Earnings call transcript: Hazer Group Q2 2025 outlines strategic growth

Hazer Group Ltd (HZR), with a market capitalization of $62.2 million, recently held its Q2 2025 earnings call, revealing significant strides in strategic funding and technological advancements. The company raised nearly $11 million, bolstering its liquidity to over $20 million. Following the call, Hazer’s stock price experienced a modest increase of 1.39%, closing at $0.36. According to InvestingPro data, the company maintains a strong balance sheet with more cash than debt, positioning it well for its global expansion plans in methane pyrolysis technology.

Key Takeaways

• Raised $11 million, increasing liquidity to over $20 million.
• Stock price rose by 1.39% post-earnings call.
• Successful completion of Commercial Demonstration Plant testing.
• Strategic focus on global expansion and commercialization.
• Partnership with KBR for enhanced competitive positioning.

Company Performance

Hazer Group has demonstrated resilience and strategic foresight in Q2 2025, successfully completing testing of its Commercial Demonstration Plant (CDP) and raising substantial funds. The company aims to leverage its methane pyrolysis technology for low-cost hydrogen production, positioning itself as a leader in the shift toward low-carbon solutions. With reduced operating costs and a streamlined workforce, Hazer is well-positioned to pursue its ambitious goal of establishing 10 projects in the next decade.

Financial Highlights

• Liquidity: Over $20 million, including a potential R&D rebate.
• Projected cash burn: Approximately $1.5 million per quarter.
• Stock price: Increased by 1.39% to $0.36.

Outlook & Guidance

Hazer Group remains committed to its long-term strategy of licensing and commercialization. The company plans to expand its project pipeline across North America, Europe, Asia Pacific, and the Middle East, targeting industries such as steel, ammonia, and methanol. Future revenue forecasts predict $2.24 million in FY2025 and $4.69 million in FY2026, with an EPS forecast of -$0.03 for both years, indicating a focus on growth over immediate profitability. InvestingPro’s analysis shows the company maintains a FAIR overall financial health score of 2.0, with particularly strong momentum and growth metrics.

Executive Commentary

CEO Glenn emphasized the company’s strategic direction, stating, "It is all about commercialize, commercialize, commercialize." He highlighted the cost-effectiveness of Hazer’s technology, noting, "Being a dollar a kilogram for hydrogen is extremely low." Glenn also remarked on the industry’s evolution, saying, "Methane pyrolysis as an industry has shifted dramatically."

Risks and Challenges

• Market volatility affecting hydrogen pricing and demand.
• Potential delays in project implementation and commercialization.
• Competition from established hydrogen production methods.
• Regulatory changes impacting the renewable energy sector.
• Supply chain constraints for critical minerals like graphite.

Hazer Group’s Q2 2025 earnings call underscores its commitment to innovation and strategic growth, with a clear focus on expanding its global footprint in the hydrogen production industry.

Full transcript - Hazer Group Ltd (HZR) Q4 2025:

Simon, Moderator: Group, and Luke Cox, chief commercial officer, who will provide a brief update following the release of Hayes’ June results. You are in listen mode only, but feel free to submit any questions in the q and a box. We’ll address them at we’ll attempt to address them at the end of the session. Glenn, over to you.

Glenn, CEO/Executive, Hazer Group: Thanks, Simon. Good morning, everyone. Welcome to our webinar. I’m joined on the call, as Simon said, by Luke, our chief commercial officer. Together, we’ll present our results and some other highlights.

So in terms of our agenda for today, we wanna talk highlights, obviously, our strategy update, provide the latest on the global hydrogen market as well as the outlook. Luke’s gonna present an update on the KBR deal and all the good work that’s being done there. We wanna come back and talk graphite. It’s the other side of our tech. There’s a lot going on in the market there, and we might wanna provide details of Hayes’ graphite as well as our marketing strategy, then turn to progress on our commercial projects, a bit more insight into our sales and our customer pipeline, come back and finish with a corporate update, recap on our 2025 priorities, and then open up the call for q and a.

So just jumping down then, Simon, to our highlights page, just diving straight in. Look, q four was a very transformational quarter for us, arguably one of our strongest and most strategic yet. It was dominated by our strategic deal with KBR, a global engineering giant to form what we believe is a very powerful alliance that supercharges our commercialization and licensing of our technology. More details very shortly on that, but I’m very confident this partnership will unlock substantial value in our company as well as our technology. I have met with very senior leaders of KBR almost at the very top of the company.

They visited our site and our company in Perth. And what I can say is we’re aligned on strategy. We’re aligned on what success looks like for this alliance. We’re aligned on what the target markets in the pipeline look like, and we’re also very aligned on getting early wins and early runs on the board. So very encouraged by the early work that’s being done there and very encouraged by the collaboration between the two organizations.

On other highlights, you can see we worked hard on our scale up. We partnered with PSRI, a leading industry leader in fluidization, to accelerate the process development that complements a lot of the work that KBR is doing in terms of the reactor and the fluidization, in particular, the scale up to very large levels. We also achieved a very major milestone in Japan. Chubu, Geodecorp have successfully completed their PFS or their prefeasibility study. They’ve actually selected site, and they have very confidently confirmed a very strong economic case, and that is very good progress for our Japanese project, and we’re very excited about the pathway that that is on.

Corporately, we successfully raised during the quarter, in fact, a little bit trickled over into this quarter of almost $11,000,000 with very strong backing from strategic, institutional, as well as retail investors. Thank you to everybody that participated and supported the company through that process. We now have a very extended runway through some very significant milestones, licensing milestones, project development milestones, and technology development milestones. Our register is filling out very nicely. I think at last look, we were somewhere between 1520% institutional holding.

That’s come a long way in in two years. So we continue to see strong growth in the quality of our register and the attraction of of some larger institutions. Couple of other highlights there. You can see we unlocked further government grant funding. Specifically, this was to our graphite product and our market development.

Graphite’s getting hot. We wanna share more of that very shortly. There’s a lot of dynamics going in the market that are very advantageous for HAZER, and then we kicked some more goals with our IP protection strategy, which protects our first mover advantage. So overall, strong momentum as the market opens up for a very practical, low cost hydrogen solution that can decarbonize industry today. In terms of strategy, our staircase, we remain on track.

We continue to move up that staircase. We’re very confident now in our commercial readiness. That follows the successful CDP test program that we’ve been through all of that successful and subsequent testing and modeling that Tim and the team have been doing. Our tech is market ready. Our project pipeline is building very nicely.

So moving up into scale up, we’re making very good progress there. We’ve locked in a very important strategic partnership to support us getting bigger and doing it faster. Our first revenues have been flowing now in Canada, and that’s a very strong signpost of our commercial project and reinforces that low cost licensing business model that we have developed. Of course, there’s more to be done as we move towards the top step of our staircase. We’re targeting commercial rollout, getting our technology to market at scale as quickly as possible.

We’ve always said get 10 of these projects into the market over ten years. I’m very confident we’re we’re gonna exceed that, and we’ve got everything in front of us to be successful. The size of the prize, the pipeline, the partnerships are all getting momentum. So if we move down to the next one, please, Simon, in terms of our customer pipeline, we made really good progress through the quarter on building out our pipeline. We’re giving a lot more detail here in terms of where and potentially who is is interested in our technology.

We see our pipeline expanding rapidly. Our target markets are obviously North America, it’s Europe, it’s Asia Pacific, and to some extent, more recently, The Middle East. Australia, as you can see, is building out very nicely. We’ve got seven live opportunities that are being pursued there, and you can see the size of the bubble that we have annotated there relates to the potential capacity of a Hazard facility. So the larger ones are over 80,000.

The smaller ones are between twenty and eighty thousand. So the scale is there on the bottom left for you to to reference. During the quarter, we started in fact, we started the quarter with 45 global leads, and most of those are shown on on the map across multiple industries, traditional industries of petrochem’s refining ammonia, but also new industries, sustainable aviation fuel, steelmaking to some extent as well. So the majority of them, as you can see, are large scale opportunities, and that is also helping us inform the way we think about the scale up of the technology. With KBR, we potentially add hundreds of opportunities in ammonia and methanol.

And from our last webinar, you’ll you may recall that there is something in the order of 450 ammonia plants worldwide. That’s the green dots. And of this, 260 facilities or ammonia facilities are KBR technology. So they today hold a dominant market share over 50% of the ammonia and the methanol market. So a very important strategic partner for our technology.

So pipeline now extremely large, active with an opportunity set of potentially over 300 deals. Moving on to then the next slide. So the question then is, how do you put a value on this? What is each one of these bubbles or dots worth to Hazer? On the right hand side, you can see that we’ve worked the Hazer cash flows under a licensing model for a single 50,000 ton per annum hydrogen facility.

The key features of that cash flow is on is in the table on the left. It’s a licensing model, first of all. There’s no CapEx associated with that. You can see that it drives early revenues and free cash. Importantly, those revenues start to start to come in pre FID.

That’s the Canada model. Canada is in year one of that model, and we are receiving revenues from from FortisBC. So it is our strategy in action. And then importantly, the key number there is a single plant for Hazza delivers a net present value over twenty years of a $115,000,000 on licensing value alone. K?

So every bubble on that previous chart is is valued at over a $100,000,000 for HAZER. With that deep pipeline of 45 active discussions, a much larger prize, potentially over 300, you can clearly see that HAES has the potential to be a multibillion dollar platform, and that’s been the vision of the company to get this tech to market into the hands of the industrial players that need a decarbonization solution. So 10 projects is a billion dollars, 20 projects is is 2,000,000,000 and so forth. And that’s relatively consistent with the analysts that have got valuations on us. I think there’s one I think the Euros Hartley’s report is out there with an un risk valuation of around $2.50 a share, and most of them seem to be coming in at that level at the moment.

So moving then down into the hydrogen market. So there’s a window of opportunity opening up. As we go left to right across the slide here, we’ve got an enormous market with an enormous problem. Green hydrogen using electrolyzers to split water has failed to deliver that solution. Why?

It’s very energy intensive. It’s it’s about seven or eight times the energy that HAES requires, therefore making it very costly. You’ve seen overnight that Fortescue, I think, have dropped to hard green hydrogen projects, Woodside earlier in the week and other green hydrogen projects. So we see this industry shift that just continues to open up opportunities for Hayes’ low cost ready today solution. We’ve got a proven tech.

It’s viable. It’s a low cost alternative. We decarbonize gas. We plug in and we utilize existing infrastructure to deliver a very clean, affordable hydrogen solution with no c o two, but with this graphite very valuable graphite co product, which is substantial upside for the technology. The time is now.

The market’s opening up. The industry and policy in particular is shifting. We see gas coming back onto the agenda in a big way globally, and we’ve got that partnership in place now in enabling us to scale up with global corporations to deliver that solution today. Next one down, you’ll just see again, there’s never any downside in reiterating the size of the market here. The current demand top left, the consumption in the market today is 97,000,000 tons per annum.

It’s valued at over $200,000,000,000. In context, that is approaching the size of the iron ore market. I always talk about the fact that it’s third going to a half of the LNG market. It’s a big market with a big problem. Production today is concentrated in three industries as you can see on that bar chart, refining, ammonia and methanol, and a little bit of steelmaking.

The problem for this market is that 95% of that 97,000,000 tonnes is produced with steam methane reforming, which emits a massive amount of c o two. It’s 10 times the amount of hydrogen that’s produced. Every ton is 10 tons of c o two. That’s our disruption. Hayes’ target markets is disrupt is really targeting those industries that need that replacement and that clean alternative affordable solution, and that is arguably our addressable market.

So if we jump down to the next one, how do we naturally compare them with steam methane reforming that dirty source of hydrogen? Well, actually quite well without the c o two. Steam methane reforming basically dominates the industry. It’s 95% of global production today. There is somewhere in the order of over 1,500 SMR plants.

So if you look at the table on the left, we’re similar in energy intensity. We have the same gas feedstock, so we integrate very nicely into existing supply chains and infrastructure. But, advantageously, we have no scope one c o two emissions relative to their nine to 12. So you can see immediately that we’re in we’re an amazing replacement technology without the c o two, but with a graphite co product. So very comparable, but without the emissions footprint.

Chart on the right, we’ve used many times before. Hayes is very well positioned, very competitively costed. In fact, we’re cost parity with SMR. We’re a third of the cost of blue hydrogen, and we’re conservatively a seventh of the cost of green. I think we’re being generous there.

We see green hydrogen projects sometimes well in excess of $10 a kilogram. So you can just see how very cost competitive HASE technology is. Now to complete the market side, if we just jump down to then how does HASE fit within the market? There’s a lot of peers out there that are developing a technology in methane paralysis. We’re clearly leading the pack of all of those peers.

We’re a front runner in the space. We do a lot of work on competitor analysis. We’ve looked at plasma. We have looked actually, as a technology, we looked at molten beds ten years ago. We’ve just figured out that those weren’t the way to scale.

We’ve got several x factors here that really set Hazr apart that drive our competitive edge over emerging players. Just to call out a few, low energy intensity and high value graphite co product delivers us a very low cost pathway to clean hydrogen. But above all, scalability, that second bottom line, scalability is a absolute critical success factor for a technology. The use our use of a fluidized bed reactor technology is a our major differentiator. It’s proven industrial scalability.

It’s a technology that we’ve adopted from the refining sector and the metallurgical industry, and that enables us to go big, go more efficiently up to very large scale deployments even on a modularized basis. So it’s a very well positioned technology with almost all proven aspects of it incorporating the major aspects of of of the of the process. Work doesn’t stop here for us. We’re confident that we can see upside with energy. We’ve got some excess heat that we think we can we can use to even bring that energy intensity down further, and we’re absolutely confident that we can bring down cost.

We’ve got KBR looking at our cost and telling us that they think they can go cheaper on certain aspects of it. So there’s certainly economies of scale that can be built into this, and there’s also massive upside with our graphite. So we win on cost. We win on scale. We win on carbon quality, and we’re leveraging this with KBR to secure important first mover advantage in key markets where we have done already with existing projects as well as new projects.

Right. So, Luke, I might just hand it over to you here to talk about our recent KBR deal and the progress that’s being made there.

Luke, Chief Commercial Officer, Hazer Group: Yep. Thank you, Glenn. Good morning, everyone. Building on on Glenn’s previous slide, all those aspects are also the reasons why KBR chose HAZER. So we’ve we’ve spoken in the previous webinar about the the deal.

This is just a reiteration of the the highlights of that deal. Important to note that KBR has committed to exclusivity with HAZER, so they will not market any of the other competitive methamphoros tech technologies for the reasons that Glenn just just spoke to. Those are all the key reasons why HAESR is different, why KBR chose HAESR. So exclusivity in ammonia and methanol, we have the optionality to bring other projects in the nonexclusive markets to KBR. Also important to note, I think, for investors, existing shareholders, we’ve carved out the existing portfolio.

So all the projects that we have developed to date as HAES, we can bring them to to KBR, but we don’t have to. If the client, KBR, and HAES think it’s a good idea, we can develop them jointly. And and that that’s definitely adding to the momentum in in our pipeline. Relevant to to mention as well, scale going up. The market demand is big as Glenn pointed out.

KBR is committed to a contribution to the work program financially, so that will also help us in terms of our runway going forward, preservation of cash, and and spending our our money wisely. Financial contribution by by KBR is very important and greatly appreciated by by us all. The market position, Glenn already mentioned, exclusivity ammonia and methanol, more than 50% of the current hydrogen demand. KBR has has a a serious position in that market, more than 50% or that 50%. So, yeah, a beautiful strategy to to have access to that market with a with a very serious global global partner.

What is not on this slide and and one of the terms that you can negotiate is is cultural fit. And as Glenn mentioned, in the in the recent weeks, we’ve had the the opportunity to engage at at very senior levels with with KBR, and the the alignment is super strong. Target markets, path to market, how ASR fits in in the KBR portfolio and in the the global markets, it’s it’s really a nice, a nice and strong alignment on on all those aspects. So maybe go to the next slide. Think I need to make up a little bit of time so I’ll go go a bit faster.

Technical work is in in progress. The process design package for for larger scale solutions is is ongoing. Go to market strategy is is being formulated in parallel, and then it’s maybe should be brought forward. The market engagement is ongoing. We’re already talking to people together.

We’re exchanging leads. We’re exchanging market intel on a daily on a daily basis. There’s a lot, and it’s it’s, yeah, really exciting to be to be part of a proper partnership as well. It’s we call it a strategic alliance, and that also comes through in the day to day interactions. It’s a proper partnership on on equal basis, equal terms.

So it’s, yeah, great to be working with with that kind of partner. Maybe move on to the next one, Simon, please. On to to graphite. The next slide, please. I think many of you would have been aware that there’s a lot going on in the world around supply chains.

Graphite comes comes to the fore quite regularly. Terrorists are being considered, put in place. Sometimes graphite is a a critical mineral for many countries. It’s on on the the critical minerals list. So what that does is that there’s a heightened awareness of sovereign risk and sovereign risk around supply chains.

So a lot of companies, a lot of countries are very interested in producing graphite locally rather than being dependent on international supply chains and being exposed to the the economic and supply risk that that those existing supply chains have with them. Maybe move on to the the next one. What it all does, what it all means, to say the obvious, is that it it it puts Haeser in a good in a good position internationally, not only for hydrogen, but now also for graphite. So this is a visualization of of the key markets that we’re focusing on in terms of key applications. A lot of work has been been done in this in this space in the last six to twelve months.

In no specific order, concrete and asphalt is something that is is right up there in terms of potential applications. As you may recall, with our our partners, Tubular Electric and Chiyoda Corporation for the project in Nagoya, That is one of the the the key focuses is to sequester the carbon in asphalt and bitumen, not as a gas, so it’s not c o two storage, but it’s sequestering the carbon in a solid form, which has many advantages, especially in jurisdictions or in countries where you don’t have access to to gas fields to store the c o two as a gas. Through that, it’s a process. You can store it and actually make economic value out of the the carbon product as it comes out of our process. Another one to mention is the the iron and steel making.

Obviously, as as many of you would be aware, we’ve got a partnership with POSCO in the market. The interest for steelmaking is is in both the hydrogen as well as the graphite product that HAES produces. We also have an ongoing partnership with Mitsui that I’ll address in in a second, but in steelmaking is where a lot of things come together. As you may recall, we use iron ore as a catalyst, so we have a low emissions graphite product with an inclusion of iron ore, which is very attractive for for steelmaking. A lot of traction in in that industry globally.

Other ones to note, water treatment, PFAS removal, a very interesting interesting topic. PFAS is quite important. It’s a carcinogenic substance found in in water across the world, major concern for water utilities. We’ve got some some potential angles there and are developing a serious partnership in that space. Next slide, please.

So coming to that that strategy, and this is quite an important slide, think, to focus on. So what we what we do in terms of our market development and product placement in the market, we’re focusing on three things. We’re maximizing certainty I’m sorry, certainty while reducing the risk around supply chains. So we have a partnership with Mitsui, as I mentioned just then. We’ve been working with Mitsui since 2022, specifically on the the placement of graphite haze graphite globally.

And for for Mitsui, that’s a scope three play. They want to help their buyers of existing commodities of petroleum coke, naturally occurring graphite, other, c o two intensive products. They want to replace that with hazard graphite, which is a low emissions product. Strong strong demand there, a serious pipeline leading to, yeah, good positions for for future off tank deals through Mitsui. And also in parallel, Hazel is also doing a direct pathway.

So we’ve we’ve derisked that that aspect of the of the marketing strategy as well, indirect and direct optionality also in terms of pricing. The other two important legs of the strategy are volumes because we’re seeing significant volume demand for for graphite and, of course, maximizing the price. The the call out box in the in the bottom left there is is an illustration. As Glenn mentioned earlier in the in the presentation, if you you take a nominal 50,000 tons per annum of hydrogen production, set plans for for Asia facility, which is where we’re now now focusing in terms of capacity or the the market demand is there, and that produces approximately a 150,000 tons per annum of graphite. If you times that by a a conservative price, that for one project would would generate $45,000,000 per annum for a single plant.

So that’s for one plant. I wanna emphasize that. All the numbers that Glenn and I’ve been mentioning is is a single plant location projection. I think that’s the most important bits of this slide. So next slide, please.

Next slide. Yep. Yeah. Earlier in the or after the the quarter on July 15, we we announced a partnership with Energy Pathways in The UK. Refer to to that announcement for for further detail.

What is important to note is, I think, three things. It’s a very clever project in terms of the strategic positioning in The UK. It’s a facility potentially of 20,000 tons per annum over production capacity for hydrogen. What is very important is the The UK policy is very explicitly supportive of methane pyrolysis. And I mentioned that because Europe is a bit complicated in terms of regulatory environments, a lot of focus on electrolysis, economics aren’t there.

As Glenn mentioned, we see projects falling over left, right, and center. That’s why we think this is a potentially quite exciting partnership in The UK, also strategically to get a foothold in the in The UK market as as Hazen. Next slide, please. Our existing business development pipeline, we’ve shown this before. We’ve spoken about it a couple of times.

Maybe just to reiterate, our existing portfolio, as Glenn mentioned, it’s it’s solid. It’s it’s been solid. It’s growing. Every week or two, we add a serious proponent to the into the pipeline. We are very selective in terms of who we speak with and who we progress with simply because there’s a there’s a lot of demand.

So we have to be selective and only work with those people that really are ready to to work with us. So so it’s a good thing. Overall, the if you add it all up, the existing portfolio adds up to just over 1,000,000 tons per annum of capacity in total, which is only is less than a percent of the of the current global hydrogen demand as as Glenn focused on earlier. So with our existing position, very confident that our 10 in 10 objectives of 10 plants in ten years is is realistic and and achievable. And with that,

Glenn, CEO/Executive, Hazer Group: I’ll add Thanks, Loewen. That’s great. And I would just say, like, we’re we’re very constructive on graphite at the moment. That market dynamic is is definitely moving in our favor. We also see quite a bit of inbound from governments.

There is a sovereign risk component to all this with China’s with China effectively controlling almost all of the graphite supply market. So that plus the tariffs is really forcing governments to think about how they shore up their supply side for graphite as a critical mineral. On other projects, I will just address Canada here. We we continue to speak with with our colleagues or at least our counterparts at FortisBC as as as late as this week. Their commercial discussions on their preferred site are going ongoing.

We believe they’re going well. It’s taking a little bit longer than we’d like, of course, but those discussions also do include offtakes. So those discussions are always gonna be a little bit lengthier when you’re talking not just site, but also potential offtakes for hydrogen pricing and and also graphite. I I don’t really wanna be drawn into a time on it, but it could happen fast once those terms are agreed. So we continue to keep the dialogue live with with Canada.

Some of our team will probably be up there this quarter to continue the discussions on the project development as they approach FID. We do see KBR’s involvement here as an enabler. In fact, all parties see that. That brings a completely new dimension to the project as in, you know, in particular, performance guarantees for the customer and so forth. So once site is selected, we think this could run fairly quickly.

So we’ll keep investors and shareholders up to date as we as we get progress from that project. Japan as well, we had that major milestone achieved during the quarter. The PFS is completed. Site is selected, there’s a strong economic case. Graphite has a home as well, and that testing is underway.

And they’re now speaking with governments on approvals and funding, and we recently hosted them at the CDP. So, Simon, if we could just turn to the corporate update, I think it’s 25. So just rounding out, maybe just one slide back up, if that’s alright. Note to the 25, which is the corporate execution. Yeah.

There there we go. So just to finish off, we continue to strengthen the company across all of our functions. We maintain that robust funding position over $16,000,000 of current funding, which is recently bolstered by that near on $11,000,000 capital raise, 10.7. So thank you again to all the existing and new investors that supported us. If you include our annual r and d rebate, which is due in q four of this year, which is circa 4 to $5,000,000, that brings our total liquidity and pot to over $20,000,000.

So that’s a really strong pot of funding that this company needs for an extended runway to get through some of those very important, what we think is major inflections for the company in terms of licensing. On top of all this, of course, there’s more sources from grant funding milestones that are due over the next twelve months, and we are actively pursuing further state and federal level grant opportunities, including on the graphite side that are at various levels of engagement. So we’re, I think, we’re in a good position. Never comfortable, but actually, we’ve got that extremely strong runway. On the cost side, we continue to streamline our operations.

The costs are coming down. With the CDP now placed into the cold stack mode, we don’t see any further testing anticipated in the short term. Operating costs are going to be significantly reduced. Contractor cost headcount is down 30, so we see substantially lower cash burn going forward. With all of those sources and uses outlook, extended runway gets us through some key commercial milestones on current trajectory.

Our goal is, of course, to always extend that towards self funding. We see that revenues are starting to flow in throughout, at least, our first project, and it is our objective to try and replicate that and and bring this business to a point of self funding as soon as possible, especially with now potential for near term paid studies through our alliance with KBR. Our strategic focus is centered on strategic projects, pipeline, leveraging our tech into the commercialization and the licensing world, all aimed at unlocking that billion dollar platform that we talked about earlier. So to wrap up on our remaining strategic priorities for the year, the next one, please, Simon. It’s a catalyst rich period.

We’ve got a derisk tech. We’re rapidly expanding that pipeline. We’ve got that strong and robust funding position. We’ve got that powerful alliance to deliver multiple license opportunities on an annual basis. And the market, of course, is becoming much savvier to the advantages of methane pyrolysis relative to green hydrogen and electrolyzers.

We’re that global leader in this space, and we’re well positioned. This year, the remainder of this year, is all about licensing, commercialization, and unlocking that potentially high value graphite product stream. So that’s our focus. We’ve got the right partnerships now in place to do that, and it’s it’s all guns blazing towards those objectives. Simon, I might just stop there, and maybe we can open up the the line to q and a before we wrap up.

Simon, Moderator: Yep. Thanks, Glenn and Luke. I will just quickly remind everyone that if you’ve got questions now, the time to type them into the q and a box, and we’ll work well, we’ll work through as many as we can. We’ve already had quite a few come through over the last couple of days, so I’m going to sort of I’m gonna start with those. Mhmm.

The first one, Glenn, is why did Hazard decide to defer the next phase of the commercial demonstration plant testing?

Glenn, CEO/Executive, Hazer Group: Yeah. So we’ve seen a few questions on that. I think we tried to address that in the quarterly this week. Look. Frankly, we don’t see any requirement for any more testing.

We’ve done a lot. It’s been over twelve months of really intensive testing on the on the process as well as the reactor concept. I think we partly underestimated how good the program was. The testing program. I think now that we’ve had the benefit of looking at all the data, Tim and the technical team technology team have really and and, you know, really interrogated all that data and really found that actually we have got a very good concept and very good reactor already in in terms of our potential to scale up.

I will just remind everyone, we’re using a fluid bed reactor. I’m not taking anything away from the technical team, but fluidized bed reactors are proven. So we’ve come out of this testing program with with the information, the data, and the knowledge that actually our reactor works, coupled with KBR’s expertise as global experts in fluidized bed systems. We’re confident in our reactor concept. How we heat it is really just a nuance of of scaling, and that’s what we’re currently working on at the moment.

Demand at the same time has crept up to larger facilities, and we’re working on, as Luke said, you know, facilities and potential plants of over 50,000 tons per annum. So we think we’re in a good position. We don’t see any need to do any more testing at the moment, all of that good data from the CDP. We also had some excellent data from Canada through the reactor testing on the ground there and all the modeling that has essentially has come out of that, and we are in a place where we think we’ve got already a commercially viable solution for for large scale facilities. It does also reduce our CapEx and OpEx.

Of course, running a plant is is is OpEx intensive, and that, you know, that aligns, of course, with with our with our business model. So that’s kind of where we got to with the with the reactor and the CDP.

Simon, Moderator: Well, thanks, Glenn. That probably leads into the next couple of questions pretty well. When will meaningful revenue be generated by the company? How long till this point?

Glenn, CEO/Executive, Hazer Group: Yeah. Very good question. Revenues are flowing already. We’ve we’ve already in year one of the Canada revenue cycle. So that’s our licensing model already in action.

It’s not a lot, but it of course, it all adds up. And that really more import importantly, symbolically, that’s the model that works. Don’t really wanna be drawn into revenue forecast, but that said, I think it’s a fair target that we have several paid feasibility studies on revenue generating projects this year. And that’s the objective of of what we’re targeting. We’re aligned with this, with KBR, and also our existing portfolio.

We’re confident in the customer base, and we know it’s there. And we’re bringing focus now to the high priority customers that will effectively sign up to early stage feasibilities that will lead into feed and then into licenses. So that’s the model that we’ve got. We’re proving it with Canada at the moment. But I again, I we’d be very disappointed if we don’t start to see this year of several paid paid feasibility studies with large players that are are very interested in our technology.

Simon, Moderator: Nice. And then probably, really again, leads into the next one. What’s the current status of how is this funding in cash burn? Do you have enough runway to reach commercial deals?

Glenn, CEO/Executive, Hazer Group: Yeah. So I think I just think covered most of that. Think well, look, we’re well funded. The the liquidity is there. We’ve got that $20,000,000 or more pot of liquidity, as I like to say, more grant funding, more state and federal government grants in flight.

KBR’s throwing in also $3,000,000 to support the work program, so that also offsets. And cash burn is going down with the CDP and cold stack s g a SG and A reductions down 30%. So on a net basis, we’re in a very good position to be probably spending in the order of on a net basis, a million and a half a quarter. So you can see what runway we’ve got. I like to think it’s gonna be over two to three years.

That is significant for us to get through some very important inflection points as we talked about. And, of course, the target is always to stretch that as far as we can to as close as possible, if not beyond the position that we can be self funding with those near term paid studies come through as we expect them to do.

Simon, Moderator: Excellent. Thank you. The next one, are Hazer and KB looking to move quickly to take advantage of the 45 p extension in The USA?

Glenn, CEO/Executive, Hazer Group: Yeah. I saw that one come up, Simon. I think there’s a there’s a that’s a very good question in terms of The US. We always see The US and North America more generally as a target market. We’re not a 100% exposed to it, which is important.

We’ve got that global diversified portfolio as Luke highlighted. Notwithstanding, US has got very cheap gas, very big industry, and a very and deep pocket. So there is a lot of value in being having a position there. The 45 v, for those that are not familiar with it, is a part of the IRA, the inflation reduction act that is potentially under threat. And, you know, I guess one of the benefits and the advantages of HAESR is that we are already low cost.

Being a dollar a kilogram for hydrogen is extremely low. We would always take subsidies, but we are being low on the cost curve means that we rely significantly less on the requirement for subsidies. And being cost parity with SMR puts us in a very strong competitive position for a switching technology that relies, you know, less on on subsidies. So the more interesting aspect of The US side is the 45 q, which relates to carbon capture and graphite. We’ve got lots of ongoing dialogue with the DOE in The US.

And, you know, my, I guess, summary of all this, it looks like that the 45 q is there to stay as a long term policy support mechanism to methane pyrolysis. So generally speaking, US target market looks like policy is shifting a little bit there, but I think it’s gonna have less impact on on Hayes’ ability to secure projects on the ground.

Simon, Moderator: Thanks, Glenn. Look. I’m just gonna try and there’s a couple of ones here on graphite. So I’ll just sort of ask them both together, and you can answer it holistically, I guess. So is graphite is using graphite to produce graphite in part of the plan?

Do you have a a update on pricing on the graphite? Are you gonna upgrade it to battery grade? Have you looked into the price to make it spherical graphite? So it’s I guess it’s about upgrading.

Glenn, CEO/Executive, Hazer Group: Yeah. Very good. Luke, do you mind if you’re still online, would you mind trying to address those?

Luke, Chief Commercial Officer, Hazer Group: Yeah. Definitely. Definitely still online. Simon, if you don’t mind, if you have the slide deck still at hand, maybe pull up slide 19. Yep.

What is important to to emphasize is that in the ongoing marketing strategy for the for the graphite And especially in the on the back of the success with the CDP, we we produced significant commercial scale samples, which have been shipped out to our project partners, potential offtake partners for graphite, and other industry experts to to further solidify that that position, the the placement potential of the of the graphite product. The the graphene question, I’d love to focus on for a minute. We get that question a lot. It comes back into market volumes and pricing. Yes.

The pricing potential for graphene is is significant. Graphene has the the real substantial potential to to change how we how we use our electronic devices. So price potential, yes. The market volume, however, is close to zero today, but no one is buying a graphene at a at a meaningful volumes. So longer term, yes.

Today, we’re not focusing on it because there’s no no one’s buying it. It’s only for research purposes at the moment. We get that question also. I’d like to address it head on, please. Mhmm.

Glenn, CEO/Executive, Hazer Group: Otherwise I think it’s the pricing point. Maybe it’s the price point. So I’m gonna put articulates that best.

Luke, Chief Commercial Officer, Hazer Group: Yep. This was the testing and then the the the pricing point. We’re conservative. We are also regularly being told that we’re conservative with graphite. As Glenn mentioned, the sovereign risk is a real thing, but the unique properties of haze and graphite are are definitely a value driver, potential premium over competitive projects products.

And then the the low emissions aspect, which could also attract a premium value. We’re being conservative in in our modeling, so there’s pricing upside. We model in ranges between $3,700, and we are regularly being told by some of our potential partners that also model the the commercial aspects of HAZER that we’re being too conservative, but that’s a good place to be. There’s volume pricing upside. And as I mentioned in the in the presentation, volume is also really important because you can focus on on premium value only.

But if you saturate a market or a market segment, the market’s not gonna accept that. So we need volume and pricing combined Yeah. Uncertainty.

Glenn, CEO/Executive, Hazer Group: Yeah. And I would just build on that, Luke. That’s excellent. Look. We’re focused on, as Luke said, high volume, high confidence markets.

There’s a lot of graphite that comes out of our process. It but I like to see it as cream on the jam even at $300 a ton there. You can see the revenue that’s generated from a project up to $45,000,000 just to 300, which we think is a very low price for it. But I think, ultimately, there’s gonna be a blended price for various applications that are probably gonna be in excess of that. But, again, market’s the right place to be at the moment.

It’s a critical mineral. We see we see various industries looking to secure large volume sources of of graphite, so it puts us in a very strong position.

Luke, Chief Commercial Officer, Hazer Group: Yep. Maybe also to add to that also in the in the the product development space, we also have objectives in a in a product development work streams where we focus on that functionalization or or or post processing, in particular, for higher higher value markets and mid to long term. So we have current positions now and and value upside in the future. Good place to be.

Simon, Moderator: Alright. Excellent. I reckon we’ve got a couple more that we can get through. With Fortescue, BHP, etcetera, looking to produce green iron Mhmm. In Australia for export to China, is this an opportunity for Hazard to partner with these companies?

Glenn, CEO/Executive, Hazer Group: Absolutely. So I think as Luke said I’ll let you jump in here, Luke. I think steel making and and green iron is absolutely where hits every corner point of Hazard’s technology. An iron ore catalyst, of course, it’s a feedstock into the into the steel manufacturing process, cheap and affordable clean hydrogen, and a carbon product. So everything fits together in steelmaking.

That’s the direction that steel is heading. It’s responsible for eight to 10% of the world’s c o two emissions. I think you will have seen on our pipeline chart that we’re in discussions with over five global steelmakers, all of them see potential in a hazer technology. So we’re very excited about this as our KBR, as a high priority segment, not just internationally, but in Australia. You everybody is aware there’s several big green iron and green steel projects that are being developed in the country.

We are having dialogue with several of those as well. Luke, would you like to add to that?

Luke, Chief Commercial Officer, Hazer Group: Yes, please. Thank you. Yeah. Exactly. Some of the names that that came up in the in the in the question are very familiar to us.

They are also very familiar with Hazen. What I maybe should refer to is also our partnership with Postgre, which is public. They chose Hazy for a reason. Right? They get it.

They have told us they’ve looked at everything. Ammonia import export for for energy, not for fertilizer, but for the energy aspect. Compressed hydrogen, all the other forms and carriers, they said for for them, that doesn’t make economic sense. Medium pyrolysis does, so that’s why we’re engaged and working with them. It is a very interesting sector, very interesting potential, and we know what the business case looks like on the back of a HAESER plant and also on electrolysis.

And as we’ve already highlighted a number of times this morning, electrolysis has a economic problem today, and HAESER can definitely make those business cases work. We’re very confident. And, yeah, it’s a it’s a matter of the market figuring it out and and moving. Post call was first mover. There’ll be there’ll be others in that space.

No doubt.

Glenn, CEO/Executive, Hazer Group: Yep. So I’m just seeing a couple of questions here on the paid studies. Maybe I’ll just address those if it’s if it’s okay. Yes. Andrew, thanks for your questions on paid studies.

I would say they’re additive to the top line in the first instance because they are obviously revenue generating activities. We’ve always seen that as the business model. Hayes is a licensing model. So early paid studies is part of that model as we’ve talked about in the initial stages like we see in Canada at this stage. They will be an important component of of it, and that’s what we’re trying to get into very quickly.

That brings in revenues that effectively covers our costs and and moves us towards FEED and then into licensing. So they’re the first step in what we consider to be the licensing model that goes into a FEED study, and then it goes ultimately into an FID and a license. So they’re they’re very important aspects of it, and we see that as as Canada is the benchmark for that. And they they’re not high cash burn because they’re effectively revenue generating activities that the client is paying for. And and that’s the model that KBR is very familiar with, and that’s the one that we’re adopting for for HAZER.

Jason had a question on 50,000 ton per annum plants. We’d love to be there as soon as possible, Jason, is the is the is the short answer. What we are seeing is plants getting bigger, demand getting bigger. If you think about ammonia, a 3,000 ton per day ammonia facility requires 200,000 tons per annum of hydrogen. They don’t need 10,000, 20,000 tons per annum.

They need multiples of that, and that’s the pathway that we’re on. These are big industries that need big volumes, and that is that is the absolute focus for for where where we’re where we’re heading. Of course, there’s always gonna be smaller projects. Our tech can be scaled up and scaled down. That’s the that’s the wonderful thing about the fluidized bed reactor, and it can go down to as low as, you know, a few thousand, but up to potentially over hundred hundred and fifty thousand tonnes per annum.

And that’s a real differentiator for HAES relative to the competitors in this space and being so advanced in that. And with a strong partner that’s got expertise, we’re very confident that 50,000 is is a very achievable target.

Luke, Chief Commercial Officer, Hazer Group: Maybe to add to that, Glenn, if if I can. In the the quarterly update, in the recent document that we issued earlier to the in to the market in earlier this week, we also included some some numbers and and some analysis there. If you look at our existing portfolio, 96% of of our existing projects in the in the portfolio pipeline are bigger than 20,000 tonnes per annum. So that is a very, very clear signal from the market where we need to be in terms of scale. It’s it’s 20 onwards, 20 to eighty, eighty onwards.

It’s it’s it’s big, and it’s there.

Simon, Moderator: Well, I think we’ll probably just finish up with one final question. What are the major catalysts investors should look out for in the coming six to twelve months?

Glenn, CEO/Executive, Hazer Group: It’s really several things. Thank you. It’s licensing commercialization, those paid studies, those feasibility studies that are gonna come through and continue to validate the strength of the tech and the and the marketability of it. Of course, graphite is a key topic that we’re actively pursuing at the moment, so there’s a lot of milestones and we think catalysts around the graphite market. And grant funding and other strategic opportunities that we’re pursuing are are absolutely near term catalysts for us as we drive towards getting our tech to market.

So it’s a catalyst rich twelve months. We’ve got that runway now. We’ve got that partnership. I’m absolutely confident that we will continue to deliver what we think is big inflections for this company as our tech is ready. It’s proven.

It’s ready for licensing with a strong partner. We’ve got we’re low cost over green. We’ve got parity with SMR and those dual revenue streams. So I would stay tuned. It’s a very exciting journey that we’re on, and we have a very exciting pathway ahead of us in the next six to twelve months.

Simon, Moderator: Well, that wraps up today’s session. Glenn, would you just like to make a closing comment?

Glenn, CEO/Executive, Hazer Group: I think that’s it. Simon, I think we’ve addressed everything. Like I say, we’re on the fast track to get our technology to market. We’ve got the tech that operates and works. We’ve got the pipeline.

We’ve got the funding, and we have the partnership to do that. And it is all about commercialize, commercialize, commercialize. I appreciate the first one is the key. In any first of a kind technology, the first one’s the hardest. Once we get that, I’m very confident that Domino’s will fall.

We’ve got that pipeline that’s ahead of us. Methane paralysis as an industry has shifted dramatically. We see that green hydrogen projects are falling over every day. That just continues to open up the opportunity for Hazer. Once that first project in is in the bag, I’m confident that we will start to see a rerating in the stock and start to uncover and unlock that deep value that is there towards that billion dollar valuation.

Simon, Moderator: Thank you.

Glenn, CEO/Executive, Hazer Group: Thank you, everyone.

Luke, Chief Commercial Officer, Hazer Group: Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.