HPQ Silicon Inc V.HPQ

Quite the overview of HPQ ! Dec 2019 , How have w e done ?

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Innovation In Silicon Materials Starts With Our PUREVAP™ Technology

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Derick L.

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Dec 16, 2019

HPQ Silicon Resources is developing the PUREVAP™ Quartz Reduction Reactor (QRR)

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 Innovation In Silicon Materials Starts With Our PUREVAP™ Technology

1. 1. Innovation In Silicon Materials Starts With Our PUREVAPTM TECHNOLOGY Si
2. 2. 2 DISCLAIMERS This presentation includes certain “FORWARD-LOOKING STATEMENTS” All statements, other than statements of historical fact, included herein, including, without limitation, statements regarding future plans and objectives of the company, are forward-looking statements that involve various risks, assumptions, estimates and uncertainties, and any or all of these future plans and objectives may not be achieved. The terms Silicon, Silicon Metal and Si are used interchangeably. Metallurgical Grade Silicon or Mg Si refers to silicon of a purity between 98.0% Si and 99.5% Si. The terms Solar Grade Silicon, SoG Si and Polysilicon are used interchangeably and refer to high purity silicon used to produce solar cells for solar panels. Depending on the production process pathway, chemical or metallurgical, the purity of the SoG Si ranges between 5N+ (99.999%) for material produce metallurgically to between 6N (99.9999%) and 9N (99.9999999%) for material produce via the chemical route. These statements reflect the current expectations or beliefs of HPQ-Silicon Resources Inc. (“the Company”) and are based on information currently available to the Company. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. All of the forward looking statements contained in this presentation are qualified by these cautionary statements and the risk factors described above. Furthermore, all such statements are made as of the date this presentation is given. The Corporation’s is focus on developing the PUREVAP™ Quartz Reduction Reactor (QRR) process therefore any monetary values given to end product produce by the equipment, projected capital or operating cost and savings associated with the development of process should not be construed as being related to the establishing of the economic viability or technical feasibility on any of the Company’s Quartz properties or more specifically the Roncevaux Quartz Project, Matapedia Area, in the Gaspe Region, Province of Quebec. An investment in the Company is speculative due to the nature of the its business. The ability of the Company to carry out its plans as described in this confidential presentation is depending on obtaining the required capital. There is no assurance that the Company will be able to successfully raise the capital required or to complete each of the growth initiatives described. Investors must rely upon the ability, expertise, judgment, discretion, integrity and good faith of the management and Board of the Company.
3. 3.  HPQ is developing the innovative PUREVAPTM Quartz Reduction Reactors Aunique carbothermic process that will allow HPQ to have a significant impact, short and long term, on the following Silicon (Si) markets: Nanoscale Structure Silicon (Si) for next Gen Li-ion Batteries; Porous Silicon (Si) wafers for solid state Li-ion Batteries; High Purity Porous Silicon Oxide (SiOx) Nanopowders for Li-ion Batteries; Metallurgical Grade Silicon (Mg-Si) at prices that will defy competitors Solar Grade Silicon using a PUREVAPTM UMG metallurgical process PUREVAPTM QRR Pilot Plant about to go live Silicon samples ready for marketing in 2020 Supported by two (2) World Class Technology Partners This is HPQ! 3
4. 4. 4 CORPORATE OVERVIEW (December 2019) Project • HPQ-Silicon, working with PyroGenesis Canada Inc (TSX-V: PYR), is developing the PUREVAPTM “Quartz Reduction Reactors” (QRR), a new innovative Carbothermic process (patent pending), which will permit the low cost manufacturing of High Purity Silicon (Si) PUREVAPTM Pilot Plant Q1 2020 Start • HPQ-Silicon is about to start its 50 Tonnes per Year Gen3 PUREVAPTM QRR pilot plant that will: Demonstrate our ability to produce high purity Silicon at cost that will defy competition Produce value added Silicon Materials, qualifying and selling products to potential customers Unique Capability of PUREVAPTM Process • Reduce raw material cost by 50%, representing a direct 20% reduction in OPEX • Reduce HPQ-Silicon Manufacturing CAPEX by 90% or more versus all other new Silicon plants • Process allows HPQ to Produce any Purity Silicon (Si) up to 4N Si in one step Advancing Silicon Innovations • Silicon (Si) is a key material for the ongoing renewable energy revolution • HPQ-Silicon intends to maximize the PUREVAPTM QRR Unique Proprietary Capability of converting low quality inputs in to high purity Silicon (Si) to advance Silicon Materials Innovations PUREVAPTM Silicon (Si) addressable markets • Present market (2018) US$ 15B (US$ 7.5B Standard Si, Batteries Si US $400M & US$ 7.1B Solar Si) • Expected to reach US$ 24B over the coming years (US$ 12B for Standard Si by 2023; US$ 1B for batteries Si by 2022; and US$ 11.8B for Solar Si by 2028) HPQ implementing a multi prong development approach • Near term: Focus on generating cash flow by using the PUREVAPTM QRR for high value niche market silicon applications (Si for batteries (Nano and Wafers, 2NSi, 3NSi, 4NSi, …) • Medium term: Focus on High Purity silicon for advanced PV applications, developing in partnership with Apollon Solar, a new PUREVAPTM QRR metallurgical pathway for Solar Grade Si Strong support from key stakeholders • HPQ-Silicon has strong support from PyroGenesis Canada Inc, which holds on a fully diluted basis about 12.5% of the capital of the Corporation PLUS the Government of Qubec which holds on a fully diluted basis about 9.9% of HPQ-Silicon. Apollon Solar is also a shareholder
5. 5. ADVANCING TO PRODUCTION Pilot Plant Commissioning and Commercial Production 5 PILOT PLANT FULLY FINANCED Anode Chemistry Option Output capacity of 50 tonnes per year; Operational Q1 2020 Using Gen2 to Produce Si Powders – Q1 2020 Using Gen3 Si to produce Porous Silicon wafers - mid 2020, first test Solar Cell end - 2021 Improving Process, Scaling, Preparing For Commercialization Seeking Silicon (SI) Customers Order of first 2,500 tonnes per year commercial plant planned in end 2021 Using Gen3 50 TPA pilot plant to produce and sell Porous Silicon wafers and Powders for the Silicon Anode market for Lithium Ion batteries end 2020 50
6. 6. 6 PUREVAPTM POTENTIAL AND MILESTONES Successful Gen 1 & 2 Bench Test (2016-2019) Validated the process Gen 3 Pilot Plant Testing Operational Q1 2020 Gen3 Si sales Expected End 2020 Commercial Plant Order - 2021 ATTRACTED INTEREST FROM KEY INVESTORS • The Quebec government agreed to finance 20% of the Gen3 project total cost Investissement Qubec (IQ) funded a $1,800,000, 5 years, 5% unsecured Convertible Debenture Convertible into common shares at $0.121 per HPQ share and interest payments are accruable IQ received 15,000,000 Warrants, (Terms one for one, exercise price $ 0.172, duration 36 months) • PyroGenesis Canada Inc invested $1,950,000 to finance remaining Gen3 project total cost PyroGenesis acquired 16,250,000 Units of HPQ at $0.12 per Unit (representing a 30 % premium to market) Each Unit comprised one share and one warrant, (warrant exercise price $ 0.172, duration 36 months) • PyroGenesis also granted HPQ a $1,500,000 Equity Line Credit to cover un-expected cost overruns that could potentially occur during the Gen3 project August 2018 $5,250,000 Financing As per Beauce Gold Field plan of arrangement: 1) the Conversion price of the debenture was reduced to $0.11 and 2) the exercise price of warrants was reduced to $0.155
7. 7. SILICON (Si) • One of today’s key strategic minerals (EU Commission - US DOJ) • Needed for Renewable Energy Transition with applications in: SILICON (Si) Primary End Markets Aluminum Silicones Photovoltaic Chemical Grade Si (99.0% - 99.5% Si) Metallurgical Grade Si (98.0% - 98.9% Si) However Silicon does not exist naturally in its pure state Carbothermic process needed to extract it from Quartz (SiO2) Quartz is one of the most abundant minerals in the earth crust • Aluminum (40-45%) • Silicones (35-40%) • Solar cells (20-25%) 7
8. 8. 8 GLOBAL MEGATRENDS DRIVING SILICON DEMAND Megatrends Implications End Customer Product Population Growth Growing middle class China and India: consumption economy • Silicones: healthcare, cosmetics, packaging Urbanization India, Brazil and other emerging markets: infrastructure build • Silicon: aluminum for cars, housing growth • Silicon: Silicone sealants for construction Energy Efficiency Reduce weight of vehicles and Electric vehicles • Silicon as alloying agent for aluminum to replace steel in vehicles • Prospects for silicon alloys in batteries Alternative Energy & Sustainability Growing demand for solar and other sources of renewable energy • Silicone sealants for wind turbine and solar • Higher consumption of silicon for polysilicon used to make solar cells • Prospects for silicon Base Energy Storage
9. 9. 9 SILICON (Si) PART OF EV TRANSITION 2015 2030E 566,000 20,000,000 ALREADY BEING DEPLOYED The aluminum alloy chassis of Tesla car is 10% Silicon! Aluminum silicon alloy makes the aluminum lighter and stronger Silicon used in Tesla batteries to replace Cobalt Silicon in the windshield PLUG- IN EV SALES (annual)
10. 10. 10 STANDARD SILICON (Si) DEMAND OUTLOOK Standard Silicon (98.5 to 99.5% Si) (Source CRU – Silicon Market Outlook – November 14 2018) Driven by Chemical Sector (2N+ Si), Demand Projected to Increase by 1 Million MT by 2023 Going from ~ 2.8 Million MT Demand of Si worth US$ 7.5 Billion in 2018 To ~ 3.8 Million MT Demand of Si worth US$ 12 Billion in 2023 CHALLENGES TO MEET ANTICIPATED DEMAND Quartz SiO2 to Silicon Metal (Si) Standard Carbothermic Process SiO2 99.5% + Low Ash Coal + Wood Chips Energy Consumption: 12,000 kWh/t MG Silicon Metal 98.0% to 99.5% Si ElectricArc Furnace Conventional process limitation caps 2N+ Si output at ~ 40% of Plant Capacity
11. 11. 11 New plants will be needed (Source CRU – Silicon Market Outlook – November 14 2018) Creep: 6% Conversions: 16% Brownfield: 20% Greenfield: 58% Greenfield plants will provide the majority of new capacity Contribution to the expected growth in annual production capacity outside China and the CIS between 2010 and 2020 & NEW CONVENTIONAL PLANTS HAVE: • Minimum Size Requirement > 30,000 MTY REQUIRE SIGNIFICANT INVESTMENTS: (Capex from most recent new plants) • PCC BakkiSilicon hf 2018 turnkey plant in Hsavk (Iceland) cost US$ 300M o US$ 9.38 Capex per Kg of annual capacity • Mississippi Silicon (Rima Subsidiary) 2015 plant in Burnsville Mississippi (USA) cost US$ 220M o US$ 6.11 Capex per Kg of annual capacity CHALLENGES TO MEET ANTICIPATED DEMAND Conventional process: mature technology with relatively flat Opex curve 90% of conventional process cost range bound between US$ 1,450/MT to US$ 2,000/MT Conventional process operations are Capital Intensive Requires 6+ MT of raw material to make 1 MT of Standard Si Conventional process: Limited Cost Control Options Raw Materials, Electricity and Depreciation(Capex) make up bulk of cost (~ 80%) Low Ash Coal, the largest single cost for Raw Material is also a Strategic Risk ~ 50% of the world supply of low Ash Coal controlled by largest Si producer in the world
12. 12. 12 HPQ PUREVAPTM Technological innovation is needed to lower per unit costs, but the High Capex & Low Margins increase the degree of difficulty of executing an innovation-oriented business plan THE SOLUTION TO THE SILICON INDUSTRY’S “CATCH 22’’ Source: The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation† (Energy Environ. Sci., 2015, 8, 3395)
13. 13. 13 HPQ PROPRIETARY SOLUTION! PUREVAPTM A SCALABLE – VERSATILE – ADAPTABLE PROCESS TO MEET NEW SILICON DEMAND • Scalable by increments of 2,500 MTY – The maximum size of one PUREVAPTM Reactor SiO2 98.8% 92.1% Total Carbon A one Step Process 2N+ Si @ 17.9% Conversion Yield - 4N+ Si @ 90.0% Conversion Yield LOW CAPEX (Kg OF ANNUAL CAPACITY MATRIX) – Very Competitive Versus Traditional Process • Matches the scale costs of Tier 1 producers for a fraction of the investment (85% - 90% less) US$ 8.89 Capex per Kg of annual capacity with (1) 2,500 MTY PUREVAPTM Reactor US$ 6.22 Capex per Kg of annual capacity with (2) 2,500 MTY PUREVAPTM Reactor Plant Quartz SiO2 to MG Si (2N+) The PUREVAP™ QRR, a proprietary (patent pending) 2.0 carbothermic process:
14. 14. 14 HPQ ADVANTAGE VERSUS CONVENTIONAL PRODUCERS Silicon Market Outlook (Source CRU – Silicon Market Outlook – November 14 2018) Silicon prices support new investment after 2019 US spot price 5.5.3 grade (Metallurgical) silicon vs avg. operating cost at plants outside China and CIS, $/t 4000 3500 3000 2500 2000 1500 1000 500 0 2004 2005 2006 2007 2008 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 US Spot Price Avg. Operating Cost HPQ PUREVAPTM QRR PROCESS • Only Require 4.5 MT of raw material and only one reductant to make 1 MT of Si • Handle standard clean coal as reductant (carbon) versus Low Ash Coal needed for traditional process • Raw material cost reduced by 50%, representing a direct 20% reduction in OPEX versus best in class PUREVAPTM estimated operating cost to produce 2N Si (To be firm up during Gen3 Pilot Plant)
15. 15. 15 Developer of PUREVAP One-Step Process To Produce High Purity Low Boron Silicon Metal World Leader In Advanced Plasma Processes Technology Sold To US Navy For Use On Aircraft Carriers Technology Tested and Validated By DARPA Leaders in High Purity Spherical Metal Powders for Industrial 3D printing Agreements With Global Manufacturers and Trading Houses Developer of DROSRITE™: a Green Aluminum Recovery from Dross process HPQ GLOBALLY RENOWNED TECHNICAL PARTNERS +25 years of experience & > 70 employees >60 Patents worldwide (issued or pending) 40,900 ft2 Manufacturing facility The inventors of Plasma Atomization (Gold Standard) Plasma Expertise: One of the largest in the World +25 Contract backlog worth $29.5MM at the end of Q3 2019
16. 16. Replacing Graphite with Silicon as anode in lithium-ion batteries 16 SILICON: THE KEY TO BETTER BATTERIES Allows greater energy storage capabilities Allows for smaller size batteries for electronic devises and electric cars Energy storage potential for renewable energy could reshape the global economy can increase battery charge 10X G P S I Anode Chemistry Option Theoretical Capacity 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Silicon Graphite 10x
17. 17.  Energy Storage: viewed as an existential threat for traditional energy players Dominance of energy storage in the 21st century is akin to control of coal in the 19th century and oil in the 20th Presently Li-ion anodes are made using low cost graphite (US$ 10/Kg) Gram per Gram, Silicon can theoretically hold 10 times more energy Going from theoretical capacity to commercial is one big challenge Micro and Nanoscale Silicon powders very expensive (US$ 2,000 - US$ 30,000 per KG1) Unprecedented billions of dollars pouring into battery R & D Batteries research is what semiconductor research was a generation ago HPQ PUREVAPTM : THE KEY TO LOW COST Si FOR BATTERIES 17 THE RACE IS ON TO BUILD BETTER BATTERIES HPQ deploying a two prongs approach to Li-ion batteries Si development High Purity PUREVAPTM Nanoscale Structure Silicon powders Combining HPQ PUREVAPTM 2N+ Si and PyroGenesis Powders expertise to produce Nanoscale Structure Silicon -powders for Batteries sector, goal: becoming the lowest cost producer High Purity PUREVAPTM Si Porous Silicon Wafers Combining Apollon patented low cost approach to making Porous Silicon Wafers and HPQ PUREVAPTM unique capacity will allow us to start the commercialization of our porous silicon wafers earlier then any other early stage R&D competitors 1 (Source PV-Magazine AUSTRALIA Oct 2019)
18. 18. An unexpected positive for HPQ PUREVAP™ : Si application in the Battery Space The Key to the next generation of Li-ion Batteries Replacing graphite with Silicon Metal (2N+) ↑ Anode battery charge 10X Silicon Anode market for Lithium ion batteries ↑ 43.6% CAGR between 2016 to 2022 Silicon Anode market for Lithium ion batteries to exceed the US $ 1 billion mark by 2022 SI GP US $400 Billion US $1Billion43.6% 18 SILICON INNOVATION: HIGH VALUE MARKET - BATTERIES
19. 19. 19 HPQ GLOBALLY RENOWNED TECHNICAL PARTNERS A French Company fully dedicated to the field of energy transition Obtained, an independently confirmed, world record conversion efficiency of 22.6% with ANU University of Australia, using monocrystalline ingots, for a solar cell made with 100% “SoG Si UMG” Part of YRIEL Group, active in Fine Chemistry, Aromatic and Renewable Energies 23 Patents to their name Created in 2001 by a team of engineers and scientists with longstanding expertise in Silicon Purification and Crystallization - Solar Silicon - Photovoltaic Cells - Photovoltaic Modules
20. 20. SILICON INNOVATION: HIGH VALUE MARKET - SOLAR 20 Renewable Solar Energies: Solar Grade Si market: US$ 7.1 B in 2018 US$11.8 Billion 2028 (Source: Deutsche Bank, Future Market Insights report titled, "Polysilicon Market: Global Industry Analysis 2013-2017 and Opportunity Assessment 2018-2028".) Solar Grade Silicon, A Large and Growing Market DEMAND READY TO EXPLODE!
21. 21. 21 HPQ TECHNOLOGICAL SOLUTION FROM QUARTZ TO SOLAR WAFERS How HPQ will implement its technological solution By Combined Expertise In Three Critical Steps: PyroGenesis and Apollon Solar experts are developing a streamlined metallurgical pathway (UMG) for upgrading the “PUREVAP™ Si” to HPQ Solar Grade Silicon (SoG Si) Apollon Solar has the expertise to transform HPQ SoG Si into high performance multi- crystalline and monocrystalline solar cells: “wafers” The PUREVAP™ technology of PyroGenesis transforms Quartz (SiO2) to High Purity Silicon (4N+ Si < 1 ppm B) in one step – “PUREVAP™ Si” HPQ QUARTZ PYROGENESIS’ PUREVAP™ PROCESS SoG Si TO WAFER WITH APOLLON
22. 22. 22 LEGACY PROCESS SiO2 99.5% + Low Ash Coal + Wood Chips ElectricArc Furnace Energy Consumption: 12,000 kWh/t MG Silicon Metal 98.0% to 99.5% Si MG Silicon Metal Is Dissolved In Hydrochloric Acid To Form Trichlorosilane (HSiCl3) Trichlorosilane (HSiCl3) is Further Refined SIEMENS Reactor Solar Grade Silicon Metal Polysilicon 99.9999+% Si Energy Consumption: between 72,000 to 120,000 kWh/t Present Carbothermic process Quartz to silicon metal (Si) Present Chemical process MG-Si to SoG-Si
23. 23. 23 PUREVAP™ UMG GREEN DISRUPTIVE POTENTIAL * Estimates will be firm up after Pilot plant phase SoG Si in CHINA, world’s largest producer, generates 141 Kg of CO2 per Kg of SoG Si SoG Si in QUEBEC with the PUREVAPTM expected to produce 5.4 Kg of CO2 per Kg of SoG Si CHINA 141 Kg of CO2 QUEBEC 5.4 Kg of CO2 HPQ’s SoG Si is poised to produce the lowest carbon footprint CO2 CO2 CO2 CO2 CO2 CO2 CO2 CO2 CO2 CO2 SoG Si in GERMANY using the same process, generates 87 Kg of CO2 per Kg of SoG Si GERMANY 87 Kg of CO2 CO2 CO2 CO2 CO2 CO2 CO2 CO2 70% of the GHG generated by any solar project comes from the production of SoG Si (source: Energy Policy, February 2014, Pages 229-244)
24. 24. 24 WHY INVEST IN HPQ? DEVELOPING THE INNOVATIVE PUREVAPTM QUARTZ REDUCTION REACTORS PILOT PLANT ABOUT TO GO ONLINE READY TO REVOLUTIONIZE THE ECONOMICS OF THE US$ 15B SILICON INDUSTRY AND THE ENERGY STORAGE MARKET WITH ITS PLANNED US$ 71 BILLION IN INVESTMENTS OVER THE NEXT FEW YEARS READY TO START COMMERCIALIZING OUR PUREVAP™ PRODUCTS: Nanoscale Structure Silicon (Si) for next Gen Li-ion Batteries; Porous Silicon (Si) wafers for solid state Li-ion Batteries; High Purity Porous Silicon Oxide (SiOx) Nanopowders for Li-ion Batteries; Metallurgical Grade Silicon (Mg-Si) at prices that will defy competitors Solar Grade Silicon using a PUREVAPTM UMG metallurgical process SILICON SAMPLES READY FOR MARKETING IN 2020 SUPPORTED BY TWO (2) WORLD CLASS TECHNOLOGY PARTNERS
25. 25. 25 MANAGEMENT, BOARD AND CAPITAL SUMMARY Management Independent Director Bernard J Tourillon, BAA, MBA Chairman, President, CEO and Director Patrick Levasseur Vice-President, COO and Director Noelle Drapeau, LLL, MBA, PMP Corporate Secretary and Director Francois Rivard CFO Richard Mimeau, B.Sc. Director Peter Smith, PhD, P. Eng. Director Robert Robitaille, M.B.A., L. Ph. Director Daryl Hodges H. BSc, M.Sc. Director Consultants/ Technical AdvisorsMajor Investors Management & Board PyroGenesis lnvestissement Quebec Strategic Investors Key Investors ≅ 9.7% ≅ 9.7% ≅ 2.8% ≅ 18.8% ≅ 10.5% (FD) ≅ 12.5% (FD) ≅ 9.9% (FD) ≅ 6.2% (FD) ≅ 21.2% (FD) Marcel Drapeau, BA, BSC. Comm, LLL PyroGenesis Canada Inc Apollon Solar Sa Auditors Transfer Agent Computershare Raymond Chabot Grant Thornton Capital Shares Outstanding Warrants Options Debenture Fully Diluted 226,864,746 67,278,000 11,400,000 16,653,361 322,196,107
26. 26. 26 CONTACT 3000 Omer-Lavalle St, Suite 306 Montreal, Quebec, CANADA, H1Y 3R8 [phone] [phone] www.HPQSilicon.com Bernard J. Tourillon, B.A.A, MBA Chairman, President and CEO [e-mail] [phone] Patrick Levasseur Vice-President, COO and Director [e-mail] [phone]

 

 

 

 

 

 

 

 

 

 

1 of 26

 

 

Innovation In Silicon Materials Starts With Our PUREVAP™ Technology

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Derick L.

, Founder at pvbuzz.com — content and marketing strategy specialist for solar industry, and energy-centric businesses

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Published on 

Dec 16, 2019

HPQ Silicon Resources is developing the PUREVAP™ Quartz Reduction Reactor (QRR)

...

Published in: Technology

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 Innovation In Silicon Materials Starts With Our PUREVAP™ Technology

1. 1. Innovation In Silicon Materials Starts With Our PUREVAPTM TECHNOLOGY Si
2. 2. 2 DISCLAIMERS This presentation includes certain “FORWARD-LOOKING STATEMENTS” All statements, other than statements of historical fact, included herein, including, without limitation, statements regarding future plans and objectives of the company, are forward-looking statements that involve various risks, assumptions, estimates and uncertainties, and any or all of these future plans and objectives may not be achieved. The terms Silicon, Silicon Metal and Si are used interchangeably. Metallurgical Grade Silicon or Mg Si refers to silicon of a purity between 98.0% Si and 99.5% Si. The terms Solar Grade Silicon, SoG Si and Polysilicon are used interchangeably and refer to high purity silicon used to produce solar cells for solar panels. Depending on the production process pathway, chemical or metallurgical, the purity of the SoG Si ranges between 5N+ (99.999%) for material produce metallurgically to between 6N (99.9999%) and 9N (99.9999999%) for material produce via the chemical route. These statements reflect the current expectations or beliefs of HPQ-Silicon Resources Inc. (“the Company”) and are based on information currently available to the Company. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. All of the forward looking statements contained in this presentation are qualified by these cautionary statements and the risk factors described above. Furthermore, all such statements are made as of the date this presentation is given. The Corporation’s is focus on developing the PUREVAP™ Quartz Reduction Reactor (QRR) process therefore any monetary values given to end product produce by the equipment, projected capital or operating cost and savings associated with the development of process should not be construed as being related to the establishing of the economic viability or technical feasibility on any of the Company’s Quartz properties or more specifically the Roncevaux Quartz Project, Matapedia Area, in the Gaspe Region, Province of Quebec. An investment in the Company is speculative due to the nature of the its business. The ability of the Company to carry out its plans as described in this confidential presentation is depending on obtaining the required capital. There is no assurance that the Company will be able to successfully raise the capital required or to complete each of the growth initiatives described. Investors must rely upon the ability, expertise, judgment, discretion, integrity and good faith of the management and Board of the Company.
3. 3.  HPQ is developing the innovative PUREVAPTM Quartz Reduction Reactors Aunique carbothermic process that will allow HPQ to have a significant impact, short and long term, on the following Silicon (Si) markets: Nanoscale Structure Silicon (Si) for next Gen Li-ion Batteries; Porous Silicon (Si) wafers for solid state Li-ion Batteries; High Purity Porous Silicon Oxide (SiOx) Nanopowders for Li-ion Batteries; Metallurgical Grade Silicon (Mg-Si) at prices that will defy competitors Solar Grade Silicon using a PUREVAPTM UMG metallurgical process PUREVAPTM QRR Pilot Plant about to go live Silicon samples ready for marketing in 2020 Supported by two (2) World Class Technology Partners This is HPQ! 3
4. 4. 4 CORPORATE OVERVIEW (December 2019) Project • HPQ-Silicon, working with PyroGenesis Canada Inc (TSX-V: PYR), is developing the PUREVAPTM “Quartz Reduction Reactors” (QRR), a new innovative Carbothermic process (patent pending), which will permit the low cost manufacturing of High Purity Silicon (Si) PUREVAPTM Pilot Plant Q1 2020 Start • HPQ-Silicon is about to start its 50 Tonnes per Year Gen3 PUREVAPTM QRR pilot plant that will: Demonstrate our ability to produce high purity Silicon at cost that will defy competition Produce value added Silicon Materials, qualifying and selling products to potential customers Unique Capability of PUREVAPTM Process • Reduce raw material cost by 50%, representing a direct 20% reduction in OPEX • Reduce HPQ-Silicon Manufacturing CAPEX by 90% or more versus all other new Silicon plants • Process allows HPQ to Produce any Purity Silicon (Si) up to 4N Si in one step Advancing Silicon Innovations • Silicon (Si) is a key material for the ongoing renewable energy revolution • HPQ-Silicon intends to maximize the PUREVAPTM QRR Unique Proprietary Capability of converting low quality inputs in to high purity Silicon (Si) to advance Silicon Materials Innovations PUREVAPTM Silicon (Si) addressable markets • Present market (2018) US$ 15B (US$ 7.5B Standard Si, Batteries Si US $400M & US$ 7.1B Solar Si) • Expected to reach US$ 24B over the coming years (US$ 12B for Standard Si by 2023; US$ 1B for batteries Si by 2022; and US$ 11.8B for Solar Si by 2028) HPQ implementing a multi prong development approach • Near term: Focus on generating cash flow by using the PUREVAPTM QRR for high value niche market silicon applications (Si for batteries (Nano and Wafers, 2NSi, 3NSi, 4NSi, …) • Medium term: Focus on High Purity silicon for advanced PV applications, developing in partnership with Apollon Solar, a new PUREVAPTM QRR metallurgical pathway for Solar Grade Si Strong support from key stakeholders • HPQ-Silicon has strong support from PyroGenesis Canada Inc, which holds on a fully diluted basis about 12.5% of the capital of the Corporation PLUS the Government of Qubec which holds on a fully diluted basis about 9.9% of HPQ-Silicon. Apollon Solar is also a shareholder
5. 5. ADVANCING TO PRODUCTION Pilot Plant Commissioning and Commercial Production 5 PILOT PLANT FULLY FINANCED Anode Chemistry Option Output capacity of 50 tonnes per year; Operational Q1 2020 Using Gen2 to Produce Si Powders – Q1 2020 Using Gen3 Si to produce Porous Silicon wafers - mid 2020, first test Solar Cell end - 2021 Improving Process, Scaling, Preparing For Commercialization Seeking Silicon (SI) Customers Order of first 2,500 tonnes per year commercial plant planned in end 2021 Using Gen3 50 TPA pilot plant to produce and sell Porous Silicon wafers and Powders for the Silicon Anode market for Lithium Ion batteries end 2020 50
6. 6. 6 PUREVAPTM POTENTIAL AND MILESTONES Successful Gen 1 & 2 Bench Test (2016-2019) Validated the process Gen 3 Pilot Plant Testing Operational Q1 2020 Gen3 Si sales Expected End 2020 Commercial Plant Order - 2021 ATTRACTED INTEREST FROM KEY INVESTORS • The Quebec government agreed to finance 20% of the Gen3 project total cost Investissement Qubec (IQ) funded a $1,800,000, 5 years, 5% unsecured Convertible Debenture Convertible into common shares at $0.121 per HPQ share and interest payments are accruable IQ received 15,000,000 Warrants, (Terms one for one, exercise price $ 0.172, duration 36 months) • PyroGenesis Canada Inc invested $1,950,000 to finance remaining Gen3 project total cost PyroGenesis acquired 16,250,000 Units of HPQ at $0.12 per Unit (representing a 30 % premium to market) Each Unit comprised one share and one warrant, (warrant exercise price $ 0.172, duration 36 months) • PyroGenesis also granted HPQ a $1,500,000 Equity Line Credit to cover un-expected cost overruns that could potentially occur during the Gen3 project August 2018 $5,250,000 Financing As per Beauce Gold Field plan of arrangement: 1) the Conversion price of the debenture was reduced to $0.11 and 2) the exercise price of warrants was reduced to $0.155
7. 7. SILICON (Si) • One of today’s key strategic minerals (EU Commission - US DOJ) • Needed for Renewable Energy Transition with applications in: SILICON (Si) Primary End Markets Aluminum Silicones Photovoltaic Chemical Grade Si (99.0% - 99.5% Si) Metallurgical Grade Si (98.0% - 98.9% Si) However Silicon does not exist naturally in its pure state Carbothermic process needed to extract it from Quartz (SiO2) Quartz is one of the most abundant minerals in the earth crust • Aluminum (40-45%) • Silicones (35-40%) • Solar cells (20-25%) 7
8. 8. 8 GLOBAL MEGATRENDS DRIVING SILICON DEMAND Megatrends Implications End Customer Product Population Growth Growing middle class China and India: consumption economy • Silicones: healthcare, cosmetics, packaging Urbanization India, Brazil and other emerging markets: infrastructure build • Silicon: aluminum for cars, housing growth • Silicon: Silicone sealants for construction Energy Efficiency Reduce weight of vehicles and Electric vehicles • Silicon as alloying agent for aluminum to replace steel in vehicles • Prospects for silicon alloys in batteries Alternative Energy & Sustainability Growing demand for solar and other sources of renewable energy • Silicone sealants for wind turbine and solar • Higher consumption of silicon for polysilicon used to make solar cells • Prospects for silicon Base Energy Storage
9. 9. 9 SILICON (Si) PART OF EV TRANSITION 2015 2030E 566,000 20,000,000 ALREADY BEING DEPLOYED The aluminum alloy chassis of Tesla car is 10% Silicon! Aluminum silicon alloy makes the aluminum lighter and stronger Silicon used in Tesla batteries to replace Cobalt Silicon in the windshield PLUG- IN EV SALES (annual)
10. 10. 10 STANDARD SILICON (Si) DEMAND OUTLOOK Standard Silicon (98.5 to 99.5% Si) (Source CRU – Silicon Market Outlook – November 14 2018) Driven by Chemical Sector (2N+ Si), Demand Projected to Increase by 1 Million MT by 2023 Going from ~ 2.8 Million MT Demand of Si worth US$ 7.5 Billion in 2018 To ~ 3.8 Million MT Demand of Si worth US$ 12 Billion in 2023 CHALLENGES TO MEET ANTICIPATED DEMAND Quartz SiO2 to Silicon Metal (Si) Standard Carbothermic Process SiO2 99.5% + Low Ash Coal + Wood Chips Energy Consumption: 12,000 kWh/t MG Silicon Metal 98.0% to 99.5% Si ElectricArc Furnace Conventional process limitation caps 2N+ Si output at ~ 40% of Plant Capacity
11. 11. 11 New plants will be needed (Source CRU – Silicon Market Outlook – November 14 2018) Creep: 6% Conversions: 16% Brownfield: 20% Greenfield: 58% Greenfield plants will provide the majority of new capacity Contribution to the expected growth in annual production capacity outside China and the CIS between 2010 and 2020 & NEW CONVENTIONAL PLANTS HAVE: • Minimum Size Requirement > 30,000 MTY REQUIRE SIGNIFICANT INVESTMENTS: (Capex from most recent new plants) • PCC BakkiSilicon hf 2018 turnkey plant in Hsavk (Iceland) cost US$ 300M o US$ 9.38 Capex per Kg of annual capacity • Mississippi Silicon (Rima Subsidiary) 2015 plant in Burnsville Mississippi (USA) cost US$ 220M o US$ 6.11 Capex per Kg of annual capacity CHALLENGES TO MEET ANTICIPATED DEMAND Conventional process: mature technology with relatively flat Opex curve 90% of conventional process cost range bound between US$ 1,450/MT to US$ 2,000/MT Conventional process operations are Capital Intensive Requires 6+ MT of raw material to make 1 MT of Standard Si Conventional process: Limited Cost Control Options Raw Materials, Electricity and Depreciation(Capex) make up bulk of cost (~ 80%) Low Ash Coal, the largest single cost for Raw Material is also a Strategic Risk ~ 50% of the world supply of low Ash Coal controlled by largest Si producer in the world
12. 12. 12 HPQ PUREVAPTM Technological innovation is needed to lower per unit costs, but the High Capex & Low Margins increase the degree of difficulty of executing an innovation-oriented business plan THE SOLUTION TO THE SILICON INDUSTRY’S “CATCH 22’’ Source: The capital intensity of photovoltaics manufacturing: barrier to scale and opportunity for innovation† (Energy Environ. Sci., 2015, 8, 3395)
13. 13. 13 HPQ PROPRIETARY SOLUTION! PUREVAPTM A SCALABLE – VERSATILE – ADAPTABLE PROCESS TO MEET NEW SILICON DEMAND • Scalable by increments of 2,500 MTY – The maximum size of one PUREVAPTM Reactor SiO2 98.8% 92.1% Total Carbon A one Step Process 2N+ Si @ 17.9% Conversion Yield - 4N+ Si @ 90.0% Conversion Yield LOW CAPEX (Kg OF ANNUAL CAPACITY MATRIX) – Very Competitive Versus Traditional Process • Matches the scale costs of Tier 1 producers for a fraction of the investment (85% - 90% less) US$ 8.89 Capex per Kg of annual capacity with (1) 2,500 MTY PUREVAPTM Reactor US$ 6.22 Capex per Kg of annual capacity with (2) 2,500 MTY PUREVAPTM Reactor Plant Quartz SiO2 to MG Si (2N+) The PUREVAP™ QRR, a proprietary (patent pending) 2.0 carbothermic process:
14. 14. 14 HPQ ADVANTAGE VERSUS CONVENTIONAL PRODUCERS Silicon Market Outlook (Source CRU – Silicon Market Outlook – November 14 2018) Silicon prices support new investment after 2019 US spot price 5.5.3 grade (Metallurgical) silicon vs avg. operating cost at plants outside China and CIS, $/t 4000 3500 3000 2500 2000 1500 1000 500 0 2004 2005 2006 2007 2008 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 US Spot Price Avg. Operating Cost HPQ PUREVAPTM QRR PROCESS • Only Require 4.5 MT of raw material and only one reductant to make 1 MT of Si • Handle standard clean coal as reductant (carbon) versus Low Ash Coal needed for traditional process • Raw material cost reduced by 50%, representing a direct 20% reduction in OPEX versus best in class PUREVAPTM estimated operating cost to produce 2N Si (To be firm up during Gen3 Pilot Plant)
15. 15. 15 Developer of PUREVAP One-Step Process To Produce High Purity Low Boron Silicon Metal World Leader In Advanced Plasma Processes Technology Sold To US Navy For Use On Aircraft Carriers Technology Tested and Validated By DARPA Leaders in High Purity Spherical Metal Powders for Industrial 3D printing Agreements With Global Manufacturers and Trading Houses Developer of DROSRITE™: a Green Aluminum Recovery from Dross process HPQ GLOBALLY RENOWNED TECHNICAL PARTNERS +25 years of experience & > 70 employees >60 Patents worldwide (issued or pending) 40,900 ft2 Manufacturing facility The inventors of Plasma Atomization (Gold Standard) Plasma Expertise: One of the largest in the World +25 Contract backlog worth $29.5MM at the end of Q3 2019
16. 16. Replacing Graphite with Silicon as anode in lithium-ion batteries 16 SILICON: THE KEY TO BETTER BATTERIES Allows greater energy storage capabilities Allows for smaller size batteries for electronic devises and electric cars Energy storage potential for renewable energy could reshape the global economy can increase battery charge 10X G P S I Anode Chemistry Option Theoretical Capacity 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Silicon Graphite 10x
17. 17.  Energy Storage: viewed as an existential threat for traditional energy players Dominance of energy storage in the 21st century is akin to control of coal in the 19th century and oil in the 20th Presently Li-ion anodes are made using low cost graphite (US$ 10/Kg) Gram per Gram, Silicon can theoretically hold 10 times more energy Going from theoretical capacity to commercial is one big challenge Micro and Nanoscale Silicon powders very expensive (US$ 2,000 - US$ 30,000 per KG1) Unprecedented billions of dollars pouring into battery R & D Batteries research is what semiconductor research was a generation ago HPQ PUREVAPTM : THE KEY TO LOW COST Si FOR BATTERIES 17 THE RACE IS ON TO BUILD BETTER BATTERIES HPQ deploying a two prongs approach to Li-ion batteries Si development High Purity PUREVAPTM Nanoscale Structure Silicon powders Combining HPQ PUREVAPTM 2N+ Si and PyroGenesis Powders expertise to produce Nanoscale Structure Silicon -powders for Batteries sector, goal: becoming the lowest cost producer High Purity PUREVAPTM Si Porous Silicon Wafers Combining Apollon patented low cost approach to making Porous Silicon Wafers and HPQ PUREVAPTM unique capacity will allow us to start the commercialization of our porous silicon wafers earlier then any other early stage R&D competitors 1 (Source PV-Magazine AUSTRALIA Oct 2019)
18. 18. An unexpected positive for HPQ PUREVAP™ : Si application in the Battery Space The Key to the next generation of Li-ion Batteries Replacing graphite with Silicon Metal (2N+) ↑ Anode battery charge 10X Silicon Anode market for Lithium ion batteries ↑ 43.6% CAGR between 2016 to 2022 Silicon Anode market for Lithium ion batteries to exceed the US $ 1 billion mark by 2022 SI GP US $400 Billion US $1Billion43.6% 18 SILICON INNOVATION: HIGH VALUE MARKET - BATTERIES
19. 19. 19 HPQ GLOBALLY RENOWNED TECHNICAL PARTNERS A French Company fully dedicated to the field of energy transition Obtained, an independently confirmed, world record conversion efficiency of 22.6% with ANU University of Australia, using monocrystalline ingots, for a solar cell made with 100% “SoG Si UMG” Part of YRIEL Group, active in Fine Chemistry, Aromatic and Renewable Energies 23 Patents to their name Created in 2001 by a team of engineers and scientists with longstanding expertise in Silicon Purification and Crystallization - Solar Silicon - Photovoltaic Cells - Photovoltaic Modules
20. 20. SILICON INNOVATION: HIGH VALUE MARKET - SOLAR 20 Renewable Solar Energies: Solar Grade Si market: US$ 7.1 B in 2018 US$11.8 Billion 2028 (Source: Deutsche Bank, Future Market Insights report titled, "Polysilicon Market: Global Industry Analysis 2013-2017 and Opportunity Assessment 2018-2028".) Solar Grade Silicon, A Large and Growing Market DEMAND READY TO EXPLODE!
21. 21. 21 HPQ TECHNOLOGICAL SOLUTION FROM QUARTZ TO SOLAR WAFERS How HPQ will implement its technological solution By Combined Expertise In Three Critical Steps: PyroGenesis and Apollon Solar experts are developing a streamlined metallurgical pathway (UMG) for upgrading the “PUREVAP™ Si” to HPQ Solar Grade Silicon (SoG Si) Apollon Solar has the expertise to transform HPQ SoG Si into high performance multi- crystalline and monocrystalline solar cells: “wafers” The PUREVAP™ technology of PyroGenesis transforms Quartz (SiO2) to High Purity Silicon (4N+ Si < 1 ppm B) in one step – “PUREVAP™ Si” HPQ QUARTZ PYROGENESIS’ PUREVAP™ PROCESS SoG Si TO WAFER WITH APOLLON
22. 22. 22 LEGACY PROCESS SiO2 99.5% + Low Ash Coal + Wood Chips ElectricArc Furnace Energy Consumption: 12,000 kWh/t MG Silicon Metal 98.0% to 99.5% Si MG Silicon Metal Is Dissolved In Hydrochloric Acid To Form Trichlorosilane (HSiCl3) Trichlorosilane (HSiCl3) is Further Refined SIEMENS Reactor Solar Grade Silicon Metal Polysilicon 99.9999+% Si Energy Consumption: between 72,000 to 120,000 kWh/t Present Carbothermic process Quartz to silicon metal (Si) Present Chemical process MG-Si to SoG-Si
23. 23. 23 PUREVAP™ UMG GREEN DISRUPTIVE POTENTIAL * Estimates will be firm up after Pilot plant phase SoG Si in CHINA, world’s largest producer, generates 141 Kg of CO2 per Kg of SoG Si SoG Si in QUEBEC with the PUREVAPTM expected to produce 5.4 Kg of CO2 per Kg of SoG Si CHINA 141 Kg of CO2 QUEBEC 5.4 Kg of CO2 HPQ’s SoG Si is poised to produce the lowest carbon footprint CO2 CO2 CO2 CO2 CO2 CO2 CO2 CO2 CO2 CO2 SoG Si in GERMANY using the same process, generates 87 Kg of CO2 per Kg of SoG Si GERMANY 87 Kg of CO2 CO2 CO2 CO2 CO2 CO2 CO2 CO2 70% of the GHG generated by any solar project comes from the production of SoG Si (source: Energy Policy, February 2014, Pages 229-244)
24. 24. 24 WHY INVEST IN HPQ? DEVELOPING THE INNOVATIVE PUREVAPTM QUARTZ REDUCTION REACTORS PILOT PLANT ABOUT TO GO ONLINE READY TO REVOLUTIONIZE THE ECONOMICS OF THE US$ 15B SILICON INDUSTRY AND THE ENERGY STORAGE MARKET WITH ITS PLANNED US$ 71 BILLION IN INVESTMENTS OVER THE NEXT FEW YEARS READY TO START COMMERCIALIZING OUR PUREVAP™ PRODUCTS: Nanoscale Structure Silicon (Si) for next Gen Li-ion Batteries; Porous Silicon (Si) wafers for solid state Li-ion Batteries; High Purity Porous Silicon Oxide (SiOx) Nanopowders for Li-ion Batteries; Metallurgical Grade Silicon (Mg-Si) at prices that will defy competitors Solar Grade Silicon using a PUREVAPTM UMG metallurgical process SILICON SAMPLES READY FOR MARKETING IN 2020 SUPPORTED BY TWO (2) WORLD CLASS TECHNOLOGY PARTNERS
25. 25. 25 MANAGEMENT, BOARD AND CAPITAL SUMMARY Management Independent Director Bernard J Tourillon, BAA, MBA Chairman, President, CEO and Director Patrick Levasseur Vice-President, COO and Director Noelle Drapeau, LLL, MBA, PMP Corporate Secretary and Director Francois Rivard CFO Richard Mimeau, B.Sc. Director Peter Smith, PhD, P. Eng. Director Robert Robitaille, M.B.A., L. Ph. Director Daryl Hodges H. BSc, M.Sc. Director Consultants/ Technical AdvisorsMajor Investors Management & Board PyroGenesis lnvestissement Quebec Strategic Investors Key Investors ≅ 9.7% ≅ 9.7% ≅ 2.8% ≅ 18.8% ≅ 10.5% (FD) ≅ 12.5% (FD) ≅ 9.9% (FD) ≅ 6.2% (FD) ≅ 21.2% (FD) Marcel Drapeau, BA, BSC. Comm, LLL PyroGenesis Canada Inc Apollon Solar Sa Auditors Transfer Agent Computershare Raymond Chabot Grant Thornton Capital Shares Outstanding Warrants Options Debenture Fully Diluted 226,864,746 67,278,000 11,400,000 16,653,361 322,196,107
26. 26. 26 CONTACT 3000 Omer-Lavalle St, Suite 306 Montreal, Quebec, CANADA, H1Y 3R8 [phone] [phone] www.HPQSilicon.com Bernard J. Tourillon, B.A.A, MBA Chairman, President and CEO [e-mail] [phone] Patrick Levasseur Vice-President, COO and Director [e-mail] [phone]