Latest / WTR Small-Cap Spotlight / CIRCULAR ECONOMY: Investing in SAF, CCUS and Waste-to-Value (PART 3 – Waste-to-Value)

Transcript

CIRCULAR ECONOMY: Investing in SAF, CCUS and Waste-to-Value (PART 3 – Waste-to-Value) · WTR Small-Cap Spotlight

• 0:02
  SPEAKER_05: Hello, everyone, and welcome to this WTR Symposium series: Circular Economy, Investing in SAF, CCUS, and Waste to Value.
• 0:10
  SPEAKER_05: This is the final episode of a three-part symposium series exploring investment opportunities emerging from industrial decarbonization and the circular resource economy.
• 0:19
  SPEAKER_05: Our focus today is on the waste to value theme.
• 0:22
  SPEAKER_05: I'm your host, Sean Severson, founding partner and CEO of Water Tower Research.
• 0:26
  SPEAKER_05: And I'd like to introduce my WTR research co-host and colleague for the symposium, Peter Gastreich, Managing Director of Energy Transition and Sustainable Investing.
• 0:35
  SPEAKER_05: Peter, welcome to the symposium.
• 0:37
  SPEAKER_05: Thanks, Sean.
• 0:38
  SPEAKER_05: It's great to be here and looking forward to our conversations today.
• 0:42
  SPEAKER_05: So starting out, Peter, why don't you share a little background on our symposium format to start with?
• 0:48
  SPEAKER_06: Yeah, absolutely, Sean.
• 0:50
  SPEAKER_06: But before we dive in, just a quick note here that you can find forward-looking statements and safe harbor statements for all the public companies in today's symposium by navigating to the investor tabs and latest IR presentations located on the company websites.
• 1:05
  SPEAKER_06: Today's podcast symposium cannot be reproduced or transcribed without written permission of Watertower Research.
• 1:11
  SPEAKER_06: But now with that out of the way, so our aim here is really to identify some long-term investment themes that we see as underserved by Selfside Research.
• 1:21
  SPEAKER_06: We populate leading companies and their senior management around this theme.
• 1:25
  SPEAKER_06: We package it all in a kind of a punchy investor-friendly format.
• 1:28
  SPEAKER_06: You know, following, we will uh publish some uh symposium recap reports so investors can take a look at those.
• 1:35
  SPEAKER_06: It's very easy for our listeners to access research on the companies by taking a look at our uh because all of our content at Watertower Research is entirely open access.
• 1:45
  SPEAKER_06: You can find it on our website or through research aggregators like uh Factset and Bloomberg.
• 1:51
  SPEAKER_05: Great.
• 1:52
  SPEAKER_05: Thanks for that overview, Peter.
• 1:53
  SPEAKER_05: And why don't we move on to a little bit about the participating companies today?
• 1:58
  SPEAKER_06: So the companies joining us today are all solving a version of the same problem, and that is how can you profitably address a waste issue by turning it into something valuable?
• 2:10
  SPEAKER_06: These companies are extracting and selling useful and sometimes scarce commodities from waste.
• 2:15
  SPEAKER_06: And on top of that, some of them are even getting paid to accept the waste feedstock.
• 2:21
  SPEAKER_06: While we've have pulled these companies together under a waste to value theme, they each have highly differentiated technologies and business models.
• 2:30
  SPEAKER_06: Now, the feedstocks for these companies are things like waste plastics, discarded batteries, end-of-life solar panels, asphalt singles, and woody biomass.
• 2:40
  SPEAKER_06: From these feedstocks, you're getting aviation fuel, critical minerals like silver and lithium, circular chemical feedstocks and construction materials.
• 2:51
  SPEAKER_06: These are not standard commodities being produced.
• 2:54
  SPEAKER_06: The critical minerals have a scarcity and security value, while other products are highly sought after by customers for their circular carbon benefits, which give you premiums.
• 3:06
  SPEAKER_06: Policy tailwinds are also as strong as ever here with a focus on onshoring supply chains.
• 3:12
  SPEAKER_06: And all these companies benefit from that focus.
• 3:15
  SPEAKER_06: So today we'll be speaking with the CEOs of Ubundia Global Impact Group, Ace Green Recycling, Aduro Clean Technologies, Comstock Incorporated, and North Star Clean Technologies.
• 3:28
  SPEAKER_06: So all together, Sean, this is a compelling cross-section of how the waste to value theme is playing across very different waste streams.
• 3:36
  SPEAKER_06: And we're uh very pleased to have all five of the COs with us today.
• 3:43
  SPEAKER_05: That sounds great, Peter.
• 3:44
  SPEAKER_05: And uh, we'll jump into our first guest.
• 3:46
  SPEAKER_05: Uh it's our pleasure to welcome Ed Gillespie, Chief Executive Officer of Abundia Global Impact Group, ticker AGIG at Trades on the NYSC American.
• 3:55
  SPEAKER_05: Uh, Ed, thank you for joining us today.
• 3:58
  SPEAKER_05: And uh, but one thing before we dive in, I wanted to note for our listeners that last week Abundia signed a 10-year feedstock agreement with Frankfort Plastics.
• 4:06
  SPEAKER_05: That's 40,000 tons of polyolefin waste annually, uh, which critically that's roughly half of what AGIG's uh first cedar port plant will need.
• 4:17
  SPEAKER_05: So it's a very significant deal and another meaningful step in de-risking AGIG.
• 4:21
  SPEAKER_05: So congratulations, Ed and team.
• 4:24
  SPEAKER_05: Um, Peter will ask about uh your other milestones later in the podcast, but for now I'd like to start at a high level for investors who might not be familiar with AGIG yet.
• 4:33
  SPEAKER_05: Um, start by talk uh by walking us through the company, you know, general overview and specifically the waste problem you're solving and uh your high-level vision for the company strategically as well.
• 4:44
  SPEAKER_04: Yeah, so um AGIG is a waste of value company, like you said.
• 4:49
  SPEAKER_04: We take either waste plastic or waste biomass and through uh the pyrolysis process, and then with the bolt on of traditional oil and gas upgrading, we turn that waste that generally is either completely discarded or ends up in uh incineration into something that's more valuable.
• 5:08
  SPEAKER_04: And and when I say more valuable, I mean transportation grade fuel, chemicals are, of course, sustainable aviation fuel, which is uh our main target because of the market and the demand for it right now.
• 5:20
  SPEAKER_04: Um our goal is to become one of the largest developers or producers of sustainable aviation fuel globally within the next six years.
• 5:30
  SPEAKER_04: Um, but the the one thing that people must realize is that when you look at AGIG, we're not a development company, we're a project developer, we're not a technology developer company or RD company as such.
• 5:44
  SPEAKER_04: Um, the technologies are already commercial at scale, and our uniqueness is the combination of the initial pyrolysis technology with the upgrading process.
• 5:53
  SPEAKER_04: So we're taking it right the way through to finished product.
• 5:58
  SPEAKER_06: So AGIG carries some uh notable competitive advantages.
• 6:01
  SPEAKER_06: Uh you have the dual feedstock pathways, which is uh very unique to AGIG, uh license improving technologies uh and CapEx that appears to be well below the industry benchmarks.
• 6:12
  SPEAKER_06: Uh, could you walk us through why these and other elements uh are competitive advantages versus your peers?
• 6:19
  SPEAKER_04: Yeah, so the the main competitive advantages are of course the diversity in the technology stack.
• 6:26
  SPEAKER_04: So on one hand, we have plastic feedstock, and on the other hand, we have biomass feedstock, both uh available in large quantities, but it provides us with the opportunity to build our plant to scale based upon the location we're at.
• 6:41
  SPEAKER_04: So, generally speaking, 80,000 tons of waste plastic within a certain radius of a of a major city, you'll get that.
• 6:48
  SPEAKER_04: Um, and therefore we can scale if if there's 80,000 tons, 120,000 tons, or whatever that might be, we can scale the opportunity or the project to take advantage of the opportunity with regards to feedstock.
• 7:00
  SPEAKER_04: The same with the biomass, it's available in different quantities in different places, so therefore, again, we can scale the biomass plants and the upgrading plants to suit the opportunity or indeed the demand in that region so that we're not oversupplying.
• 7:13
  SPEAKER_04: That's one uh real competitive advantage.
• 7:16
  SPEAKER_04: Um, as I mentioned also, these technologies are already fully operational on that scale, so we don't have the scale-up risk that a lot of our competitors are going to find.
• 7:26
  SPEAKER_04: We already know that these things make pyrolysis oil to a certain standard continuously, and the upgrading pathways are already defined.
• 7:34
  SPEAKER_04: And with regards to the upgrading, which is one of our main uh advantages, taking it right the way through to finished product, and we partner with the best in the industry.
• 7:43
  SPEAKER_04: So we're not here trying to reinvent the wheel or develop uh an upgrading process that hasn't already been tried and tested.
• 7:49
  SPEAKER_04: We know that with the partners we've identified, and then the plastics, it's of course top so that was recently announced.
• 7:56
  SPEAKER_04: Um, these guys know what they're doing, right?
• 7:58
  SPEAKER_04: So we know the product we're going to end up with, we know the scale that we can develop, and we know the uh drop-in fuel that's going to be made, which will um obviously be able to be distributed locally, um, and that's another competitive advantage, uh, Peter.
• 8:14
  SPEAKER_04: The fact that we can build these plants within uh a radius of the end user, um, that makes sense with regards to transportation and logistics and distribution, that that's a big deal, right?
• 8:27
  SPEAKER_04: So we feel that um with regards to our licenses with the various companies, with regards to the technology readiness, which is also a big deal that that we're that we're well positioned to to really uh commercialize this technology and get it deployed.
• 8:44
  SPEAKER_06: And let's uh step back and uh talk a bit about the end markets for your products.
• 8:50
  SPEAKER_06: Um in AGIG, of course, you're very focused on sustainable aviation fuel or SAF.
• 8:55
  SPEAKER_06: Um, what are the key demand drivers uh you know behind SAF and how durable is the outlook?
• 9:01
  SPEAKER_04: Yeah, so um the reality is that SAF, although it's been around for a long time now, and when I say a long time, what that 10 to 15 years since the market started demanding it, um it's still in its infancy, right?
• 9:15
  SPEAKER_04: The demand dates, especially that are being driven in Europe, show that they would like at least a 30% content of SAF by 2035.
• 9:23
  SPEAKER_04: Right now it's only at a few percent, and most of that comes from used coconut or some kind of other uh discarded oil feedstock to meet that demand, and 2035 is really only eight years away, to get to that 30% blend, there's gonna be an awful lot of work to do.
• 9:38
  SPEAKER_04: And we we are going to be part of the solution.
• 9:41
  SPEAKER_04: That's the reality.
• 9:42
  SPEAKER_04: We want to position ourselves that we can contribute in some way to meet this global demand.
• 9:47
  SPEAKER_04: Um, so we see it as first of all, the reduction of carbon, it's a good thing to do.
• 9:54
  SPEAKER_04: But second of all, the mandates are going to pull this through.
• 9:56
  SPEAKER_04: And candidly, the consumers are now demanding it.
• 9:59
  SPEAKER_04: They want to know that everybody's playing nice and contributing with regards to the environmental solutions that's required.
• 10:08
  SPEAKER_06: And Ed, you you have a uh expanded agreement with Altera that gives AGIG rights to develop up to seven sites across Europe and the US, which is really quite a runway.
• 10:19
  SPEAKER_06: Um, you know, starting now with advancing the anchor project at Cedar Port in Texas, uh, what can you tell us about AGIG's growth strategy and sequencing those opportunities?
• 10:31
  SPEAKER_06: And what does the financing and capital strategy look like for that as well?
• 10:35
  SPEAKER_04: Yeah, so obviously, as you said, you know, the first site at Cedar Port, it's our flagship as such, um, with the combination of the upgrading and the pyrolysis on one site.
• 10:46
  SPEAKER_04: Um, as we work through the completion to get to FID by year end or Q1 of next year, we're already identifying the next two sites.
• 10:55
  SPEAKER_04: So the goal is that by the time we get the commissioning and have a successful commissioning and are producing fuel on the first site, we'll have the next two sites um identified, have started permitting planning and construction, or not construction, but planning, um, secured the feedstock and know where the fuel's going to go.
• 11:14
  SPEAKER_04: So we'll be ready to pull the trigger on sites two and three within a very short period of the first fuel being produced in uh in Bay Town.
• 11:21
  SPEAKER_04: With regards to financing, um, there's a lot of different ways to finance these projects.
• 11:27
  SPEAKER_04: Obviously, the financing for plant two and three will be easier than plant one just because it's plant one, right?
• 11:34
  SPEAKER_04: So whenever we're producing fuel and everybody can see it, feed it, touch it, and see the plant operational, financing becomes a bit easier.
• 11:40
  SPEAKER_04: But we look at this as project financing, more than likely a bit of debt and equity at the project level.
• 11:47
  SPEAKER_04: Um, and maybe that may be supported by uh funding from the parent, which is already funding the uh development, the feed and the get into FID right now.
• 11:59
  SPEAKER_06: So you've already uh touched on a few of these, but as we look ahead, uh what are some of the key milestones and signposts that investors should really be tracking uh with respect to AGIG to kind of benchmark that uh management's executing on its strategy?
• 12:14
  SPEAKER_04: Yeah, um I think that um we're so with regards to AGIG, it's not an overnight company, right?
• 12:22
  SPEAKER_04: It was here for six years before we ever went public.
• 12:25
  SPEAKER_04: We had identified the site, we had identified the feedstock, we had identified who we're going to use for the EPC.
• 12:31
  SPEAKER_04: All those things are are essentially being executed upon right now.
• 12:36
  SPEAKER_04: So the next big ones will be um obviously updates on the way through with regards to feedstock agreements being secured and finalized, off-take agreements being secured and finalized, the feed being completed.
• 12:47
  SPEAKER_04: It's just really execution mode from here on in and meeting all the ticking all the boxes as such with regards to getting to a successful final investment decision, as they say, by year end or the start of next year.
• 13:00
  SPEAKER_06: Okay, great.
• 13:00
  SPEAKER_06: And in on a previous podcast, you had mentioned about uh potential for an announcement related to your biomass opportunity.
• 13:08
  SPEAKER_06: Is that still something investors should be keeping an eye out for?
• 13:11
  SPEAKER_04: Yeah, that is.
• 13:12
  SPEAKER_04: Yeah, that's that's moving along.
• 13:14
  SPEAKER_04: Um, it's it's quite exciting.
• 13:16
  SPEAKER_04: We're we're not quite there yet, but sometime during the summer we'll we'll be able to inform the investment community of of the strategic moves we're making and the partners that we're bringing into the biomass side of things.
• 13:29
  SPEAKER_04: But um it's it's it's a very exciting opportunity.
• 13:32
  SPEAKER_04: You know, the the plastics opportunity is the foundation for the company, but the biomass is you know a multiple of the opportunity as such, especially when the partners we have are announced.
• 13:44
  SPEAKER_06: Okay, that's great.
• 13:45
  SPEAKER_06: Um we we've got a little bit more time and just kind of try to slip in one more question here, uh kind of stepping out more to the industry side of things.
• 13:52
  SPEAKER_06: So if we if we kind of shift to the broader policy environment, uh you have you know US-China supply chain decoupling, which has become a central theme really across clean energy and critical materials, and you also have you know implications from Straito Hormuz crisis.
• 14:08
  SPEAKER_06: Um, you know, how does that strategic narrative um affect AGIG?
• 14:12
  SPEAKER_06: And it would seem that uh you are um uh advantaged to position as a domestic supply chain solution in both both plastics and woody biomass.
• 14:20
  SPEAKER_06: Is that the right way to look at that?
• 14:22
  SPEAKER_04: Yeah, that's that's the right way to look at it, uh Peter.
• 14:25
  SPEAKER_04: You know, this is localized, right?
• 14:27
  SPEAKER_04: So we build the plant in Houston, we secure the plastic within the US from various locations, including the Houston market, um, and then we generate fuel that can be distributed inside the same market.
• 14:39
  SPEAKER_04: So it's it's uh certainly it has highlighted the uh the advantages to what we're trying to offer with regards to uh centralized or localized collection and distribution.
• 14:52
  SPEAKER_04: Um, and this feedstock is being you know thrown away right now.
• 14:56
  SPEAKER_04: We're not disrupting anything that's that shouldn't be disrupted.
• 15:00
  SPEAKER_04: We're actually enhancing the opportunity for both the waste collectors and the waste sortation companies because we're giving them an alternative use for something that they're either paying to get rid of or discarding.
• 15:11
  SPEAKER_04: So we see it as we're here to supplement and enhance the oil and gas industry and certainly the renewable industry locally with regards to where we situate these plants.
• 15:22
  SPEAKER_06: Okay, great.
• 15:22
  SPEAKER_06: That's fantastic.
• 15:23
  SPEAKER_06: Well, Ed, thank you so much uh for joining us again here today.
• 15:27
  SPEAKER_04: Thanks, Peter.
• 15:28
  SPEAKER_04: It's a pleasure as always.
• 15:29
  SPEAKER_04: Thank you.
• 15:30
  SPEAKER_06: And we appreciate really you walking us through the AGI story.
• 15:33
  SPEAKER_06: And uh we at Watertower Research will be following your progress and key milestones very closely, as I know investors will as well, uh, for this year and beyond.
• 15:41
  SPEAKER_06: Uh so with that, Sean, um, I'll hand it back to you to introduce our next guest.
• 15:47
  SPEAKER_05: So it's my pleasure to welcome our next guest, uh Nish Jay Shada, CEO and co-founder of Ace Green Recycling.
• 15:53
  SPEAKER_05: Ace recycles lead and lithium batteries using a cleaner and lower cost process uh than conventional smell smelters.
• 16:00
  SPEAKER_05: Uh the company's in the process of listing on the Nasdaq.
• 16:03
  SPEAKER_05: Uh that'll be via business combination.
• 16:05
  SPEAKER_05: And we're pleased to have uh Nishay here to tell the story.
• 16:08
  SPEAKER_05: I'll kick things off before handing it over to Peter.
• 16:10
  SPEAKER_05: So welcome, Nishe.
• 16:12
  SPEAKER_02: Hi, Sean.
• 16:13
  SPEAKER_02: Very nice.
• 16:14
  SPEAKER_02: Very good morning to everyone.
• 16:15
  SPEAKER_02: Uh thank you uh to you and Pira for having me here.
• 16:19
  SPEAKER_02: I'm very glad to be here.
• 16:21
  SPEAKER_05: So so let's start off with just a brief overview of ACE, you know, addressing uh the battery waste problem you're you're actually solving and then the basics of how your recycling technology works and uh you know, and interestingly, why the industry has operated for decades uh and is actually overdue for a change.
• 16:41
  SPEAKER_02: Absolutely absolutely.
• 16:42
  SPEAKER_02: First of all, I think you've already uh covered my pitch.
• 16:45
  SPEAKER_02: You know, you've said all the right things already in your introduction.
• 16:49
  SPEAKER_02: So so thank you for making it easier for me.
• 16:51
  SPEAKER_02: But uh essentially, ACE's Ace Green Recycling's existence uh is there to solve a very simple problem.
• 17:00
  SPEAKER_02: Batteries are very essential to electrification.
• 17:04
  SPEAKER_02: Anything which is happening in the modern world requires metals, but recycling infrastructure per se has really, really fallen behind in terms of you know setting up the right capacities and recycling in the right way or extracting metals in the right way.
• 17:17
  SPEAKER_02: Historically, what's happened in the recycling industry is there's a process like you mentioned, Sean, smelting.
• 17:23
  SPEAKER_02: Smelting essentially is a conventional process which has been there for decades and decades.
• 17:29
  SPEAKER_02: Uh, there's plants around the world or factories around the world which have been operating for more than a century.
• 17:34
  SPEAKER_02: Uh, this process has involved uh melting or burning metal at very high temperatures, 1500, 1600 degrees, chucking in a lot of very toxic chemicals as part of the process.
• 17:48
  SPEAKER_02: And essentially, what you get is you do get very good quality metal, but at the same time, you are exposing the workers there, the environment nearby to very hazardous uh air pollution, and at the same time, a lot of toxic solid waste which goes into the environment in landfills, which thereby disturbs the soil and the water content uh in those regions.
• 18:10
  SPEAKER_02: So that's been the go-to process for many, many decades.
• 18:14
  SPEAKER_02: And what AISE does is we've created technologies for both lead and lithium recycling, whereby we've created fully electrified processes which require essentially organic food-grade chemicals, mainly the lead process, which recycle these batteries at room temperature, thereby extracting similar or better quality battery materials which can go back into the battery value chain to create new batteries.
• 18:38
  SPEAKER_02: So essentially, what we're trying to do is we're trying to solve a very important problem, which is extracting metal or very important critical minerals from these batteries, which are waste or going to waste, but at the same time, we're trying to ensure that these batteries are recycled in a manner which does not hurt the workers, the environment, the communities.
• 18:58
  SPEAKER_02: That's essentially what we exist for.
• 19:00
  SPEAKER_02: And and you know, uh financial uh the the positive impact on on the financial aspect of recycling is is definitely a very important outcome, but yeah, that's that's what we do as a company.
• 19:14
  SPEAKER_06: Okay, thanks, Nishti.
• 19:16
  SPEAKER_06: That was a great uh introduction.
• 19:17
  SPEAKER_06: Um and you you've touched on this, you know, we've got a very large uh market opportunity here, and this uh emerging structural supply gap is very interesting.
• 19:26
  SPEAKER_06: Uh, could you walk it watch walk us through uh you know what's driving demand for the battery cycling and and why conventional smelters just aren't going to be able to keep up with this uh supply supply gap that the US is facing?
• 19:38
  SPEAKER_02: Yeah, sure.
• 19:39
  SPEAKER_02: No, absolutely.
• 19:39
  SPEAKER_02: That's a great uh great question, Peter.
• 19:42
  SPEAKER_02: I think fundamentally, if you look at things, uh consumption worldwide is increasing.
• 19:48
  SPEAKER_02: Uh metals are part of our day-to-day life, whether we realize it or not.
• 19:51
  SPEAKER_02: Metals are very important part of that.
• 19:53
  SPEAKER_02: Uh electrification is increasing worldwide, the use of AI is increasing, there are more and more data centers, there are more and more cars, whether they are ice engine cars or whether they are uh there are EV cars, uh, you have industrial vehicles.
• 20:06
  SPEAKER_02: Everywhere you're using a battery, either directly or indirectly.
• 20:10
  SPEAKER_02: So there is a constant requirement which is increasing day by day, of the batteries requiring uh which are required to create energy storage solutions or mobility solutions.
• 20:22
  SPEAKER_02: And there are only two ways to extract or to get these metals, either via mining or via recycling.
• 20:28
  SPEAKER_02: Now, mining, as many of us know, is not just an environmentally unfriendly process.
• 20:34
  SPEAKER_02: That aside, it's a very expensive process and it's a very long-term time-taking process.
• 20:41
  SPEAKER_02: In the US itself, as as you would know, Peter, uh copper, for example, which is a very important metal for the whole electrification.
• 20:48
  SPEAKER_02: Uh it takes on an average more than 20 years from start to finish to get a mine up and running.
• 20:54
  SPEAKER_02: That's on the historical average.
• 20:56
  SPEAKER_02: And the same goes for many other uh mines.
• 20:58
  SPEAKER_02: So it's it's uh it's a long gestation uh period issue, it's an availability issue, and also you know, these critical metals which are required to make batteries, they're not really available in the United States all the time.
• 21:10
  SPEAKER_02: You have to depend on countries which may or may not be very friendly as well.
• 21:14
  SPEAKER_02: You have to depend on countries which also have human rights issues, right?
• 21:18
  SPEAKER_02: For example, the the DRC, where you have child labor issues associated with mining and extracting these critical materials.
• 21:24
  SPEAKER_02: So you have a lot of these different issues, and at the same time, you have batteries which earlier used to be called waste, but you're not trying to extract value from these batteries, so that these could be treated as urban mining solutions or urban mines, where once these batteries have arrived in the United States, there's no reason to allow these batteries to go to another market because these are resources, so you can really extract value from these batteries and very valuable metals from these batteries, and thereby feed the domestic supply chain of the United States.
• 21:54
  SPEAKER_02: Why should we let this metal go elsewhere once it's already in the country?
• 21:59
  SPEAKER_02: So you Have this great asset which you now need to unlock value from and utilize it for national security and your own supply chain security.
• 22:08
  SPEAKER_02: So that's essentially why recycling becomes very important.
• 22:12
  SPEAKER_02: And that's the key demand driver.
• 22:14
  SPEAKER_02: And most countries, most large countries have realized that.
• 22:16
  SPEAKER_02: And it's not just a US phenomenon.
• 22:18
  SPEAKER_02: China started doing it many, many years ago.
• 22:21
  SPEAKER_02: Uh, you know, India has been doing it now.
• 22:24
  SPEAKER_02: Especially with all the uh conflicts, this problem has become even more evident, initially starting with the Russia-Ukraine conflict, and more recently with the Middle Eastern conflict, it's become more and more apparent that every large uh economy needs to make sure that you have an internal domestic circular supply chain so that you do not have to depend or you can at least reduce your dependence on other countries.
• 22:53
  SPEAKER_02: And that's the real real driver for so it starts from consumption and it then leads to creating you know more security around uh your own requirements as a country.
• 23:05
  SPEAKER_02: And that's the key driver for recycling.
• 23:09
  SPEAKER_06: So you you've got a you know cleaner process, lower build costs, you know, higher purity output than conventional smelting, as I understand.
• 23:16
  SPEAKER_06: Uh, and of course, investors, what they want to understand is the economics here.
• 23:20
  SPEAKER_06: So could could you walk us through that and and also you know what actually makes this uh uh process uh and your technology hard for the competitors to copy?
• 23:29
  SPEAKER_02: Sure.
• 23:30
  SPEAKER_02: Absolutely.
• 23:31
  SPEAKER_02: See, any project or any technology we commit to, Pira, we as said earlier, and Sean also mentioned, we process both lead and lithium recycling, uh both lead and lithium batteries.
• 23:42
  SPEAKER_02: And in the future, we might commit to other products as well.
• 23:45
  SPEAKER_02: But any technology we commit ourselves to, we follow a few fundamentals.
• 23:51
  SPEAKER_02: Uh, the few boxes we need to check.
• 23:53
  SPEAKER_02: One, these technologies have to be modular, which means that you can deploy them in a small market, in a large market alike, and it has to be scalable.
• 24:02
  SPEAKER_02: They have to be capital-light.
• 24:04
  SPEAKER_02: You need not spend hundreds of millions of dollars to set up a project.
• 24:08
  SPEAKER_02: They should be deployable with small capital, and then you scale as the market scales and as the opportunity grows.
• 24:15
  SPEAKER_02: You have to have quick payback periods of a few years.
• 24:18
  SPEAKER_02: You cannot wait for five or ten years to have long payback periods because markets change and technologies evolve as well.
• 24:25
  SPEAKER_02: Your consumers require different products as well.
• 24:27
  SPEAKER_02: So you have to have quick payback periods and you need to be on the right side of regulation, which means you do not need to uh have huge dumping footprint, you don't need to have a lot of compliance-related costs, and you need to have as automated processes as possible where you are not just exposing your people, you're also creating uh a better mode from a cost perspective.
• 24:48
  SPEAKER_02: So when you combine all of these aspects, which are true both for our lead and lithium technologies, and more so for lead, which is what we've commercialized already, and we are deploying worldwide pretty pretty fast, there these are capital-like projects, which means they require a very low amount of capital to deploy and to start.
• 25:06
  SPEAKER_02: You do not require to create large humongous factories which are required in conventional smelting, which are very, very CapEx heavy.
• 25:14
  SPEAKER_02: Your payback periods are pretty quick.
• 25:16
  SPEAKER_02: We do not have those excessive dumping costs which a typical smelting operation will have because we are not generating that solid waste or those air emissions.
• 25:23
  SPEAKER_02: So we don't have those extra compliance costs, costs as well, and we are fully automated, so we save a lot of money on manpower, and we have higher efficiencies because we are not losing extra metal to the toxic solid waste which smelters lose too.
• 25:37
  SPEAKER_02: So when you combine the impact of higher efficiency, lower manpower, lower disposable costs, and a fully automated process and modularity, low capex, then you have a very effective solution which becomes operationally and economically very viable and very nimble as well and easy to deploy and scale.
• 25:57
  SPEAKER_02: That's and on top of it sits the intellectual property mod.
• 26:01
  SPEAKER_02: The biggest mod which we have, you know, there's we filed more than 140, 150 patents already, and and between both lead and lithium.
• 26:09
  SPEAKER_02: And that's really another mod which we've created, whereby we make sure through a mix of some of the IP is also focused on some organic food-rate chemicals, which we've created, which are proprietary to us.
• 26:23
  SPEAKER_02: And they are very critical to make sure that these processes work as they should.
• 26:29
  SPEAKER_02: So if you combine the impact of all of these factors, it gives us a pretty strong foundation to build a scalable uh company and a global platform.
• 26:40
  SPEAKER_06: Okay, and say maybe going from there, let's talk about uh you know how you're going to scale that platform.
• 26:46
  SPEAKER_06: And I understand that ACE has a few different levers that you have for growth uh potential, you know, running your own plants, licensing technology, uh, maybe some other avenues.
• 26:55
  SPEAKER_06: Uh could you walk us through how you're thinking about these different levers and how you balance uh you know building out say US operations versus uh other opportunities?
• 27:06
  SPEAKER_02: Yeah.
• 27:07
  SPEAKER_02: No, I 100% uh Peter.
• 27:10
  SPEAKER_02: So if you you mentioned we have different levers and we have different divisions, which is absolutely right.
• 27:16
  SPEAKER_02: But if you think about it, these divisions are very complementary.
• 27:19
  SPEAKER_02: The key three key divisions in the company.
• 27:22
  SPEAKER_02: One, in North America, we are very clear we are going to operate our own plants.
• 27:26
  SPEAKER_02: 100% clear.
• 27:27
  SPEAKER_02: North America is a large market.
• 27:29
  SPEAKER_02: Uh US specifically is a pretty large market, very organized, uh, very important uh to set up domestic supply chain here.
• 27:37
  SPEAKER_02: And we are very committed to creating uh starting from Texas, which is our flagship project, which is under uh construction right now.
• 27:44
  SPEAKER_02: Starting from there, we'll hopefully build multiple projects in the US over the next few years.
• 27:50
  SPEAKER_02: That's our own and operate strategy, or that's part of our own and operated strategy.
• 27:54
  SPEAKER_02: However, given our IP and given the modularity of the whole process, we have the ability to grow globally pretty fast.
• 28:04
  SPEAKER_02: Now we can either take risk by entering different markets, which could be small or large on our own.
• 28:10
  SPEAKER_02: That's also possible, but it's not a bad strategy.
• 28:13
  SPEAKER_02: However, what we've done is we've tried to de-risk our scale up as much as possible.
• 28:18
  SPEAKER_02: And we've gone ahead and partnered with companies in different markets.
• 28:21
  SPEAKER_02: For example, Taiwan, Armenia, Thailand.
• 28:23
  SPEAKER_02: We had discussing, you know, there are always discussions ongoing in Europe, in other markets, where we are saying, hey, you are an existing recycler, we have the technology, you have the local infrastructure, you have the capital, you have the supply chain, you have the manpower permits, you have everything.
• 28:36
  SPEAKER_02: But you need to upgrade your facilities both from a financial and an environmental perspective to make your business more sustainable financially and environmentally.
• 28:46
  SPEAKER_02: So why don't we retrofit some of our machinery into your system?
• 28:51
  SPEAKER_02: You don't need to change your whole plant.
• 28:52
  SPEAKER_02: And we go and retrofit some of our modules into their factories and we help them either replace capacity or add new capacity through our processes, and we sign these 10, 15, 20 year licensing deals where we charge them a licensing fee and we supply chemicals to them, and then we help them grow and we grow alongside them.
• 29:11
  SPEAKER_02: So the the strategy we've chosen here is we set up our own projects in the US, rest of the world, we go and license our technology to other players, and of course, eventually, depending on how we grow as a company and how markets evolved, we might not be averse from considering operating some of these facilities in other parts of the world ourselves.
• 29:29
  SPEAKER_02: But right now, we see North America as our core focus for the next few years for our own facilities.
• 29:34
  SPEAKER_02: And then the third and very important piece, Peter, I would like to touch upon is the supply chain piece.
• 29:40
  SPEAKER_02: So many companies in this industry I would not say failed, but have not really succeeded because they've not really figured out the supply chain piece.
• 29:52
  SPEAKER_02: People have underestimated supply chain and how important it is.
• 29:58
  SPEAKER_02: We like I can personally tell you from my experience, I've spent 20 years in supply chain commodities and battery and materials, and many of our other team members have done so.
• 30:06
  SPEAKER_02: We have a very strong team operationally, we have great scientists, we have great technologists, we have great operational people, and we have great supply chain people who worked in the industry for many, many years and decades.
• 30:17
  SPEAKER_02: And that's a very important piece because yes, you might have the best technology in the world, you might have factories and capital to deploy uh for those factories, but if you've not figured out the supply chain, how are you going to operate and feed those plants?
• 30:30
  SPEAKER_02: So we've the benefit of having a very strong supply chain presence in multiple countries has benefited us because we've ended up having long-term contracts with some very key counterparties in the US, outside of the US, in Australia, in Asia.
• 30:45
  SPEAKER_02: So it's really helped us.
• 30:46
  SPEAKER_02: So all these three elements they work really together to help us build this global platform we talk about.
• 30:53
  SPEAKER_06: Okay, thank you.
• 30:54
  SPEAKER_06: This has been a great uh uh overview here, and I just want to ask um for investors, uh, what are the key milestones that we should be tracking, you know, going forward from here?
• 31:06
  SPEAKER_02: In terms of key milestones, I would say see the success or the lack of success of our company will, and I hope it's it is a success, will really depend on how efficiently we deliver on the projects we are working on.
• 31:26
  SPEAKER_02: So if if someone if I'm an investor looking at A-Screen as a company, then I would be looking at how the company is progressing with its flagship Texas project over the next year, year and a half or two years.
• 31:38
  SPEAKER_02: That's going to be the most important one because that's going to be our largest facility to date.
• 31:43
  SPEAKER_02: Then how are we progressing by deploying our technology in different markets, whether it's Armenia, Thailand, Taiwan, and other markets, because even though those projects might be in smaller countries, but each new project means one new customer who's been experienced for decades in this industry has validated the technology.
• 32:01
  SPEAKER_02: So each of these deployments add another piece of validation for the company, for the technology, and our business model.
• 32:10
  SPEAKER_02: So I would say deployment of technology, Texas progress, and how we are doing on the supply chain side, all of these three things put together is what if I was an investor looking at A, that's what I would look at.
• 32:24
  SPEAKER_06: Okay, great.
• 32:24
  SPEAKER_06: Well, Nish Che, thank you so much for uh walking us through the A-screen story today.
• 32:29
  SPEAKER_06: Um, you know, you've got a we've unpacked a lot here, and it's very compelling with your uh technology, you know, strong economics.
• 32:35
  SPEAKER_06: You've got a you know proven global footprint, uh structural supply deficit here to address, uh, and a lot of uh you know de-risking uh well underway at the company.
• 32:45
  SPEAKER_06: So it's really a compelling setup.
• 32:46
  SPEAKER_06: And you know, thank you so much for joining us today, and we wish you best of luck.
• 32:49
  SPEAKER_06: Uh we'll be watching very closely uh into your NASDAQ listing here.
• 32:53
  SPEAKER_02: Thank you so much, Peter.
• 32:54
  SPEAKER_02: It's been a pleasure, and thank you so much, Sean, uh, as well for having you.
• 32:58
  SPEAKER_02: Thank you.
• 32:58
  SPEAKER_05: So it's our pleasure to welcome Ofer Mikas, Chief Executive Officer of Aduro Clean Technologies, Ticker ADUR on both NASDAQ and the TSX.
• 33:08
  SPEAKER_05: Ofer, thank you for joining us today.
• 33:10
  SPEAKER_05: Oh, it's a pleasure to be here.
• 33:12
  SPEAKER_05: Thank you, Sean.
• 33:13
  SPEAKER_03: Very exciting.
• 33:14
  SPEAKER_05: So Aduro's Breakthrough Technology addresses an enormous uh opportunity to convert waste uh waste plastics to heavy crude and renewable oils into high-value, low-carbon, drop-in petrochemical and refinery feedstocks.
• 33:28
  SPEAKER_05: Um I'll get things started with the uh with the first question and then hand it over to Peter if that works for you.
• 33:34
  SPEAKER_03: Yes, for sure.
• 33:35
  SPEAKER_03: I'll just take on a comment Aduro is uh one of those leasing technologies for chemical recycling.
• 33:39
  SPEAKER_03: So we convert waste plastic to some kind of an oil, but we turn heavy oil, heavy crude that needs a lot of work to a lighter crude.
• 33:48
  SPEAKER_05: Well, can can you expand on that a little bit?
• 33:50
  SPEAKER_05: Because I think a lot of investors are are new to the story.
• 33:53
  SPEAKER_05: So a high-level overview of the company, you know, maybe starting with the uh environmental problem you're solving and then get dig into the technology a little more and address that.
• 34:02
  SPEAKER_05: Uh, and then and then, of course, the key end markets that you get to, the end products here.
• 34:06
  SPEAKER_03: Yeah, yeah.
• 34:07
  SPEAKER_03: And and why the investors would know anything about NVMal crude oil, right?
• 34:11
  SPEAKER_03: Um, well, it's it's the technology basically is based on this very unique phenomena we identified in 2011.
• 34:18
  SPEAKER_03: That phenomena suggests that we can do, you know, with the using a very simple catalyst, uh, and you know, some relationship between temperature and pressure, and a little bit of water, and um, I would say something we call hydrogen donor, so to the audience, that means would be glycerol or ethanol.
• 34:35
  SPEAKER_03: Then we take uh high and long, very heavy and long molecules in the case of heavy oil, and we put them under very specific condition, and out comes a lighter oil.
• 34:47
  SPEAKER_03: A lighter oil doesn't need to be blended, um, it needs less blending or zero blending, so it's a chemically different oil, it's a lighter conventional oil, so we increase its value.
• 34:58
  SPEAKER_03: And if you do it over thousands of thousands of barrels, you can see why you you keep on adding value to this, and now it's uh easier to pipeline.
• 35:06
  SPEAKER_03: Um, this by the same the same phenomena, because we call ourselves a platform technology, you we turn this phenomena uh to long and heavy other types of hydrocarbons that would be uh um uh basically waste plastic.
• 35:22
  SPEAKER_03: Waste plastic, uh as opposed to to heavy oil, it's actually not not very unified, right?
• 35:28
  SPEAKER_03: It contains different types of chemical uh components, mainly polyethylene, polypropylene, polystyrene.
• 35:34
  SPEAKER_03: Those are the families that we're working on, but a lot of contamination.
• 35:38
  SPEAKER_03: But when we melt it and bring it into our condition through a reactor and very specific condition, we do very selective bond breaking, and then we turn it this into what we call a nafta nafta uh oil.
• 35:54
  SPEAKER_03: Uh, so that would be a circular nafta.
• 35:57
  SPEAKER_03: So that oil now becomes appropriate to mix with virgin oil and to do something, you know, that that oil now can go back to um a production of new plastic.
• 36:08
  SPEAKER_03: Um, in terms of other applications that we have, such as um renewable oil to renewable fuel, uh, it's based on the same philosophy of the technology, it's a different technology, but then we're turning, you know, uh renewable oil to some kind of a uh uh fuel, renewable fuel.
• 36:23
  SPEAKER_03: So there's a lot, this is a platform uh chemical technology with a lot of potential overall.
• 36:29
  SPEAKER_03: I'll just say with significant two benefits.
• 36:31
  SPEAKER_03: A, we do not need any hydrogen, and uh B, the configuration of the system is so good that we can do scale up rather than scale down.
• 36:40
  SPEAKER_03: We can do very small units.
• 36:42
  SPEAKER_03: So now we address plastic recycling, or we can do very large units if we want, but we came to a term to build units that are a certain size.
• 36:50
  SPEAKER_03: And if you need more of capacity, we'll just give you more unit.
• 36:53
  SPEAKER_03: And I'll stop there and leave the room for maybe Peter to ask more questions about it.
• 36:58
  SPEAKER_06: Okay, great.
• 36:58
  SPEAKER_06: Thanks, Ofra.
• 36:59
  SPEAKER_06: That's uh that's a very helpful framing.
• 37:01
  SPEAKER_06: I'd just like to maybe go a bit more into the economics and competitive advantages here.
• 37:05
  SPEAKER_06: And you know, one thing that stands out uh about your company is your positioning as a you knowysis uh pioneer in a space where pyrolysis has historically really you know dominated.
• 37:15
  SPEAKER_06: I'd love to dig into the economics a bit.
• 37:17
  SPEAKER_06: You know, what does unit economics picture look like?
• 37:20
  SPEAKER_06: Um, well, where do you see your key competitive advantages?
• 37:22
  SPEAKER_06: And related to that, um, you know, what should investors take away from the fact that you know companies like Shell and Totel Energies have you know already engaged with this technology?
• 37:32
  SPEAKER_03: Yeah, so uh I'll uh uh for the economics, we see uh you know gross margin of around 50% to our work, which is quite quite fantastic.
• 37:40
  SPEAKER_03: Um, I think the economics should also look in terms of uh um your uh position and where you're located in the market.
• 37:48
  SPEAKER_03: So just by terms, um, let's say by comparison, normally porosis would require anywhere between, let's say, uh, 100 to 200,000 tons of processing capacity in a single site.
• 38:02
  SPEAKER_03: I think in our case, because we our starting point, our economic starting point is somewhere around the 25,000, 30,000 tons of waste plastic over a year, if you need a larger capacity, we'll give you uh a little bit more units.
• 38:17
  SPEAKER_03: Um, in addition to all of that, I think one uh one really advantageous uh um component that needs to be considered is the fact that this unit that we we are operating does not need require the oil that we're producing, does not require any hydrogenation.
• 38:36
  SPEAKER_03: And that means we're actually lowering the operational cost that we have on us.
• 38:41
  SPEAKER_03: And another uh good item that we have there is that we are basically, um, because of the size um and where we are located, the comp the technology really has uh this capacity to configure situations.
• 38:55
  SPEAKER_03: So we have high tolerance, higher tolerance than anyone else that I know in the market right now for contamination.
• 39:01
  SPEAKER_03: It doesn't mean that we have to use it, but it means that we are capable of configured solutions to dedicated uh problems.
• 39:09
  SPEAKER_03: So, for example, while everyone is uh talking about uh waste plastic in general and just consuming as much as you can and producing uh more of that.
• 39:17
  SPEAKER_03: In our case, we see dedicated applications such as synthetic turf or um, I'll say agricultural waste, very defined, unified material, need some work, but probably on a smaller scale would be advantageous for us.
• 39:30
  SPEAKER_03: So there's a lot of benefit in the technology that adds on into the economic.
• 39:34
  SPEAKER_03: But overall, what we see on a scale of 25 to 50,000 tons, that we see about 50 uh 50% uh gross margin, which is quite fantastic.
• 39:43
  SPEAKER_03: I'm putting aside right now all the issues that are related to the environment benefit because we think um the system um potential to contribute on the environment benefit is of a league of its own, but we'll touch, well, I'm sure we'll touch paste later in the program about it.
• 40:00
  SPEAKER_06: And so you have a lot of uh you know irons in the fire, so to speak, on the growth side, you know, multiple levers.
• 40:05
  SPEAKER_06: Uh, you know, you have the company owned and operated, you've got uh the capital light licensing pathway, uh, you've talked about opportunities in Mexico and Canada, uh, and then you have the Paraffinite Crude application opportunity in Utah.
• 40:17
  SPEAKER_06: So, you know, how are you thinking about uh you know these these various uh levers and sequencing uh the opportunities here?
• 40:24
  SPEAKER_03: Yes, I admittedly it sounds a little bit of chaotic here, but I I can tell you that if the audience would have listened to what we've been saying for the last five years, it will all be in order.
• 40:33
  SPEAKER_03: So, and I'll try to make that uh order.
• 40:36
  SPEAKER_03: So um when we become public, we've been approached uh very closely by our Genesis was um upgrading of heavy oil, but when we become public, we received a lot of uh interest from organizations around the world, the Shell and the Total, to test the technology on chemical recycling.
• 40:53
  SPEAKER_03: Very quickly uh we shifted and we put our attention on chemical recycling.
• 40:58
  SPEAKER_03: And so, although the technology has different applications, let's say unconventional crude, in unconventional crude side, I'll put heavy oil, turning heavy oil to a lighter crude and waxy oil to a conventional crude.
• 41:12
  SPEAKER_03: Uh in the environmental section, we have this um uh chemical recycling approach and maybe renewable oil or turning turning uh uh let's say um waste tires.
• 41:24
  SPEAKER_03: Uh so we in the last four years we put really significant attention on the chemical recycling stage.
• 41:29
  SPEAKER_03: So we build a pilot, and that pilot, as we told to investors already last year, was up and running since early 20 this year.
• 41:37
  SPEAKER_03: We're very happy with the performance.
• 41:39
  SPEAKER_03: We actually published some information about it, but we also told our investors that we're immediately going to uh go on and build an industrial site uh with a small industrial scale unit to demonstrate or to work and operate on this chemical recycling.
• 41:56
  SPEAKER_03: So that's what we're doing in the Netherlands.
• 41:58
  SPEAKER_03: So really uh our plan was building the pilot, moving on the pilot to an industrial scale site and building the smallest unit we can have on that side.
• 42:08
  SPEAKER_03: So this is what's happening in the Netherlands right now.
• 42:11
  SPEAKER_03: The site itself is built for a larger capacity.
• 42:14
  SPEAKER_03: What be what we're we are building the smallest economic unit that we can we can do, which is about 10,000 tons a year unit, just for plastic recycling.
• 42:23
  SPEAKER_03: And by the way, we will start with the simple to complex.
• 42:26
  SPEAKER_03: We will start with like with materials such as synthetic crude, synthetic um synthetic turf, or maybe agricultural waste, and we will gradually upgrade the unit to do full waste plastic recycling.
• 42:39
  SPEAKER_03: Saying all that, um the um paraphinic crude for us is just an extension of the plastic recycling.
• 42:48
  SPEAKER_03: If I mentioned to you before, paraphernic crude for us is uh that's what we're producing, that's the end product that we have actually from the chemical recycling platform.
• 42:58
  SPEAKER_03: And so uh the paraphernic crude that is uh we identify a site that's situated in Utah, not a lot of uh production that is out there, but um it's for us it's just liquid plastic, it's just an addition and extension.
• 43:10
  SPEAKER_03: So we've been focusing, although we were sitting on this application for many years, we've been focusing first to conquer, if you will, from technology perspective, the pilot and the industrial unit for waste plastic.
• 43:22
  SPEAKER_03: And then we just shift a little bit of attention and extended the pattern, and now we have a small system on paraphrinic crude.
• 43:28
  SPEAKER_03: And basically we have you know very much paraphernic uh crude that is a little bit longer than the usual, and all we need to do is to chop it.
• 43:36
  SPEAKER_03: And uh a big difference in that in that um, I guess, approach as opposed to waste plastic, which is solid, you have to melt paraphrinic crude is only about um it's it's at 50 degrees, it's already melting.
• 43:49
  SPEAKER_03: So there goes the extruders.
• 43:51
  SPEAKER_03: We don't need half of our system is there, and even because it's very unified material, the reactor design is much simpler.
• 43:57
  SPEAKER_03: So I I hope I made some organization.
• 44:00
  SPEAKER_03: Organizing, organized the chaos of how we're working right now.
• 44:03
  SPEAKER_03: But we are very much focused on target.
• 44:05
  SPEAKER_06: Okay, thanks.
• 44:06
  SPEAKER_06: That makes sense.
• 44:07
  SPEAKER_06: And just maybe following on that, uh, you know, with with your capital light strategy, you'll eventually reach a you know self-funding stage.
• 44:14
  SPEAKER_06: But how should we how should investors think about uh the time between now and then and and going through your own and operated uh uh financing?
• 44:22
  SPEAKER_03: So so one word on the licensing and the and the establishment of build on operate.
• 44:26
  SPEAKER_03: So we knew the licensing, we're we're very much we love licensing, but licensing could take some time.
• 44:31
  SPEAKER_03: So we because we knew that we have this simple application that we can generate money quite um, I guess, sooner than later, we uh have also also told to our investors that we will do build-on operate.
• 44:43
  SPEAKER_03: So basically, we have a site in the Netherlands that we own.
• 44:47
  SPEAKER_03: It's it's that site uh we build on operate, and it will be destined to a commercial, you know, fully commercial site.
• 44:55
  SPEAKER_03: And uh we we take information from the pilot and generate it towards that site and fix the site.
• 45:01
  SPEAKER_03: But in terms of uh uh this year and next year, in terms of the news that are related, you will see a lot of news that are related to the pilot performance.
• 45:08
  SPEAKER_03: You will see a lot of news that are related to maybe uh testing that we do for some customers.
• 45:13
  SPEAKER_03: You'll hear um a lot of uh, I guess, uh, information that is coming with respect to engineering organization, long-led items that we're building, permits, all of those things that we told investors already this year that this is what we're heading.
• 45:26
  SPEAKER_03: So 2026 and 2027 is a really important year for us in terms of the growth.
• 45:31
  SPEAKER_03: I invite people to monitor what we've been doing.
• 45:34
  SPEAKER_03: I also will tell people everything that we're telling you now.
• 45:37
  SPEAKER_03: We told investors a year before, and a year before, and year before.
• 45:40
  SPEAKER_03: So we just making small steps that actually adding value to the process, adding value to the company, open opportunities and helping us de-risk with the whole process.
• 45:50
  SPEAKER_06: Okay, great.
• 45:51
  SPEAKER_06: I'll just ask one sort of uh uh final industry level question here.
• 45:55
  SPEAKER_06: Um, you know, you've talked in the past about these uh you know European recycled content mandates, which are set to tighten uh starting in 2030.
• 46:03
  SPEAKER_06: Uh looks like uh you know a clear tailwind for the company.
• 46:06
  SPEAKER_06: You know, what what would you tell investors about that uh that year and why that should be pivotal for uh for you?
• 46:12
  SPEAKER_03: So the European um over the last few years came with some mandate about you know, can't ship any more uh waste plastic outside of Europe, you know, you have to absorb it.
• 46:22
  SPEAKER_03: And and the European has has done it from different reasons.
• 46:26
  SPEAKER_03: The first reason, of course, was to deal with circularity, so to try and create more material in the name of the environment, if you will.
• 46:32
  SPEAKER_03: A second reason, less discussed, is that we feel that European is doing that just to protect the local industry.
• 46:38
  SPEAKER_03: So if you buy cheap material from the Far East, then you have to protect your industry.
• 46:43
  SPEAKER_03: And now you have some dynamic where you said you have to recycle a little bit of material from your own.
• 46:48
  SPEAKER_03: That means it doesn't matter how much um cheap industry you can bring, but every material that is coming in has to be somewhat with the circular material.
• 46:57
  SPEAKER_03: And recently we've we start to identify another level of interest, which is the independence, the energy independence.
• 47:05
  SPEAKER_03: So the European uh bring a mandate by 2030 that there'll be uh it's called extended producer responsibility that will bring that suggest that every plastic product out there in Europe will have some certain component of uh circular material.
• 47:21
  SPEAKER_03: So we are right there with a very good technology.
• 47:24
  SPEAKER_03: We we are producing much more circular material than others, so we have a good chance.
• 47:28
  SPEAKER_03: And the first approach would be mechanical recycling, and whatever they're rejecting will go to chemical recycling, and we have a very good opportunity there.
• 47:36
  SPEAKER_03: The second item that is related to that European mandate, which I think is very important, our peers, the guys that are doing parosis, they're basically uh um producing much more petroleum product, gasoline and diesel.
• 47:49
  SPEAKER_03: And so the European mandate exam those and doesn't like it.
• 47:53
  SPEAKER_03: So our peers have a bit more challenges in terms of how much my product they are bringing back to the circularity, on top of the fact that they need to hydrogenate it, on top of the fact that they need very, very clean material.
• 48:05
  SPEAKER_03: So there's a lot of punishment there, which effectively means that if a duro is doing what we did, we're suing on in doing what we are saying we will do in 2030, there is a good motivation to use more and more and more of a duro process because we are producing more material to the circular environment.
• 48:23
  SPEAKER_03: We have a smaller scale unit that could grow.
• 48:26
  SPEAKER_03: You know, it only takes us 12 months to build a unit.
• 48:28
  SPEAKER_03: If you want 10 units, it will take us 10, 12 months.
• 48:31
  SPEAKER_03: We just order 12 units or 10 units, and we do not need hydrogenation, and there is a mandate there to call.
• 48:38
  SPEAKER_03: So there's a lot of benefit that coming 2030 will present.
• 48:42
  SPEAKER_03: And we feel this would be fairly advantageous to Aduro.
• 48:46
  SPEAKER_03: And we see now also the reasons why the European is actually continue with this mandate and actually promoting it.
• 48:52
  SPEAKER_03: So that is uh a good thing for us.
• 48:56
  SPEAKER_06: Okay, this has been great.
• 48:57
  SPEAKER_06: Oprah, really appreciate you taking the time to walk us through the uh duro story today.
• 49:01
  SPEAKER_06: The you know, the technology differentiation is really you know coming through very clearly in what you're saying here, and the market opportunity certainly looks uh you know very compelling.
• 49:09
  SPEAKER_06: But uh, you know, we'll be keeping a close eye on the progress from uh Chemelab Forward and you know, certainly exciting times ahead.
• 49:15
  SPEAKER_06: But again, thank thank you very much for joining us.
• 49:17
  SPEAKER_06: Well, thanks for having me.
• 49:20
  SPEAKER_06: Now, Sean, back to you to introduce our next guest.
• 49:25
  SPEAKER_05: So it's our pleasure to welcome back Corado de Gasparis, Chief Executive Officer of Comstock Inc.
• 49:31
  SPEAKER_05: That's ticker L-O-D-E on the NYSC American.
• 49:34
  SPEAKER_05: Corado, great to have you with us again.
• 49:36
  SPEAKER_01: Thanks, Sean.
• 49:37
  SPEAKER_01: Pleasure to be here.
• 49:38
  SPEAKER_05: So in our first installment of the symposium, I know we covered Comstock's biomass and renewable fuels opportunity through Biolium.
• 49:45
  SPEAKER_05: Uh, and I definitely encourage listeners to go back and hear that conversation or of course read uh read some of Peter's research on it as well.
• 49:52
  SPEAKER_05: Uh but today we're going to go deep on uh into Comstock's compelling and very timely opportunity with the solar panel recycling and critical minerals platform.
• 50:01
  SPEAKER_05: I'll get started with the first question and then we'll hand it over to Peter.
• 50:04
  SPEAKER_05: So um, Carol, setting the stage, can you give investors a brief overview of the solar panel recycling opportunity?
• 50:11
  SPEAKER_05: I don't think everybody's familiar with it by any means and the scale of the waste uh problem and why it's been so poorly addressed until now, right?
• 50:19
  SPEAKER_05: And uh how Comstock's platform is really solving that problem.
• 50:24
  SPEAKER_01: Yeah, no, for sure.
• 50:25
  SPEAKER_01: I mean, the um the market opportunity is is truly staggering.
• 50:30
  SPEAKER_01: The totally addressable market in the United States alone is over 1.4 billion panels deployed.
• 50:39
  SPEAKER_01: And I think what happened, Sean, was that the panels were supposed to last 25 or 30 years.
• 50:47
  SPEAKER_01: And so um, you know, because because it's such a new industry and because of the expectation of such a long life, even the utility companies, the users of these panels really were not planning for end-of-life.
• 51:01
  SPEAKER_01: There's really no coordinated, integrated end-of-life solution that was planned for.
• 51:06
  SPEAKER_01: And so about three years ago, I was looking for technology to help uh get battery-grade metals for recycling batteries at the time.
• 51:17
  SPEAKER_01: And we came across a chemist who just had an extraordinary 40-year career in industrial metals, industrial materials.
• 51:25
  SPEAKER_01: And his his real claim to fame was the speed, efficiency, uh, and effectiveness of eliminating the contaminants so these materials could be reused.
• 51:36
  SPEAKER_01: I mean, truly closed cycle.
• 51:39
  SPEAKER_01: And he's the one that said, yeah, we have a solution that will do that, but um, we should address solar panels.
• 51:45
  SPEAKER_01: And I said, solar panels.
• 51:46
  SPEAKER_01: Like I didn't see that opportunity.
• 51:50
  SPEAKER_01: Almost nobody saw it, you know, three years ago.
• 51:53
  SPEAKER_01: Last year, four million panels came end of life.
• 51:57
  SPEAKER_01: In 2030, 34 million panels will come end of life.
• 52:02
  SPEAKER_01: And and if you appreciate that, we believe we're the only high-speed, high-effective, zero landfill solution.
• 52:11
  SPEAKER_01: And even in that context, we can only do 3.3 million panels a year from one production line.
• 52:18
  SPEAKER_01: Now that's extraordinary.
• 52:20
  SPEAKER_01: It's a panel every seven seconds, but it's only 3.3 million panels, meaning you would need 10 of those production lines to handle just what's coming in 2030.
• 52:29
  SPEAKER_01: And that's only the tip of a massive 1.4 billion panel uh uh iceberg in the United States alone.
• 52:38
  SPEAKER_01: And and uh internationally, that number is anywhere from eight to ten times the same amount.
• 52:48
  SPEAKER_06: Okay, thanks, Caroto.
• 52:49
  SPEAKER_06: That gives us a great uh you know foundation.
• 52:51
  SPEAKER_06: So you've got these you know decades of solar panel installations that are approaching end of life uh in a wave wave which is uh only really just accelerating, right?
• 53:00
  SPEAKER_06: So you know what are the the macro uh demand drivers behind that solar panel recycling volumes and and how does the silver recovery story layer on top of that as a critical materials opportunity?
• 53:12
  SPEAKER_01: Great question.
• 53:13
  SPEAKER_01: I I think there's two distinct demand drivers, if I'm understanding the question correctly.
• 53:20
  SPEAKER_01: The first one is that these materials, the compositions of materials, of course, including the silver in the solar panels are hazardous.
• 53:29
  SPEAKER_01: And so there is no easy solution for dispose disposition of the end of life.
• 53:36
  SPEAKER_01: Not there's no clean solution, you know, unless you can repurpose and reuse all these materials productively.
• 53:42
  SPEAKER_01: So the first macro demand equation is an environmental service.
• 53:48
  SPEAKER_01: You know, who can truly efficiently, expediently, and expediently means scale?
• 53:54
  SPEAKER_01: You know, well, what if I could handle 100,000 panels?
• 53:57
  SPEAKER_01: It doesn't help if my if my client has 30 million panels deployed in one array and and replaces two to three million a year.
• 54:05
  SPEAKER_01: You know, you can't help them.
• 54:07
  SPEAKER_01: So so our ability to handle that volume of hazardous material is the environmental service.
• 54:16
  SPEAKER_01: And and bluntly, we get paid to do that because it's very, very expensive otherwise.
• 54:22
  SPEAKER_01: Number two is the demand for these critical, precious, and essential minerals.
• 54:30
  SPEAKER_01: You know, it's ironic because what's driving this demand is electrification for most intents and purposes, it's batteries, it's solar panels, it's robotics, it's GPUs, it's cars.
• 54:44
  SPEAKER_01: You know, so electrification is creating an incredible demand on critical minerals, certain rare earths, uh, certain precious metals that are highly conductive, of course, like silver, you know, and so the ability to A provide environmental service effectively, efficiently, expediently, and then to be able to repurpose and resell these materials into the market is really the best of both worlds for us.
• 55:13
  SPEAKER_01: We're meeting two demands head-on, almost simultaneously.
• 55:17
  SPEAKER_01: And then just recently, because the highest value comes from the metals, but the highest weight, the highest mass in the equation is the glass.
• 55:30
  SPEAKER_01: And now we're seeing a tremendous demand for clean glass for things like fiber optic networks and and and and and those types of technology-based applications.
• 55:43
  SPEAKER_01: So yeah, it's it's it's it's tremendous.
• 55:45
  SPEAKER_01: Like we we feel like we couldn't be in a better market, in a bigger and or better market position.
• 55:52
  SPEAKER_06: So let's talk a little bit about the economics and competitive advantages here.
• 55:56
  SPEAKER_06: So you know, you've got this demand picture.
• 55:58
  SPEAKER_06: Uh be great to dig into how this actually translates into a business model because it is a unique one.
• 56:04
  SPEAKER_06: Uh, as you mentioned, you're essentially delivering two critical services here and getting paid in each instance.
• 56:10
  SPEAKER_06: Uh, but could you walk us through how the model works uh and what makes it so difficult for a competitor to replicate?
• 56:17
  SPEAKER_01: Yeah, I think the the most difficult thing is the to effectively be able to eliminate all the contaminants, which means extinguish, eliminate, um, remove without any hazardous implication, meaning we don't have wastewater, we don't have industrial wastewaters, we don't have uh acids or chemicals.
• 56:40
  SPEAKER_01: So that's number one.
• 56:42
  SPEAKER_01: Number two, when when we when we deconstruct, you know, and and this this happens at the material science level, at the molecular level, when we deconstruct these polymers and these plastics, um we we deconstruct the molecule and then we thermally oxidize in a way where only really CO2 and water vapor is what's being emitted.
• 57:08
  SPEAKER_01: So some people say, oh, it's extraordinary.
• 57:10
  SPEAKER_01: It's it is extraordinary in its effectiveness, but it's just as extraordinary in its expedience, where we can literally load a panel every seven seconds, unload the process was engineered, right, such that we'd have very, very little material in the system with high speed loading and unloading.
• 57:29
  SPEAKER_01: That's what allows you to do 3.3 million panels per one production line.
• 57:34
  SPEAKER_01: You know, so it's a combination of speed and effectiveness.
• 57:38
  SPEAKER_01: Because if you are generating aluminum or or or metals that have plastics and glues attached to them, then they're gonna have other hazardous materials attached to them.
• 57:49
  SPEAKER_01: They are no longer a saleable metal, they are a hazardous waste that you've generated.
• 57:55
  SPEAKER_01: And it's a it's a double whammy, right?
• 57:57
  SPEAKER_01: Instead of selling that metal, we have to pay a hazardous waste fee to dispose of it.
• 58:02
  SPEAKER_01: So the real uh capability is zero waste generation, clean, truly clean, closed loop, reselling, reusing 100% of zero.
• 58:14
  SPEAKER_01: Like we we use the whole buffalo.
• 58:15
  SPEAKER_01: Somebody used that term the other day.
• 58:17
  SPEAKER_01: We use the whole buffalo.
• 58:18
  SPEAKER_01: Like we don't we don't let any aspect of the buffalo go to waste.
• 58:23
  SPEAKER_06: Okay, so with with yeah, sorry.
• 58:26
  SPEAKER_01: Well then they pay us, right?
• 58:27
  SPEAKER_01: We get paid, we have customers on both ends of our supply chain.
• 58:31
  SPEAKER_01: We get paid to perform a very difficult service, you know, and and and we believe that that we're most competitive in any legally compliant uh scenario, they're not paying us any more than they would somewhere else.
• 58:48
  SPEAKER_01: If if they're doing things that are non-compliant, you know, um, you know, sending hazardous waste to a landfill and calling it solid waste, if you know, shredding and sending things overseas and manifesting it the wrong way, then they're probably getting away with a cheaper uh solution, but we don't see how that's sustainable.
• 59:05
  SPEAKER_01: So our effort has been to educate the market that you're not paying us any more to handle your environmental liability better, you know, and that resonates.
• 59:14
  SPEAKER_01: When we get to the right people, when we get to the right customers, it resonates.
• 59:19
  SPEAKER_01: And we're bringing in, you know, you'd recognize them, all of the biggest utilities, you know, in the country.
• 59:25
  SPEAKER_01: Then on the flip side, um, it isn't it isn't automatic.
• 59:30
  SPEAKER_01: I mean, with with the aluminum, it's close to automatic.
• 59:33
  SPEAKER_01: We produce very, very clean aluminum, it's easily saleable at commodity prices.
• 59:38
  SPEAKER_01: But the glass and and the industrial tailings, we need to upgrade and and enhance.
• 59:45
  SPEAKER_01: You know, so we're at the point now where we've successfully upgraded, enhance the glass so that it's clean and meets the specification of some of the largest glass manufacturers in the country.
• 59:57
  SPEAKER_01: And we're working, I already engineered, but working on bench testing and pilot testing the metal recovery piece from the tailing.
• 1:00:05
  SPEAKER_01: At the end of the day, we want to be getting the maximum throughput for the maximum value of the maximum amount of metals recovered.
• 1:00:12
  SPEAKER_01: Um, so we're not quite there yet, but we're close.
• 1:00:14
  SPEAKER_01: So if you're bringing in four to five hundred dollars a ton on on tipping fees, you're getting four to five hundred dollars a ton on on off-take sales, then you're getting you know nine hundred to eight hundred to a thousand dollars a ton, you know, for this material, and it's not costing you two hundred dollars a ton to process it, you know, and so it's it's very it's very good, but we're providing two services, two different services to two different customers, and they're both very valuable.
• 1:00:46
  SPEAKER_06: So you have uh you know very convincing economics there.
• 1:00:49
  SPEAKER_06: Let's talk about uh you know scaling this business.
• 1:00:52
  SPEAKER_06: So, you know, plant one is commissioning now.
• 1:00:54
  SPEAKER_06: You've got storage sites uh coming online across the country.
• 1:00:57
  SPEAKER_06: Uh plant two permits are already submitted as I understand.
• 1:01:01
  SPEAKER_06: So could you walk us through the growth strategy and what the path to becoming a meaningful domestic industrial producer, including you know certain precious metals like silver, you know, what does that look like uh scaling up from here?
• 1:01:14
  SPEAKER_01: Yeah, no, great, great question, great question, great segue.
• 1:01:18
  SPEAKER_01: Because when we, you know, something, Peter, something uh remarkable is happening.
• 1:01:24
  SPEAKER_01: Like, like we the core of our competency, which we just described, is taking a solar panel and reusing 100% of those materials.
• 1:01:32
  SPEAKER_01: Okay, that's the core of our competency.
• 1:01:34
  SPEAKER_01: But then you start to get sophisticated with some of your customers in using the glass for other, you know, nationally critical applications, or or using some silica to reinforce some other materials in other construction industries, or you know, um uh somebody coming to us and saying, hey, wait, you're extracting metal from industrial tailings.
• 1:01:59
  SPEAKER_01: Could you extract metal from mine tailings?
• 1:02:03
  SPEAKER_01: You know, are are they similar?
• 1:02:04
  SPEAKER_01: Are they almost the same?
• 1:02:06
  SPEAKER_01: You know, and so what we're seeing evolve is really uh an industrial scale uh material, industrial materials company.
• 1:02:16
  SPEAKER_01: You know, I I almost am feeling remiss just to regulate it to solar panels, although that is the backbone, right?
• 1:02:23
  SPEAKER_01: That is the backbone.
• 1:02:25
  SPEAKER_01: We had a we had a customer major company call us the other day and said, hey, we understand you're you you can you can recycle solar panels um and and laminated glass.
• 1:02:36
  SPEAKER_01: So yeah, solar panels are essentially laminated glass.
• 1:02:39
  SPEAKER_01: Well, well, could you could you recycle windshields?
• 1:02:42
  SPEAKER_01: We're like, what?
• 1:02:44
  SPEAKER_01: You know, it's like you know, so so there's a there's an expansion of this, you know, reusable material uh supply chain.
• 1:02:52
  SPEAKER_01: And it's and every dollar of throughput matters.
• 1:02:57
  SPEAKER_01: You know, some people said to me, well, but if you you're only getting 20 bucks a ton for the glass or 25 bucks a ton or 30 bucks a ton, you know, is it that important?
• 1:03:05
  SPEAKER_01: It's important if it's 70% of the material flow, you know.
• 1:03:10
  SPEAKER_01: So so what we're seeing is an expansion of sophisticated customers on the offtake side and an expansion of sophisticated um, I want to say suppliers, right?
• 1:03:22
  SPEAKER_01: But they're really customers as well, you know, on the supply side.
• 1:03:28
  SPEAKER_01: And um and so uh the rollout is we start in northern Nevada, as you said, we're commissioning as we speak, okay.
• 1:03:36
  SPEAKER_01: So July's gonna be very fun for us.
• 1:03:38
  SPEAKER_01: Um we're we've had second facility in Vegas with permits already submitted.
• 1:03:43
  SPEAKER_01: We've identified um and permitted uh uh like a more like a transfer uh capability in California, which which were only one of I think five that are permitted to handle these types of hazardous materials.
• 1:03:58
  SPEAKER_01: We've we've got a facility up and running, and we've got some job credits and grant money in Ohio, you know, and we're very, very focused also on Texas, Florida, Georgia, North Carolina.
• 1:04:10
  SPEAKER_01: The the Southwest region of the United States, California, Arizona, Nevada, of which our two Nevada facilities perfectly situate us for, we believe represents more than 50% of the current end-of-life panels, and probably will represent more than 50% through 2030.
• 1:04:30
  SPEAKER_01: So the notion is addressing half of the market in these three states in the Southwest region with our Nevada facilities, Nevada and California facility, and then starting to address you know the rest of the country.
• 1:04:45
  SPEAKER_01: Now, ideally, you could say, hey, let us let us just focus on Nevada and California and Arizona for the first three years, and then we'll get to the rest of the country.
• 1:04:55
  SPEAKER_01: Probably initially that was an unspoken notion in the back of our mind as we're rolling out our business plan.
• 1:05:01
  SPEAKER_01: But the customers are in Indiana, they're in Ohio, they're in Pennsylvania, they're in Florida.
• 1:05:08
  SPEAKER_01: And even though they're not 50% of the market, they're not insignificant.
• 1:05:15
  SPEAKER_01: So what I think people are gonna see is an intelligent, a measured, but but an accelerated rollout, you know.
• 1:05:25
  SPEAKER_01: And when I say intelligent and measured, we don't want to deploy tens and tens of millions of dollars of production lines uh prematurely, but we do want to be site selecting, we do want to be permitting, and we do want to enable storage so we can start taking things, you know, um taking a business, getting market share, receiving panels in those localities.
• 1:05:51
  SPEAKER_01: Because when we talk about$150 or$200 a ton of processing costs, you know, that is based on.
• 1:06:00
  SPEAKER_01: An assumption that we are close to the panels, which is true in Nevada, right?
• 1:06:05
  SPEAKER_01: It's true for 50% of the market.
• 1:06:08
  SPEAKER_01: Okay.
• 1:06:08
  SPEAKER_01: But if they had to ship panels from Florida to Nevada or from Texas to Nevada, it's not$200 a ton.
• 1:06:15
  SPEAKER_01: Okay.
• 1:06:15
  SPEAKER_01: That that would that logistics is literally the singular largest cost of the network.
• 1:06:22
  SPEAKER_01: And so one interesting derivative is as we're working with these glass companies and we're moving a lot of glass, the glass manufacturers are highly sophisticated in logistics, right?
• 1:06:34
  SPEAKER_01: Their glass doesn't travel far, you know.
• 1:06:36
  SPEAKER_01: So so um so we're leveraging that know-how and that partnership and that system, if you will, right, to to enhance our logistics capabilities.
• 1:06:47
  SPEAKER_01: So the technology to eliminate the contaminants cleanly and expediently is a core competency, but ultimately the logistics of managing a national network of industrial materials, I think becomes you know, second most important capability, you know, on our on our platform.
• 1:07:08
  SPEAKER_06: Yeah, and part of the growth strategy, probably the uh final question here because we are getting close to our time, but uh, think investors would love to hear about uh you know your uh uh um uh balance sheet going forward and what your plans are for financing capital.
• 1:07:22
  SPEAKER_06: I mean, you've got uh recently some deep addition in terms of institutional capital.
• 1:07:27
  SPEAKER_06: Um you've uh you know you have you've been discussing recently your mining uh uh asset monetization, for example.
• 1:07:33
  SPEAKER_06: Um how should we be thinking about the capital structure going forward and what your financing flexibility looks like?
• 1:07:39
  SPEAKER_01: Yeah, no, that's a good concluding uh point.
• 1:07:42
  SPEAKER_01: Like so we we raised capital in la last August and then again in January with some of the top institutional, you know, uh representations across the country.
• 1:07:51
  SPEAKER_01: I mean, we went from having uh, you know, uh a single-digit institutional representation last July to now, you know, easily 70-75% of our capital base uh is a strong institution, you know, including like 35 or 40 of let's say the top 50 or or 60, that kind of that kind of penetration.
• 1:08:13
  SPEAKER_01: Fully funded the first facility it's commissioning as we speak.
• 1:08:16
  SPEAKER_01: It's gonna be running here first of July.
• 1:08:18
  SPEAKER_01: We're very excited about that.
• 1:08:20
  SPEAKER_01: Um we funded also the first phase of development for metal extraction, you know, what most people think of as refining metals.
• 1:08:29
  SPEAKER_01: We call it metal extraction, and we'd like to have by the end of this year a one ton per day pilot demonstrating we can recover silver, we can recover copper, we can recover silica, we can recover you know metals to the extent that we're still zero waste.
• 1:08:44
  SPEAKER_01: That's big.
• 1:08:45
  SPEAKER_01: That's unprecedented in our opinion.
• 1:08:47
  SPEAKER_01: Okay, so so so and then we would like to see the growth and panel flow, right, the market actually coming to us.
• 1:08:56
  SPEAKER_01: We'd like to see that right actually um um get traction and grow and grow and grow, see that grow and grow and grow, and then we'll let those market indicators trigger ordering the second production line for Vegas or ordering a third production line.
• 1:09:16
  SPEAKER_01: And I think when we do that, people will be like, yeah, that's good, good timing.
• 1:09:22
  SPEAKER_01: You know, and and I think you know, maybe to just be clear, we we previously when raising capital said we're going full speed ahead on site number two, we we we really haven't changed our philosophy of going full speed ahead, but maybe better clarify, secure the site, permit the site, get storage, receiving on the site, and that's enabled, and then do it again, then do it again, then when the capacity, when it's clear the capacity is going to be needed for processing, then timely order the next production line.
• 1:09:55
  SPEAKER_01: You know, and I and most most of the investors that hear me say that say, that's good, that's good, right?
• 1:10:00
  SPEAKER_01: You know, even even though it looks like you're the market leader, even though it looks like uh there's a tsunami of panels coming.
• 1:10:06
  SPEAKER_01: Let's not assume that you know we have all the market share until we get the market share, or you know just with just enough lead time not to miss an order, kind of a thing.
• 1:10:19
  SPEAKER_06: Well, Corrado, uh thank you so much for walking us through the uh solar recycling story in depth.
• 1:10:24
  SPEAKER_06: Um, you know, you've really got a lot of things going on here that we talked about, uh, you know, highly differentiated technology, uh a first mover platform, uh software-like unit economics, and uh, you know, critical mineral recovery angle.
• 1:10:36
  SPEAKER_06: Uh these things really all contribute to a genuinely differentiated opportunity, and we'll look forward to following Plant One's ramp uh and the broader build-out and also looking forward to you uh checking back in with us in the near future.
• 1:10:48
  SPEAKER_01: Yeah, no, we'll do that.
• 1:10:50
  SPEAKER_01: And and just maybe the last the last exclamation point on that.
• 1:10:54
  SPEAKER_01: We are monetizing, you know, you know, the mining assets, we are monetizing some of the other real estate uh related investments that we have.
• 1:11:03
  SPEAKER_01: And so even though we're funded to profitability, I think we're gonna see more funding that's non-dilutive coming into the company.
• 1:11:10
  SPEAKER_01: So it's a it's really gonna be uh a very exciting next six months.
• 1:11:16
  SPEAKER_06: Okay, fantastic.
• 1:11:17
  SPEAKER_06: Thank you very much, Corrado and Sean, uh back over to you to introduce our next guest.
• 1:11:22
  SPEAKER_05: It's my pleasure to welcome Aidan Mills, Chief Executive Officer of North Star Technologies, ticker R O F on the TSX V and R O O F on the OTCQB.
• 1:11:33
  SPEAKER_05: Aidan, great to have you with us.
• 1:11:36
  SPEAKER_05: Thanks.
• 1:11:37
  SPEAKER_07: Thanks for the invite and great to be here.
• 1:11:39
  SPEAKER_05: With this innovative technology and business model, North Star aims to generate high returns for investors by recovering and reprocessing used asphalt shingles, a very large and overlooked waste stream in North America.
• 1:11:51
  SPEAKER_05: I'll kick things off before handing it off to Peter with the first question.
• 1:11:54
  SPEAKER_05: Aiden, for investors who may not yet know North Star, can you give us a brief overview of the asphalt shingle waste problem and how your recovery process works and the revenue model that makes this business so interesting?
• 1:12:07
  SPEAKER_07: Sure.
• 1:12:08
  SPEAKER_07: Well, look, um great, as I said, to to be here.
• 1:12:10
  SPEAKER_07: Uh excellent.
• 1:12:11
  SPEAKER_07: Thank you for the thank you for the interest and and great to to be in the on the water tower research uh podcast.
• 1:12:18
  SPEAKER_07: So look, North Star has got a very basic um uh but very competitive model.
• 1:12:24
  SPEAKER_07: So we take asphalt shingle tiles, whether they are manufactured waste or whether they come off your roof when you re-roof your house, and we split them up into their individual component parts.
• 1:12:36
  SPEAKER_07: So we like unmanufacture the shingle for want of a better word.
• 1:12:41
  SPEAKER_07: And a shingle tile's got about 50% aggregate, about 25% fiberglass and limestone, um, and about 25% asphalt in it.
• 1:12:52
  SPEAKER_07: And so that's what comes out the back of our process.
• 1:12:55
  SPEAKER_07: We literally put the tile on the front end and out comes the aggregate, the fiberglass, the limestone, uh, and the asphalt.
• 1:13:04
  SPEAKER_07: And the most amazing thing about all of this, in terms of, as you kind of in your introduction, kind of an overlooked waste stream, 16.5 million tons of shingles are destined to landfill in North America every year, which is more than 20 million barrels of oil.
• 1:13:24
  SPEAKER_07: And so the industry solution probably we in in some, if you Google recycled asphalt shingle, and you'll see there are some uh jurisdictions or some states that allow you to take the tile, grind it up, and put it into paving, but that accounts for about a million to a million and a half tons a year.
• 1:13:42
  SPEAKER_07: So the balance of that of the 15 million tons is literally going into a landfill across North America, and that's the business model.
• 1:13:51
  SPEAKER_07: So our business model is to be able to roll this technology out again and again and again uh across North America.
• 1:13:59
  SPEAKER_07: I keep on saying we're going to be the dunk and donuts of asphalt shingle reprocessing, where we can literally build one of our facilities in every city that has more than uh is more than uh a million and a half people.
• 1:14:12
  SPEAKER_06: So thanks, Aiden.
• 1:14:13
  SPEAKER_06: That's a very helpful uh foundation.
• 1:14:15
  SPEAKER_06: Now let's uh zoom out to the uh the market itself and the the demand drivers.
• 1:14:19
  SPEAKER_06: So you're selling uh into roofing manufacturers, uh hot mixed asphalt producers and municipalities.
• 1:14:26
  SPEAKER_06: Um what are the macro demand drivers uh you know for your recovered outputs and how durable uh do you see those signals as you scale?
• 1:14:34
  SPEAKER_07: Well, actually, our business model is kind of split um twofold.
• 1:14:38
  SPEAKER_07: So about 35% comes from the tipping fee or the revenue that comes from the input, and 65% comes from the output.
• 1:14:45
  SPEAKER_07: And we can jump into that a little bit in more detail later.
• 1:14:49
  SPEAKER_07: Um but ultimately the two major drivers are shingles are going to landfill, and what we enable to happen is the diversion away from landfill um from the manufacturers or from the roofers.
• 1:15:02
  SPEAKER_07: So that's the kind of first principle of uh of the business.
• 1:15:06
  SPEAKER_07: And as we as and as we think about it, you know, the price for landfill is not going down.
• 1:15:11
  SPEAKER_07: So that's an underpinning about 35% of the business model.
• 1:15:15
  SPEAKER_07: For the products that come out the back end, they are all circular.
• 1:15:19
  SPEAKER_07: So the aggregate can go back into road building and the shingle manufacturers are testing that for reintroduction in the shingle tile, exactly the same with limestone.
• 1:15:28
  SPEAKER_07: Um the the the uh fiberglass is under RD with uh with concrete uh manufacturers.
• 1:15:34
  SPEAKER_07: Again, no offtake yet from Calgary for for that.
• 1:15:37
  SPEAKER_07: But the most valuable product coming out the back end is the asphalt.
• 1:15:41
  SPEAKER_07: So the asphalt can either go into road building, it can go into flat roofing, or it can go back into shingle manufacturing.
• 1:15:49
  SPEAKER_07: We're about 20% owned by Tamco, the big US shingle manufacturer, and they have done the RD that has proven it is completely circular.
• 1:15:58
  SPEAKER_07: So they can reuse that oil into high-value shingle manufacturing, and that's the real benefit of this.
• 1:16:05
  SPEAKER_07: It it's it's completely circular.
• 1:16:09
  SPEAKER_06: And so with that in mind, I'd like to dig a bit more into the economics.
• 1:16:13
  SPEAKER_06: You mentioned uh you know, about the um uh tipping fees.
• 1:16:17
  SPEAKER_06: Uh be interested to know uh a bit more about exactly how those you know tipping fees work.
• 1:16:22
  SPEAKER_06: Uh and uh and also uh I understand that there is a relationship um uh to crude oil as well for the asphalt prices.
• 1:16:29
  SPEAKER_06: It'd be great if you kind of just just yeah, broadly kind of talk through the economics and how that works.
• 1:16:34
  SPEAKER_07: Sure.
• 1:16:35
  SPEAKER_07: Um so if you think about um as you think about our business, the base facility that we would build, um, which is kind of running just day shift, would divert about 40,000 tons a year away from landfill.
• 1:16:49
  SPEAKER_07: So if you're doing your math, and so what we do is we look at um the tipping fee in the region, and of course, we want to attract roofers and manufacturers to us, so we would discount for volume, et cetera, versus versus the base, the base tipping fee.
• 1:17:04
  SPEAKER_07: The real benefit that we have though is if we can have a facility that has the ability to process 80,000 tons, so actually, rather than just run day shift, we can double the efficiency and run and run um at 24-7.
• 1:17:18
  SPEAKER_07: And that's driven solely by the size of the city and the amount of shingles that are going into landfill.
• 1:17:25
  SPEAKER_07: So as you look at our next two plants, one in Hamilton, so right close to the Greater Toronto area, and one in Baltimore is the first US facility, those both we believe have the capability in those markets to be able to process 24-7 and 80,000 tons a year away.
• 1:17:40
  SPEAKER_07: Then what we look at as so as we kind of think about citing locations.
• 1:17:45
  SPEAKER_07: So, as we say, number one is how big is the location and how can we run a 24-7 plant?
• 1:17:50
  SPEAKER_07: Second is what's the asphalt price, and the third is what's the tipping fee.
• 1:17:55
  SPEAKER_07: So there's a little bit of a matrix of a of a of when we look at a uh uh attractiveness of a location, which is based on tipping fee, asphalt price, and can we run the plant 24-7?
• 1:18:07
  SPEAKER_07: And those are the fundamental drivers for the economics.
• 1:18:10
  SPEAKER_07: Absolutely 100%.
• 1:18:12
  SPEAKER_06: Uh you mentioned a few sites that you're looking at.
• 1:18:15
  SPEAKER_06: Could you elaborate a little bit more on your uh growth strategy from here forward?
• 1:18:20
  SPEAKER_07: So, I mean, 2026 for us is all about um ensuring the Calgary facility delivers the business model that we have.
• 1:18:31
  SPEAKER_07: And so learning from the Calgary facility and then and then bringing it into the next two facilities.
• 1:18:37
  SPEAKER_07: And the next two facilities have been identified as Hamilton and Baltimore.
• 1:18:41
  SPEAKER_07: Um, but ultimately we believe we have the capability to deliver approximately three plants per year.
• 1:18:50
  SPEAKER_07: But if you look at the, you know, so here's the market size again, kind of coming back to almost the first question.
• 1:18:56
  SPEAKER_07: So if you look at the Ashfalt Roofing Manufacturing Association, so that's the association of all the major producers, you know, it's got you know Certainteed, ICO, um, Tamco, etc., all in that.
• 1:19:09
  SPEAKER_07: They came out with a strategy statement a couple of years ago where they said they wanted to divert 50% of all shingles away from landfill by 2035.
• 1:19:20
  SPEAKER_07: If that was the case, we would have to build 200 North Star plants.
• 1:19:27
  SPEAKER_07: That's how big this market size is.
• 1:19:29
  SPEAKER_07: And so our view of our current capability is we should be able to build, you know, kind of three steadily per year.
• 1:19:37
  SPEAKER_07: Um, so this year, Calgary constructed, operating, you know, nail, make sure every all the lessons are learned.
• 1:19:45
  SPEAKER_07: And then Baltimore and Hamilton built in 2027, and then three a year as we go forward after that.
• 1:19:55
  SPEAKER_06: And so when you have this uh execution, uh of course, your you know, balance sheet uh and financing is going to be very important.
• 1:20:01
  SPEAKER_06: Um, you've done significant capital work recently with the convertible debenture, uh, you know, warrant conversions and an ATM facility.
• 1:20:08
  SPEAKER_06: Uh, could you help investors understand uh you know your balance sheet picture and and how you're thinking about uh the financing strategy from here?
• 1:20:16
  SPEAKER_07: Yeah, so so the 10 million US D venture we brought in was with a with a group of international finance, you know, a very sophisticated uh group of international finance guys.
• 1:20:26
  SPEAKER_07: Um so that was good.
• 1:20:27
  SPEAKER_07: That's the bridge to bring Calgary all the way through to kind of you know the full operation demonstrating the commercial model.
• 1:20:34
  SPEAKER_07: Um so so that's good.
• 1:20:36
  SPEAKER_07: The ATM, so we'd done a lot of work.
• 1:20:39
  SPEAKER_07: We'd done um an AIF and we had done a shelf, etc.
• 1:20:42
  SPEAKER_07: So the ATM was just a tool to be able to you know use the work that we'd done already.
• 1:20:48
  SPEAKER_07: Um that's not that obviously with the 10 million US dollars, that doesn't need to be need to be used.
• 1:20:54
  SPEAKER_07: Um, and then we had uh warrants roll off um at the end of uh you know just in April.
• 1:21:01
  SPEAKER_07: And so the balance sheet cleaned up by kind of 12 million shares, which uh we which weren't executed uh uh because they were at the money at 20 cents.
• 1:21:10
  SPEAKER_07: Um so I think the balance sheet has become cleaner and there's not very there's not very many outstanding warrants on and and they're kind of like at the 35 cent level.
• 1:21:19
  SPEAKER_07: So so we see the balance sheet is cleaner now.
• 1:21:23
  SPEAKER_07: And so as we think about so well set for 2026, I guess is my message.
• 1:21:28
  SPEAKER_07: Then for 2027, you know, 25 million Canadian per plant to build can to build um Hamilton and Baltimore.
• 1:21:38
  SPEAKER_07: Um, but as you think about that 25 million, I mean we're engaging both provincial and federal support in Canada, state and federal support in the US, and debt support from for for both assets.
• 1:21:53
  SPEAKER_07: BDC have already um outlined interest in um in the facility in Hamilton and Canada.
• 1:22:00
  SPEAKER_07: EDC have already given us a letter of intent for the Baltimore facility.
• 1:22:05
  SPEAKER_07: So optimizing both the government funding and the debt funding, just like we did for Calgary.
• 1:22:10
  SPEAKER_07: So we had$7 million worth of emissions reduction, Alberta grants, and an$8 million or$8.75 million BDC loan.
• 1:22:20
  SPEAKER_07: So optimizing that is all about minimizing the equity that we need um to go forward.
• 1:22:26
  SPEAKER_07: And and we see there is no difference at all in that strategy as we do all of these facilities.
• 1:22:33
  SPEAKER_07: Because it's a standalone facility, because of the great economics, um you know the the the the debt the debt coverage is there.
• 1:22:41
  SPEAKER_07: And I should have said actually from kind of a 10,000-foot perspective, if we build a 40,000 um ton a year facility, it should kick out a revenue of about 10 million Canadian and 5 million EBITDA.
• 1:22:56
  SPEAKER_07: If we're able to run at 24-7, those numbers should double.
• 1:22:59
  SPEAKER_07: Should should be a 20 million Canadian revenue and a 10 million Canadian EBITDA.
• 1:23:04
  SPEAKER_07: And again, cost of a so of a facility round about 25 million bucks.
• 1:23:10
  SPEAKER_06: Okay, great.
• 1:23:11
  SPEAKER_06: Well, this has been a very uh you know comprehensive overview.
• 1:23:14
  SPEAKER_06: I wonder if just for uh investors um you know that are sort of looking out maybe you know 12 to 18 months from now, what are the what how would you frame the um the milestones that they should be uh focusing on?
• 1:23:26
  SPEAKER_07: Like the critical thing for any investor is like, does this facility work, right?
• 1:23:30
  SPEAKER_07: So so we've already come, you know, we came out to the market just a couple of weeks ago to say the facility's operating, and we're and we're now ramping that up.
• 1:23:38
  SPEAKER_07: And so really it's all about what are they hitting the operating targets?
• 1:23:42
  SPEAKER_07: Emissions reduction Alberta, as I said, they um so they funded us from from a Calgary governor or you know, uh Alberta government perspective.
• 1:23:52
  SPEAKER_07: And milestone four for them is the operational milestone.
• 1:23:55
  SPEAKER_07: So we had four milestones with them engineering, um uh sorry, yes, so engineering, construction, commissioning, and operation.
• 1:24:02
  SPEAKER_07: The fourth milestone is operation.
• 1:24:04
  SPEAKER_07: And so if we hit that, then investors can, which is you know, we aim to do that in the next couple of months.
• 1:24:10
  SPEAKER_07: And so investors should see, okay, now they've got external validation that you know they're they're starting to operate at uh at design rates.
• 1:24:19
  SPEAKER_07: We have a shutdown or a turnaround in October, um, or sorry, kind of October, November time, and that is the next step to get the Cal the Calgary facility to full commercial operation.
• 1:24:32
  SPEAKER_07: So that's another thing that's really important for us to deliver, really important for the uh for the investors to see.
• 1:24:39
  SPEAKER_07: And then we should have the engineering for the next two facilities completed by the end of the year, and that's kind of taking, as you said, the lessons learned from the Calgary facility into the new design.
• 1:24:50
  SPEAKER_07: And then in the middle of 2027, we should be uh we should have shovels in our hand or picks in our hand um for uh for for Hamilton and Baltimore.
• 1:25:01
  SPEAKER_07: So people should start to see you know permitting completed and construction uh commencing those facilities based again on uh uh a Calgary operating facility and the lessons learned integrated into that um for both Baltimore and Hamilton.
• 1:25:18
  SPEAKER_06: Okay, great.
• 1:25:18
  SPEAKER_06: Well, Aiden, thank you for uh walking us through the North Star story.
• 1:25:22
  SPEAKER_06: You've got a you know large underexploited waste stream, um, you know, strong economics here with a working commercial scale facility to point to and attractive macro macro uh backdrop.
• 1:25:32
  SPEAKER_06: So you know we'll look forward to following your progress into the next phases of expansion and uh hope you can check back in with us for a future event.
• 1:25:39
  SPEAKER_07: Perfect.
• 1:25:40
  SPEAKER_07: Well, thanks for uh thanks for the time and uh thank you for the invite.
• 1:25:44
  SPEAKER_06: So Aiden is our final speaker for the day.
• 1:25:46
  SPEAKER_06: So, Sean, I will pass back to you for uh closing comments.
• 1:25:51
  SPEAKER_05: Great, thanks, Peter, and that'll wrap it up for part three of our WTR Symposium series, Circular Economy, Investing in SAF, CCUS, and Ways to Value.
• 1:25:59
  SPEAKER_05: Uh, thanks to all of our great guests uh for participating today.
• 1:26:02
  SPEAKER_05: And also I'd like to thank my equity research colleague Peter Gastrike for co-hosting, and a special thanks to producer and editor of the Symposium series, my WTR colleague Krista Fitzpatrick.
• 1:26:12
  SPEAKER_05: So thank you again, everybody, for listening.
• 1:26:14
  SPEAKER_05: Don't forget to subscribe to our podcast uh and uh as well as checking out all of our great research at www.waterresearch.com, where you can read Peter's latest research on SAF, as well as accessing countless other small cap equity research reports, podcasts, fireside chats, and conference schedules from water tower research.
• 1:26:34
  SPEAKER_05: Thank you, everyone.