Mr. Bernard Tourillon of HPQ Silicon reports

HPQ PUREVAP(TM) QRR WILL USHER IN ZERO CO2 EMISSION SILICON METAL MANUFACTURING

HPQ Silicon Inc. has provided shareholders information on the significant environmental benefits of the Purevap quartz reduction reactor (QRR) process currently being developed in collaboration with technology provider PyroGenesis Canada Inc.

As the GEN3 QRR pilot plant testing progresses toward commercial validation, HPQ can now highlight a distinctive environmental advantage of its proprietary QRR process. This advantage, combined with recently acquired intellectual property from PyroGenesis, will enable HPQ to achieve more than just the milestone of zero CO2 (carbon dioxide) emissions in silicon metal manufacturing; it will also incorporate a carbon recycling step that should also yield an additional significant reduction in feedstock usage.

These developments will further enhance the sustainability and efficiency of the QRR production process.

"By modernizing the production of high-purity Silicon, our QRR process has the potential to transform a century-old industrial process, known for its significant CO2 emissions, into a carbon credit-generating solution," stated Bernard Tourillon, president and chief executive officer of HPQ Silicon. "Amidst the global focus on reducing carbon emissions and achieving sustainability goals, the advancements of HPQ hold immense significance in driving the transition towards cleaner and more environmentally responsible silicon production."

Silicon manufacturing is currently the largest emitter of CO2 among metals and non-ferrous metals

In traditional silicon metal manufacturing, a carbothermic process involving the reduction of silica (SiO2) using carbon sources (coal, coke or charcoal) as reductant at high temperatures more than 1,800 C in open electric arc furnaces (OEAF) is used to make silicon metal (Si). The carbothermic process alone results in five tonnes (t) of CO2 emissions per tonne of silicon produced. This makes silicon metal manufacturing the largest emitter of CO2 among all metals and non-ferrous metals, based on a tCO2/t product basis, as per the Intergovernmental Panel on Climate Change (IPCC), a United Nations body focused on climate change research.

Currently, traditional silicon metal manufacturers have only one option to reduce their carbothermic carbon footprint and this involves replacing fossil-based carbon with an organic carbon source. While adopting this alternative allows manufacturers to effectively mitigate a part of their overall carbon footprint by offsetting the CO2 emissions associated with the organic carbon source, it will never allow them to produce zero CO2 emissions silicon metal.

Purevap QRR zero CO2 silicon metal advantage: a closed electrical arc furnace design

The QRR, by design, is a closed electric arc furnace (CEAF) with the ability to operate under controlled atmospheric conditions. This innovative furnace enables the semi-continuous feeding of silica (SiO2) and a carbon reductant, facilitating the production of 3N+ silicon in a single step. Notably, the QRR's design eliminates air infiltrations within the reactor, ensuring that the CO gas (Co(g)) generated during the carbothermic reaction remains unoxidized. Consequently, the QRR produces a gas composition enriched with CO(g), which can be readily captured for further utilization.

The recently acquired IP from PyroGenesis encompasses a process that involves capturing the CO(g) stream emitted by the QRR. This captured CO(g) is subsequently converted back into a solid carbon form, creating the potential for its reuse in generating the carbothermic process for silicon production once again.

By harnessing the unique CO(g) sequestration ability of the QRR in combination with the utilization of an organic carbon source, HPQ is poised to achieve the production of zero CO2 silicon metal. This innovative approach enables carbon-neutral silicon metal production and holds the potential for generating carbon credits. According to management estimates, the QRR potential carbon credits should be between 1.5 tCO2/t product basis and 2.6 tCO2/t product basis.

HPQ intends to commercialize its zero+ CO2 silicon metal under the brand name Silicium X.

Zero nitrogen oxides emission, another environmental advantage of the QRR process

The size, complexity and open-top nature of open electric arc furnace facilities contribute to the heating of atmospheric nitrogen, causing it to enter a reactive state and releasing highly reactive and poisonous nitrogen oxides (NOx) gases. However, the unique design of the QRR inhibits air infiltrations within the reactor, effectively preventing the formation of NOx. This environmental advantage is another positive aspect of the QRR process.

Quantifying the environmental benefits of the QRR: a zero CO2 emission process

HPQ's QRR zero CO2 emission silicon metal manufacturing can have a profound environmental impact, as exemplified by its significance in key markets:

• Market research indicates a need for one million tonnes of additional silicon metal production capacity in the coming decade, exacerbating the carbon emission issue. By fulfilling just 25 per cent of this demand with QRR systems, worldwide CO2 emissions could be reduced by 1.25 million tonnes annually, equivalent to removing 278,163 gasoline-powered passenger vehicles from the road yearly, or more than 50 per cent of the cars produced in Canada in a year.
• Canada's annual silicon metal production of approximately 50,000 tonnes could see a remarkable reduction of 206,000 tonnes in annual carbon emissions by adopting QRR systems.
• With an annual silicon metal production of around 310,000 tonnes in the United States, replacing old legacy plants with QRR systems could lead to a substantial reduction of 1.55 million tonnes of CO2 emissions per year.
• European countries, with an annual silicon metal production of approximately 450,000 tonnes, have the potential to achieve an impressive reduction of 2.25 million tonnes of CO2 emissions annually by transitioning to QRR systems.

These figures, not including the QRR carbon credit potential, highlight the significant environmental impact that can be realized by implementing QRR systems in these key markets.

Quantifying the economic impact of the QRR: a zero CO2 emission process

Silicon metal manufacturing incurs significant carbon taxes in numerous markets, calculated based on the per-tonne price of CO2 emissions. The deployment of each 2,500-tonne-per-year (t/y) system utilizing the innovative and proprietary design of the QRR process, along with the recently acquired intellectual property (IP) from PyroGenesis, will result in substantial cost savings.

HPQ management has calculated the net present values of carbon tax savings for each 2,500 t/y system over a 25-year period to estimate the potential cost savings. This analysis considers a projected 5-per-cent compounded increase in the carbon tax and applies discount rates of 7.5 per cent, 10 per cent and 12 per cent. The results provide an order of magnitude for the potential financial benefits in different markets:

• For a Quebec-based operation, with a carbon tax of $27 per tonne of CO2 emissions, the net present values of potential savings range from $4-million (discount rate of 12 per cent) to $6.5-million (discount rate of 7.5 per cent).
• In an ROC-based (rest of Canada) operation, with a carbon tax of $50 per tonne of CO2 emissions, the net present values of potential savings range from $5.1-million (discount rate of 12 per cent) to $8.5-million (discount rate of 7.5 per cent).
• For a European-based operation, with a carbon tax of 90 euros ($126 (Canadian)) per tonne of CO2 emissions, the net present values of potential savings range from 9.3 million euros (or $13-million (Canadian)) (discount rate of 12 per cent) to 15.3 million euros euros (or $21-million (Canadian)) (discount rate of 7.5 per cent).

These significant potential carbon tax savings highlight the substantial financial advantages and environmental benefits of adopting the QRR, a zero CO2 emission process, in these markets.

HPQ acquisition of new intellectual property from PyroGenesis

HPQ has acquired a new intellectual property from PyroGenesis for $3.6-million. This significant IP pertains to a low-carbon emission process for the production of silicon, which holds the potential to achieve zero CO2 emissions and introduce a circular carbon usage approach through carbon recycling. By incorporating this IP, HPQ strengthens its QRR patent portfolio and gains a unique competitive advantage over traditional silicon metal manufacturers.

Under the agreement, the parties are currently negotiating a complementary agreement focusing on the research and development phases necessary for implementing this IP. This collaboration will propel HPQ's capabilities in implementing the low-carbon-emission process, further solidifying its position as an industry leader in sustainable silicon production and PyroGenesis' position as a world leader in innovative industrial technologies.

About PyroGenesis Canada Inc.

PyroGenesis, a high-tech company, is a leader in the design, development, manufacture and commercialization of advanced plasma processes and sustainable solutions, which reduce greenhouse gases (GHG) and are economically attractive alternatives to conventional dirty processes. PyroGenesis has created proprietary, patented and advanced plasma technologies that are being vetted and adopted by multiple multibillion-dollar industry leaders in three massive markets: iron ore pelletization, aluminum, waste management and additive manufacturing. With a team of experienced engineers, scientists and technicians working out of its Montreal office, and its 3,800-square-metre and 2,940-square-metre R&D (research and development) and manufacturing facilities, PyroGenesis maintains its competitive advantage by remaining at the forefront of technology development and commercialization. The operations are ISO 9001:2015 and AS9100D certified, having been ISO certified since 1997.

About HPQ Silicon Inc.

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 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 five pillars:

1. Becoming the only zero CO2 emission, low-cost (capex and opex) producer of high-purity silicon (2N+ to 4N) using its proprietary Purevap quartz reduction reactors (QRR) being developed by PyroGenesis;
2. Becoming a producer of micron-size high-purity silicon (3N and 4N) powders for high-value applications;
3. Working to become the first producer of nano silicon materials from high-purity silicon chunks using the company's proprietary Purevap nano silicon reactor (NSiR) being developed by PyroGenesis;
4. Becoming a green low-cost (capex and opex) producer of fumed silica using the company's proprietary Fumed silica reactor being developed by PyroGenesis;
5. Developing a small and compact process for the on-demand production of green hydrogen via hydrolysis of silicon and other materials, in co-operation with Novacium SAS.

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