VGM 1H 2022 – Increased capacity potential at Follum, strong market drivers and solid project pipeline

For the first half of 2022 Vow Green Metals had an operating loss (EBITDA) of NOK 6.69 mill as expected, driven mainly by employee and other operating expenses. Net loss after financial items was NOK 6.84 mill.

Total non-current assets on 30 June 2022 was NOK 60.7 mill and consists of process equipment delivered for the Follum plant, offset by ENOVA grant drawdown. Total assets were 137.5 mill, and the cash position was NOK 76.0 mill. Total equity after retained earnings was NOK 134.3 mill and total equity and liabilities amounted to NOK 137.5 mill.

1H 2022 highlights:

Signed Letter of Intent with a global producer of non-ferrous metals with a potential of 50,000 tonnes of biocarbon production.

European projects in discussion totalling 400,000 tonnes of biocarbon.

Natural gas prices have increased dramatically in the period and Europe is facing an energy crisis. This has strengthened the markets pull for our pyrolysis gas even further as is now business critical for European Industry to have energy diversification and be more energy self-sufficient.

The CO2 emission cost (EUA) has reached an all-time high level, currently at 98 Euro/ton and is expected by analyst to increase even further going forward.

The Company continues to see a high and increasing interest for its main products: biocarbon and CO2 neutral energy driven by strong regulatory and commercial drivers.

There is a potential for increasing capacity at Vow Green Metals AS’ biocarbon factory on the Follum site. Since the Company on November 4, 2021, announced its plans to build Europe’s largest BioCarbon production plant at Follum, other companies have signaled interest to becoming part of this larger industrial complex.

Most recently in March 2022, Billerud Korsnäs, a leading provider of sustainable packaging, and Viken Skog, a large cooperative in the Norwegian forest industry announced that they have formed a joint venture, with the aim of establishing a bleached chemi-thermomechanical pulp (BCTMP) production plant at the site.

Vow Green Metals consider this to be an opportunity to at least double the production capacity of its biocarbon factory to match the potential increased demand from the Billerud Korsnäs and Viken Skog joint venture, as well as severe more customers in their efforts to decarbonise secure an energy efficient set up at the site significantly improve economy of scale.

Further discussion with potential partners, studies, and analysis of what this could mean for the exact location, layout and construction schedule for Vow Green Metals’ plant will start immediately. This could impact the overall project, and result in a more efficient plant.

“We see an increased need for energy from potential industry partners at the Follum location which could lead to a ramp up of our planned production from 10,000 tonnes to 20,000 tonnes biocarbon at the Follum plant. A potential doubling of capacity will significantly improve economy of scale at a marginally higher CAPEX cost, says Cecilie Jonassen, CEO in Vow Green Metals”.