Highlights for the third quarter. I think first and foremost, I'd like to point out that we started up our Moses Lake plant, as we had previously communicated. Currently, all is on schedule and budget, and we plan to have first silicon in November. Revenues were $34.8 million. Our EBITDA was -$17.8 million. Market-wise, while solar PV is still was still strong in terms of installation, the supply of components into solar PV is undergoing a situation with a little too much inventory at this time. Semiconductor market is stable, I think off of the lows that we saw at the end of last year into the beginning of this year, and we see potential for a second half recovery in 2024.
We were able to complete our high purity granular polysilicon offtake, as announced previously, with very high quality offtake counterparty, Hanwha Qcells. We were able to get our final two term loans in place in the third quarter, which in fact represented a final tranche of the funding that we require for the restart of the Moses Lake facility and the high value investments we're doing in Butte. I'd like to talk first a little bit about to reorient who REC Silicon is. I think that when in reality our assets give us a unique exposure to several of the mega trends that are currently in place.
We have the largest silane gas capacity outside of China, and we're able to use this silane gas capacity to create value and move into to applications such as digitalization, renewable energy, energy transition, and electrification, or in this case, specifically, energy storage. Next. So we're characterized by the fact that, again, as I mentioned earlier, we have the largest amount of silane in the world outside of China. This is, in fact, the most amount of product that we make, and it's the way that we create value. We have very strong position, long-term relationships with our customers. We have very lots of redundancy in terms of our capacity, high reliability, high quality, and with that goes the brand that allows us to make sure that we remain with these high-quality customers, particularly in these times when we're going to be expanding.
We also have immediate capacity available, both in the high purity granular polysilicon that we're now in the process of bringing online, as well as our silane that can be supplied to silicon anodes. One of the things that's facing our industries right now, silane-based industries, is the fact that these markets and investments are shifting from overseas to more United States as well as in Europe, due to reasons of supply chain sufficiency, geopolitical tensions, and concerns around ESG. This is also backed by a firm commitment from governments, particularly in the U.S., via legislation, CHIPS and Science Act, Inflation Reduction Act, Uyghur Forced Labor Prevention Act, and the Infrastructure Act.
What this means is that there's a tremendous amount of investment happening right now, going into the United States, and we happen to have a very good position given our location and capacity and the nature of our assets. So then, how do we get from where we were to where we're going to be once we're done ramping these assets? And that's the key part of this, is that we're gonna move from an exposure to more volatile markets and lower value commodity products, to changing the product mix to higher value products, and a revenue profile that is more North American-centric and outside of China-centric. Okay. So the Moses Lake restart. As I noted, we started our restart, we started the plant and the activities, prior to the date that we had announced before.
Currently, our first silicon is planned this month, and we're still on track to have shipments out by Q1 of 2024. I wanna state that this particular phase that we're entering into is gonna be going on for the next year. We are evaluating ways that we could potentially accelerate it, and as we go through that process, we will, of course, make note of it in any, future discussions around this particular matter. But right now, everything is on budget and on schedule. We still plan to be at full capacity by Q4 of 2024.
In our Butte operation, we expect to make our first shipments of our DCS product in Q1 of 2024, and they will be ongoing as we qualify the product there, and then as new capacity comes online to consume it, and we are able to increase our shipments. In addition to that, we should have all of our—the majority of our, I should say, of our containers in place by the middle of next year. These will allow us to take advantage of market for silicon gases around the time when we expect it to potentially recover.
From an electricity standpoint, we've stabilized that input, and currently, we'll have hedging in place for 60% of our demand through the middle of 2024, and we balanced our business case and plan around that in terms of pricing, product mix, and how much we're going to make. Financially, as stated before, our revenues were $34.8 million, and our EBITDA was -$17.8 million. However, I would like to point out that if you look at Q3 of 2023, that we are now reporting on, the semiconductor materials segment was $6.1 million, versus Q3 of 2022, where it was -$5.3 million. Q3 of 2022 was when we entered into the period of softness, as well as the period of electricity imbalances and commensurate price volatility.
So we've done a lot of work on our underlying EBITDA to make sure that we have sufficient leverage as the volumes return and demand returns to improve our position there. So specific, again, in our semiconductor materials, you can see that, if we go back again and look and see how the three quarters went when we entered the downturn until Q2 of this year, when we became positive again, our expectation is now, as we look at how we're performing, that we should be somewhere in that current range, going forward for the next few quarters, given our visibility on orders and inputs.
Cash flows, I think the most important thing to note here, our, our cash balance was $121.7 million, and of course, greatly affected by the fact that we had $30 million advanced payment for execution of our contract and $140 million term loans to finish out the final tranche of our financing. Nominal debt was $352.7 million. Nominal net debt was $231 million. Our silicon gases, as noted, was down slightly from where we were the previous quarter. And the thing is, is that we can expect to have a run rate somewhere around the average of what we had prior to entering into the period of downturn for the semiconductor industry.
And the reason we're able to do this is that we had been focusing on making up volumes through movement into other kind of non-core applications and geographies, and opportunistically selling our products into, into those markets, given the less barriers to entry and our brand and strength within those areas when we choose to participate in them. So I think that, if you look at kind of the average of where things were before we entered into this period, and that's kind of where we're going to be here for the next, foreseeable future, until we start seeing more about the, potential recovery in the second half. But underlying everything, the fact is this: as I noted, the investments in semiconductor, solar, and battery materials are real. They have begun.
Advanced processes in semiconductor and even in solar PV do result in an increase in silicon gases used per unit. Digitalization, data, electrification, energy transition, AI, all are still in place and all still need silicon gas to happen. So that hasn't, that hasn't changed. And, and, in spite of the weakness that we're seeing now. We're still making sure that we're positioning ourselves, so that when that weakness recovers, we'll be in a position to take those opportunities. In terms of silicon, you see that we had, it's a relatively flattish, to compare to, for our semiconductor-grade polysilicon, which is really what we're focused on, and not so much, as much on the total. And I would say that we, we you can expect that we will be seeing sort of a relatively flattish portfolio going forward. More consistent shipments of lower volume.
However, our focus is on higher value. And so, as noted with the hedging position we've taken and the way that we're gonna try to optimize that particular product line, it means that while we'll be making less product, our focus will be on higher value product. In this case, the float-zone polysilicon, which visibility still remains strong and consistent, and it is primarily driven, again, by the energy transition and electrification. PV polysilicon, as I noted before, while installation growth is still very positive, the fact is that there is tremendous oversupply in the value chain, and this includes from polysilicon in China, through all components in China. You have cell manufacturers running at lower utilizations, module manufacturers running at lower utilizations, even some of the wafer manufacturers running at lower utilizations.
There's a lot of inventory in the value chain, particularly forward in some geographies. However, having said that, demand for polysilicon outside of China is still strong, and I think that's also reflected when you look at what the price is relative to the price inside of China. You can see that, overall, that mono-grade polysilicon prices have, I would say, stabilized in a band. They go up a little, they go down. Until I think there's some more rationalization or forced maintenance within China, it's probably going to be within that band for a little bit. In summary, our Moses Lake restart has begun. We expect to make first deliveries in Q1 of 2024. Our offtake agreement's in place to secure those products.
Our Butte operation, we've stabilised our polysilicon inputs and our product mix through mid-2024. We are starting to get some real signals about a market recovery possible in the second half in semiconductor, particularly some of the segments that use more of our materials. We secured our long-term financing for the Moses Lake restart and Butte upgrades. We are still having ongoing discussions with silicon anode material producers and potential channel partners. And yes, this, this particular comment has not changed a lot, and that is simply because that process is more driven by where those producers are at in their evolution of new capacity and ability, and desire to conclude on some of the discussions that we've had. And the sales process for our interest in TR Silicon is still ongoing.
It's been progressing well, and at this point, we have passed every major hurdle. So I think we're getting very close to that particular process being completed. And again, in this particular case, you know, we're dealing with the government through these phases, so they have a process, and we just need to make sure we continue to support what we can to move it along. So with that, thank you. We will be next reporting in February of 2024. We will have a specific date on that to follow later. Thank you. Take some questions.
So moving into the questions coming in on the internet, there are multiple questions related to silicon anode partners, and you touched on it in the summary. But, again, multiple questions related to... Well, it's a well-known fact that there's two facilities being constructed near the Moses Lake plant, and if you're willing to elaborate further on any, anything going on with those?
Yeah, there are, in fact, three facilities here at the Moses Lake plant. Two that are, I would say, relatively larger than the third one, which is more of a small demonstration facility. So all of those are in progress of some sort. There's earth being moved, there's buildings being erected, but all are still a ways off in terms of when they think they're going to actually need silane. So as such, we're not at the point where they're willing to engage in some sort of longer term agreement. So, although those discussions are still going, and all of that is still out there, and it's a third party that we're dealing with here.
So I think that's really more a matter of you have a willing party in our sense, and we'll continue to move along and expedite where we can, and the remainder of that is upon them when they're ready.
There's also multiple questions related to the Yulin JV-
Okay
... and the transaction there. It seems to be a long process. Do you expect that this will be concluded in 2023?
Yes, our expectation is this should be concluded in 2023. But again, I wanna say that what our expectation is, may or may not be what the, you know, the government authorities approving everything, comply to. So again, they have their own timeline. However, everything that we've been-- that's been indicated, is that this will be done this year.
Okay, another question that there, more than one person has asked a similar question is: The Oslo Exchange still the right place for REC Silicon, or are there plans to move to a U.S. exchange?
Yeah, there are currently no plans to move to a U.S. exchange. We're very focused right now on building our business, bringing up our assets, and kind of completing the pieces that we need to have in place to grow the business and actually be profitable.
At the recent energy conference in Oslo, you stated that further contracts for the offtake of silicon gases from Butte are in process. Have these contracts been entered into, or can you provide any update to the process?
Yeah. Okay. Yes, we have not completed those yet, but those are moving along, and we would expect that we should have most of those in place here as soon as possible. So I think that's progressing in a much quicker than what the silicon anode discussions are.
Yes, moving into questions surrounding the restart of Moses Lake. Well, I'll go to a question related to the offtake agreement for Moses Lake. And it stated that a $30 million advance payment was received in Q3, and can you provide more detail on further advance payments, and when do you expect these?
Yeah. We'll receive the remaining advance payments once we make our first shipments to silicon.
Can you please elaborate on the offtake agreement with Hanwha, and is it consistent with the price range for polysilicon outside of China, or is it closer to the prices inside of China?
I think what I've stated before, and consistent with that, is that it takes into account both factors. So it is neither the outside of China nor the inside of China. We use multiple indices in terms of coming up with the calculation, so that there's a price that's still tied to what's happening inside of China and still tied to what's happening outside of China, taking into account the fact that there's a certain premium for us being conflict free, low carbon, reliable, polysilicon supply.
You have a target of 50% utilization within the second quarter of 2024, and 100% within the fourth quarter of 2024.
Right.
Would that mean you can sell close to 50% and 100% in those quarters, or will there be a long lead time from production to sales?
No, what it means is that, as we—there's a ramp up, you can think of it almost as linear at this point. As I said, we're looking at ways to accelerate different parts. But, you know, linear at this point, up to 50%, and then linear again up to 100%. And yes, it means that once everything's up in the system itself, so to speak, the supply chain itself is kind of has material moving in it, then, yeah, the time between make and the time between delivery should be very consistent.
Okay, switching here to the tax credits from the IRA, is that going to be related to production volumes or sold volumes? And will the tax credits be booked as revenue in the income statement?
Yes, the tax credits are based upon sold volumes.
... And it is a revenue, I believe it will come as other income in our, is that correct, Jack?
Yeah. So this is the income for the first five years when we receive the direct cash payment, and then just, I mean, the tax credit, which is not, I mean, the revenue for the remaining years of the IRA.
Okay, a few group questions related to the Butte facility. Are you able to say the capacity of polysilicon and silane gas we have in Butte? And, and to go along with that, I guess, do we expect to see revenue and EBITDA kind of normalize in 2024 and 2025?
Yeah.
Specifically from Butte.
Yeah, I think if we go back in this presentation, on one of the slides in there, we in fact covered what the capacity was for the Butte facility. And in terms of normalization, yes, that is our goal is probably to be fully normalized in 2025. However, you know, we think that at least for the near term, kind of in the range where we're at now, and then as we look at recovery in the second half, it could be, you know, better. But I think that that's why we've been working on issues around inputs and issues around making sure that we have our product mix. And we're not done yet, by the way. There's still more optimizing to do.
So, for that reason, I think 2024 will still be transition.
Okay. And for deliveries from Moses Lake in 2024, are you, are you willing to say what those will be? Will they be substantial?
Yes, they will be substantial. And, as of right now, I think we're not gonna say anything. However, we will hear, at some point, next year. So I think that first we wanna go through the process, finish up getting all the reactors we can here up and going as per the plan for this particular phase. And then, we can come out with discussing what we think that will be.
There's a few more questions here I'm going through, so... Are there any plans for expansion in Moses Lake?
Well, I think as we had indicated, the last quarterly call, we did close on land in Moses Lake so that we would have optionality around the ability to expand. We are open to expansions, obviously. It's gonna be driven by how much consuming capacity comes online here in the United States as a result of all these initiatives, and/or outside of China as a result of all these initiatives. So yes, is the answer, but it's gonna depend upon having a reliable, solid offtake partner.
There's lots of questions related to silicon anodes, but I think you've addressed those. So let me scroll through these. Are you able to elaborate any further, and you may have touched on this, the price inside and outside of China, and what are your expectations with that deviation going forward?
Okay. Well, I think, if you look at what third-party indices and analysts are reporting, you have a price inside of China that's somewhere between $8-$10, depending upon what it is. You have a price outside of China that is north of $20. And, as far as, what the other, the other part of the question was?
It was just the prices inside and outside-
Yeah
... kind of the development going forward.
Yeah. I mean, I think as I had stated before, that is gonna depend upon how fast that—for inside of China, it's gonna depend upon how fast that capacity rationalizes and/or goes into extended shutdowns. I'm confident from the fact of this, that every time this has ever happened before, that that outcome is inevitable. It's just a matter of time of how long that takes. And then outside of China, though, I think that outside of China, the situation is different. So we can expect that there's going to remain a premium for the time being on material that's made outside of China.
Okay, and this one, it's been noted that REC Silicon recently purchased back a couple neighboring parcels. Is there any plan for this land?
Yes, as I had noted before, I mean, the plan right now is to have optionality and to give us space if there's opportunities, and we have solid offtake on either high-purity granular or silicon gas, or silicon anodes, or whatever it may be, any other sort of investment that may be part of our portfolio, then yeah, of course, we would, we would want to do it. That's why it's really important for us to make sure that we move our business to a point where we're consistently profitable and we're generating a lot of cash, so that we can then look at opportunities, such as, such as that, should it, should it present itself.
So the remaining questions, and are all similar to ones you've already addressed. But I mean, that's kind of it from the internet questions.
Okay. Okay. Well, thank you very much for your time, and have a nice day. We'll see you in February.