Calix Limited (ASX:CXL)

Investor Day 2021

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Sep 2, 2021

Good morning and welcome to Calix's inaugural Investor Day, dated the 2nd September 2021. From the company today, we have Phil Hodgson, who will be joined by a number of staff from Calix as well as a number of special guests in the different lines of business. The agenda has been released to the ASX. It will be kept strictly to the agenda in terms of Questions, concluding right on the finish time of each session. If you did want to ask a question, we will do so per vertical or per line of business. So please submit those via the Q and A button at the bottom of the screen. But without any further ado, I hand it over to Phil to get started. Thanks very much. Excellent. Thanks, Simon. Thanks, everyone, for joining this morning. This is our first attempt It's a bit of an Investor Day, if you like. So, we've got just over 2 hours here, which, if you're going to stay for the whole thing, Very much appreciate the time, that you're putting into understanding our company a little better. Some of you obviously may know us fairly well and others, This could be your first time you've introduced to Calix. So, sit back. Hopefully, this goes smoothly. We're Obviously, dealing with technology and COVID and all those sorts of things, but we're pretty confident that, you'll enjoy the presentation. Here's our tagline, Mars is for quitters. We've got our general manager for marketing communications who will go into this in a little more detail as to What is our purpose for the company to some extent as well? A little bit of humor in there, of course, but a serious message underneath. Interesting enough, sitting here a year ago, I would have been quite amazed at what's happened in the last 12 months in terms of Growth in Environment, Social and Governance Investing. And you can see on this slide, the countries, the companies, The investment funds really starting to move towards ESG investing as really almost an alternative. The commitments that are being made by companies to net 0 in countries is really starting to mean the investment that required to achieve net 0 by 2,050 is quite astronomical, dollars 3,000,000,000,000 per year by 2,050, according to the IEA. And obviously, within the media and the press, these themes are just continuing to grow. And even most are saying this is only just the beginning of this type of growth trend in investment in ESG type themes. Just in terms of Calyxt ourselves, we actually have several different lines of business. And today we'll be going through each of those lines of businesses. It'll be a bit more than just me and Darren, who some of you may be used to presenting those. What today is about is the leaders of those businesses And some special guests, taking you through in a little more detail. And so it's a chance for you to get not only to know the businesses a little better, but Also to get to know who our team, that are leading these businesses and, the passion, if you like, that they have For these businesses, so that's really what we want to get across today is for you to understand who this wider team is that's going to Really have, really going to deliver on the potential that we see in these different lines of business. But for those who don't know Calyxt all that well, what is the core technology? What is it that allows Calyxt Play in all these different lines of business. Well, the core technology platform is really just a new type of kiln, a new way to heat stuff up, if you like. And in a normal kiln, you sort of throw what it is you want to heat up and you throw the fuel, you light a match and off you go. And that's basically been done the same way for 5,000 years. What we do is a little different. We have a central reactor tube and Here's sort of a toiler role to demonstrate this tube. But in actual fact, this tube is a little bigger. We are our plant at Backus Marsh in Victoria. The tube is about 24 meters high and about 1.8 meters in diameter. So a bit bigger than this. And we heat that up to about 1,000 degrees centigrade. And how we heat that doesn't matter. It can be fuel, such as gas, it can be biomass, it can be waste, it can be electricity. So we're very agnostic about how we heat the tube up. And then whatever it is we want to heat, we put down the middle of the tube. And we need it in a fine powdery form. So imagine holding a lump of flour in your hand, And then imagine dropping that flower to the floor and just watching it float down. Well, that's all that happens inside this tube. The flower sort of floats down, Or whatever it is we're trying to heat up, sorry, floats down through the tube, and it's the red hot radiative heat from the walls of that tube that is heating up the powder inside. What's the advantage of doing it that way? Well, there's actually 3 key advantages in doing that way. The first advantage comes when you're heating Materials such as limestone. What a lot of people don't realize is that, limestone, almost half by weight is CO2 Trapped in the rock. And when you heat limestone, as the cement and the lime industries do, that CO2 comes out of the rock And basically, it goes straight up into the atmosphere. And in fact, CO2 is, that's 2 thirds of the cement and lime industry's total global emissions. And those guys are emitting 8% of man made CO2 emissions. So CO2 is a big issue for Cement and lime industry isn't really difficult to mitigate. But with our technology, your heating comes on the outside, The cement mill, the limestones on the inside floating down. As that heats up, the CO2 comes out of those particles and just makes its way back up to the top of the tube as a pure stream. And so that CO2 comes out as a pure stream, the material comes out the bottom, the stuff at the top is ready for use, Some purification and use or sequestration. And so it's a way to directly separate the CO2 That's being produced for the limestone in the cement and lime industry. So that's the first key advantage. The second key advantage is the source of A few of our different lines of business in biotech and batteries and water, and that's the ability to make very high surface area materials. And so what that is, is as these particles fall down through our tube and the gas comes out, we can maximize what's Called the surface area porosity of those particles. And when you can maximize surface area porosity, you can make some really interesting materials. And those businesses we'll talk through, obviously in more detail later this morning. The third advantage of the technology is we're energy agnostic. As I say, No matter how we want to heat this tube, we don't really mind. It can be fuel, it can be electricity, As in renewable electricity. And so in the industrialization, sorry, in the electrification of industry, the technology is already Renewable energy ready. And that's really important for our sustainable processing lines of business, which again, we'll cover a bit later on in more detail this morning. So that's the core technology platform. Just a quick flashback to, what we've achieved through, 2021. So we've seen strong growth in our water business and improved gross margins. Our CO2 mitigation business, mainly in alignment cement, is really starting to take its first early commercialization steps. We've already piloted the technology in Belgium with Heidelberg Cement, But it's really starting a journey, in terms of its commercialization, which is, into a huge potential market in CO2 mitigation. In Biotech, we've got 3 different areas of Biotech that we're now under development, and we'll cover that off in more detail. We've just started sales of our crop protection product in Europe, and we've got some testing underway with our marine coatings business. In advanced batteries, we've got some early but very prospective results from some interesting battery materials we've made with our technology. And that is sustainable processing. We've got 3 different areas of the business there that we're going to talk about today that are really taking again some steps towards commercialization. So a lot happened in 2021, including a cap raise in March that was heavily oversubscribed, that's allowing us to invest in these different lines of business to help accelerate them. I'll just quickly introduce Audrey. And Audrey's going to talk a bit about our Sustainability, I guess, backbone as to why we do everything here at Calyxt and also The source of the passion, if you like, for all of the individuals you're going to meet today. So Audrey, just like to introduce yourself quickly and then we'll talk a little bit about sustainability. Good morning, everyone. Can everyone see me and hear me? All good. So as Phil said, my role here at Calyxt revolves around marketing and communications. But what brought me to Calyxt Almost 10 years ago now and still drives me today is sustainability and circular economy. Now You probably saw it on the first slide, and I'm sure you'll hear plenty about it through the presentation this morning. But at Calyps, we take CSR very seriously. And not only solving global challenges has been the purpose of our business for over a decade now. But we and I talk on behalf of all of my Colleagues at Calyxt, we're very committed to using not only the technology, the products, the ideas that you'll hear about this morning, but also All of our skill sets to make a meaningful contribution to society. So in 2020, We formed a sustainability team, a sustainability team comprising of 8 members, all of Calyxt employees Covering different lines of business, many countries, generations, cultural backgrounds, and languages. In 2020 as well, later that year, we joined The United Nations Global Compact, which is the world's largest corporate sustainability initiative, Driven by the idea that companies have a crucial part to play in achieving the sustainability development goals, the SDGs. Since then, we've reviewed all of the 17 SDGs. First of all, to familiarize Sales with what they mean, not only to the world, but also to us as a company, assess the risks and the business opportunities they represent, but also setting priorities and ambitions for ourselves. We also took a thorough review of the ten principles set by the UN Global Compact in areas such as human rights, labor, environment and anti corruption as well. And I think the next important step for us will be to train all of our employees on the SDGs And further integrate those SDGs into all of the lines of business. So they continue to influence our decision making, but also all of our day to day activities, not just because it's the right thing to do for the environment and the community, but also Because the SDGs represent a tremendous opportunity for us to go into the future. Now I could talk about sustainability probably for hours, but And I could probably give you a lot of tangible examples of what that means on a day to day basis. But I wanted to keep it short and to the point. There will be a lot more details on our sustainability journey in the upcoming financial report. And of course, you're always welcome to contact us. Thanks for listening, and I hope you enjoy the webinar. Excellent. Thanks very much, Audrey. Okay. What I'm going to do is just invite our CFO, Darren Charles, to give a very quick recap on our FY 'twenty one financials, and then we'll delve into each of the lines of business. Thanks, Phil. And good morning, everyone, and thanks very much for your time. Just, I guess, for me today is really about The rest of the presentation, Audrey's part and what Phil introduced, but really kind of beyond these next 3 or 4 slides. These next 3 or 4 slides are duplicates of what we presented last week. So many of you were on the call last week and were able to Kind of go through some of our financial performance, obviously, in the last 12 months. I will touch very briefly on these things just to reiterate I'll reinforce those comments for those of you who weren't able to attend last week. But again, The focus for today is really on the important work and the opportunity to understand the strategies across all of our lines of business. So Hopefully, we can skip through these fairly quickly. Obviously, if there's any questions afterwards, please feel free to reach out. So key themes in terms of, I guess, the summary page It's continued strong revenue growth. For those of you who are kind of familiar with these charts, essentially what they represent Is it, I guess, the breakdown of where our revenue comes from, the very dark blue bar is our sales revenue. We also get revenue from R and D Incentive schemes. And then also the top part of the bar is kind of project income that we receive associated with kind of funded R and D activities. So you can see there that we've seen kind of continued growth in our revenues 2 or 3 years ago. Obviously, we're sort of $14,000,000 We reported just under $30,000,000 in revenue this year. They're principally the main contributor was the growth was to the growth was The performance of the U. S. Business and Doug's on the line and he'll talk a little bit about that in the coming slides with Bill when we talk more about the water line of business. There's also some headwinds as well Across Southeast Asia and as well, Bill will go into that when he talks about Southeast Asia and Australian sales. So, the other, I might feel if I can just kind of skip on to the next slide and talk more detail about, I guess, a few things in our profit and loss. One of the key messages that I wanted to get across is essentially the sales revenue that we've reported this year is all the water business. So you'll get to learn more about the other lines of business. So we have essentially, we have no sales revenue contribution from any of those businesses. In the year ahead, FY21, 2022, we expect to see contribution From a couple of our lines of business, sustainable processing and CO2, there'll be some engineering and project income start to make their way onto the P and L. So that's first kind of commercializing and Good strong kind of commercial progress we're making in those particular lines of business. The other thing to mention is our gross profit, our gross margin increased During the year from 23% up to 27%. Our kind of medium term target is to get it up to 30%. And we're making some investments, particularly in the U. S, to develop our manufacturing capability to help achieve that over the near term. And again, we can talk more about some of the strategies and opportunities that we see Moving forward, a couple of other key kind of points to make is when we kind of set our budgets for the year, we try and make sure that our gross profit covers Our cost of sales and marketing, typically, it's done that this year. Off the back of the cap raise that we announced earlier in March, We said that we were going to start to make an investment ahead of the curve, particularly in the United States. It's a great opportunity for us to grow our Our water business, and so we have begun to do that. And so the gross margin didn't quite cover the sales and Cost this year, but essentially that was investment ahead of a curve in terms of our opportunity for growing our U. S. Business. The other kind of key point that we like to make is that the grants and the R and D incentives that we're able to very successfully kind of tap into, Essentially, all go towards the R and D and the development of technology. As best as we can, we've worked over the years to try and make sure We tap those kinds of, I guess, revenue streams grant opportunities to cover the investment in the technology. And we haven't asked shareholders to assist us with R and D. And we've been very successful in that. And we also have another sort of 2 or 3 years' worth of grant funding to cover of the major R and D work that we're doing. But really what we've done in the last 12 months again is make significant progress in derisking the technology, particularly in the CO2 business with a significant investment into Lilac 1 and Lilac 2 started, Obviously. And but we've always taken a very conservative approach to the accounting treatment of our research and development. Essentially, everything is expensed, including the investment that we're making into our pilot plants. So that conservative approach, We're in the process of reviewing that as we get closer to commercialization of our technology, which is happening, We'll kind of revisit those things. And you can expect to see the balance sheet will represent the The kind of investment in the technology and the value in the technology that we're now building. So we've made kind of very significant Strides and obviously as you'll learn, we're making good commercial progress or good progress towards commercialization in the CO2 business. And the carbon capture technology that we've developed is, you know, we hope to be able to demonstrate in the very near future. It will be the lowest cost carbon capture technology that's available for an industry that requires major investment over the next kind of 5 to 10 years to decarbonize to achieve that net zero goals. So I might just move on to the next Slide, Phil, I think, again, just trying to keep my part as short as we can so that we can get to the meat of the webinar. So Phil touched on it previously. In terms of the balance sheet, again, we're very comfortable with our growing asset base. We've got no debt and again, a strong cash position. Obviously, as Phil mentioned previously, we did a cap raise in March, which was very strongly supported by institutional investors through the placement and also through the retail investors through the share purchase plan. Again, that was heavily oversubscribed. We very much appreciate the support that the investment community is providing to us. We're very happy and pleased to get the support and To have the share register that we've been developing. And so we laid out Activity that we want to invest in. And again, hopefully you can get some flavor as to why we chose to, I guess, hit the acceleration button with the support of the investment community earlier in the year. Again, we're a company that has essentially no debt, Which is not unusual for a company in terms of a technology business in our sort of stage in the cycle. So hopefully, anyway, the kind of financial position is very clean. Phil, just the next slide, if I may. A final point for me, I guess, is a couple of final points for me. The operating cash flow there number, just To reiterate, essentially from our perspective, it's a timing issue. I think we've mentioned there in the slide, we've got $8,000,000 Of grants that we expect to receive over the next 2 to 3 months. So in the prior year, we got some grants Ahead of an investment cycle or investment process that we went through in the last financial year. And we get paid essentially reimbursed with some of our expenses from last year and the next few months. So we always aim to be sort of EBITDA positive or operating cash flow positive. And then we reinvest as much We can in the broad range of technology that we're developing. And again, like I said, hopefully, you can see why over the course of the next hour or so. In terms of where we spent some CapEx, the $6,300,000 that we've invested during the year in PPE is essentially The LILAP technology, which was just over about $5,000,000 There has been some investment in the U. S. Water business as well. We've already kind of got one plant, one new plant that we invested in. We've got some plant upgrades that We invested in as well. And again, Doug can put some more color and movement around that. So, Phil, I think that probably covers everything that I should be talking about today. So I'll hand over, sir, so we can get into the meat a bit all. Fantastic. Excellent. Thanks very much, Darren. Thanks, Leonard. We covered off the financials So last week, so I might skip through to the water piece. And if there are any specific financial questions, we might deal with that at the end. So Deep dive water business. Sorry for the pun, everyone. Who we've just got with us today is Bill and Doug, who are leading our, well, the US business for Doug and Bill's everything else. And we've got a special guest also, Dwayne, who's joining us. So huge welcome to Dwayne. So what I might do is get Bill and Doug on the line to introduce themselves. And Doug, maybe you introduce Dwayne and then we'll kick in. Fantastic. Thanks, Phil. And thanks everybody. Bill Carris is my name. I'm the General Manager of Water as Phil just explained. My background is a mechanical engineer. And I've spent most of my career in large corporates, and learnt a lot from that kind of experience that I've been able to bring now to Calyxt in terms of, Our approach to our sales and our strategy and our long term plus short term growth. So, I'm, I'm one of the true believers In this business as are most people. And I look forward to sharing with you a little bit about where our water business is at and, in the direction that it's heading. So, before I pass over to Doug, I'll be taking you through an overview. We'll then pass over to Doug who will take you through the US business. And then you'll come back to me and I'll talk you through the, the rest of the the world and and some of the other countries that we're active in at the moment. Okay. Over to you, Doug. Over to you, quick intro. So is it ready for me to jump in? Is that it? Are you waiting for me, Bill? I can't hear very good. Yeah. Yeah. Yeah. Oh, I'm sorry. Okay. Yep. Yeah. Yeah. Doug Kelly, yeah, president of IER. Halfway between one place and another, so I'm outdoors and it's a beautiful day, so I'm going to take advantage of it. So anyway, IER is thrilled to be part of the Calyxt team, And wonderful working with, you know, Darren, Phil, Bill, and the whole the whole gang. Our expertise, my expertise is a I'm a PhD chemist who's grown madly in love with We're treating wastewater as odd as that might sound and using milk of magnesia instead of caustic soda to pH adjust it. It's a passion. It's simply people burning themselves, people, inappropriately using chemistry when there's so many simple, safe approaches to do it. So IER has been based on trying to develop world class technology. Our technology, I would argue, was far from world class before we met Calyxt a year and a half or so ago, but they helped us develop, and improve the stability, pump ability, feedability. Magnesium hydroxide, as many of many of you might know, is a slurry. Feeding a slurry in water treatment, regardless of how many wonderful properties it has, could be a nightmare. If you can't feed it, you can't enjoy the benefits of it. So IER has taken a lot of time and expertise to develop world class technical service so that we don't just sell a drum. We sell an entire feed system. The cost benefit that they get over the more hazardous chemical readily pays for the feed system so that they don't have to worry about long term ROI worries. It's a Incredibly fast turnaround for something that's safer for their employees and it's better for the environment. So it's a pretty easy sell. When I can go to A food processing manager to help them clean their wastewater or a municipality who's spending quite a bit of money and and say, hey, look, let's get rid of this hazardous chemical, Make it safer for your employees and, oh, by the way, you're going to save a few grand every month on your chemical bill. It's not a difficult sell, but the hard part is making sure that it feeds right. And that's where Dwayne's story comes in. We'd like to take pride in technical expertise. We hire people who are wastewater experts or Chemistry experts, microbiology experts, we try to bring expertise so we're not just a bunch of sales guys again dropping off the drum and going away. We're there to work with the people and help develop a project to make it be a win win. World class chemical, world class expertise, world class service. So that's what we, that's we're all about and Calyxt bringing us on board has helped immeasurably with our product quality. So We're excited about the growth of what we can do here in North America. So that's kind of it in a nutshell. We want to have Dwayne chime in. Do you want to introduce Dwayne? Yes. Yeah. What I'd like to say is that we started with, we used to use caustic soda back in the day, and then We had magnesium hydroxide a whole full, and it just kept clogging and clogging, and we weren't getting any support So what we use, and then at the same time in 2015, Doug Kelly and his support With John Strong and so forth came in, they helped us out. So we had clogging issues happening all the time. The stuff prior was turning into almost like concrete on us all the time. We were new to the magnesium hydroxide aspect So we were getting frustrated with it and about ready to just say quit with it. Luckily, IR came in. They gave us great customer support. They came in and helped, revamp all of our piping system that we had. They brought in a temporary tank so that we can continue using mag While we were transitioning to the new piping and the new, they cleaned out all our tank. They Davis, and ever since we've started with them back in 2015, and we've had nothing but, great success with them. And It has been a pleasure to work with Doug and John Strong and all of them. And I think that's got to be the biggest thing is that, You know, we can call anybody. They call us all the time just to check-in, make sure we're doing good and all that. So it's been really good. Excellent. Thanks very much, Duane, and thanks for joining us. A huge appreciation. I might jump down, Bill, to Just a quick overview. Yes, Phil. And then Doug, we might go into the look forward for the US, what you see coming up. So Bill, you go first. Yeah. Just a quick summary. A key foundation of the revenue and growth in the waterline of business is our focus on the treatment of wastewater. Management of wastewater into sewer networks and the environment is driven by legislation and specifically discharge limits. To achieve the discharge limits requires extensive infrastructure and chemical dosing, whether that's in the treatment plant Or upstream to manage overall corrosion. Chemical, chemical dosing is adopted by almost all water authorities and councils as Waste water management strategy. So that's a key foundation of our, water business is wastewater. What you'll hear in a moment is, the US business is very strong in industrial discharge. There's effectively 2 main sources of wastewater. 1 is industrial discharge and the other is effluent that comes from human consumption. The US business is very strong in the industrial side And the Australian business as you'll hear shortly is very strong in the municipality and the council side. And we're working together very well To share those strengths and experiences and part of our growth in the future is working together as a collective group of people To grow in both of our respective territories in the US and the rest of the world. Now one of the quick things I just wanted to say about our solution, all the chemicals that have been adopted by the, by water authorities, MHL offers some very clear Benefits. Chemically, Duane touched on the physical properties of MHL And the need to actually be able to manage those, which is part of the service that we offer as part of our overall package, which we'll talk to in a little bit more detail. But Fundamentally, MHL has some really clear chemical benefits. And Usually I like to read the room before I share this story, but it's very hard to do it in, in this kind of environment. But what what what 2 of the things that I'd like Do because I like to engage people in, in conversations we're in meetings is if, if you take a beaker and you can do this at home. If you take, A beaker of an acid, and something like a vinegar. And you take caustic soda and you take MHL And you pour both of them into these 2 beakers to try to get the pH up to 7. You'll be pouring the MHL. You'll stop. You'll continue to have to pour caustic to get it up to a pH of 7. And that's a very simple practical, And it makes a huge impact to people to understand the volume of the different chemicals that you need to achieve the pH. And one of the other things about, MHL as Dwayne and Doug mentioned is the safety of the environment the Safety of the product not just to the environment but to the user as well. And I've been known to actually have a sample of our product And actually taste it in front of the customer to create the discussion and it leaves an impact. When they're used to dealing with very harsh difficult chemicals and you have a supplier who brings their product in And basically eats it, it leaves an impact. And it starts a conversation. So I've been known to do it. So Anyway. Excellent. Thanks, Bill. We might jump forward to, I think Doug's covered The sort of the basics of the U. S. Business. But Doug, just in terms of the strategy from here on in and what you see moving forward. Absolutely. So can you see that slide there? I I can. When when IER joined Calyxt, we were, as you can see all the dots, we were a Pacific Northwest company With some satellite business in the upper Midwest. And now we are rapidly growing to be a company that is covering probably 2 thirds of the of the nation. All the territory basically west of the Mississippi River is our is our short term and we've got some much more aggressive long term goals. You can see the investment that we're really going Strong and very successfully with and it's a 2 pronged investment. We're not just investing in equipment and putting plants in different places. Like I said, we want to be world class, not only in the product, but also in the knowledge of how to feed the product and the knowledge of wastewater in general so that we can be a resource for folks like Dwayne instead of Just a shiny salesman with, you know, with nice shoes who doesn't want to touch anything. You know, we want to roll up our sleeves and help him. We've added 3 new sales professionals who are all long term wastewater, actually operators Like Dwayne, someone who actually operated a wastewater plant either municipally or industrially or in most cases they've done both. One of our new guys that Duane knows well is is a young guy named John Van Wingernan who lives the farthest northwest dot up there in in Washington State. Young guy in his early 30s still learning how to try to be a salesman because that's not he was trained to do. He was trained to be a chemist who worked in an environmental lab for an industrial wastewater plant. Learned enough about the wastewater treatment process, the microbiology, the equipment to To do solid separation and all necessary things you need to do for wastewater treatment, he's not just out selling magnesium hydroxide. He's trying to really work The folks just to understand what's the best solution for their process. So we're really excited about the investment that we're doing. New plants down in Texas, California, where we have a tremendous amount of growth opportunity, both in industrial and municipal. And again, when we think of municipal, we're thinking mostly Out in the collection system, the network where you've got to get the sewage from out there to the plant. In many cases, you can put magnesium hydroxide in that part of the And you don't need to use it at the plant and it's something that we really need to talk with Dwayne more about, to minimize his usage at the plant and solve a problem out in the collection system and So he doesn't have to add another chemical. You can just use the same chemical, just put it a little bit farther out in the system. Bottom line is With this kind of approach, you've got the expertise, you've got the relationships, you've got the product that you can have confidence in the feed system that can handle it. You see our customer retention is very, very strong. We had this last year transition to go from A different type of magnesium hydroxide to one that we make ourselves, again, with the with the guidance and the and the knowledge that we've got support from Calyxt. And we made a complete turnover of our upper Midwest business to this new product and that was not a trivial thing to do when we've been selling somebody else's product for all that time. And yet our retention was phenomenal. And it gets back to not just the product, but the knowledge of the product and the service for the product. So anyway, I'm sorry if I'm beating a drum, but that's who we are. No problem at all, Doug. It's an excellent story. And Thanks, Duane, as well for your thoughts on our service to you. Bill, I might just get you to very quickly cover off Rest of world. You can do rest of world in 1 minute, I'd imagine. And then we might have time for 1 or 2 very quick questions. Fantastic. So In the Australian business, we're focused on solutions for the water authority. So it's not just providing the product, It's providing monitoring, dosing systems, and ongoing service and maintenance as well as telemetry. So we have a number of KPI based contracts with the customer gives us responsibility to meet PH, H2S, and delivery service levels, And they effectively give us an open purchase order and we're responsible for effectively, being a partner in their business. So that's a solution that we've developed And is a key part of our kind of focus at the moment and going forward, and transferring that knowledge across the world, Including into the US, as Doug spoke about. Southeast Asia, we haven't spoken about this Previously, but aquaculture is a key part of our water business. We have a unique product in the aquaculture market. It's a water conditioner. We have a great product. There is a problem. And so we're very confident in that market and in our ability to Attack that market and try and grow it. We've had some headwinds. COVID is causing us some issues as Darren spoke about earlier, which everybody's in lockdown. Everybody's able to visit customers. However, in China, we've just recently employed a new a new person, Steve Shaw, Whereas masters degree in aquaculture and the information and the strategies and the work that's coming out of that It's been fantastic in the recent time. Sorry, I've had to rush through this, Phil. That's good, Bill. I mean, it's a bit of a readback as well. So there's a few other facts and figures there for people interested in the business to have a look. But Maybe, Simon, there's 1 or 2 questions coming from the audience, either Doug or Bill. Yes, absolutely. Thanks, Phil. First question is from Hamish Murray Bell Potter. How is IEA sourcing the in magnesium oxide for its NHL currently in the US. What targets do you have for the installation of CFC in the US and what benefits would it bring to the IER business? We're sourcing our magnesium oxide in North America from a company called Baymag, which is owned by Rafa Technik. It's the highest purity magnesium oxide, magnesium carbonate in North America. So that's where our primary sourcing has come from, but we're looking at other sources as we Expand into other areas of North America where logistics might make more sense. Thanks, Doug. Next question, more of a sort of outlook question, but in terms of revenue, what is the split between U. S. And Australia for water currently? And what do you project for the next 2 years? I missed that one again. The revenue for the next couple of years for North America versus the rest of the world? You want to take that? You said that one, Phil? Yes, I'll take that one. So in your report, I think the U. S. Business, and Darren, correct me if I'm wrong, it was about million, but US11.4 million dollars And the Australian and Southeast Asia business was about 3.6 So that's the current split. The US business is our major growth market that we're targeting. And so what we achieved in the Australian business when we first entered the market was, we grew to about 40% of the market in about 3, just over 3 years. And obviously, getting the base set up in the US now with the right technology in strategy for growth. Really, what we would love to do is emulate that. So we're not giving guidance in terms of actual numbers at this point. What we're Giving is what our aspirations are, is to try and emulate what we achieved in the Australian business. So Hopefully that answers the question, Simon. Thanks, Phil. I think that concludes the questions in terms of the time allotted. I'll hand it back to you. Okay, excellent. Well, thanks very much, Bill and Doug and Duane for a bit of a deep dive into the water business. What we'll do now is just move on to the CO2 business. This is the business, if you recall, that we're using the same core technology to separate the CO2 directly associated with the emissions from limestone Into CO2 and obviously cement meal. Now that CO2 separation business has largely been focused overseas. But interestingly enough, we're starting to see a few projects start to emerge in Australia. Unfortunately, Dan, who here is our you can see he's our General Manager of cement decarbonization. It's about 2 am in the morning, I think, in Europe. And Dan spent the whole day yesterday with the European Commission on our lilac1 output report. I'll talk a bit about, more about that shortly. So I'll fill in for Dan today, and we'll hopefully have a chance for you all to meet Dan a bit further down the track. But Adam is available today, our General Manager, Loan Decarbonization. Maybe, Adam, if you introduce yourself. Sure, Phil. Yeah. Adam, Vincent. Good morning. Yes. I'm the general manager for Lime Decarbonization, which is A bit of a mouthful, but it's meaningful to us. What does it mean? It means that my role is to develop and Commercialize our technology into the Lyme sector. And I sit alongside Dan, who's looking at the sector. I've been with Calix since 2010. So I'm in my 12th year and it's been a hell of a ride and very exciting place to work. I've had a number of roles. In 2016, I moved to the UK to manage the Lilac 1 project, Return into the role of General Manager for R&D, and then earlier this year moved into this current role. And I've got an engineering chemical engineering background. Thanks, Phil. Excellent. Thanks very much, Adam. Okay, let's Have a look at this whole issue with CO2 in the cement and lime industry. Here's the only chemistry you're ever going to have to learn in today's discussion. Limestone, when you heat it up, splits into lime and CO2, and you can see here, it's roughly the same amount of CO2 that's emitted as lime produced. So, this is the equation that is really difficult with respect to this particular industry. You can't avoid it, no matter how you heat. Even if you heat renewably, you're going to be producing significant amounts of CO2. So, that's the CO2 problem. The other thing that's interesting, this interesting, again, compared to a year ago or a few years ago, The increasing legislative pressures that are coming in on cement and lime manufacturers. And here, Again, I won't go through it in detail, but you can see from earlier dates moving forward to current dates, just the tightening pressures And incentives that are being put in place for cement and lime industry to mitigate their CO2 emissions. The most recent European Progress is really quite interesting. It costs to emit a tonne of CO2 there. You have to go on market and buy a permit If you emit a tonne of CO2 above a cap, and that cap is reducing year on year. Now that tonne of CO2, When we listed the company in 2018, it was €5 per tonne. It's now over €55 per tonne. And so if you can imagine the Cement or Lime Costing that much to produce, then you can see that these industries are facing existential liability challenges associated with their CO2 emissions. And recently as July, the EU introduced even more strict targets, Targeting a 55% reduction by 2,030, and have also introduced maritime shipping, for the first time in their caps. And so in Europe, there's real pressure. In the States, the legislative progress is again a little more on The incentive side, and what's really interesting here is a lot of moves by senators and Congress to introduce bills all looking at the same thing, which is Increasing what's called a 45Q tax credit for mitigation of CO2. And so that system is getting more and more and more funding. So it'd be interesting to see how the budget process goes through the US in the next month as to how much this cap, sorry, this tax credit may incentivize even more CO2 mitigation projects in the States. Our particular technology, you can See here in this little diagram, fits into a cement plant here. And so it's not a new process, that is effectively a new chemical plant that you add at the end of pipe. It's integrated into the cement plant. And in terms of our development, we've already built a pilot scale facility in Belgium with Heidelberg Cement At a site there, you can see a little picture of it there. It's about 5% of the capacity of a cement plant. You can see here, we've got a scaled up version of that. We're calling that Lalac 2, low emissions intensity, lime and cement 2, very imaginative, I know. But that's fully funded. We've got money from the EU and committed from industry to build that facility, and that's targeted to start up early 2024. Lilac 3 is in planning now. That's full scale, 100% capacity for cement. Lilac 2, by the way, is already at large Capacity cement for lime. And as we go through the discussion this morning, we'll split cement and lime up a little bit, so you'll understand those 2 different industries. Just in terms of the opportunity, there's, here's a quick global map, if you like, of the number of Plants and the millions of tonnes of CO2 that's produced from those plants around the world, in total is over 2.2 gigatons, Sorry, 1,000,000,000 tonnes of cement that is producing CO2, lime and cement product produce CO2 every year. And so the other sort of number I use is that if we were to build One of these lilac 3 facilities, this one here, capable of mitigating the process emissions from a 1,000,000 tonne clinker plant Every 3 to 4 days for the next 25 years, that would still not be enough to mitigate all of the CO2 coming from the cement and lime industry. So it's a significant challenge. And with respect to some of these maps, we're starting to really understand, where we'll target and what countries we'll target with respect The rollout of the technology. We're working with some pretty big companies. Heidelberg Cement, I mentioned, but we've also got CEMEX, Tarmac, Loast, Big lime company, Simple Portuguese Cement. Solvay, big chemical company, needs CO2 and lime in the production of soda ash. We're also working with CO2 hubs. We'll talk a bit about more of these, especially with the lime business as well, but Port of Rotterdam is one of the largest and most developed of those. So, what's happening across the globe and really is a global This is our opportunity pipeline. And I've talked to some extent about some of the stuff It's starting into initial scoping. But I've added an extra dimension to this pipeline because there's a hell of a lot of dialogue happening with Several companies in several different parts of the world. You can see some are starting to move through into memorandum and some understanding We've defined project timelines, tarmac there, and Adbri, pending some grant funding support also announced recently. So the pipeline is really starting to build for both cement and lime. Just a snapshot of what we might look at with cement, because often people might ask us, what do you do with the CO2? Well, that's a very good question because our expertise is in separating it. But increasingly, our expertise needs to also be in helping our customers understand what to do with it. So we're starting to get into quite detailed geological understanding, especially with our projects in Europe. And in the States, There's quite a bit of logistics work that we're starting to undertake to understand, which cement plants are located proximate to existing CO2 infrastructure. And so you can see here a map, if you like, of all of the cement plants in the US in what's called enhanced oil recovery CO2 pipelines. These are CO2 pipelines built in the 70s, But increasingly, will be turned to be used for CO2 sequestration. And so, while people might think that it's a long way away before the CO2 infrastructure is there to handle all the CO2 Structure is there to handle all of the CO2 coming out of the cement and lime industries if they were to try and deal with it. In fact, they're already starting to be logistics solutions for these, especially in the States. So, it's not that far away that these sorts of projects could start to come to fruition. I might hand over to Adam very briefly, and he'll talk about To Lyme and a bit of a quick case study on the Lyme CO2 infrastructure being looked at. I will, Phil. Would you like to just cover off the hilt Portion of that slide, first. Sure. Yeah. Sorry. I will. Adam, yeah. So, one of the just in terms of A few of the things that have happened, very recently we did announce we were part of the HILT CRC, which is part of an Australian Government Funded Cooperative Research Centre. Now, interesting here is, I mentioned before, I didn't think I'd be doing a project in Australia for quite some time. Well, that may not be the case anymore. There is a hell of a lot of focus coming here on decarbonization, especially of heavy industry. Why? Heavy industry, there's A lot of export dollars earn us a lot of export dollars. And despite the fact we may not have a carbon price here, countries such as Europe And we'll be implementing a carbon price by 2023, and other countries will follow. So our export industry had better start to Compete on a decarbonized level, or it's going to impact our economy very badly. And the LCRC, you can see some pretty major players joining that with cemented LUM opportunities for the company. So, Adam, over to you. Thanks Phil. Yeah as we showed earlier, we have a couple of MOUs signed this year with Adbri and Tarmac Here in Australia and in the UK. The Adright project is awaiting some grant funding, but the Tarmac project is underway. We're in the pre feed phase of that project and hope to get to feed by Q2 of next year, where we'll make an application to UK government funds to build the plant, but the feed is currently underway. That plant will be able to separate up to 20,000 tonnes a year of CO2 using our process. And we're looking at some interesting fuel options as well Hydrogen and Renewable Electricity. But what's really interesting about this project in particular is that It has the ambition to not just separate CO2 in the process, but to actually store that CO2. So this is not just A project where we want to demonstrate that we can separate CO2. We've done that in lilac one, but this project has the ambition to actually store CO2. And I guess, how will we do that? Next slide, please, Phil. Thank you. And Phil touched a little bit before about hubs and hubs are critical and they'll be super important for storing CO2 Around the world and the UK are out in front a little bit, in this regard, I guess, with some of their networks that they're starting to establish. This particular one in the Hynet, on the West Coast of the UK, it aims to use Some existing pipe and offshore infrastructure to pump CO2 into disused Oil and Gas well. So there's already some existing infrastructure in place for this project. So that's a really important head start. There'll be some new infrastructure built to help to feed that pipe. Some of the black pipes you can see here on this graphic. And what will underpin this, harbor this cluster is the production of hydrogen from natural gas. And When that's done, you produce CO2. So the CO2 for that will be stored. That gives them a, well, a blue hydrogen, but it's still a CO2 free Hydrogen, but it's the base load that then allows other industries, heavy industries like lime and cement, to feed that network as well. So together, You know, the ambition here is that, we achieve enough CO2 into these networks that they become commercially viable. The other exciting thing for us, of course, is that there is hydrogen production in and around this network. So it does offer us the opportunity to Partially or fully substitute natural gas in the reactor, burn that, That in conjunction perhaps with some renewable energy and we ultimately then have the ability to produce 0 CO2 lime, which would be a great outcome. Thanks, Phil. Not sure if there's anything else you wanted to add. Thanks very much, Adam. An interesting thing about this hub is it's targeting its first hydrogen production and CO2 storage By 2025. So if you recall the timeline we looked at before with, say, the tarmac project, it lines up really quite well. So CO2 utilization and or storage is one of those things that isn't decades away for us. So But just in terms of time, I guess, Simon, happy to take any questions on the CO2 business. Right. Thanks, Phil. Questions. Haldobrook Cement have moved ahead with commercialising a different carbon capture technology, which I say on the website they're rolling out the world. The first was built in Norway called the Brevik CCS project. How does this affect your CAPTCHA technology being adapted? Yeah, no, good question. So Heidelberg Cement have not adopted a single technology. They're putting their eggs in a few different baskets. The Brevik project is A particular capture method called amines. Amines is a type of chemical That if you like, captures the CO2 out of the flue gas at the end of the pipe of the cement plant. And it's the most technically advanced. So it's what they call Tech Readiness Level 8, which is sort of one step before sort of commercialization. And so, Hardwick Cement are making a bet on amides as well as several other technologies. But the problem with amides is they're very expensive. Once that CO2 is absorbed in that amine, you then have to reboil it to get the CO2 out as a pure stream to then do something with. And that reboiling is very energy intensive. So while it's the most technically advanced, it is about the most costly way to do it as well. So they're making bets there. They're making bets with us. And the reason they're making bets with us is because We don't have any parasitic energy load. Ours is part of the process itself. And so theoretically, having no extra energy load gives us the potential to be the lowest cost. And so what we have to do is to continue to scale and prove our technology and our lilac 2 project to prove that we're the lowest cost. We're just a few short sort of days or weeks away from releasing the results of our Lilac 1 pilot. As I said, Dan has been with the European Commission, just in the last 24 hours on that output report. And in that output report, there'll be a lot more detail once approved by the EU that we can share publicly about where our costs are coming in. So it's supposed to say we remain highly confident that our process will be extremely cost competitive Compared to even more advanced technologies further down the commercialization pathway than I mean. Thanks for your next question. Looking at the world map that you showed us, CO2 emissions in China are almost 10 times the combined emissions from the U. S. And Europe. Do we have a plan to develop the market in China? And if so, how do you view the threat of locally developed alternatives? Yeah, no, it's a very good question. And China is absolutely far and away the largest cement producer, globally. China is in terms of the way we want to develop the technology, China doesn't have an emissions trading scheme yet Full Cement. It's introduced one for power. So what we're trying to do is develop where we have those incentive schemes first To take our technology up the scale, we've hit 6 with lilac 1. We want to hit 8 with lilac 2, which is then starting to get ready to be commercially Once we've hit that and we've utilized the support of the incentives and penalties in Europe and the US to really drive that development, That's when the approach to China will take place. Suffice to say, the approach to China will be much more a licensing approach. It'll be licensing the technology, and we'll need to be careful and choose the right partners to license that technology. But that's what I call almost our blueprint stage. Once we've got the blueprint for the technology, licensing those blueprints is what we're going to be looking for countries like China. And it will be a royalty or upfront capital charge type license arrangement. So, our approach to China is sort of late 20s. And, the approach to the U. S. And Europe is immediate. Right. Thanks, Phil. Question, are there any plans to purify the CO2 to stream for food grade CO2 market? That is an option, obviously. The CO2 coming At the top of our calcite is actually quite pure. It will require a little further refining. But that CO2 is effectively owned by The Cement or Lime Company. And there are big gas companies, obviously, who currently offtake CO2 and put it into those sorts of food industries. So, the sorts of partnerships that may be struck up include those gas companies. So, absolutely, that's a possibility. And in fact, With some lime plants producing around 50,000 to 100,000 tonnes a year, that's exactly the type of utilization of that material you would do before Considering some of the more logistically challenging sequestration options for the CO2. So our CO2 is high purity and Can be cleaned up relatively easily for use in those sorts of applications. Great. Thanks, Phil. Last question on this segment. Storage of captured CO2 liquid gas remains a serious problem for CCS. Does the purity of the captured CO2 provide advantages for solid phase storage of the captured CO2? And is the company looking at partnerships or technologies to integrate solid storage? Yes, look, I assume by solid storage, I mean, the ability to store the material in what's called a carbonation reaction, which is where The CO2 basically goes back onto lime or other material in form of carbonate, or indeed even Geologically injected underground to be recombined as a carbonate and locked away. So, the purer the better, Totally agree. With CO2, there's all sorts of issues that can enter the chain to sequester it if you don't deal with the CO2 properly, corrosion and these sorts of things. So certainly, purity is important. The only other thing, I guess, with respect to partnerships is Absolutely. In terms of looking at sequestration options and utilization options, part of what we're using, a bit of the funding that we raised to do is to start Expanding our expertise and reach into forming more partnerships that allow a total solution, if you like, to be offered to a customer, Not just a separation technology. Thanks, Phil. That concludes the Q and A segment for that line of business. Excellent. Well, thanks folks, and thanks for sitting through it all so far for those who've made it this far. I'll jump forward into Sustainable processing now. And I'll get Andrew and Michael, and we've got a very special guest, Ken, joining us From holidays, by the way. So huge applause to Ken for dialing in. So maybe, Andrew, you kick off and then we'll go to Michael and Ken. Thanks, Phil. And good morning and welcome everyone to Now look at sustainable processing business line. We might have the next slide. Thanks, Phil. Okay. The sustainable processing business line is the area within Calix that looks at opportunities to utilize the carbon Calix, sorry, Carbon, Calix Platform Technology, outside of our CO2 business, which you just heard all about. Today, I want to take a deeper look at 3 areas where Calix is actively studying opportunities with partners And then touch on some other opportunities in the development pipeline. So looking at the slide in front of you, moving from left to right, hopefully, you're left to right. We'll start with the mineral looping energy storage. In partnership with Saltex, we are developing a pilot plant to study the opportunity to convert Renewable electricity in stored energy via a mineral salt, which can later be recovered as either electricity or heat or both. As renewable energy generation grows, so too will the need for longer duration energy storage solutions such as this to provide balance to energy grids. Bloomberg New Energy Finance predicted $620,000,000,000 will be invested in energy storage in the next 2 decades. A portion of this will have to be longer duration energy storage. And we'll talk in more detail On the Soltex opportunity in the slides coming. Now moving to the refractory industry. Like cement and lime industries, the 15,000,000 tonne for anorefractory industry needs to head for net 0 CO2. In partnership with RHI, Magnesita, Calix is studying the application of our technology to both separate process CO2 And operate using renewable electricity to create a truly 0 CO2 refractory feedstock. And again, we'll look more deeply At that, in fact, Michael will talk to that slide shortly. And the next one in the queue, if you like, is the spodumene processing. With lithium consumption predicted to grow by 500% by 2,050, the development of a process to reduce the CO2 footprint Of this vital battery material, while simultaneously reducing the movement of waste materials on the mine site and producing a higher value lithium sold in Australia Is a great challenge and opportunity. The CEO of our partner in this journey, Ken Brisden from Pilbara Minerals, is here with us today to share his thoughts on the importance Lowering the CO2 footprint of battery materials. And we'll again, we'll look at that more deeply shortly. Of course, we're not stopping at just these three areas. Other concepts in development, you'll see to the right of the slide in the shaded area. The 0 CO2 production of clay for next generation cements, which are being designed to reduce the CO2 footprint of the infrastructure being Built around the world every day. Now, one of these is known as LC3. This is a potential 1,000,000,000 tonne per annum market. Another one electrifying aluminium oxide production, which exceeded 125,000,000 tonnes And finally, We're continuing to review existing thermal processes to understand their suitability for conversion to our technology using renewable electricity. So now we'll look more closely at the first three opportunities. Energy storage. I felt the best way to communicate this would be to actually look at an example, which is one of many Potential ways this technology could be used. So an example is the provision of heat in the form of superheated water into district heating systems Such as that in Helsinki. The current system is provided with heat from combined heat and power plants, which burn fossil fuels. The power portion of these plants can and is being replaced with renewables, but the heat portion is a bigger challenge. The Soltex concept can convert the renewable energy into stored energy, which is then released as required to provide heat into the district heating system. This potential solution was recognized in 2020 by the City of Helsinki when it announced Soltex as one of the winning concepts In a €1,000,000 competition run by the city for new technology solutions can help them realize the ambition of completely closing the CHP plants by 2,035, and thus cutting 56% of the city's direct emissions. To get a Since of the scale of this opportunity, if all the existing heat energy used in Helsinki was supplied using the Soltex solution, A total of 45 Lilac 2 sized Kallax units would be required. That's just Helsinki. And Helsinki is one of many cities in the northern hemisphere that use a district heating system. Some of the largest include Moscow and New York, Quite famously, I'm sure. Those that have had the opportunity to travel to New York see the steam vent coming out up through the pavement. You can see the concept illustrated in the figure in the bottom left corner of the slide in which the Calix technology is providing the salt charging function. [SPEAKER ANDREW WIECHMANN MUNDY:] So we're putting the energy into the salt. The diagram bottom middle of the slide illustrates the flexibility of the concept In which various energy inputs can be transformed to different energy outputs and, of course, stored and used when required. In this example, we're talking about We're turning renewable electricity into heat. The first step for Soltex and CalEx has announced in February this year is to construct a pilot plant in Sweden, which is well progressed with the discharging section already being commissioned and the Calix charging section Components being delivered to site and assembled right now. Now I'd like to hand you over to Michael to talk about our refractory opportunity. Thank you, Andrew. I'm really pleased to give a quick rundown on the progress we have made with the refractory industry. Calix has been producing magnesium based products, including magnesium oxide and magnesium hydroxide Since 2013. So we've got extensive knowledge in that area. And leveraging that knowledge in IP in the refractory space is really low risk and high reward for us at the moment. So in July of 2021, Kallax announced To the ASX, the memorandum of understanding that we established with RHI Magna Sita. So I'm sure some of the investors on the call now are aware of this project. The largest RHI Magna Sita is the largest refractory manufacturer globally. And since we've signed that MoU, through August, what we've done is we've demonstrated the proof of concept Through testing directly testing the materials from RHI Magnesia through our pilot scale Batman plant at the Backus Marsh facility or the Mattingly facility here in Victoria. Now that measured CO2 purity above 98.5 percent, which is Fantastic in terms of demonstrating the efficacy of the technology. And that has been verified by an external independent NADA Certified laboratory. So that way the clients have got their RHI Magna Cedar has got the confidence that we can supply The CO2 at the high purity, ready for reuse storage and those type of things as has already been discussed by Adam and the team earlier. The Calix engineering team is actively working on the 2 projects, focused on building 2 25,000 tonnes per year Two potential projects focused on building 2 25,000 tonne a year calciners, designed to produce Low carbon or green refractory products, one of which one of these projects, one of these potential projects has the opportunity to be powered fully by renewable energy. This financial year, we're looking at targeting the to complete Pre feed phase and moving forward into full feasibility studies with these potential projects. So it's very exciting. These are the first steps Yes, to decarbonize the $20,000,000,000 refractory industry, which offers huge opportunities as Every tonne of refractory produces more than a tonne of CO2 from the mineral and even more when you consider burning the fossil Fuels within the traditional calciner. So, at this stage, hopefully that gives you a bit of a rundown of the project with RHI Magnesita. So I'll hand it To Andrew to discuss the lithium work. Thanks, Michael. Right. So I wanted to move on to our latest project looking at processing the spodumene concentrate that contains lithium to extract that lithium. For this opportunity, we've been fortunate to team up with Pilbara Metals, as we mentioned, The owners of the world's largest independently run hard rock lithium operation. So let's start by looking at A couple of forces driving the need for innovation in this space. So by now, it's no secret that the era of the electric vehicle is with us. The rapid growth in EV uptake has led to the EU to declare lithium a critical raw material with an expectation that the EU alone will need Times more lithium in 2,050 per annum than it is using now. The graph of the EV sales in Europe Month on month, year on year growth you can see on the screen, supports such a need. And of course, not all lithium batteries go in cars. So demand for lithium battery storage is also increasing. The second driving force for this decarbonization of the lithium Production is that lithium batteries can't become part of the problem if they're going to be part of the solution. The means of batteries and the materials that make them must have low CO2 footprints. Again, the EU is leading the way developing a framework of legislation To phase in, ultimately resulting in maximum lifecycle carbon footprints having to be declared and a battery passport system. And we can see that the drive is supported by the major car manufacturers here on the slide who have set goals to use materials in their cars that have 0 CO2 Footprint within the next 2 decades. So now we can see the why. We can move on to the how. In the diagram on the left, you'll see a flow sheet being developed to take on the challenge of lower CO2 lithium salt production. As we step through this, you can see some other sustainability benefits that have also been identified. We start with this guajamene from the Pilbara Minerals existing Pilgangora operation and process it through a new plant at the Pilgangora site. The The whole plant, including the Calix technology, is designed to use electricity, which would eventually be renewable as the availability grows in the Pilbara region. The availability of renewable energy, that is. The output of this process is a concentrated lithium salt, Which is then shipped to existing cathode materials producers. As the lithium is now in a concentrated salt, The mass of material being shipped is as little as 1 eighth of the original concentrate, further reducing the CO2 footprint. The remaining alumina silicate waste material stays at the mine and is managed in the existing tailings facility, which again improves the sustainability of this process route. The process offers further opportunities to improve sustainability by treating fine lower grade Woodgermain concentrate. It is often difficult to process in a traditional rotary kiln. Now let's take a look at how the project is progressing. We can go to the next slide, please. Many of you will recall we announced an Back in May to undertake an initial scoping study for this project. The project was targeting 5 objectives. These were higher value product produced at the mine site, namely lithium salt, A process that can be powered with renewable energy, less shipping of waste aluminosilicate from the mine site, Higher recovery from the ore body by potentially treating fine low grade concentrates. A lower CO2 footprint product, Which can provide a competitive advantage as carbon barriers are erected in markets such as the EU and United States. The project remains on track to deliver all these objectives. We have undertaken trials using the Calix pilot plan in Baker Smart in Victoria, Australia, on several spudumene concentrate samples with excellent results. These materials have been used by the Pilbara team to develop the lithium chemical concentration or Yes. This process includes a traditional asset extraction leaching step followed by solution purification and final high grade lithium salt precipitation. Based on this flow sheet, the teams are working diligently on all the elements of the scoping study, including the preliminary plant layout you can see in the slide, Capital and operating costs, an initial view of a potential project development timeline, and of course, initial lithium product market testing. The scoping study report is on track for completion in 2021. With the strong tailwinds in the market, Pilbara and Calix will look to move to an accelerated feasibility study And start the work to establish a joint venture for the demonstration project and future marketing of the technology to the wider lithium industry. I'll finish with a couple of comments on the lithium market. Current market conditions are very buoyant for lithium businesses at present. Lithium carbonate and spudumene concentrate prices both rising significantly over 2021. As you can see, some recent figures on the slide there. Rather than me talking about that, I'll hand over to an expert in all things lithium, Kim Brisbane, CEO of Pilbara Minerals for a few words. Fantastic, Andrew. Thank you. And Phil, Andrew, Michael, great to be with you. Really appreciate the opportunity. Yes. It really constitutes a material step forward for the Hard Rock supply chain. The application of A midstream product when you think about the opportunity from Pilbara Minerals perspective that creates alternate markets To what otherwise would happen with the conventional spodumene tonne, which comes with its own set of problems, combination of lots of waste being shipped, But also a materially higher carbon footprint when you think about a fossil fuel 5 conventional calcined facility. Our opportunity comes through the application of a really smart piece of technology in the CALIX Batman reactor that is really well matched to the fines concentrate feed coming off the back of our flotation plant. And it has Industry wide implications because the effect of flotation is only going to grow within our hard rock industry over time. Flotation is a key tool to maximize the recovery of Lithia to concentrate, in which case More and more operators are going to apply flotation for the purpose of maximizing the value in the resource. However, Andrew quite rightly pointed out That represents a challenge in conventional kilns. The beauty in the Calix Batman reactor is its ability to discreetly calcine a Fine particle, in a very selective manner and incredibly efficient with the application of, an electric fired kiln and, of course, Bolt on renewables. So all those things combined, we think makes for a very, very powerful tool and really pleased to be working with the Calix team. Thanks very much, Andrew. Hand over to you. Thanks, Ken. Really appreciate it. And we'll go to Phil, I guess. Any questions? Absolutely, no. Thanks, So, Andrew and Michael, and huge thanks to Ken again, because this is your holiday time that you've taken out to join us today. But, look, there might be just a couple of quick questions we could take, Simon, on this one. Yep. So this is relates to the whole line of sustainability processing. Do you intend to compete in all of these markets? It seems like a widespread of risky projects. The answer is yes. Yes, it's a widespread. Risky? I don't think so. I think technical development To commercialization, we're getting pretty good at. So the opportunities are just too big and the need is too great To not follow all of these that we've talked about today. And I haven't even released Mark and Matt on you with the Skunk Works yet. We're very ambitious, and we're very driven about what our technology can do. Phil, just an extension of that. It might be worth expanding on the restructure of the business in terms of addressing these markets, why we're not stretched too thin. Exactly, Simon. So the structure that we talked about at the front of the presentation, which was focused down line of business, is really about giving appropriate focus. So it's not like Darren and I, who some of you may have met on investor presentations, trying to do it all. Today is about meeting each of the line of business heads that are responsible for developing And in detail, managing these different lines of business. As these lines of business develop into Bigger businesses, we may have to split a little more out, in terms of lines of business. But I'm very comfortable at the moment with the way With the additional resources we raised at the March cap raise, with the way that these lines of business are now starting to really focus and accelerate towards commercialization. Thanks, Phil. Another question. Can you talk to the pipeline you have in place with other lithium opportunities outside of Pilbara and inbound interest levels from other spodumene players? There is a lot of inbound interest. I think the announcement sort of stirred that up. Our agreement with Pilbara is to co develop this technology for the industry. So, the joint venture that's talked about there, if all successful Fluoroscoping study. The idea is that we co develop this technology for the industry. So, yes, there's inbound interest They are partners at the moment at Pilbara, but the intention is that it's for the total industry. And just final question, Phil, will Calix give priority to lithium processing or its own battery metal materials? The answer is both. You haven't even seen the battery talk yet, but it's about some really interesting stuff we're doing in Manganese lithium Manganese Oxide. So lithium is front and center in our battery development right now. So, yeah, both are important And for obvious reasons. Perfect. Thanks, Phil. That concludes the Q and A segment for that one as well. Fantastic. And thanks again, Andrew, Michael and Ken especially. So, we'll see you later. Enjoy your holiday, Ken. Okay. Thanks all for those who've made it so far. This next This is really quite an interesting section. Again, highly prospective, we believe. We'll take time. Biotech is an interesting space for But I'd like to introduce Rob Van Merkstein and our Chief Scientist, Mark Skeets, both of whom are working very closely in this biotech space for us. So without further ado, I hand over to Rob to run through the prezo with a few interjecting comments from our Thank you very much, Phil. And hello all. So I'm Rob Van Moekenstein and I'm the leader of the Calix Biotech line of business and with me of course is Doctor. Mark Skeets, co founder of Calix and our Chief Scientist, Executive Board Member and frankly the genesis of many of the good ideas that Calix are pursuing. Over the next 20 minutes, we hope to provide you with a better understanding of the drivers for our Biotech business, our objectives, our plans and our progress, to achieve these. So, why biotech? Experts have been warning us for years that our world is well and truly due for a global pandemic. But for most of us, it came as a great Surprise along with a substantial amount of disruption, pain and suffering. And it's instructive. Along the way, you know, we've learned some new words that are pertinent to our biotech business. You know, words like variant, which is another word for a mutation or even evolution. And we've also learnt about resistance. So I was reluctant to raise the COVID pandemic and I'd do so only to point out that The concept of variance mutation and the development of resistance is not just a viral thing. It really is a feature of any living system, including, pathogenic microorganisms or just otherwise troublesome microorganisms. Calix knows that our materials the materials we make are bioactive. What that means is our materials have an effect on a living organism. And what we're doing with Biotech really is We're seeking to leverage this bioactivity in applications as a partial substitute for a conventional treatment where Emerging variants are becoming resistant to those chemical treatments and equally as important, The unintended consequences of these conventional treatments, you know, are really becoming unacceptable to our society. So the Biotech line of business is currently focused on developing new products for 3 critical applications. Crop protection, where we seek to improve the safety, sustainability of food production. Advanced coatings, we're seeking to develop and integrate our active as an environmentally, Well to produce more environmentally friendly marine felling and anti corrosion control coatings. And finally, we see great opportunity in human and animal health as a pharmaceutical or veterinary medicine. In general, within Calix and Biotech, our approach is to do some work to convince ourselves really just The internal proof of concept and if that's successful then we get serious and we double down our efforts and we do this internally but Frequently by collaborating externally with experts and they can be academia and commercial partners. We always engage with market leaders and commercial market leaders where the objective really is to license our technology. But in general, our preferred position is to continue to manufacture our materials. In terms of materials and bioactivity, right now, our materials are based on Material magnesium minerals and their derivatives. And this is great. The reason is that magnesium Oxide and hydroxide are intrinsically safe. Safe to us, safe to animals, safe to the environment, non persistent, By accumulative arguably we don't get enough magnesium. Chemically our materials are identical to milk of Magnesia. So why are we excited? It's the physical form of our materials and what this means. Our materials That can be classified as a nano form. What does this mean? We take magnesium minerals from the ground and we grind them more or less So the size of plain flour, nothing special. We then calcined these materials to produce magnesium oxide and derivatives That are also the size of plain flower. The nano bit refers to the crystal grains Within each of these particles that we produce and what you can see here hopefully is an image. It's a high resolution Electron microscope image and it's a close-up of a single sized of a single flower sized Magnesium hydroxide particle which happens to be the active in our agricultural product. What you're seeing here is the particle is composed is an aggregate of very, very small Nanocrystals. These nanocrystals are like dinner plates, they're wide across and very thin. The width of these plates is about 100 nanometers and their depth is around 25 nanometers. And for scale a very sharp knife Is in the order the edge of a very sharp knife is in the order of 1 micron or 1,000 nanometers at its thinnest point. So our crystals are you know our crystal crystals are very small. The smaller your crystal, the higher your surface area. And as a consequence, our materials have very high surface area. And in terms of bioactivity, the nano form, the high surface area and the small particle size are really fundamental To our bioactivity. And why is that? Oxygen reacts at the surface of our nanocrystals Produce reactive oxygen or ROS. ROS Is a key component of many immune system responses. It's a necessary and natural part of life. Humans, animals and plant immune systems Naturally produce ROS to fight on fight off infections and for very complex reasons. One of which is that ROS directly inhibits Many pathogenic microorganisms. Further detail on how we seek to exploit the ROS that's produced by our materials in 3 key Applications, firstly agriculture. We've been working with bioactive Materials in agriculture for nearly 6 years and really what this slide is all about is providing an update on where we are. Firstly, proof of concept. We're in our nearly 6th consecutive year of efficacy field trials, toxicology field trials. There is no question that we have broad spectrum, antifungal and also anti pest efficacy on a number of Very common problematic, crop pathogens and pests. And regarding proof of concept, We've now our 1st distribution license in place in the EU and our products are already in market. In terms of the value proposition, it's a function of a couple of different things but all related to a reduction in the Use of toxic pesticides. And that can be done at the Grower's Choice or it can be forced upon him When regulators ban active substances that in some cases that have been using for many many years And ultimately it's to increase the safety, productivity and sustainability of the way food is grown globally. In regard to commercialization, as I said, we've been working for nearly 4 or 5 years now, Going through a very arduous process to have our material registered by the Australian regulator, we are hopeful and expect to achieve that Registration allowing it to be used in agriculture in the calendar year 2022. It's also very important to point out in fact That we are, I think, well progressed in negotiations for our second license. In this case, A global license with 1 of the top 4 crop protection majors globally. Where are we however now? We are in market entry stage in the Netherlands and the drivers for the sort of product for our bioactive materials are as follows. The Netherlands, a global agricultural powerhouse, the world's 2nd largest exporter of crop, A leader in sustainable agriculture and many of their crops are highly susceptible to fungal pathogens. In 2020, the EU advised that they would be banning a product called Mancozeb. It just happened it's a fungicide, it's the global go to fungicide because of its Broad spectrum functionality and its use is somewhere in the order of 200,000 tonnes per annum. It's also been identified as an endocrine disruptor, As I said it's been banned in Europe already. It cannot be used after this year and it's in review globally, in the US, in India, etc. And even if it's not banned, any country that continues to use mancozeb cannot from the In future export to countries where that mancozeb ban is in place. So lots of reasons. Mancozeb was seen over the last 50 years as indispensable and a Substitute is urgently required. So this graph really shows the effectiveness Well, this graph shows the results from a field trial under Taken a couple of years ago in the Netherlands, in this case on field onions. And we're really trying to evaluate the ability Of our materials to substitute in the mancozeb product in. The disease in this case is prongospora destructor otherwise known as downy mildew. It's a terrible plant pathogen. It can destroy it can rip through an onion field overnight and destroy the crop. So there are really good reasons to look at crop protection. As you can see in the green line here, Which is what this green line shows that without treatment, the severity of that infection in the onion field starts from Very low levels initially and then progressively increases to a point where conditions become conducive to an explosion in the disease and That is a function of both temperature and humidity, at which point the disease takes off. In this case 50 percent like I said it's quite Quite easy to lose 100 percent of your crop effectively overnight. The red curve here is the sort of Disease suppression or control that can be achieved with the current grower standard which is A cocktail if you will of fungicides that are applied at different times to control the disease. The key thing about the red curve is that it Fundamentally relies on the Mackazette Active, not an option in 2022 and beyond. So, the effect of our material can be seen in the solid orange line, which is where our material was Added to a multi active program as a substitute for MANCOZIP and although The degree of control that was achieved is not as great as mancozeb. In this case, it was still sufficient To keep the level of the disease below what the level that became economically damaging to the farmer. So effectively he could still produce the same amount of crop and the same amount And crop with the same of the same quality. So that is where we are in regard to agriculture, in regard to marine coatings, what we're really trying to establish here is the potential for the use of our Act is As an additive into a conventional anti failing marine coating and there are quite a few different things that are happening in parallel. What we know, of course, again, starting with the proof of concept, we've had to convince ourselves. You know we are we have completed a 26 month exposure trial to assess the effectiveness of Adding our magnesium oxide powder to an in market benchmark coating, and to see what effect that had On the anti failing properties of that coating and if I can draw your attention to the two images on the bottom left, which you can really see here are some Quite profound visual differences. The simple addition of our powder to this in market product substantially reduced The degree of fouling. That is, I think, a pretty compelling proof of concept. So what are we doing now? We are working with large end users and large manufacturers of antifouling coatings. The value proposition that we've put to both of those Is that the potential to reduce the maintenance costs by increasing the frequency at which you have to remove your boat and apply a new coating And potentially reduce the content of effectively environmentally toxic biocide, in this case copper, which is effectively the current go to buy a site used in marine For a manufacturer is to reduce input costs by substituting an expensive copper input with a less expensive magnesium oxide input And to assist them with their regulatory compliance because copper is a biocide and is regulated in the same way that Pesticides are regulated. So where are we? Working with manufacturers and end users. If I can draw your attention to the images on the bottom right, which you can see here are 4 panels. 1 is untreated And 3, they're all the same, they're 3 replicates, where the copper in a conventional antifouling Coating has been either partially or fully substituted with magnesium oxide. Each of these red panels contains Three vertical strips, which are labelled 1232 is the in market coating as is. So this is what you could buy at your At your boatyard today on the left and on the right, on the left, strip 1, you can see The result where we've where the manufacturer of this coating in fact has reduced the copper content by half and added The equivalent amount as MGO and the strip on the right is, where all of the copper has been substituted with MGO. We are at 3 months exposure now at Williamstown in Port Phillip Bay in Victoria. What we can basically see here is that in all cases, you know, whether a coating has been applied, we see mild fouling in the untreated panel. We see A lot of failing. So there is very high failing potential within this water. The water, the failing that's evident is mainly scum. It's not of Great concern to owners because any movement and this scum will naturally just slough off. There are no secondary or tertiary colonisers apparent. By that I mean tube worms or the scourge of shipping and recreational boating globally, which are barnacles. In essence, what we see is equivalent fouling across all three panels, albeit it's early days. It's very promising. And finally, the other area of interest within Calix is pharma and veterinary medicine, where we seek to evaluate and ultimately apply our bioactive materials for human and animal health. We are at very early stages here, Which it would stay still in the proof of concept stage, but so far we have very promising results. We have demonstrated We, that is independent tests, have demonstrated that our materials, our bioactive materials successfully suppress Antibiotic resistant and highly pathogenic bacteria Staphylococcus aureus otherwise known as golden staph, You know becoming ubiquitous hospital and community infection. You know some quite profound and serious implications. Our materials suppress this greater than 99% suppression at a dose rate of 1 gram per liter. These are sort of in vitro tests, so they're not real world tests. Similarly with e coli and with Shooter- all Ran negative or gram positive bacteria? Again, we see greater than 90% suppression, Which is otherwise put as the MIC90 which is the minimum inhibitory concentration required to achieve A reduction in the proliferation of bacteria by 90% or more. So very promising Preliminary results of the effect of our bacteria of our bioactive materials on Really quite serious pathogenic bacteria. Mark, if you have anything that you'd like to add or comment here at this point? I think my contribution really is to say, why does it work? Because The mode of action of the bioactivity is really important to understand. And We're working on that with with global experts. It is important in another We'll talk about it a little bit more back in R and D is this is the first material we've tried. Many more to come. Indeed. Okay. Look, I might stop there. We've gone a little over time. But Simon, if there's one One quick question from the audience. We might see if we can deal with that, and then we'll move on to batteries. All right. Thanks, Phil. Just one question. Notice the development of the marine fouling is down near the HMIS Cerberus. Any Navy contracts in the pipeline or development of this product? The Navy, of course, is one potentially huge potential huge user of this type of product. So as we're able to disclose Who an end user might be, we will do so. Well answered, Phil. That concludes the Q and A segment. Thank you. Excellent. Thanks, Rob. And Mark, you're going to hang around for batteries. So let's keep moving. And congratulations, everyone, who's made it thus far. Nearly there. This is the last line of business. And for this line of business, we've got a couple of special guests. So Maybe I'll get Matt Boothandford to sort of take it from here and take us through the battery line of business. Yeah. Great. And I'll get Pat and Oliver to introduce themselves too. That's all right. So look, hey, thank you all for attending this talk. My name is Matt I'm the recently appointed General Manager for R&D, and Deputy Chief Scientist. But probably most relevant to this talk is I'm leading the battery materials development program at Calyxt. My background is chemistry, chemical engineering, material sciences. Before Calyxt, before joining Calyxt, I spent the best part of 10 years working out of Imperial College in the UK, completing my PhD, Acting Head of the Engineering, Energy Engineering and Carbon Capture Research Group, moved to Australia at the beginning of 2019 to join Calyxt as the R and D Manager for And also on the call as is, Mark Skeets, Co Founder, Executive Director and Chief Scientist who was introduced, I think, in the previous talk. And I'm delighted to be able to also introduce, Professor Patrick Howlett, And one of our key research partners on the battery materials development program at Calyxt, he's working with us on a number of R and D projects. And Oliver Gross, who's the industry expert who we've been, who's been advising the battery material development program at KedX since Late last year. So I can hand it over to Pat maybe first. Okay. Hi, everyone. So, yeah, I'm Patrick Howlett. I'm A researcher at the Institute of Frontier Materials at Deakin University. We've got around 20 years of research experience, investigating Advanced batteries. And I guess been working with Calix for the past several years working, in this Project we're going to hear about today, developing some new Australian made cathode electrode materials. As part of my role, I'm also the director of the battery technology research innovation hub or battery hub. Let's say Essentially a battery scale up and prototyping facility, which is focused on engaging with industry and demonstrating new battery technologies and new battery materials. We've recently received a $9,500,000 grant from the Victorian government to scale up Battery Hub. So Battery Hub 2, Which will be a much larger facility, aimed at, making larger scale batteries to demonstrate the new materials such as the ones Calyxt and Martin. So we're very excited to work with Calyxt on that. The facility will be able to make quite large battery cells up to sort of 15 amp hour to be assembled into battery packs for everything from, I guess, mobile phones through to, to stationary storage, electric vehicles, that So it's a pilot scale production facility. And it's probably enough for me. Thank you. Let me over to you, Oliver. All right. I guess it's my turn here. Hi, Oliver Gross, technical fellow at Stellantis, Responsible for the global advanced technology and development in energy storage conversion systems. That's batteries and supercapacitors. I have about, coming on close to 30 years experience in the areas of batteries and supercapacitors with a material science background. Began work Predominantly actually in the materials area of the development and worked my way up through battery design, industrialization and systems. And so working here at Calyxt since, probably the latter part of last year, focusing on looking at The materials, the processes, and really how's the best way to optimize them for electrochemical systems, Four batteries and understanding really what the true values and benefits of those materials are. We've had some pretty good successes. We're going to be going through a few little results Today that show a little bit of the progress for the very first generation, the very first type of materials with more materials to come, as we understand the processes be applied to some of these other materials. And with that, Matt, I'll get that back to you. Yeah. Great. And look, I'm obviously going to go through all these slides, but if there's anything that I missed, please feel free to interject and comment if you feel That's needed. All right. So, I suppose to start off by saying the energy revolution is here. As we as a global society need to Transition away from fossil fuels is the primary source of energy towards renewables and other low carbon Sustainable forms of energy, the need for efficient, low cost and sustainable energy storage solutions such as lithium ion batteries will become increasingly more important. So I suppose regardless of where you look, demand for lithium ion battery technology is growing and is expected and is predicted and expected to continue to grow Fast over the course of the next 10 to 20 years. And this will be driven by increasing demand for EVs and more and more so stationary energy Storage. So this is both domestic and large, grid scale batteries. So at Calyxt, we're developing An efficient low cost, low carbon manufacturing process to deliver high performance lithium manganese oxide cathode materials. At the heart of this process is the Calyxt flash calcination technology as depicted here on the left hand side Of this slide, now we've obviously gone through this before, but as with all the other processes that we're developing at Calyxt, We start off by dropping our raw material in a fine powdered format. In our case, it's a manganese carbonate And then indirectly fired, indirectly heated tube. So as the powder is heated, the bound gases in this case, CO2 are released to yield highly porous, high surface area, manganese oxide intermediate product and a concentrated stream of CO2 at top. So we then take this manganese oxide intermediate and we add lithium in the form of a soluble lithium hydroxide Side form solution processing method, and then we sinter it and anneal the material at around 800 degrees C for 2 hours and to yield the final lithium manganese oxide product. So by using the high surface area and porous intermediate manganese oxide product and adding lithium virus solution processing methodology. We get really good contact between the manganese and the lithium. So it's the LMO structure, the lithium manganese oxide LMO structure forms quickly. And therefore we're reducing the amount of time needed to sinter the material, to anneal and form the phases from around about 12 to 24 hours, which is typical of a conventional production process is down to about 2 hours. So this will contribute to a significant reduction in the cost and energy of the process. So as you'll see here, Calyxt's materials are also presenting a unique structure, which I'll discuss in a little bit more detail in the next couple of slides. So Phil, do you want to change over slides? Great. So I suppose at this point, I should probably mention our research partners at Deakin and Battery Hub And specialist chemical manufacturer for Molecular, who we're working closely with through several Fund research projects, most notably the Australian Government Funded Cooperative Research Centre for Advanced Hybrid Batteries The Calyxt leads, of which the primary objective is to develop our cathode manufacturing process And, the high power cell categories and formats that will exploit the catheter cathode materials. So much of the work that you're going to see over the course of the next couple of slides has been undertaken at Deakin and Battery Hub. So I'm just going to use the next couple of minutes now just to run through, a quick recap on some of the results that we've presented previously. So here you can see on the left hand side of this slide, you'll see what we term a Rigoni plot. And this shows specific energy of several LMO cathode materials that we've tested in half salt at Deakin as a function of their specific power. So we use, a car analogy. Specific energy on the y axis refers to the size of the fuel tank, and the specific power refers to And the rate at which you can deliver that, the energy can be dispatched or charged. So we're obviously aiming to, for a chemistry that can retain as much of its energy when charged and discharged at high rates. And we see this with the calyxt LMI as shown in this plot. We're seeing exceptional rate performance, surpassing the performance of its commercial competitors and similar in performance to the best, lab scale Alamo is that are prepared using exotic chemistries at the benchtop. So we believe that the superior rate performance As demonstrated by the Cadence Catter material relates to its unique structure. So as you'll see from these, from these High magnification scanning electron microscope images. So the calyx material presents a mesoporous multilayered onion like structure. And we believe this porosity provides the electrolyte with access to the internal structure of the LMO facilitating rapid transport of the lithium ions. So the distance then the lithium has to travel through the solid is much shorter than would be expected in the case of a conventional non porous low surface Material as depicted in the images to the left on this slide. I think it's also worth noting that the cathode material expand and contract as it accepts and release lithium during discharge and charging. And this expansion and contraction can lead to the cracking and fracturing of the material, which is a common degradation mechanism for, for electro materials leading to that leads to the loss in capacity recycle number and time. And so the porosity of the Kallax material may accommodate this expansion Leading to a more resilient material that resists that cracking and pulverization. Okay. So if we move on to the next slide, We'll see some new results from our testing at Calyxt and Deakin, in full cell. So we've now tested our cathode materials against commercial graphite And LTO anode, and we found that our materials continue to demonstrate outstanding rate capability and now importantly stability. So as you'll see in the figure over on the left, we've tested the Codex LMO in a full LMO LTO cell with fast, charging discharging. So charging discharging taking place over 15 minutes. So pretty quick, And over quite a large number of cycles. So I think we're now probably up to about 6,000 cycles with this cell. And we've seen, particularly with this cell, we've seen no Occurable decay in the capacity, which is pretty remarkable, I think. I think for the context, just for context, the millimile battery that Jeff Dunham and Tesla are developing require 5,000 cycles to meet the target. Okay. So again, here we have some high magnification scanning electron microscope, images, the cross sections. I think the Deakin team here have used a focused And beam to to mill away the surface of the cathode films to reveal the internal structures of our materials, and the of the materials before and after electrochemical cycling. And we can see that the novel layered structure is preserved with no notable Structural degradation observed. And I think it's probably also mentioned as well, moving on to electrolyte development program. I think it's important to recognize that the success of the Kedex will depend on its compatibility with the other componentry within the cell. So work is also underway on the development of net generation safe electrolyte systems tailored to Calyxt's Electromaterials. And this work has been done through the CLCP, which I've previously mentioned, but also through the Australian Research Council funded STORE Energy Training Centre, As exemplified by this recent paper from our research partners at Monash University and also the team at Deakin, that was published in the High Impact Factor Advanced Energy Materials. So if we move on to the next slide. So as of April this year, we've I'm working with the UK based power cell developer AMT Power and its partners Kinetic and MEP Technologies, who are undertaking a program of work to develop commercial format, pouch cells and battery packs featuring the KX thermo chemistry. So So the first stage of this program is now well underway, and we expect to have finalized cell design specifications later this year, Such that we can start to begin scaling the production of the commercial format power cells with the ultimate aim of delivering a 2 kilowatt hour prototype battery pack towards the end of 2022. So over on the left hand side of this slide, You'll see plots showing the rate performance and capacity retention of the Calyxt LMO compared to commercial benchmark material. And again, So in this case, we're working with commercially relevant cathode loading and formulations, up to 95 weight percent cathode active materials of the LMO and loadings up to 2,000,000 amperes per centimeter squared. And again, we're seeing superior, better Capacity retention and rate performance for the Calyxt LMO, which is consistent with all the work that's been done previously at Deakin. So So on the next slide. So I'm sure you're all aware that Capes raised capital In the year to, amongst other things, accelerate the battery materials development program. And we're starting to put this money to good use. We've now set up the electrode coatings, coin cell assembly and electrochemical testing suite, to augment and expand our existing capability and capacity at Deakin. We're upgrading our laboratories at Calyxt to provide a dedicated fit for purpose and clean space to house the facility in the battery materials, R and D work and characterization equipment. And finally, we're also growing the team, as exemplified by the 2 new positions that we're currently recruiting for process engineer to lead process flow development And ScaleUp and Materials Engineered Sports, the development optimization and characterization Alamo and of course our next generation of electro materials. So just on the final slide, Here, we're just showing our key milestones deliverables and essentially we're currently on track. Progress is good. In terms of Alamo full cell performance, we've begun testing, of commercially relevant cathode active materials as part of our path cell development program in the UK. And we've also tested LMR in full cell, in some cases up to 6,000 charge cycles at Deakin. In terms of scale up, we've manufactured the Kallax and the Moab batches up to 10 kilos in size and a setting of equipment at the moment to allow production capacities of between 30 to 50 kilos. Optimization of the LMO continues and is ongoing. As I mentioned previously, the team at Monash are developing tailored electrolyte systems for KELEX Electromaterials and screening. It's well underway. Papers have been published. So then that concludes This presentation. Fantastic. Well, you've really brought us back on time, Matt. That was excellent. Just maybe before we jump to if there's any one or two quick questions, any final comments, I guess, from Pat or from Oliver on your thoughts on what you've seen in the results so far and where they could head? I can make a quick comment, I suppose. I think, I guess the LMO results that we've seen here are pretty exciting in terms of, I think, the right And I guess, as I mentioned, the battery hub 2 will have that facility that's facilities I aim to be running it in May next year. So unfortunately, we weren't quite ready to do the scale up of the batteries that It's currently being done by AMT in the UK, but we'll have that capability, I guess, next year to that in Australia. As far as I'm aware, From my background, those the batteries that will be made in that will be the 1st fully developed cathode materials or electrode materials that will go into a full scale battery of any Australian produced electrode materials. So that'll be the first example of a truly Australian cathode based electrode. And I guess the other thing that I think is really interesting is the breadth. This is just the first example that we chose in terms of the manganese oxides to scale with a whole range of other really interesting, electrode materials that this process can be applicable for. So It's very exciting, I think, from that perspective. The main thing that I would add is the scalability That was going to be coming with the next phase, looking at the ability to produce considerably more of this material, The consistency that's associated with that material, we've learned an awful lot. And quite honestly, a lot of the things that have been discovered is How pretty robust that material is in terms of those processes. And really, it's just about a matter now about learning how to put that into a cell. You always have that learning curve. But once you get that nailed down, the rest is about consistency and scale up. So very exciting. Excellent. Okay. Simon, are there any 1 or 2 quick questions? I think that was pretty comprehensive, Phil. So we're all good on the question front. Fantastic. When you say comprehensive, I'll chip Matt a bit more later about, the level of scientific language he's using. I tried to okay. Okay. Now just in case We still have anyone on the line. This bit's the fun bit. This is the skunkworks. So, just when you thought that We couldn't be doing much more. There's always a little bit of the company on a Friday afternoon that does a little a few little specials just to see what might be there coming forward. And of course, our Chief Scientist and Co Founder, Mark, leads our Skunk Works piece of work and joined by Matt now, who's Obviously, General Manager R&D and recently named Deputy Chief Scientist. So Mark, do you want to take us through the Skutt Works with Matt? I would love to and thank you, Phil, and good morning or good afternoon, everyone. There's something deep About our technology, it starts out with a kiln. Now, that kiln could not have been conceived of Before 1970, when new steels became available that could transfer heat at high temperature. But kilns have been around for 5000 years. They've been perfected, but majority of them are met with much carbon. Our opportunity lies in dealing with the processing using a nuclear, which is environmentally Friendly. But we've seen also that a key capability is making new materials that have Never been made before. We've said in every of our activities that we engage in. So there is a huge amount to be done by Calyxt, Biops associated with the evolution and development of our technology. Probably it's best that we quickly move to looking at this slide here. And I'll ask Matt, to introduce the new stuff very quickly, Matt. The new I mean, is it catalyst, coatings, batteries and Yeah. So look, I think one of the unique features of the materials that the Calyxt technology produces is it's very High surface area. And that is something that is, has huge amounts of, it's pretty exciting in the catalyst world. I think the surface is the active part of any material and its ability to activate molecules And, and compounds, for a whole host of different applications is quite exciting. You know, in the space of things like CO2 utilization, hydrogen production, production of, platform chemicals, I think it's something we're only just starting to touch on is a really exciting space for Calyxt to work through. I think Mark's touched on that. We've got a periodic table Available to us of all sorts of different materials that we can look to calcine and generate potential catalyst materials from. So that's quite an exciting aspect. Yeah. Thank you, Matt. I'd like to move to water. In our introduction to water, we talked about treating discharged water. The new area that we're looking at is to go into freshwater treatment, how to make potable water. I think Bill showed that he can actually Basically, eat our material. Well, it is safe, but cannot be used for Freshwater treatment. There are many chemicals, complex processes that go into a municipal water treatment plant. We believe that there's a capability of using our material in the water treatment plant Well, the benefits flow not only in water treatment, but through the whole system. So, there's an opportunity there. PFAS are polyfluorinated alkanes that were used and developed for applications in firefighting. Unfortunately, they're toxic. And there's big issues in water treatment plants To deal with them and in soil treatment. Also, fluorides are a problem, Particularly in potable water in in Asia. We know from initial work that's been done that our materials Captures PFAS and Fluorides. We might all also be able to destroy the PFAS Using our process techniques. So there's a glimpse of what might happen in water. Let's not try to project that we will do. We've got R and D to be done, but it's a glimpse into that future. In CO2, What have we learned? An enormous amount. In everything that we've done, you've heard today, You'll always find that we're working with international experts in academia, Thought leaders in the industry and our own experts who are brilliant in Calix. That's a powerful grouping of people that can accomplish many things. It all comes down to the fact that we Working in one area that is the calcination. But for our technology to be adapted, We need to work with people that fill in the blanks, do all the hard work of integrating our technology and our materials into new products. The CO2 piece has extensions. We've learned that the material we make to lime Is incredibly reactive. And under appropriate conditions, it can be used to capture the CO2, See, from combustion systems, that's been well established previously. But our process is so reactive. It's different. And we're actively looking at decarbonizing shipping Because there is a need to continue to use affordable fuels Unfortunately, otherwise, it would be combustant to give off CO2. Question, Can we use our very active flying to capture the CO2 in the ship? Sustainable processing. That is incredibly interesting. You've seen the transition. We've gone from A vision of capturing CO2 from calcines to other applications where CO2 is not the issue. We are learning to use renewable power and hydrogen into our reactors. Well, if you look at every process, the industry is relevant. Usually, there's a heating process involved. Okay. That's CalSiner could, with a glimpse, be used in pretty much everything we make. It's a bold statement and all of that. But, you know, we're seeing that in Mineral processing, despotumene, we're doing it. There's that little story In a background, the Calyxt technology was enabled by steel. When the biggest polluters that is going to be hard to deal with is mitigating CO2 emissions from the production of steel. Can we help there? Maybe. These are very interesting topics for us. And then coming back to batteries, Matt has talked about the lithium manganese oxide. That's just the start. And I'll turn it over to Matt again to fill in the potential. Yeah. Well, this is it. We've spoken all about the lithium manganese oxide and this is our starting point. But our ultimate Objective is to develop a sort of chemistry agnostic platform technology for the manufacture of active electrode materials and potentially other battery components. So there's a whole host of different chemistries that we are starting to explore now, and we've got programs in place and we're bringing on the people that we need in order To focus on the new chemistries that we're referring to our generation 2 chemistries, things like lithiumide phosphate or lithium nickel manganese oxide, just Just to name a few. And then we're also looking at, you know, the next generation, you know, next generation post lithium ion batteries. So Things like, things like, sodium ion batteries as an example. And Also things like lithium metal, sodium metal batteries and solid state batteries is another program of work that we're starting to explore and understand how we can integrate Calyxt battery materials into some of these electrochemical devices. Thanks, Matt. I think that just illustrates that we can get there by working with a great global networks. If I had to mention all of the research organizations and industries we're involved in, we'd be here for another half hour Try to explain that and I can't do that. But that is how Calyxt can work. We can actually Introduce our technology into many applications, many industries by sticking to what we know best. Thank you. Excellent. Well, thanks, Mark, and thanks, Matt, for that glimpse into the future. You know, I guess it's always interesting for people who are new to Kallax to get their head around all the sorts of things that Just a new way to heat stuff up can ultimately lead to, but as you've seen today and hopefully especially in this last session, We're by no means finished yet with all sorts of potential applications for the technology. Just on time now. So, very conscious and thank you all for your attention over a fairly long period this morning. And Apologies, it had to be in this format because of COVID and all those sorts of things. But you've seen, all of our leaders of our lines of business Over the last few hours, take you through what they're trying to achieve. And hopefully, what's come through is the passion they have and the purpose They have and the ambition that we have, with respect to making this Australian growing technology, you know, and Tiny little company when I first joined it. I think maybe 18 people when I first joined it, but with huge ambition. And you can hopefully, you can see why now. Just in terms of our outlook for next 12 months, again, this is just a summary of each of the lines of business and what they covered before, but just Summarizing to this last slide here. But most importantly, I guess, just signing off with respect to our purpose. There is only one Earth. Mars is for quitters. Hopefully, you can see why you've got a team here that's really working hard for our shareholders to make the world a better place and make a great business. So Simon, any last quick questions? Happy to take a few while we're here. Yep. Phil, there's a number of statements in terms of how great the presentations and passion has been. So I won't read through them. One question was Scrap presentation and team extremely male dominated those. This is indicative of the company culture. I'll let you address that one, Phil. No, that's absolutely a valid observation. Audrey led off. She's a formidable part of our team and In leading the sustainability team and all the things that we need to do with respect to our sustainability goals, diversity is one of those things that we need to improve upon. We've got a lady on our board now. Unfortunately, Emma couldn't present. She's in the UK, but she heads up the whole of our engineering function. So we're getting, and along with Audrey, so we're getting some, we're helping, we're trying to improve, I guess, the gender diversity of the company. Suffice to say, science, engineering, etcetera, tended to be male dominated, but we want to change that. We want to really improve the diversity. So point well taken, but we are doing something about it. Bill, it's Darren here. Can I just add some further color? So just to that point, in the last kind of 2 years, I think 2 years ago, 10% of our workplace workforce was female. We're now up to a 30 June is 23%. So hopefully, you can appreciate we're taking active steps, as Phil said, to address the balance. Thanks, Darren. Next question from Hamish Murray at Bell Potter. First, I'd like to congratulate Mark on the contributions his work is likely to make globally. Are there any obvious materials that could provide a similar breadth of exciting opportunities as magnesium or the materials likely more singular in their applications? Meg, these MPS is on our list of things to do. My collaborator that founded Calix was involved in dealing exactly with that in Queensland. And that was part of his drive as well to ultimately lead us to Back to making magnesium metal. And the connection that we're making with aluminium industry It's also very important for that. It's still in Sculpteworks, I have to say, but we will get there eventually. Thanks, Mark. Sorry, Salvator. I was just going to say, Phil, that concludes all of the Q and A. For those that have tuned in, or have missed some of the presentation, it has been recorded, which will be available and approximately 30 minutes, just to let you know. But Phil, I'll pass it back to you for closing remarks. Excellent. Thanks, Simon. And look, again, thanks for everyone who Especially those who have put up with the whole presentation, which has gone on, as we sort of predicted, sort of To 12:15, maybe a few minutes over. And again, just reiterating, this is the first time we've really tried to showcase our team and showcase what it is that they do and why they do it. And hopefully, it's been of value to you because, it's great to have Great business and report numbers and all those sorts of things. But really, it's only once you get to know the team, that you really understand what a business is all about. So hopefully, that's really helped people

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