Mr. Bernard Tourillon of HPQ Silicon reports

UPDATE - HPQ FUMED SILICA REACTOR HAS THE POTENTIAL TO REDUCE CO2 EMISSIONS IN FUMED SILICA PRODUCTION BY OVER 50%

HPQ Silicon Inc. is reissuing an amended version of its May 24, 2023, press release at the request of L'Autorite des marches financiers.

This release focuses on the environmental benefits of the fumed silica reactor currently being developed by its wholly owned subsidiary, HPQ Silica Polvere Inc. (HPQ Polvere), in collaboration with technology provider PyroGenesis Canada Inc.

On May 17, 2023, HPQ Polvere announced that its proprietary reactor technology successfully produced, at lab scale, fumed silica using quartz (SiO2 (silicon dioxide)) as feedstock only, thereby opening the door for this process to allow a reduction of over 50 per cent in the direct CO2e (carbon dioxide equivalent) emissions associated with fumed silica production.

A technology reducing direct CO2 emissions in fumed silica production by over 50 per cent

Conventional fumed silica manufacturing processes rely on silicon metal (Si) as a feedstock, involving complex steps, high energy consumption, hazardous materials and hydrogen chloride gas (HCI) production as byproduct. These processes result in a carbon footprint of 9.5 tonnes (t) CO2e/t of fumed silica plus or minus 2.5 t CO2e, with over 60 per cent of emissions stemming from the use of silicon metal as feedstock.

By contrast, the HPQ Polvere fumed silica reactor enables a direct transformation of quartz into fumed silica, eliminating the need for the conventional carbothermic process to convert quartz into silicon metal. This innovation could potentially reduce direct CO2e emissions associated with fumed silica production by more than 60 per cent, equivalent to a reduction of approximately five t CO2e/t of fumed silica produced.

"The fumed silica reactor developed by HPQ Silica Polvere Inc. perfectly embodies HPQ's commitment to green engineering processes. We are dedicated to developing innovative processes that minimize the environmental footprint while meeting the material demands of the industry," said Bernard Tourillon, president and chief executive officer of HPQ Silicon and HPQ Silica Polvere. "This release specifically highlights the direct CO2 emissions reductions achieved by the reactor and does not encompass the additional substantial indirect environmental benefits. Work to date strongly suggests the potential for HPQ Polvere to develop commercial-grade fumed silica with greatly reduced carbon footprints relative to today's commercially available technologies."

Unlocking CO2 reduction potential: exceeding 500,000 tonnes per year (t/y) in key markets

The CO2 reduction potential of the HPQ Polvere fumed silica reactor is exemplified by the following key markets examples:

• In Canada, where approximately 24,000 t of fumed silica are consumed annually, the adoption of the HPQ Polvere process would result in a reduction of 120,000 t/y in CO2 emissions.
• The United States, with an annual fumed silica consumption of around 29,000 t, stands to benefit from a reduction of 145,000 t/y in CO2 emissions through the implementation of the HPQ Polvere process.
• European countries, consuming approximately 92,000t/y of fumed silica [5], could achieve a reduction of 460,000t/y in CO2 emissions by utilizing the HPQ Polvere process.

These figures highlight the environmental impact that can be achieved by utilizing the HPQ Polvere fumed silica reactor in key markets. Furthermore, there is a potential for a per-tonne reduction in carbon taxes in these markets:

• In Europe, the current price per tonne of CO2 emissions for manufactured and imported goods is approximately 90 euros. This implies that traditional producers of fumed silica could potentially reduce their carbon tax by around 450 euros per tonne by upgrading to the HPQ Polvere process.
• In Canada, the price per tonne of CO2 emissions for manufactured goods is approximately $50, and in Quebec it is around $27 per tonne. This indicates that traditional producers of fumed silica, if they adopt the HPQ Polvere process, could potentially reduce their carbon tax by about $250 per tonne in Canada and $137 per tonne in Quebec.

These potential reductions in carbon taxes underscore additional financial advantages and environmental benefits of embracing the HPQ Polvere fumed silica reactor in these markets.

Other news: HPQ new intellectual property acquired from PyroGenesis

As disclosed in its June 27, 2023, release and in its most recent management discussion and analysis reports, HPQ has acquired a new intellectual property (IP) from PyroGenesis for $3.6-million pertaining to a low-carbon emission process for the production of silicon.

PyroGenesis and HPQ are still negotiating a complementary agreement focusing on the research and development phases necessary for implementing this IP. As a result, the parties signed on July 11, 2023, an addendum to the original agreement pushing back the in-cash payment of $3.6-million date from no later than by June 30, 2023, to no later than by Dec. 31, 2023. The effective date of the addendum is June 30, 2023.

About PyroGenesis Canada Inc.

PyroGenesis Canada, 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 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 a green low-cost (capital expenditures and operating expenditures) producer of high-purity silicon (2N+ to 4N) using its proprietary Purevap quartz reduction reactors (QRR) being developed by PyroGenesis;
2. Becoming North America's first producer of micron-size high-purity silicon (3N and 4N) powders with the assistance of Novacium;
3. Working to become the first producer of nanosilicon materials from high-purity silicon chunks using its proprietary Purevap nanosilicon reactor (NSiR) being developed by PyroGenesis;
4. Becoming a green low-cost (capex and opex) producer of fumed silica using its proprietary fumed silica reactor being developed by PyroGenesis;
5. Developing a small and compact process for the on-demand production of hydrogen via hydrolysis of silicon and other materials.

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