we're still going to be operating to meet the commitments. And then there's a transition period as we right-size everything and adjust the operations. So once that's done, yeah, that is a fair assessment.

Are there any other questions from the audience? Yes.

One last question. Do you think you will be able to supply the Cylon to Group 14 or Cylon through pipelines? Is that a plan for now?

I think that that is a possibility. And that will depend upon, obviously, upon their demand and when that would actualize. In the meantime, we have plenty of loading capacity and assets to move the material back and forth from Butte or even from Moses Lake. So I think we can cover the interim and we can cover the longer term.

Thank you. I go back to one of my questions. Did you say that Moses Lake and Butte in the market today could be sold for $3,000 million?

What I said was the replacement value.

Right. Yes. Okay. Yeah.

Okay. Yeah. Sorry if I miscommunicated, but it was the replacement value. Yes.

Yeah, I think we covered most topics, but just one final. What is expected remaining capex at Moses Lake towards full operation?

Yeah, I think right now we're still on target to be at the capex level that we had said before in terms of the cost of that.

And how are you on funding for the remaining process for starting up Moses Lake and also the ongoing restructuring of Butte?

Yeah, we are adequately funded at this point, as you can see from our cash balance and what we project our sales to be. As well as, of course, the prepayments and other things that are remaining to come in.

Okay. I think, well, there's quite a few questions. There's pretty much different angles to the same topic. So hopefully we have covered most of it. And if not, I hope that the one on the web could be reverted at a later stage from direct reaching out to investor relations. So thank you for your attention.