Mr. Bernard Tourillon reports

HPQ SECURES THIRD-FUMED SILICA NDA, AS INTEREST IN TESTING OF ITS COMMERCIAL-GRADE SILICA MATERIAL CONTINUES TO GROW

HPQ Silicon Inc. has provided an update on continued industry interest from third parties in evaluating the potential of HPQ-produced commercial-grade fumed silica material.

HPQ's wholly owned subsidiary, HPQ Silica Polvere Inc., and technology provider PyroGenesis Canada Inc. have successfully signed of another non-disclosure agreement (NDA). This NDA represents the third NDA between HPQ and interested third parties signed in 2023.

This third NDA involves another participant in the fumed silica industry that is keen on evaluating material produced using HPQ Polvere's proprietary fumed silica reactor (FSR) technology. The agreement aims to facilitate the sharing of samples for evaluation.

"The increasing interest in our fumed silica material, demonstrated by numerous requests for samples under these numerous NDAs, validates our technological potential within the industry, which is a big boost in our confidence of the commercial capabilities of our process and products," said Bernard Tourillon, president and chief executive officer of HPQ Silica Polvere and HPQ Silicon. "While success is never guaranteed, the preliminary feedback and ongoing discussions offer the promise of potential commercial partnerships with our HPQ Polvere venture, including commercial-scale offtake agreements and/or technology adoption."

Fumed silica initiative -- from lab demonstration to pilot scale then commercial scale

Using a lab-scaled model of HPQ Polvere's proprietary FSR technology, PyroGenesis successfully produced material with the desired structural high surface area (100 to 200 square metres per gram), like commercially available fumed silica. This material is garnering significant interest from multiple third parties.

The FSR pilot plant fabrication and assembly are expected to be finalized by Q1 to Q2 2024. Following this, scalability validation using the FSR pilot plant is planned for Q2 to Q3 2024.

Once scalability is confirmed, the intention is to transition from testing to commercial production using the same equipment, with an initial production capacity of about 50 tonnes per year. HPQ Polvere plans to incrementally increase production capability by 250 tonnes per year per reactor in response to anticipated demand within the next 24 months.

The FSR process unveils potential beyond fumed silica alone

In 2022, sales of fumed silica, also known as pyrogenic silica, reached $1.3-billion (U.S.), accounting for about 16 per cent of the total $7.8-billion (U.S.) specialty silica market. The remaining 84 per cent ($6.5-billion (U.S.)) comprises other materials, such as precipitated silica, fused silica, silica gel and colloidal silica. The specialty silica market is expected to grow to $13.4-billion (U.S.) by 2030, with a projected compound annual growth rate (CAGR) of 7 per cent.

Lab-scale testing not only confirmed that HPQ Polvere has a one-step technology capable of using raw quartz (silicon dioxide, or SiO2) to produce commercial-grade fumed silica but also suggested that the process could be modified to produce precipitated and/or fused silica in one step, using raw quartz (SiO2) as feedstock. This expansion nearly triples the addressable market that could benefit from the deployment of HPQ Polvere's FSR technology. This testing phase will occur after the pilot plant validates the scalability of the FSR process but before the transition to commercial production.

Fumed silica reactor unique advantages

HPQ Polvere holds a distinctive competitive edge through its fumed silica reactor. This advantage stems from the company's ability to directly transform quartz into fumed silica and potentially other specialty silica materials, resulting in energy requirements as low as 15,000 kilowatts per hour per tonne produced. This process not only enhances efficiency but also minimizes environmental impact and associated carbon taxes.

By contrast, conventional manufacturing processes for fumed silica depend on 2N purity silicon metal (Si) as feedstock. These processes also entail substantial CO2 (carbon dioxide) emissions, intricate procedures and high energy consumption (approximately 115,000 kilowatt-hours per tonne produced). Moreover, they give rise to hazardous byproducts like hydrogen chloride gas (HCl).

"We believe our technology and its commercial potential is increasingly evident," added Mr. Tourillon. "As our process gains more industry visibility, we expect continued interest in fumed silica production technology and our specialty silica materials potential. This will benefit both the company and the industries that rely on this essential material."

About PyroGenesis Canada Inc.

PyroGenesis Canada, a high-technology company, is a leader in the design, development, manufacture and commercialization of advanced plasma processes and sustainable solutions that reduce greenhouse gases (GHGs) 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 (International Organization for Standardization) 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's activities are centred around the following five pillars:

1. Becoming a zero-carbon-dioxide, low-cost (capital expenditures and operating expenditures) producer of high-purity silicon (2N+ to 4N) using the company's proprietary Purevap quartz reduction reactors (QRRs) being developed for HPQ by PyroGenesis;
2. Becoming a producer of silicon-based anode materials for battery applications with the assistance of Novacium;
3. Becoming a green low-cost (capex and opex) producer of fumed silica using its proprietary fumed silica reactor being developed by PyroGenesis;
4. HPQ Silicon affiliate Novacium is developing a low-carbon, chemical-base, on-demand and high-pressure autonomous hydrogen production system;
5. 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.

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