Mr. Bernard Tourillon reports

PUREVAP PILOT PLANT TESTING STARTING EARLY WITH COMMISSIONING OF HPQ 1/250 SCALE PILOT EQUIPMENT

PyroGenesis Canada Inc. is about to commence an advanced, second stage bench testing program. PyroGenesis Canada has informed HPQ-Silicon Resources Inc. that the Gen 2 Purevap quartz reduction reactor (QRR), one-250th-scale model of the planned 200-tonne-per-annum (tpa) pilot plant, will be operational in the coming weeks.

Bernard J. Tourillon, chairman and chief executive officer of HPQ-Silicon, stated: "The design and construction of the Gen 2 Purevap QRR is another exciting step toward commercialization and is a result of the collaborative efforts of PyroGenesis and HPQ. Building on our success to date the Gen 2 Purevap QRR will allow for further refinements to the silicon purification and testing of the numerous process improvements now planned for the pilot plant. This will greatly derisk our project and provide valuable information sooner as we continue to make the process adjustments needed to produce solar grade silicon metal."

Gen 1 Purevap QRR reactor: successful and now being retired

The first-generation batch lab-scale Purevap QRR (now referred to as Gen 1 Purevap) was built to prove the concept that quartz could be transformed in one step into silicon metal (Si), for the solar panel industry. A series of tests using the Gen 1 Purevap were ordered (Sept. 2, 2016, press release) to generate key technical data required for the design of the 200 tpa pilot plant capable of producing solar grade Si (SoG Si). The Gen 1 Purevap process succeeded, demonstrating significant impurity removal, in one step, transforming low purity SiO2 (quartz) into 3N-plus purity Si (99.97 per cent Si) (May 16, 2017, PR, Jan. 26, 2017, PR, Nov. 29, 2016, PR, Nov. 2, 2016, PR and Sept. 29, 2016, PR). This product exceeds the highest purity level of the metallurgical grade silicon metal (Mg Si) industry, a $5.5-billion-(U.S.)-per-year industry (1).

(1) Source CRU, 2018 MG Si demand projected at 2.5 million tonnes, 2018 prices $2,200 (U.S.) per tonne (Ferroglobe).

The company's next key milestone is to produce quantities of solar grade silicon for testing of its electrical characteristics, sending material to industry participants and finalize pilot plant design en route to commercialization. Mr. Tourillon commented: "Our Gen 1 Purevap was a great success and we believe the reactor will eventually make its way to a science and engineering hall of fame. It has currently reached its maximum operational efficiencies and nothing more could be gained by additional tests."

Gen 2 Purevap QRR reactor presents major derisking milestones

The Gen 2 Purevap QRR will focus on process refinement, characterization, metallurgical testing and purity improvements using the new semi-continuous feed one-250-scale pilot plant (May 4, 2017, PR).

Based on Gen 1 Purevap results, PyroGenesis completed the detailed engineering and design of the 200 tpa pilot plant, including substantial process modifications. Gen 2 Purevap therefore is an upgraded version of the Gen 1 Purevap that will be a true one-250-scale replica of the planned larger pilot plant (Gen 3 Purevap). The Gen 2 Purevap is undergoing final manufacturing, assembly and testing and will be operational during the first weeks of October, 2017.

The start of this new metallurgical testing program using the Gen 2 Purevap represents major derisking of the pilot plant program for the following reasons:

• Gen 2 will allow specific process design improvements and modifications derived from Gen 1 Purevap test work to be implemented and perfected.
• The Gen 2 produces larger silicon metal (Si) samples to test improvements to the purification process.
• Gen 2 allows an intermediate step in scaling up to the pilot plant, mitigating that scaling up risk.
• Gen 2 will allow the following milestones to be reached sooner than originally planned:
  • Producing larger Si samples for testing by potential purchasers;
  • Allows HPQ and Pyrogenesis to test the electrical parameters of the high purity Si;
  • Produce enough material to send samples to solar industry participants;
  • Provide data to demonstrate the economics of Purevap QRR.

Pyrogenesis CEO remarks

"We are pleased to join HPQ in announcing both reaching this new milestone and commencing the second stage testing program," said P. Peter Pascali, president and CEO of PyroGenesis. "I also wish to commend the team, both at PyroGenesis and HPQ, for having persevered through the many challenges to date and for all the discoveries they made along the way (the ability to transform low-purity quartz into 3N-plus silicon metal in one step at lab scale not being the least of them). As we have said in the past, it will not be a straight line to success, but given the results to date we are more confident then ever before that we will have a commercial success. What level of success, is yet to be determined. As in all projects, delays will occur, but I firmly believe we are on the right track to have a significant impact in the high purity silicon and solar markets."

Update on silicon metal purity testing

Further to the company's June 23, 2017, press release, the company continued to work with PyroGenesis and a number of specialized laboratories on silicon analysis protocols. Specifically, efforts focus on analytical procedures, certification and analysis turnaround time. The company is working with its partners to resolve the analytical bottlenecks.

Results will be reported in a comprehensive report on the proof of concept and phase one process characterization and metallurgical testing programs, being prepared by PyroGenesis.

About HPQ-Silicon Resources Inc.

HPQ-Silicon Resources is a TSX Venture Exchange listed resource company planning to become a vertically integrated and diversified metallurgical grade and solar grade silicon metal producer.

The company's business model is focused on developing a disruptive one-step high-purity and solar grade silicon metal manufacturing process (patent pending). HPQ plans to generate high-yield returns and significant free cash flow within a relatively short timeline. The process will have a greatly decreased carbon footprint, energy footprint and will eliminate the use of the toxic chemical reagents and byproducts now in use by the current solar silicon production technologies, which fundamentally date from designs made in the mid-1900s.

We seek Safe Harbor.