Mr. Bernard Tourillon reports

FIRST GENERATION OF ADVANCE SILICON-BASED ANODE MATERIAL CONTINUES DELIVERING STRONG PERFORMANCE

HPQ Silicon Inc.'s France-based affiliate, Novacium SAS, has continued to achieve milestones. This announcement highlights the promising results from continuing cycle testing of industry standard 18650 industrial batteries, notably at the 125-cycle mark. Additionally, it introduces the massive market opportunity for HPQ associated with advanced silicon-based anodes material manufacturing.

"The fact that our first generation of advanced silicon-based material continues to deliver about 3,100 milliampere-hour (mAh) of battery capacity after 125 cycles is a powerful indication of the commercial potential of the materials we are developing for advanced mobile technology applications, a $228.9-billion (U.S.) addressable market in 2023," stated Dr. Jed Kraiem, PhD, chief operating officer of Novacium. "These results underscore our ability to produce a blend of graphite and advanced engineered silicon anode material that can be seamlessly integrated into existing anode manufacturing facilities and utilized without requiring modification by battery manufacturers worldwide, all the while significantly enhancing the battery performances."

Continuing to deliver 14-per-cent battery capacity improvement at 125 cycles

The data demonstrate that the three industrial-type batteries, which utilize Novacium's first generation of custom-engineered silicon material blend, continue to achieve greater than 14-per-cent performance improvement over 125 cycles. These batteries exhibit a high discharge capacity of approximately 3.10 ampere-hours (Ah) (or about 3,100 mAh), surpassing the benchmark set by three comparison batteries which have a capacity of about 2.65 Ah. These results confirm and extend the approximate 14-per-cent enhancement in full-battery capacity compared with 100 per cent graphite benchmark batteries that was observed in the previous five, 25, 50 and 100 cycles testing.

Continuing to deliver minimal battery degradation at 125 cycles

Results continue to demonstrate minimal increase in the measurable cycle degradation between the batteries made entirely of graphite and those incorporating Novacium's custom-engineered silicon-based material blend, between the 100 cycles and the 125 cycles, as expected. The Novacium non-optimized first generation of engineered silicon anodes material continue to deliver results within the range of comparable graphite batteries. These promising results have real world applications.

"The data generated during testing continues to provide the crucial information needed to develop an enhanced second generation of advanced silicon-based material, that we believe will allow us to deliver even better results," added Dr. Kraiem. "This material is presently being utilized in the production of additional batches of 18650 batteries to be tested."

Advance silicon-based engineered anodes material market opportunity

As pure graphite anodes have essentially achieved their maximum performance in terms of energy density, a trend in the lithium battery industry has been the introduction of small amounts (about 5 per cent) of silicon oxide (SiOx) material into graphite composite electrodes. This basic SiOx material, primarily used in the fabrication of optical materials, sells for about $15 (U.S.) per kilogram (kg) and delivers less-than-optimal results.

While silicon remains the most promising candidate that can drastically improve the anode performance (more than 10 times), its industrial application is still very limited due to unresolved issues related to volumetric expansion, or due to the usage of very complex and highly expensive solutions.

The manufacture of an engineered silicon-based anode material, such as the Novacium product, will enable the battery industry to overcome these problems and increase battery capacity without significant degradation of the battery's lifetime. Presently, the selling price of engineered silicon-based anode material is around $75 (U.S.) to $100 (U.S.) per kg. The Si-C (silicon-carbon) material made using CVD deposition of silane material sells for about $300 (U.S.) per kg, which is not feasible for massive industrial application.

This new reality is driving a surge in demand for advanced silicon-based anode materials. As of 2023, this market is valued between $1.1-billion (U.S.) and $2.7-billion (U.S.). Its growth prospects indicate a potential demand of 300,000 tons by 2030, estimated at $15-billion (U.S.), according to one source, and $131.6-billion (U.S.) in 2033 according to another source.

It is important to highlight that silicon-based materials for lithium-ion batteries currently make up a relatively small portion, accounting for less than 10 per cent, of the global demand for graphite, which is primarily used in the manufacture of anode materials for Li-ion batteries. This graphite market is estimated to be worth $25-billion (U.S.) in 2023.

"I continue to be profoundly encouraged by the results to date, however, I am even more excited about the potential of our next generations of materials," expressed Bernard Tourillon, president and chief executive officer of HPQ Silicon and Novacium SAS. "These achievements open the door for HPQ to become one of the first North American manufacturers of advance engineered silicon-based anode materials in a jurisdiction that supports these types of initiatives as it aims to become a central hub for battery material manufacturing in North America."

About Novacium SAS

Novacium is an HPQ-affiliated company started in Q3 2022. This green technology start-up is based in Lyon, France, and is a partnership with HPQ and three of France's leading research engineers, Dr. Kraiem, PhD, Novacium's chief operating officer, Dr. Oleksiy Nichiporuk, PhD, Novacium's chief technical officer, and Dr. Julien Degoulange, PhD, Novacium's chief innovation officer. Novacium is a new research and development company which allows the researchers to develop their own technology in high-added-value fields connected to renewable energy, and allows HPQ Silicon, a Canadian company, to expand the depth and reach of its technical team to help develop its silicon and new renewable energy projects.

About HPQ Silicon

HPQ Silicon is a Quebec-based TSX Venture Exchange Tier 1 industrial issuer. HPQ is developing, with the support of world-class technology partners PyroGenesis Canada Inc. and Novacium SAS, new green processes crucial to make the critical materials needed to reach net-zero emissions.

HPQ activities are centred around the following four pillars:

1. Becoming a green low-cost (capital expenditures and operating expenditures) manufacturer of fumed silica using the fumed silica reactor, a proprietary technology owned by HPQ being developed for HPQ by PyroGenesis;
2. Becoming a producer of silicon-based anode materials for battery applications with the assistance of Novacium SAS;
3. HPQ Silicon affiliate Novacium SAS is developing a low-carbon, chemical base on demand and high-pressure autonomous hydrogen production system;
4. Becoming a zero-carbon dioxide low-cost (capex and opex) producer of high-purity silicon (2N+ to 4N) using the company's Purevap quartz reduction reactors (QRR), a proprietary technology owned by HPQ being developed for HPQ by PyroGenesis.

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