Calix Limited (CXL) Earnings Call Transcript & Summary

Calix Limited. My name is Darren Charles, and I'm the Company Secretary. Today's meeting is being held as a hybrid meeting, we have shareholders in the room here in Sydney and shareholders participating online in an audio and video format via the Lumi platform. We hope this hybrid format allows as many of our shareholders, proxy holders and guests to attend the meeting as possible. Shareholders and proxy holders who are attending online have the same ability to ask questions and vote as those attending the meeting in person. To help facilitate the business of the meeting, for each individual item of business, we will invite people in the room to ask questions before then inviting people online to ask questions via the Lumi platform. For online attendees, written questions can be submitted at any time during the meeting. You can also ask questions directly during the business of the meeting when each resolution is being considered. To ask a written question online via Lumi, select the Messaging tab at the top of the platform, type your question in the box towards the top of the page and click the arrow symbol to send. A copy of the questions you submit, along with any written responses, can be viewed by selecting My Messages. Please note, while you can submit questions from now, they will not be addressed until the relevant time in the meeting. Please also note that your questions may be amalgamated if we receive multiple questions on one topic. Finally, due to time constraints, we may run out of time to answer every single question. If this happens, we will answer these questions via e-mail or by posting responses on our website as soon as possible. To ask a question verbally using the online system, click, Request to Speak in the broadcast window. The audio questions interface will then be displayed. You'll be prompted to confirm your name and enter your question topic. Please submit these details and select Join Queue to be connected. If prompted by pop-up, select Allow to grant access to your microphone. Voting is being conducted by way of a poll on all items of business. To provide you with enough time to vote, for those joining virtually, polling on the resolutions will open as soon as the meeting commences. Equally, for those in the room, the polling cards handed to you on arrival can be completed at any time during the meeting, before the meeting closes. If you are attending online and are eligible to vote at this meeting, a new voting tab will appear as the meeting commences. Selecting this tab will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options presented. Your vote is automatically recorded, so there is no need to click submit or enter button. You are able to change your vote up until the chair declares voting closed at the end of the meeting. For those in the room, once your voting cards are complete, they will be collected by staff from Board room and tabulated with the online votes. The results of the polls will be published on the ASX platform later today. I will now hand over to Peter Turnbull, Chair of the Board of Directors for the commencements of the 2023 Calix Limited AGM.

Thank you very much, Darren, and welcome to all here in the room in Sydney and to all those attending online. It's great to have you with us. My name is Peter Turnbull, the Chair of the Board of Calix. And again, I welcome everyone to 2023 Annual General Meeting of Calix. As Darren has touched on, we continue to share with our hybrid meeting format and are pleased to have shareholders joining us both here in the room and virtually around the country. As always, our goal is to make the meeting as interactive as possible for shareholders. The Lumi platform will enable you to make comments, ask questions and vote whether you are here in person or attending virtually. I'd like to introduce the Board and management team attending the meeting here with me today. Helen Fisher, to my right, Non-Executive Director; Alison Deans next to Helen, Non-Executive Director; Phil Hodgson, Managing Director and CEO; Mark Sceats, Executive Director and Chief Scientist, good timing, Mark; and on my left, Darren Charles, our Company Secretary and Chief Financial Officer. I would also like to welcome Calix's existing auditor, Elysia Rothwell, who's here with us today, too. I'll start my address by talking a little bit about the tailwinds that are assisting Calix at the minute. As Akshat Rathi states in the opening to his book, Climate Capitalism, economically, it is now cheaper to save the world than destroy it, which is quite an interesting statement. It is estimated that if average temperatures rise by 2 degrees rather than 1.5 degrees above pre-industrial levels, the global economy could be USD 100 trillion poorer. Limiting warming to 1.5 degrees celsius requires as most of you would know, reaching 0 net emissions globally by 2050. And this is just a mammoth undertaking. This means very deep industrial carbonization is required. It means green cement, green iron and steel, stable and sustainable supplies of critical minerals, sustainable transport fuels and it means removing legacy emissions from the atmosphere directly. The past year has brought into focus the urgency with which the world must act. 2023 marked the hottest Northern Hemisphere summer in recorded history. Extreme heat, fires, storms and floods range from Hawaii and Canada to Europe, North Africa, the Middle East and Asia. What we considered some time back extremes of weather are now becoming the norm. On the investment front, our willingness to invest is apparent, despite ongoing inflationary pressures and global conflicts at the minute, more than USD 35 trillion worth of assets and now aligned with environmental, social and governance goals. This is a hard number to comprehend. To put that another way, over 1/3 of all invested assets are now ESG compliant. This capital is increasingly working in sync with government policy to drive the massive decarbonization needed across the world. That's a really important point that the investment capital is working in sync with the various government regimes and the incentive structures around the world. This year in Europe, the carbon border adjustment mechanism and Net Zero Industry Act were introduced, coupled with the European emissions trading scheme in which prices reached over EUR 100 per tonne of CO2 this year. These policies promise to provide the economic framework and supporting infrastructure required to decarbonize even the hardest to abate sectors. As many of you would know in the U.S., the inflation -- the unusually titled Inflation Reduction Act, has turbocharged climate action, a tax incentive of USD 85 per tonne of captured CO2 is reigniting interest in industrial carbon capture solutions. An incentive of USD 180 a tonne per CO2 for direct air capture, in addition to the $1.2 billion Direct Air Capture Hubs Program, have led to rapid development of new approaches to carbon dioxide removal. Here in Australia, the safeguard mechanism has introduced clear decarbonization targets and carbon prices for our biggest industrial emitters. All of this adds up to ever strengthening geopolitical and macroeconomic tailwinds for decarbonization and therefore, for Calix. If I just move to focus -- our focus and strategy. Calix's platform technology has the potential to deliver economically viable and competitive solutions to decarbonize a range of industries, including cement and lime, iron and steel, alumina, lithium and other critical minerals as well as more sustainable solutions for water, agriculture and the battery sector. When you have so many opportunities to develop new products and processes from one core platform technology, you must be disciplined with priorities and discretionary capital. Calix is both. Quite simply, we concentrate on and prioritize the applications and opportunities that we believe will create the best outcome for shareholders over an acceptable time period and with the best use of capital. Our capital-light commercialization strategy based on licensing, joint ventures and spin-outs is providing the focus, flexibility and speed to support our ambitions and potential. This model also enables us to minimize any further capital required by Calix at the consolidated level as opposed to the -- within the various subsidiary businesses being built and scaled up. Flexible funding options for each of the subsidiary businesses aim to accelerate commercialization. They enable investment in a focused and specialist team and the development of application-specific technology. A license agreement with each of our subsidiary companies will continue to deliver royalty income to Calix regardless of Calix's future shareholding in each relevant entity. Our target -- at the higher level, our target applications are guided by a number of factors, essentially by a focus on a significant global challenge consistent with our purpose; secondly, applications that have potential for significant value creation in very large addressable markets; and thirdly, by exploiting the core platform technology to sustainable competitive advantage. Ultimately, for us, it's about identifying where we can deliver the greatest environmental and shareholder impact. This year, we have continued to focus our efforts on key priority applications and our key projects within them, those being Leilac and Leilac-2. Secondly, green iron and steel and designing our ZESTY demonstration plant; and thirdly, our joint venture with Pilbara Minerals to produce sustainable lithium right here in Australia. Leilac is, of course, the first example of our capital-light licensing strategy in action. A little over 2 years ago, Carbon Direct Capital Management invested EUR 15 million for 7% stake in Leilac. Since that investment, Leilac has grown from 8 to 50 employees across 12 countries and from 21 to 76 projects around the world. It has signed global and perpetual license agreements with Heidelberg Materials and now Heirloom Carbon Technologies, with further agreements currently under negotiation with Cemex and others. Our significant progress is as a result of investing in a single focused team in Australia and around the world and they are just getting started. Turning to financial strength, where we are at the minute. Calix's strong balance sheet, revenue and margin growth are providing the platform required to pursue our commercialization opportunities. In the 2023 financial year, Calix achieved revenue of just slightly under $30 million with a gross margin of 33%, which were up 42% and 18%, respectively from the prior year. Investment in our research, development and commercialization activity was partially offset by $10.7 million in grants and tax rebates over the period. We concluded the financial year with essentially no debt and $74.5 million cash on hand and a clear prioritization of high-growth projects. The balance sheet strength that we currently enjoy enables us to grow and to support the enhanced capability needed to deliver our current project commitments. Looking at the 2023 financial year as a whole. Following our formal agenda items for the meeting today, we'll turn to Phil Hodgson, who will update us in quite some more detail about our priorities for the year and the 2024 year ahead. At this stage, I'd like to provide a brief update on our activity during 2023. Starting with Leilac as mentioned earlier, Calix CO2-mitigation business, Leilac has undergone significant growth in the depth and breadth of the team to support our continuing efforts to scale and deploy this technology around the world. The growth is also reflective of the increasing demand for decarbonization solutions, particularly from the cement and lime industry, driven by particular regulatory incentives in Europe and the U.S., which I touched on earlier. The Leilac 2 project remains the primary focus for Leilac. Following a value engineering phase, a lighter and simplified modular unit has now been designed and approved that can be replicated and scaled to a cement plant of any size. The procurement of long lead items for Leilac 2 is underway and the commencement of civil works, which was delayed about 3 months due to permitting issues, has now commenced. Commissioning and testing is expected to start in March 2025. Key commercialization milestones for Leilac included a global license agreement with Heidelberg Materials as I mentioned and most recently, another global license agreement with direct air capture company, Heirloom. The partnership with Heirloom aims to integrate Calix's -- integrate Leilac's electric kiln technology for lime carbonization into Heirloom's lime-based direct air capture process for the removal of atmospheric CO2. Leilac's goal is to capture 1 billion tonnes of CO2 from the atmosphere by 2035 and they have achieved significant momentum towards that goal and quite some success to date. Since signing the MOU in February 2023, Leilac and Heirloom have conducted successful research, development and engineering programs that are now informing the design of the new commercial direct air capture facilities. Projects with Heirloom will also accelerate the scale-up and the electrification of the core technology for other applications, which will include cement, iron and steel, lithium and other critical minerals. The second priority I touched on earlier is ZESTY, the zero emission steel technology. Australia supplies over half the world's iron ore, contributing over $150 billion to our national export earnings. All of these exports are in the form of hematite, an ore type that is not currently compatible with other H-DRI technologies being developed. With iron and steel contributing around 7% of global emissions, enabling the decarbonization of iron ore processing across a range of ore types is imperative for global climate and development goals and also a national importance here. With the support of the Australian Government's Australian Renewable Energy Agency, which you probably know as ARENA, we have progressed testing and the design work for a renewably powered, direct hydrogen reduced iron or H-DRI demonstration plant. Initial pilot scale testing showed excellent mineralization of a range of iron ore types with ZESTY. Importantly, as I said this includes the hematite ores from the Pilbara region. A front-end engineering and design study for 30,000 tonne per annum plant for those ZESTY iron plant, as well as a significantly expanded ore testing program is expected to be completed by the end of the calendar year. Turning to lithium. As you probably know, in November 2022, we executed a joint venture with Pilbara Minerals to develop a novel midstream lithium processing technology to provide low carbon, low waste and high-value lithium salt. The joint venture has made significant progress, culminating in the proposed midstream demonstration plant passing its FID decision point in August this year. The demonstration plant is designed to produce around 27,000 tonnes per year of spodumene concentrate fines to produce over 3,000 tonnes a year of lithium phosphate. This process could increase lithium concentration in the product from around 5% to 6% to 35%, and its aim is to reduce waste from 94% to 0%. And I hope it will also reduce emissions by 80% to 90% relative to conventional processing as is done today in rotary kilns. The process also aims to demonstrate the expected lower capital and operating costs of electric calcining, as well as the potential to rationalize supply chains by processing minerals at the mine site itself. This is $105 million project, which is supported by $20 million grant from the Australian government, $67.4 million from Pilbara Minerals, with Calix contributing $17.6 million and receiving a 24% carried equity interest as recognition of the contribution of our core technology. Successful demonstration of the midstream process is intended to provide a pathway to its commercialization for the global spodumene processing industry. Turning to magnesia. As some of you would know, this year, we combined the water and biotech businesses into a single new magnesia line of business. This was designed to increase the scale and reach of Calix's magnesium-based products. The Magnesia business will focus on delivering revenue growth for the group through increased sales of water treatment products in the U.S. and Asia. In addition, it will develop and commercialize applications for agriculture, marine and antimicrobial resistance, as well as develop sustainable processing of magnesium metal. In the U.S., new water product development helped to secure a new business within existing hydration plant regions in the Pacific Northwest and upper Northwest of the United States. Revenue growth in our U.S. business was 14.2%, coupled with strong margins, which led to a gross profit increase of 28.6%. Revenue growth accelerated during the year, with growth in the second half of financial year 2023, up 28% compared with the same period in financial year 2022. Significant progress was also made in building the 2 new hydration plants in Ripon, Wisconsin and Lufkin, Texas; with the Lufkin plant now online and the Ripon facility expected to commence operations by the end of this year. We believe that these 2 new plants will support a significant growth in this line of business in the region. Turning to research and development. In collaboration with our network of research centers and industry partners, Calix continues to develop -- and explore and develop further applications of its core platform technology. Our high surface area magnesium oxide materials with enhanced bioactivity, offer multiple safe and sustainable environmental and health solutions. Trials continue for novel applications in agriculture, marine coatings and antimicrobial resistance. In relation to batteries, commercial type -- commercial prototype level, lithium manganese oxide battery cells, targeted at high-power applications have been successfully produced. Calix also expanded its battery production capability to new chemistries favored by the electric vehicle segment of the battery market demonstrating potentially renewably powered and low-cost chemistry agnostic platform technology to produce cathode materials. Turning now to sustainability. Calix endeavors to help solve critical global environmental challenges, but we're also making progress towards greater sustainability in our own operations. We're not exempt from making the changes that everyone around the world is also trying to make. We have again reaffirmed our commitment to the United Nations Global Impact, the world's largest sustainability initiative, of which we have been a participant since 2020. We've also completed our inaugural greenhouse gas assessment, which has provided an accurate and transparent foundation on which Calix is developing an emissions reduction road map for our own operations and supply chain in financial year 2024. Complemented by various initiatives to foster health, well-being, diversity and inclusion, the safety and well-being of our employees continues to be our primary operational focus. Each and every injury, incident, investigation outcome and near miss is reported to the Board, demonstrating a strong safety reporting culture as we, of course, work to prevent reoccurrence and improve safety in general. We continue to foster forward-looking preventative culture and very much seek to learn from any incidents and safety-related events that do occur. It's an environment of continuous improvement. Turning to people and culture. Calix has a dynamic workforce now spread across many countries and we obviously understand that our people drive our performance. We foster a culture of innovation and diversity of thinking. We also seek to provide ongoing personal and career development opportunities, as well as a framework of close communication and listening to and with our workforce. Our recent culture survey conducted by external and independent consultants showed strong engagement from a very passionate and caring team, as well as identifying areas where we can enhance our employee experience and the way in which we work and collaborate with each other. As we continue to grow, we will remain focused on building a collaborative diverse and supportive culture across the whole team around the world, and that's one of the highest priorities for field at this stage. Turning to governance. In the 2023 financial year, the Board established a new sustainability committee. In addition to updating the Board charter and code of conduct, we also replaced the Remuneration and Nominations Committee with a new People and Culture Committee in Charter and updated charters for the Audit and Risk Management Committee and Technology Committee. Over the last few years, the Board has also continued to maintain a very proactive approach to Board succession and renewal. Our goal, of course, is to ensure the size and composition of the Board is appropriate to support the continued delivery of Calix's growth strategies as well as being positioned to meet prevailing best practice governance standards. As part of this process, in February 2023, we're very pleased to announce the appointment of Alison Deans as a Non-Executive Director, and the retirement of Non-Executive Director, Dr. Jack Hamilton, from the Calix Board of Directors. Alison's appointment in addition to further renewal planned, has strengthened the collective skills and the overall experience of the Calix Board. On behalf of the Board of Directors and the whole Calix team, I would like to express my sincere gratitude to Jack Hamilton, who is with us here today, for his substantial and valuable contribution to Calix over many years. His commitment and wise counsel have provided considerable benefit to the group, again, over an extended period, and we wish Jack you all the very best for the future. Our process of board renewal and succession continues, and I'm pleased to announce the proposed appointment today of Dr. Sarah Ryan, who was with us online today. Dr. Ryan will join the Board on 1 January next year. Dr. Ryan will bring to Calix's extensive global experience from across the energy, mining and investment sectors including a deep understanding of heavy industry, complex project management, technology commercialization and company scale-up processes. Dr. Ryan's deep technical experience and breadth of executive and board experience includes helping to build organizations across a range of sectors, including energy, natural resources and infrastructure with a particular emphasis on innovation and technology-enabled solutions. Dr. Ryan is currently a Non-Executive Director of Viva Energy Group, Aurizon Holdings Limited, Transurban Group and the Future Batteries Industries Cooperative Research Centre. And until recently, Dr. Ryan was a Non-Executive Director of Oz Minerals and Woodside Energy. Dr. Ryan holds a Bachelor of Science in Geology from the University of Melbourne, a Bachelor of Science First Class Honours in geophysics from the University of Adelaide and a PhD in Petroleum Geology and Geophysics from the University of Adelaide, and is also a fellow of the Academy of Technological Sciences and Engineering. I would also like to let you know that this will be my last Calix AGM as I propose to retire from the Board in the first half of calendar year 2024. It has been both an honor and a privilege to serve Calix over the years and to work with such a great team of people here in Australia and around the world. And I have absolutely no doubt that the period ahead is going to be very exciting for Calix. After my retirement, the Calix Board will be in excellent hands with Alison Dean set to take over the role of Chair. Alison's company building, commercial, governance and technology-related skills are very well matched to Calix's current and future needs. And I know the Board will be very well positioned in the future to work with the whole team to meet our strategic goals in a risk-managed and well-governed way. So on behalf of the Board of Directors, I would like to conclude, [ Malroy ] I'll come back to that at the end, actually, Darren, I think we'll commence the formal resolution process at this stage. Is there anything you need to say any reminders about voting?

No, I think we're okay.

Okay. So in terms of where we are with proxy -- the proxy situation overall. I can advise that we've had 182 valid proxy forms, which we received by the relevant cutoff date, totaling 74.8 million shares being equal to about 41.3% of the shares on issue. There were no invalid proxy forms received nor were there any proxies lodged by security holders with a nil balance. As has been in our structure in the past, each resolution will be determined on a poll. So the first item of business is the financial report. This is to consider the financial report and the reports of the directors and auditors for the year ended 30 June 2023. There is no vote as such on this item and I note that Calix did not receive any questions prior to this meeting on the accounts for the auditors or management but that doesn't preclude any questions, obviously being raised today. So on that note, are there any questions in the room first up, before we turn to online questions. Nothing in the room? Anything online, Darren?

There are no questions online, Peter.

Okay. Well, as I mentioned, there's no vote on the report. So they are essentially just tabled for the meeting. The first of the substantive resolutions we can move to Resolution 1 now, which was the normal remuneration report, which is to consider and if thought fit to pass the following resolution as an ordinary resolution, that the remuneration report of the company for the financial year ended 30 June 2023, which forms part of the Director's report be adopted. As most of you would know, this is an advisory resolution and doesn't bind the company as such. But if you get a significant vote against the remuneration report, there is always something to take notice of.

What is exclusion rate?

So there are certain shareholders who are unable to vote on that resolution, namely the Board of Directors.

[indiscernible] exclusion of the board?

They can't vote. Yes. Just actually coming there, each director has a personal interest in their own remuneration as described in the rem report, and the Board unanimously recommends adoption of the remuneration report. But when we interested persons vote, the share registry takes our votes out of a report where we must be excluded by this one.

Understood [indiscernible].

I should just note as Chair of the meeting, I intend to vote some proxies come in undirected and I intend to vote those proxies in favor of the resolution. And as we mentioned, this voting, this particular resolution is subject to the exclusions we just talked about. The proxy votes, I think, are up on the screen, Darren, for this particular resolution. So can I just turn to the room and ask if there's any particular questions or comments on the remuneration report?

It's not specifically on the remuneration report. But to say that people are doing [indiscernible] in future, could you include the percentages, or I guess...

Yes, good idea. Yes. We will do that. Sure. Any other questions in the room? Otherwise, we'll turn to the online cohort.

There are no online questions, Peter.

Okay. Well, can I ask you now to vote, as Darren described earlier on the poll. [Voting]

We'll turn to Resolution 2. This is the reelection of Helen Fisher, who's been with us for a number of years and comes up under the constitution for reelection. The precise resolution is to consider and if thought fit to pass the following resolution as an ordinary resolution. That, Helen Fisher, who retires under the company's constitution and being eligible offers herself for reelection that she be reelected as a director. The Board is unanimously behind this recommendation. And again, as Chair of the meeting, I intend to vote any undirected proxies in favor of the resolution. So let's just check if there's any questions on this resolution from here in the room in Sydney. No?

There are no questions online, but...

Yes. I'll just turn to Helen now to -- you might like to say a few words about your reelection.

Thanks, Peter. So to the Chair and my fellow directors and shareholders, ladies and gentlemen, good morning. I appreciate the opportunity to talk to you at this Annual General Meeting. It has been my pleasure and privilege to serve you over the 3 years that I've been a Non-Executive Director with Calix. And during this time, I also have been the Chair of the Audit and Risk Management Committee. And obviously as Peter said, being eligible I stand for reelection. Calix is a company that can change lives. It has the potential for exceptional global environmental impact and value creation, both for shareholders and society more broadly. I'm deeply passionate about what Calix does and the positive impact, its unique platform technology and purpose-driven team can have in solving global environmental challenges. I'm confident that my strong financial, taxation and strategy skills and professional services and investment experience can continue to support Calix in achieving its full potential. Building up on my undergraduate degrees in Science and Law, and Master's degrees in Law and Commerce. I spent 11 years as a partner at Deloitte and for more than 5 years, led Deloitte Australia's National Life Sciences practice. Since leaving Deloitte, I have founded a Global Life Sciences Fund called Bio Capital Impact Fund, investing in what matters for life, where I'm the CEO and Managing Director. In this role, I have built extensive global networks in the industry and develop strategic partnerships with various industry players. I'm also an experienced non-executive director in listed companies. I serve, in addition to Calix, I serve as a Chair of the Audit and Risk Management Committee and a Non-Executive Director for Paradigm Biopharmaceuticals Limited, an ASX-listed late-stage clinical company developing an osteoarthritis drug. I have previously served in similar roles at Sienna Cancer Diagnostics and Bio Life Sciences Limited. In my role as a Non-Executive Director, I have been involved in numerous acquisitions, licensing transactions, various capital raisings and one, an on-market merger of 2 publicly listed companies. If reelected today, I will continue to use all my skills and experience to contribute to Calix's ongoing success. I will continue to chair the Audit and Risk Management Committee effectively to safeguard shareholder value and the financial performance of Calix. Ultimately, I will work to help ensure Calix achieves its full purpose and mission because as we know, Mars is for quitters. Thank you.

Very good. Can I ask everyone to then just move to vote on this particular resolution, please, in the way that's been described earlier. [Voting]

Thank you, Helen. All right. Well, let's move to Resolution 3, which is the election of Alison Deans, who joined us, as I mentioned earlier, earlier in 2023. The resolution itself is to consider and if thought fit, to pass the following resolution as an ordinary resolution. That Alison Deans, who retires after having been appointed by the directors as a director to fill a casual vacancy under clause 13.10 of the company's constitution and being eligible stands for reelection that she be reelected as a Director of the company. Again, the Board unanimously recommends this resolution to shareholders and as Chair of the meeting, I again intend to vote undirected proxies in favor of the resolution. So before turning to Alison, are there any questions within the room here, on this resolution? No?

There are no questions online, Peter.

May I turn to you, Alison, if you wouldn't mind to say a few words, please.

Thank you, Peter. Ladies and gentlemen, good morning, and thank you for the opportunity to talk with you today. It would be a privilege to serve you, the shareholders of Calix as a Board member. As you all know and as Peter has so well described this morning, Calix is an exceptional company with a rare opportunity to contribute to one of the most important challenges of our time, decarbonizing the planet. Calix technology has the potential to be competitive across several industries and leverages a smart capital-light business model. And it's this opportunity and mission that has attracted a highly skilled, motivated and aligned team. These 3 themes of purpose, technology and people have been the thread through my career, which is focused on helping to build high-growth companies that are tech-enabled, people driven and fueled by an alignment of purpose and shareholder value. I spent 30 years in high-growth tech organizations as a consultant with McKinsey & Company, as a CEO of eBay Australia and as a Board member and adviser to many tech companies, and as the CEO of 2 venture capital funds. I'm currently the Chair of Cochlear and a Director of Ramsay Healthcare and Deputy. I'm also a venture partner with Main Sequence Venture, which invest in deep tech companies where founders are using technology to address major global challenges, such as feeding 6 billion people, humanity scale healthcare and, of course, decarbonizing the planet. If elected today, I'd endeavor to use my experience from all these environments to deliver long-term value to shareholders and also to society. I look forward to serving the company and helping to realize the potential of Calix. Thank you for your time today.

Excellent. Thank you, Alison. If there's no more questions, can I just ask you to vote in the normal manner on Resolution 3, please? [Voting]

We'll turn then to Resolution 4, which is the appointment of a new auditor. A bit worthy this one to consider and if thought fit to pass the following resolution as an ordinary resolution that in accordance with Section 327B of the Corporations Act and for all other purposes, KPMG having been nominated by a shareholder and consented in writing to act as the auditor of the company, be appointed as auditor of the company in accordance with the Corporations Act with effect from the later of A, the conclusion of the AGM or B, the day on which ASIC gives its consent to the resignation of the current auditor of the company and the Board be authorized to agree to KPMG's remuneration in connection with the appointment. Again, the Board is unanimously supporting this recommendation. And again, undirected proxies will be voted in favor of the resolution. So may I check again at this stage, whether there's any questions here in Sydney on the proposed change of auditor. No?

There are no questions online, Peter.

Again, at this point, can I ask you to formally vote on Resolution 4, which relates to a change of audit service provider. [Voting]

I do just want to -- at this point, BDO has been our audit firm for a long, long time. We went through a full external independent tender to get to this point that's taken us to a change of auditor. But I do want to just publicly thank BDO. It's been a tremendous and valuable relationship over a long period which is now going to change, but I'm sure we will keep in touch with BDO in many senses, and we very much look forward to working with a new audit firm, KPMG. Anything I've missed, Darren? I'll just check it this is...

Just a question [indiscernible]?

Look a range of issues, I guess, time has played a role. It's been a long, long time.

2011. Yes.

12, 12 years. It's healthy to have a change over time. We have had a change within that of various audit partners. But it's the same firm. And I think our needs have changed a little bit. So there's a number of factors that sort of led to us. Not that it was an easy decision. BDO were on the -- we had a small final list of 3 or 4 firms and it was quite a close-run thing at the end of the day. So -- but we, as a Board determined that it was a good time for us to make a change. Anything I missed, Darren? Okay. Just check once again. Any other questions from here in the room in Sydney? Or online?

There's no question online, Peter.

Okay. All right. Can I just make a few concluding remarks. On behalf of the Board of Directors, I would like to conclude by thanking all of Calix's customers and partners for their continued commitment and collaboration as we work together to help solve global challenges. I would also like to thank my Board and senior management colleagues, Helen Fisher, Alison Deans, Phil Hodgson, Mark Sceats and Darren Charles for their dedication to the goals, which Calix has set for itself. Our ambitions are considerable, as you know, driven by the potential we see in the core platform technology and the scale and urgency of the problems we hope to address. We continue to prioritize our efforts on the key applications that we believe will deliver the greatest impact and put Calix on a path to realizing its full potential. Our rapid progress over the past few years is a result of our talented and purpose-driven team and the Board sincerely thanks all of Calix's employees and our contractors and consultants for their tireless efforts. Finally, on behalf of the Calix Board management team and all the staff, we would like to thank each and every one of our Calix shareholders who are ongoing and very much valued support. Thank you. Now I'll turn to Phil to give us what's going to be, I think, quite an interesting rundown on where we're headed to into financial year 2024.

Excellent. Thank you very much, Peter, and before I launching it all, of course, I am not standing. What I've learned from Peter, he challenges me, he supports me when needed. And it's been really a very fruitful relationship with I think our first capital raise we were $7 million valuation pre-money -- and so the journey we've taken in the last 10 years has been outstanding.

A lot of tougher issues in 2013 too...

We've had some very interesting issues. And so I've really valued, Peter our relationship and we wish you all the very best on behalf of the Board. I know I've got a few months to work with you. So I'm kidding, it is all nice. I'm not saying anymore.

Anything can happen in the next little while.

Absolutely. And of course, Alison, looking forward to working with you from January 1st in your new role. And I'm sure it's going to be every bit is entertaining. Every bit is fun. Every bit is challenging and every bit as successful as the time I've enjoyed with Peter.

I should just say to you, Philip, was remiss of me. I think the proxy votes are reasonably clear. So congratulations. Well done.

Do you want to have the cards for later, [indiscernible], I think we'll collect them at the end.

Excellent. Okay. Well, welcome, everyone, a formal part of the meeting over. So I'll take you through a little bit about what's in my head about the business. What we've achieved, Peter has covered off really well. But looking forward and where do I see the opportunities, what we've done to date so far this year. It's a very fast-moving world, and we're a very fast-moving company. And so in that, I very much welcome questions. I'll try -- I'll repeat them as the microphone needs to pick up for those online. I want this to be an interactive session. So as things arise yes, put your hand up, ask a question. I'll jump through the -- well, you've all read that, I'm sure. And Peter has covered about Calix. I mean it's quite a remarkable journey, as we've said before, founded 2005, one of the co-founders here with us today, our Chief Scientist, Mark Sceats. It's an even longer journey for you, Mark, than it has been for me, but quite a remarkable journey. A lot of the cleverest, a lot of the inventiveness, the patents, the intellectual property, all coming from that man over there. And the team we're building around Mark, highly impressive. And as shareholders, if you ever get a chance to go down the Bacchus Marsh, just 40 minutes out of Melbourne, let us know. We'll take you to meet some of the people who are doing this amazing work. But Mark, a lot of this before, Peter or my time even, sprung out of your head and continues to. So very -- it's excellent to have you here as well. Okay. So some of you may be wondering, I know a lot of you have been with the journey for us for a little while at Calix, but some of you may be new shareholders. And what is this technology? That this Australian homegrown technology that we're taking to the world that could address global challenges. There's a lovely diagram there in the sort of industrial sort of picture and all that sort of stuff. But in the end, it all comes down to how I explain the technology with my toilet roll. I'm just back from overseas. I was 9-weeks overseas. So this has got a bit crushed, but I'll sort of move it out of it. So this -- the core technology is a new way to heat stuff up. And how I usually describe it as a tube. We do make them bigger than this. The biggest one we've made is 1.8 meters in diameter, over 30 meters high. So quite a significant scale. And we heat this tube to over 1,000 degrees centigrade. And so it's glowing red hot. And whatever we're heating goes down the tube. It needs to be a small particle size like dust or flour. And so when you drop that -- it just floats down through the tube. And it's the red hot walls of the tube radiating heat into those particles that does the heating up. So as opposed to a normal kiln, when you shut your rocks and your fuel, you light a match and the Roman's been doing it since 10,000 BC. We don't heat directly. We heat indirectly. Why do it this way? So here's where my second prop comes in. This is my traveling rock. I usually have a bigger one because it's more impressive, but this is a lump of limestone. About half the weight of this is CO2, trapped in the rock. So if you can remember your chemistry days, limestone is calcium carbonate. So the carbonate bed, when you heat up the limestone, that ejects CO2. And so the cement and lime industries need this to make cemented lime. And what they do is they heat this up and release that CO2 and you're left with what's called calcium oxide, which is lime. And that's the basis of cement clinker. And the cement lime industries are responsible for 8% of global CO2 emissions and over half of those emissions is coming from this. So whatever they do to have electric kilns, use renewable energy, et cetera. They've still got over half their emissions coming from this. And so if you think about our technology, which is just a different type of kiln, then as this is descending down our tube in small particle form floating down and being heated up. Those little particles are releasing CO2. But in our kiln that's not released to the atmosphere. It's not mixed with other furnace gases, it's trapped inside the tube, makes its way out the top as a pretty pure stream. And so the core technology there represents a way for just a different way to heat stuff up that can directly separate the CO2 coming out of this. The other thing about our core technologies, we don't mind how we heat this tube. We can heat it with fossil fuels. We get heat it with waste. We can heat with biomass. We can hit it with electrons. So imagine your toaster in the morning when you're cooking your toast, imagine having sort of elements around the outside of the tube, heating the tube. So not only can we capture the CO2 that is coming out of this, this kiln is ready to be electrified, okay? Ready for renewable energy. So that's cemented lime. I don't carry 3 rocks in my pocket. My second rock, imagine this is brown, iron ore. With iron ore, what you're doing with iron ore is trying to make iron and ultimately steel, iron ore is rust. Iron oxide. And what you do in a blast furnace is basically you're burning that iron ore with carbon, not only to make heat, but the carbon sucks the oxygen off the iron ore to make iron, okay? And that's how 80% of the world's steel is made today. So imagine this is iron ore. Imagine this is iron ore fines, millions of tonnes of those produced every year. And what I mean by fines, small particles, our kiln have small particles. Currently, that stuff is waste. It's too small to go in a conventional blast furnace, too small to be economic to penalties. And so with iron ore fines waste, if you put that down at tube and up the tube, you put hydrogen. And if you made the hydrogen from renewable electrons that's called green hydrogen. And that green hydrogen loves oxygen. It will suck the oxygen off the iron ore to make iron. And so here's a way to use hydrogen to turn iron ore into iron. And when we talk -- think about some of the stats that Peter talked about in his speech, not only are we producing half the world's iron ore here in Australia, but we're just shipping it offshore as it is. 44% of our export earnings is iron ore. 96% of those are unsuitable to go into what's called electric arc furnaces. So the ability to renewably make iron and steel for -- in terms of its impact upon Australian ore is profound. We are at risk of losing half our income as a country. Very important stuff. My last rock, I mentioned this is sort of a greeny blue. I always -- there's about 5 rocks -- I can talk about the 3 at the top of the speech. Greeny blue, spodumene. Over half the world's lithium currently comes from spodumene. So all the electric vehicles being produced, et cetera, over half those lithium mines are coming from Australia, from a rock called spodumene, which is the sort of green -- the greeny blue, a bit higher in lithium. And so spodumene is currently mined and shipped offshore. There's a bit of concentration. But as Peter said in his speech, 6% is lithium oxide, in what's shipped offshore and the rest is waste. 94% of what we ship offshore is waste. And so that is just -- makes it hard to handle, of course, the end customer. And of course, all the carbon used to move that stuff around as well is difficult. And not only that, what does it do at the other end, it goes into a kiln. And some of the fine stuff gets blown out, some of the fine stuff gets melted and you can't get lithium out of it. So there's even more waste. So with our kilns, we love small particles. A lot of these small particles are produced in concentrating up the lithium or the spodumene that's shipped overseas. That particle is a perfect size for our kiln. Not only that, if we can locate this skill at the mine site and power with renewable energy, then all of that other waste, if you're producing, putting the [indiscernible], extracting the lithium salt on a mine site, all that other waste if you would have shipped offshore can be used at the mine site for rehabilitation. So you're not moving stuff away from the mines out where you've just mined it. So again, when we look at the statistics that Peter talked about before, about how much savings this could make in terms of carbon and also waste, dealing with waste, and also adding value here in Australia using renewable energy. It sort of makes sense. And that's the project we're developing with Pilbara Minerals. So -- that's the core technology -- there's 3 applications. I put my little tube down there and move through. Any questions on the core tech? I always want to make people -- yes?

Yes. Just question on the ZESTY, you're only at the moment focus on taking fines and we are not actually having discussions around the [indiscernible] ?

Yes. So the question concerned, ZESTY, we're targeting the iron ore fines. And yes, we're not necessarily targeting, let me say, targeting, taking what is normally exported as lump and crushing it down further. Why? There's already millions of tonnes of fines to do with. It is at sufficient value in Australia. And of course, as there's pressures coming on to Australia to make green iron here, there's no issue with adding a crushing circuit at the front end to take lump and convert it to fines eventually. But the market is already very substantial just waste fines at the moment there. Okay. Just in terms of our achievements in '23, again, Peter covered these off. I'll pick one little eye out of this one, just to emphasize how important it was the license agreement with Heidelberg in November. The business model we talked about, where Calix remains capital-light and generates income from licenses and royalty fees, and as these businesses that we're developing mature and start to commercialize and also start to go past a significant value inflection point. We'll look and see whether it's worth spinning these businesses out. We've done that already with a lot of group, and we will earn 30% of the license revenue of that group regardless of how much we own of it. So we could sell that down even more. But the key thing is we continue to earn 30% of the license fees that group generates. Now the question always came to us, is a licensed business model going to work in the cement industry, which has never paid a license fee? All of the equipment in a cement plant today is paid for as equipment. And so what was important about that deal that we did is it proved for the first time with a cement major that we can put a license agreement in place that underpins this business model that we've been trying to achieve. And of course, since this announcement in November. Last year, we recently announced another license agreement. And that was for a different application that was for -- still the Leilac piece, but for direct air capture. But again, that's a license arrangement that is underpinning the business model that we've been talking about for some time. So very, very important deal for us that was completed then. And of course, the Pilbara Minerals still progressing past final investment decision in August. So just past FY '23 was a critical move for us. We formalized that joint venture during FY '23, and then move past the final investment decision for that facility to move ahead in August this year. So we talked about the financial position. We've got a very strong balance sheet. Raised capital in November last year to really take us through to completion of the Pilbara Minerals project and the commencement of pretty transformative revenues that ultimately come for that project as it ramps up. So if I concentrate the rest of this talk on what we're doing here, where we're focusing on decarbonization because that is really, I guess, the theme of the day. And there's a lot of things we're doing in a few different areas. We talked about a little bit about batteries and biotech before. And there was -- in a sense, their decarbonization activities as well low-energy routes and much more environmentally friendly routes for production of some pretty interesting materials. But what's really, I guess, driving the inbound into our business and when I mean inbound, it's not just casual interest or I mean, corporates contacting us to find out how they can decarbonize their businesses -- that is really governing the activity in the company today. It's really governing most of the activity. So what are we focusing on? We talked a bit about cemented lime, key activities, as Peter mentioned, site works have commenced on our Leilac facility, Leilac 2 facility, I should say, 4 of these. So the original Leilac facility was one of these 25,000 tonne per annum capacity CO2 separation for 1 tube is what our sort of nameplate is. And by the way, the Leilac 1 facility, which we completed in 2019 is still the largest CO2 separation facility on a cement plant outside of China. And the one in China is using a chemical system, which is quite energy inefficient and that's about 50,000 tonnes. So we're about 25,000 tonnes, still the latest one today outside of China on a cement plant. So we're going to 4 of those in the Leilac 2 facility. And as we said, site works have commenced. We had a bit of a delay of 3 months while some bats needed to be moved out of a rather large concrete tower that needed to be demolished to make way for our tower. I don't think anyone saw the bats. They just saw some well, remains of where bats had been. I won't say this is -- and so under the German permitting system, we couldn't touch that building until late September. So that building is now being demolished. So anyway, well underway, which is great, long lead items procured. And so really great to see that underway. The Leilac 1 tower, once we got access to site to build the Leilac 1, we erected in 14 months. So the race is on. We want to get this done as quick as possible. And at last, we're creating the space to get that work underway. Green iron ore steel. Interesting here, we wanted at this stage to have finished our second campaign on different iron ores. We've decided to expand that campaign. So we're going to run that through to the end of this year -- calendar year because of the inbound, we've got quite a few more ores that we are testing now from just about every major iron ore producer in Australia. And so we're not going to be publishing interim results because the iron ore producers are very sensitive about their ore providence. So we're going to publish it all together in the one with obviously, or A, B, C, D, F, et cetera. So no one can tell who is what, but each will get their own individual results. But that program is going to run to the end of the year. So I'm really looking forward to talking about that at our half year results presentation, which usually is towards the end of February. But suffice to say, I am very pleased with the progress being made on that iron ore testing. So that's what I'll say on that. Critical minerals, as we said, oh, question, yes?

Just on the subject [indiscernible] ?

Yes. So we're still continuing to work with Adelaide Brighton on -- there's a couple of projects that could be prospective there, no doubt. You're aware that November last year, the government canceled the CCUS program or the Carbon Catcher Utilization Storages Program with funding for those particular projects. The government did, however, announce a new series of funding rounds. And so -- and it's not just carbon capture, the technology and the work with Adbri fits into several different categories. We're still waiting for full details of what those funding rounds are going to look like. So watch this space. So the work with Adbri does continue, albeit slowly. And I'll talk a little bit about green methanol project in South Australia that could be prospective for the lime calcination with Adbri. Okay. And lastly, direct air capture. I'll talk a little bit about direct air capture as well, which is another lime application, by the way, and I'll explain a little bit how that works. So just in terms of moving through the presentation, as I say, the decarbonization bit is the bit consuming 80%, 90% of the activity in the company based upon inbounds. It's based upon what were questions we're being asked, interest in the technology from those in the industry. One here that perhaps is going to start emerging over the course of this year and it's in our KPIs to get the basis of design to get it for alumina. I won't talk too much about alumina today, but it's really interesting that the technology that we've got here could be applied to alumina as well. So alumina is -- well, tiny compared to iron ore steel, it's only been a tenth the size, just a few hundred million tonnes a year, but still a significant opportunity for the technology, in decarbonization, decarbonizing aluminum production. And again, 50% of our aluminum gets exported to Europe. And as Peter mentioned, the carbon border adjustment mechanism is starting to kick in Europe. So carbon will be a tariff in imports into Europe and aluminum is one of those metals or exports from Australia that will be core. So you've seen the aluminum industry start to really make noises here and make some effort here. So one to watch. Just quickly on Leilac. I think I've talked about the scale up. I've talked a bit about where Leilac 2 is getting to. It's -- the civil works, site works have commenced which is great. It's a 4-tube version. Leilac 3 is ultimately where we're going. And Leilac 3 is really just taking several Leilac 2 modules and bolting them together. And so a full-scale Leilac 3 facility, you could see sort of the diagram there, what it looks like on a cement plant, not a huge footprint. It's sitting there next to what it would replace. So on the very right-hand picture here, what's called the preheater tower in the cement plant is what it would ultimately replace. So not a huge difference in the footprint. The pipeline, again, Peter mentioned, up to 76 projects in the pipeline, sort of moving up quite rapidly over the last 3 years. We're not targeting to double the pipeline this year. What we're targeting this year is to move projects down the pipeline. We've got most major cement companies in this pipeline now. We've talked about a few where we can. We're under confidentiality for quite a few others that we can't. But our target is to move projects down this pipeline this year. And also -- yes, question?

You need Leilac 2 [indiscernible] some Leilac 2s, or 3s, or 4s, or?

So the question was, do we need the Leilac 2 to start these projects? In cement, these other -- cement projects, for example, there are several that would like to be around their final investment decision point as Leilac 2 comes up and hits its operational proof points. So that's what we call the final investment decision on those plants. But to start, to be at a final investment decision on those plants, the work starts today. Exactly right. And so some of these numbers, and you can see some moving down this pipeline from initial scoping, the basis of design and these sorts of things, that work has to start today for those plants that really would want to come on. So yes, Leilac 2 is important because it takes that proof of point.

Leilac 1 will still be used [indiscernible] ?

Yes. So Leilac 1 is...

[indiscernible].

So if we're talking just about a 1 tube module, yes, that will be the first sort of plant that we'll build for direct air capture and then expand similarly to Leilac 2s and then 3s. Yes. The other thing to remember is that 2/3 of this pipeline is cement, but about 1/3 is lime. And Leilac 1 is already a small lime facility. Cement and lime, what's the difference between the 2? They're both basically using lime stone to make an end product, but lime is a really important input into iron and steel, aluminum, pulp and paper, glass production. It's a very important industrial chemical. It's about 1/10 the size of the cement industry. Again, only 400 million tonnes a year of this stuff. So still quite a large opportunity. But about 1/3 of these projects slate is lime.

[indiscernible] certainly for the mutual plan for Leilac 3 [indiscernible]?

So when we talk about committing to work today to plan for Leilac 3s on the [indiscernible]. Yes, there are other companies outside of Heidelberg. CEMEX is one of them. We're in the public domain, CEMEX 3 projects that are being worked on and there are numerous others. And we've got to remember that the Leilac project -- the Leilac 2 project is a consortium project. So I'm not sure if it's in one of our slides here, but it doesn't look like it. In the consortium is CEMEX, Heidelberg, Simple, Portuguese Cement Company, CRH, one of the bigger Irish, the old Irish cement. So it's a consortium with numerous cement companies in it already, okay? It just happens to be being built on the Heidelberg side. Okay. Our last glimpse of the plain of the future, the big Leilac 3 module. And some of the questions that came back, especially when we've done the direct air capture announcement with Heirloom is, well, how big is this opportunity? What we said with cement, we've got to build 2 of these full-scale plants every week from now to 2050 to decarbonize the cement industry over 2,300 plants. The direct air capture opportunity is of similar magnitude. So Peter mentioned before that Heirloom are targeting 1 billion tonnes captured by the mid-2030s. So already, that's just Heirloom. And already that's of a similar scale to the opportunity for us is in cement today. And there's been calls that needs to get to 10 billion tonnes a year. Now that would be 10x the size of the opportunity in the cement industry. So I'm not saying that, that will happen. I'm not saying that we'll get there. If we've got 100th of the way there, that's an enormous opportunity for the company. So hopefully, that gives you an idea of the sense of the opportunity in direct air capture.

Heirloom have said 1 billion tonnes will be catched by 2025. What's the ramp up? How many -- they're doing 1 plant or 2 plants now? How many plants do they need to be to achieve those objectives by 2030? Because what I'm trying to understand is what's the revenue curve [indiscernible]?

Yes. Look, if they get there, well, what a journey. No CapEx on our side. It's a license fee arrangement. Nearly 2,500 of those Leilac 3 units, 2,500 of them if they are to get to 1 billion tonnes by 2035. So what's the ramp-up? Bloody rapid. And sorry, you...

But the other question, I see the economics on carbon pricing or so the prices for cement and I see the comparative pricing, can these direct air capture machines as it work be competitive as well on a price basis against the current carbon price in Europe at EUR 80 a tonne?

It's an excellent question. And there's lots of different thoughts about that. I was -- a few years ago, a bit of a direct air skeptic, direct air capture skeptic because the costs are going to be high. But the thing is you could locate these plants where you're going to use or sequester the CO2. So as soon as you remove the need to compress, transport and then inject the CO2 you're removing about half the cost of a potential CO2 sequestration supply chain from, say, a cement plant from a more concentrated CO2 capture scenario. And so where direct air capture has an advantage as you build it, where there's renewable power and a place to put the CO2, and that can take enormous cost out. So how do they then get down to, let's call it, the magic USD 100 a tonne. So if they can get it even partway there, they can get it below USD 200. They were already in the tax regime benefits of the U.S. at USD 180. And as they go lower than that, then obviously, they start to make some pretty reasonable money. What's helping them get there? Companies like Microsoft, recently Ford purchase carbon storage off Heirloom at USD 600 a tonne. So you can see how they're part funding the journey to get to lower cost. And that was the largest forward purchase of actual CO2 sequestration credits ever done, 315,000 tonnes worth at USD 600 a tonne. So and really, when we look at the Heirloom technology, why did we decide to partner with them? The technology has about 3 less process steps than any other that we've seen. They use our technology to make lime from limestone. The lime is wet. And that's just sent out -- and the whole thing is automatic. It's a little robots that run around, chuck it on trays. So the whole thing is designed to scale and become cheaper and cheaper and cheaper to scale. Those trays are simply put into a tower and left. And there's a natural draft of air of big fans, blowing air everywhere that's generated by the trays and they absorb their CO2 over 5 days or so. And then those trays are collected by robots and brought back and put back to our calcine. And the circuit goes around again. So it's a pretty neat system, and that's what attracted us to Heirloom. So if anyone is going to -- we felt that if anyone was going to get there to get below USD 180 first and then below a USD 100, a simple system with the fewest process steps has the best chance.

And that's [indiscernible] the circuit of reusability has been tested and proven?

Yes. So we carried out quite a few tests over a period, a couple of months earlier this year with a team from Heirloom on-site [indiscernible] . It has to be scaled. There's still some technical risk. I'm not claiming that this is all completely derisked. It's going to be scaled. But the looping that we've done confirm the basic principle was sailed and that we were getting CO2 off, and we're getting a significant efficiency in terms of looping back around again. So yes, it's -- that was sufficient, I guess, for Microsoft to go -- we get a forward purchase [indiscernible] tonnes for you. So yes. Okay. So quite an exciting -- quite an exciting, obviously deal for us, very exciting. And hopefully, the previous slide where I talked about the potential addressable market, it's as substantial potentially as cement, if not more so. Okay. One of the questions we ask is, I get asked is, what to do with the CO2 with direct air capture. They're really locating in close to where you're injecting in the ground. But what do you do with it if you're not? Well, you got to have CO2 infrastructure in the U.S., I think just overnight, they announced USD 444 million to enhance the CO2 infrastructure that's pipelines and these sorts of things for sequestration in the States, the Department of Energy. But if you don't have CO2 in your infrastructure, what you do and here's where we come to quite an interesting project we're developing in Australia, Port Augusta. It's called the Highgate project, where with [indiscernible] there, and the idea is to start to demonstrate the production of a green methanol. Why green methanol? Methanol is one of those fuels that can be burned in a standard engine. And so for some pretty difficult to abate industries such as shipping, if you have green methanol substituting green fuel oil, you're taking one molecule of CO2 out of the atmosphere. Sure. They're burning a fuel but because the CO2 has already come from a source that would have been released anyway, you're getting 2 uses of the one CO2 molecule. So green methanol is of interest to companies like Maersk. And their ships that they've ordered, the next 26 containerships are dual fuel, methanol and marine diesel. The other thing back green methanol is it's great -- it's pretty good precursor to make synthetic aviation fuel. And so when you think about decarbonizing aviation, which is really tricky, long-haul heavy loads fuel is the most energy dense what -- I think a batch would have to be about $1,000 more energy dense to do the same job as a long-haul heavy aircraft. And so synthetic aviation fuel was an area of intense interest and green methanol is a great precursor to make that as well. So CO2 use into shipping decarbonization, aviation decarbonization and a neat little project that we're doing in South Australia that's leading us in that way. Just a little bit about sustainable processing. Obviously, the lithium plant, I think we've covered a lot of this in the top speech, but I won't bore you to death by going through it all again, but this is classic in the wheelhouse of what Australia is trying to do, using renewable energy, onshoring value here and focusing on critical minerals. Steel was the other one, a critical mineral, one might say, but a hugely important export, and of course, as I said before. Here, the same core technology, my toilet roll, with hydrogen in it, iron ore fines going in the top. Why are we so enthused about this application? This is testing we did. We just put some iron ore through a facility we had at Bacchus Marsh last year. So what we're seeing here is a different little tiny particles that we're putting through our unit. You can see the porosity of those particles that's allowing hydrogen to get in and taking that oxygen off it. And these graphs here talk about what's called metallization. And so that means the conversion of iron ore to iron. And 96% of our exports are hematite, goethite ores, the red stuff mined over in the Pilbara, et cetera. And here's the performance curve for those hematite, goethite ore, up over 90% metalization. And these were just the very first test we did without optimizing the unit. So all the tests we're doing now is a much more optimized unit. You can see Dan here, this is called magnetite. And they have a very small proportion of ores in Australia are magnetite, but we thought we better test it because magnetite is the ore that's suitable for electric arc. And so well, we haven't optimized that yet. We still got some excellent results for magnetite. It's a much denser ore. It's not nearly as porous us hematite, goethite. You can see these measures what's called porosity here. You can see these measures, what's called porosity. There we go. Okay. And so yes, the magnetite ores are not as porous. So we've got some levers to pull on magnetite, but really the focus is hematite, goethite. As I say, this is a real Australian opportunity to make a green ion here with renewable electricity. So Phase 3I underway with an expanded ore testing program. Lastly, I'll just touch on magnesia. Again, Peter talked about the businesses coming together, the water, the marine coatings, the antimicrobial resistance, all really exciting stuff. Some of that will be fairly long-dated. We're making some great progress in the antimicrobial resistance I think that's a real sleeper for the technology. This is where a very high surface area of magnesium oxide particle that we can make in our reactor is showing antimicrobial, antibacterial, antifungal. So all of those 3, agriculture, marine and antimicrobial resistance are just properties of the stuff that our unique calcine produces. But the last little bit, magnesium metal goes right back to the heart of decarbonization and also critical minerals. And so that's quite an exciting one for us. 86% of the world's magnesium metal is produced in China. The next biggest producer at 8% is Russia, and magnesium metal is critical for lightweight, strong metal components for aviation, aerospace, these sorts of things. So that's why it sits there is an absolute critical mineral. We've already got the technology that can decarbonize with capturing the CO2. We've already got the mine, and so we're having a look and seeing what sort of project we could develop around magnesium metal here in Australia, especially since the recent noises about what's classed as domestic production between Australia and the U.S. We're hoping the last visit by the Prime Minister was going to give us a few more details on that. Still none coming, but we're watching and waiting with interest and we're very well positioned with the assets and the technology we have in that space. So just in terms of what we're trying to achieve this year, I won't go through them all in detail. I've been through the highlights, but we're on track for all of them. So it's a great start to the year. And lastly, what I'll touch on is really the overarching strategy of the company is to look at how we accelerate the commercialization of these technologies as much as possible. And one of the areas that we did back in '21 was to start to spin out the Leilac business to focus some resources into that business that are cement back resources. So we talked about the new people we've added to that business. You should see the backgrounds of these people. We've been publishing in our newsletter. So hopefully, you've read it, but all background in cement, lime and processing. So that capability in the Leilac group has been substantially enhanced over the course of the last 12 months. And so that is of interest to us as we look at some of these other businesses. So how do we take iron and steel forward in the best way for example? And what could it be worth? Because in the end, the other thing that looking at spinouts achieves is giving people some look-through value on what these businesses are worth. How much is iron and steel valued in Calix head company at the moment? I would argue it's highly valued at all. Have a look at what some of these portfolio deals value, iron and steel decarbonization technologies at similar tech readiness levels. H2 Green Steel their valuation is multibillion. They are a bit more events than us in terms of permitting. They've got a big steel facility, they're building in Sweden. But the core technology for their decarbonization is no more advanced an ours. Boston Metals, probably even behind us a little bit. The tests we're doing a 2,000 tonne per year type throughputs, we're big pilot scale. Boston Metals are hardly out of the lab, they've raised $262 million. We don't know what publicly that values that company yet, but it's likely to be at least $0.5 billion. So these are companies pursuing the same thing we are much the same tech readiness level. And so when we come to think about how we accelerate iron and steel, similar to the sort of deal we did with Leilac, that's the sort of thing that's the flexibility we have in the business model we have. So iron and steel, direct air capture, some pretty amazing deals done as well. And so when you look at the capital markets, you look at some of the volatility in those markets, interest rate concerns and those sorts of things is money going into environmental technologies, ESG, is money going into these sectors, absolutely. And it's not just down rounds and low valuations. There's a lot of interest and a lot of money that is being done in these deals as evidenced there, that suggests that there's plenty of interest from impact funds from strategic investors in decarbonization. So lastly, the one thing about this, I want to leave you with is -- this is -- we're developing as a solution in cement and line. It's one of probably half a dozen solutions that are being developed in cement and line, but not like thousands. We went at half a dozen iron and steel, same technology. And again in iron and steel, there's not thousands of solutions. There's only half a dozen today that will ever decarbonize iron and steel, and we've got that as well, all in the one tech. So that's what makes it so exciting and that's why we're working so hard. So I'll just finish on thanking everyone, all shareholders for their support for the company. We've, as you can see, got a great Board. We've got a great team. Please visit us, let us know if you want to visit at Bacchus Marsh facility. We'll show you around what we're doing there. And the reason why you see the passion in this business is because of the potential and because of the need. So again, thank you for coming on to the AGM and happy for questions.

Thanks, Phil. It's a great story. And I think it's just yYes. Well, of course, I've got a bit of interest in it, but it's a really great story. But a lot of my friends and relations who are not part of the investment community, get very frustrated. They keep asking me, "why don't we hear about this in the newspaper, the Herald or what have you, the Australian, on ABC TV or even the other commercial channels?" Also, this increasing anxiety amongst everybody about global warming. I mean you can't do it all, but it's a great message of hope that you could bring to a much wider audience, particularly school children, I attended a rally the other day at another shareholders' meeting and I heard this young woman just give the most -- she's at school, gave the most passionate and amazing address to the fellow demonstrators. And will Calix do more to get this message and the interest? I mean, there's educational interest about the technology that you very well are able to bring to the level of -- as mom and dad, as mom investors, do more to get the message out to the wider audience? And the potential mom and dad investors, probably millions of them out there, and particularly to get maybe some people to talk in schools and get the message to the school kids that yes, there is hope?

Yes. No, look, it's an excellent question. We always are working on our message. I'm going to ask Darren for a budget to buy a few more of these to -- so others can help me spread the word. But look, I think it's a hugely valid question, Elizabeth. With technology, you always I guess, struggle to break through in the 10 seconds of people's attention these days. We're revamping and updating all of our marketing to try and make it easier for people to see who we are and what we're trying to achieve. So we're developing a new website. We're really trying to focus the messages. We try to make it much, much easier for people to understand who we are and what we're trying to do. I've got to tell you the -- where we're known in government and where we're known for those companies that want to decarbonize, we're very well known. The general public is not an area that we've done as well on. So I'll take that on board. I think we've got great sort of engagement with all of the -- I guess, the government and the corporations, the interest in the tech for various reasons. But absolutely, we're working on it. But the outreach is a great idea. We're doing something similar just out of Bacchus Marsh. We go and talk to the schools and invite them to site and those sorts of things, but we could consider a wider program for sure.

[indiscernible].

Would you like a jab at that?

[indiscernible].

Well, we've got James [indiscernible] at the chat.

[indiscernible].

Yes. We're publishing a series of webcasts for James [indiscernible], the host of The Inventors, if you remember, James. Yes. So we are trying to enhance that and make it more easy for the public to access what we are.

[indiscernible].

Yes. Absolutely. We'll do our very best.

[indiscernible] and in some of the slides to batteries and I was just wondering, my impression about some of these batteries is they're quite dangerous. So they've started some pretty big fires and that sort of thing. How do you see the future of these batteries? And could you have any increments on that through your technologies?

Yes, absolutely. And look, I focused on decarbonization, might have -- doesn't in any way, downplay the efforts and the achievements we've had in batteries. So our focus in batteries was for a safer chemistry with your manganese oxide and now lithium-ion phosphate. These very high-powered batteries that are in the big -- the Teslas of the world, those sorts of things. They're the ones that can actually have a runaway temperature at lower temperatures. So there is absolutely a place for safer batteries. And of course, we don't need to accelerate from north to 101.5 seconds, the people scale, let's call it. I think there's absolutely a place for those types of batteries to commuting 150 kilometers, those sorts of things a day rather than this range anxiety. I've got to get to 500 miles a day. Absolutely the people's car, those sorts of safer batteries, I think, are going to be really the standard.

Yes. I think that's for the whole process of being accepted by the public, the batteries need to be made a bit safer.

Yes. No, I agree.

I'm a shareholder. Have you ever thought of looking -- I've actually done some research to copper and I was surprised how much is used in electric cars. And I was wondering if you were doing anything on copper, plastic, fast fashion to reduce that. And my passion of course, is water and making money, profits.

The magic combination. So we normally don't let Mark speak because absolutely, we normally don't let him speak because what he tends to do is tell about the 99% of other stuff that we don't talk about. But Mark, would you like to answer this one?

Copper is a rare material. [indiscernible] persistent. They use old technology being around for 50 years, and we can replace all of that. So yes, there's a role there. I just don't worry about lime and cement, [indiscernible] steel but it will happen. The [indiscernible] industry is moving in Australia very quickly to electric power calcine. It's so old, please. So we'll be there.

There's a comment on line from the shareholder, and I'll just add, it's not my wife, and it's not your wife [indiscernible] Group. So I would like to acknowledge the exceptional efforts of our management team. That's my role, including the entire Calix Board and Calix leadership group. Their leadership has been crucial over the last 10 years in transforming Calix from a small startup into a company adapted collaborating with major corporations across various mineral applications. I would like to express my gratitude for their role in shaping our successful business model and steering us towards a sustainable future through rapid commercialization of core technology. That is not my wife and its not your wife either. Thank you very much for that feedback.

One potential roadblock is successive sequestration of carbon dioxide. You read it. I think Chevron has not captured -- sorry, stored as much carbon dioxide, as they said they were going to. So can you speak to that? Is that a roadblock for Calix? Or are you confident that the sequestration science and engineering is actually going equal your ambitions?

Yes. It's an excellent question. I think Chevron's held up as a failure. In fact, technically, it's been a big success. It was the promises that were made of our total quantities and these sorts of things to get the project up that I think led that project to put too high a bar on what was technically feasible to achieve, but they're storing hundreds of thousands of tonnes of CO2 a year. And so there's the Otway project in Victoria, that's been storing CO2 underground for 15 years now. And so CO2 sequestration is not unproven. It's proven. It will be horses for courses. There are different geologies that can be utilized, and so each one will need to be tested. But I think the knowledge about what's required to store CO2 is pretty good. So yes, sequestration is one of those things that technically, you've got to prove up as you do it. I think from a permit perspective and from a public acceptance perspective, there's work to do. And I guess the key thing that we really like, say that a project in South Australia is looking at this alternative use for CO2 as a sort of once through fuel. As I say, you use the one CO2 molecule to do a couple of things, make your lime and also a sustainable fuel. So just in terms of volumes there, shipping is responsible for 2% of global CO2, aviation for 1%. And so the process emissions from cement and line could really supply and some a little bit, all of the shipping and aviation requirements. So sequestration is important. Don't -- I won't step back from that. It's important. It's technically feasible. It's technically proven in certain applications already, but other uses are going to be important to develop as well. Any further questions or online?

Nothing online.

No? Nothing online. Okay. Again, thanks once again. Of course, the directors will be available after the meeting. If you'd like to have any one-on-one chats, et cetera, and hugely appreciate again your support and for coming along today.

Just remember don't forget the blue cards.

Yes. So I think the Board room team or outside will collect them.