onlyCleantech company reducing emissions and pollutants

useCapital raising to support new production facility

ersonalInvestor Presentation

29 July 2022 ASX: CG1

Company snapshot

❖ ASX listed Cleantech company producing

only

patented activated carbon products ('AC') to

eliminate toxic pollutants from industrial gas and

wastewater streams

❖

The ONLY US manufacturer of industrial AC

Pellets

use

❖

Operating in large addressable markets with

rapidly growing industrial use cases

❖ Large and sticky customer base, with a number

of 3-5 year contracts with high retention

ersonal

❖

Multiple near term value drivers provide

shareholders

with

significant

growth

opportunities

SUMMARY

Share Price ($)1

$0.15

Shares on Issue (m)

189.5

Market Cap. ($m)1

$28.4

Cash ($m) (30 June 2022)

$1.10

Debt ($m) (31 December 2021)

$5.03

Enterprise Value ($m)1

$32.33

Options/Warrants (m)

36.54

  1. As at 20 June, 2022
  2. As at 31 March, 2022

PRICE AND VOLUME CHART

(c)Price

40

1.4

(shares)Volume

35

1.2

30

1.0

25

0.8

20

0.6

15

0.4

10

0.2

5

0

28-Aug-21

28-Sep-21

28-Oct-2128-Nov-21

28-Feb-22

30-Apr-22

31-May-22

0.0

28-Jul-21

28-Dec-21

28-Jan-22

31-Mar-22

30-Jun-22

Volume

ClosePrice

BOARD OF DIRECTORS

Name

Position

Shares (m)

Matthew Driscoll

Chairman

1.58

Warren Murphy

MD

1.08

David Mazyck

Director

0.43

TOTAL

1.63%

SHARE REGISTER

Pie Funds Management

7.8%

L A Andrews Investments

4.2%

Sufian Ahmed

3.6%

Altor Capital Management

2.9%

2

Transformational investment opportunity

CG1 has signed term sheets for the establishment and financing of 50% ownership in a new state-of-the-art activated carbon plant located in eastern Kentucky, USA in collaboration with KCP, an established, well capitalised and well connected participant in the US market

only

Increases current production capacity from ~16,000 tonnes to over 25,000 tonnes (a 57% increase), with a further expansion available

thereafter. All capacities are in CG1 economic ownership terms (i.e. 50% of new capacity)

Right time in the cycle; pricing of all forms of CG1's activated carbon products are up 40% in the last six months to between US$3,200 and

use

US$3,800 per ton as evidenced through new contracts

Cost of production for incremental Kentucky volumes expected to be materially less than existing capacity due to higher quality feedstock, low-

cost renewable power source and shared services with KCP. Provides Gross Margins of approximately 55% based on initial contracts. Modest

incremental operating cost requirement for CG1, resulting in significant operating leverage

ersonal

Production Facility located adjacent to established and operational, renewable waste-to-energy facility, providing synergistic opportunities to

further improve operating costs and quality control

World class ESG credentials - Management believes that Kentucky will operate as one of the most sustainable plants of its kind in the world

CG1 emerges with a diversified manufacturing portfolio in North America with plants located in Kentucky, Minnesota and Georgia

3

with ongoing discussions for additional volume
average of US$3,725 per ton to support new production capacity,
New contracts announced for ~2,400 tons (1,200 CG1 share) at
Production expected from Kentucky facility before 30 June 2023
Due to a number of supply and demand forces, activated carbon prices have increased by ~40% in 2022. The Kentucky expansion provides scale and cost benefits, allowing CG1 to capitalise on the structural growth within activated carbon markets at attractive operating margins
o
GAC consumption of 110k-120ktons per year is set to increase by a further 25-50%tons per annum based on decarbonisation trends
New activated carbon production plant located in eastern Kentucky alongside innovative waste to energy ('WTE') provider Inez Power LLC
Significantly increases production capacity and gross margin and allows existing capacity to be repositioned to produce more specialised products
Activated carbon market continuing rapid growth as energy intensive industries commit to reducing emissions
Facilitates entry into the ~US$500m granular activated carbon ('GAC') market, dramatically increasing CG1's addressable market
The GAC market in the US is set to outpace the current market for pellets;

Kentucky project delivers significant production capacity

Indicative Revenue A$m (CG1 Share)*

❖

only❖

❖

❖

use❖

❖

ersonal❖*Current reflects 1H FY22 annualised.

80

70

60

50

50

40

25

30

20

10

18.2

0

Current

50% Capacity

100% Capacity

CG1 Share of Kentucky JV

Indicative Gross Profit A$m (CG1 share)*

80

70

60

50

40

30

20

13.8

27.5

10

6.2

0

Current

50% Capacity

100% Capacity

CG1 Share of Kentucky JV

Initial and Total calculated based on utilising additional Kentucky capacity an average activated carbon price of US$3,500 p/t, with 70c AUD: USD exchange rate, and 55% gross profit margin

4

Benefits delivered from unique plant characteristics

  • Design and engineering work underway, with first production anticipated prior to 30 June 2023

only❖

❖

use❖

ersonal❖

❖

Strategic location adjacent to Inez Power's WTE facility (refer image)

Economies of scale for the initial construction and long-term operation of the plant;

  1. Close to high quality raw material (carbon) sources
  1. Strategically located beside a modern four-lane regional highway - within one day's delivery to two thirds of the US population

Synergistic opportunities to deliver much lower costs of operation, including high- quality feedstock, shared services with KCP and access to low-cost, renewable energy source

Electricity from WTE facility to be used as an energy source, resulting in the lowest cost of production for CG1's activated carbon plant in the US;

  1. ~US$0.06 k/Wh compared to typical commercial rate of over US$0.20 k/Wh.
  1. Represents a > 10% reduction in production costs, from renewable source.

Significant volumes (2,400t) newly contracted to CG1 partners and new customers in multiple industrial sectors

5

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Carbonxt Group Ltd published this content on 29 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2022 03:43:07 UTC.