april 2018 advanced water treatment company introduction ......the global wastewater treatment...

Hydrus Technology / HTX Solutions Company Introduction April 2018

Hydrus Technology / HTXAdvanced Water Treatment

Company Introduction 2018

2 HTX Solutions, LLC © 2018 / Confidential 2 HTX Solutions, LLC © 2018 / Confidential

Water management is a global issue requiring immediate solutions to enable preservation

•

"Globally, more than 80 percent of wastewater is released into rivers and lakes without treatment with a negative impact on health and the environment”

U.N. World Water Development Report (2017)

“Potential water shortages and the regulatory burden of treating wastewater for disposal has prompted users to increase their rates of wastewater recycling and reuse. This often requires aggressive treatment, usually with sophisticated technologies…” Freedonia Group (2017)

“1.9 billion people live in potentially severely water-scarce areas. By 2050, this could increase to close to 3 billion people”UNESCO (2017)

“Clients face pressure to show that water extracted for their operations does not have an adverse effect on local people or the environment”

Global Water Intelligence Report (2015)

“About 30 percent of Earth's fresh water lies deep underground in aquifers. And it's extracted daily for farming, drinking and industrial processes – often at dangerously unsustainable rates.”World Institute Resource (2017)


The global wastewater treatment market is expected to grow to ~$674bn by 2025

The global water and wastewater treatment market size was valued at ~$478 billion in 2016. The industry is anticipated to register robust growth over the next few years and grow to ~$675bn by 2025, owing to factors such as water scarcity, stricter environmental regulations increasing industrial activities.

The growth of equipment & services market is likely to gain momentum as it utilizes environment-friendly and economically feasible instruments and technologies.

Source: Hexa Research 2017


HTX’s provides a disruptive patented solution for the treatment of highly contaminated and complex wastewater across industries

§ Ability to achieve treatment targets for particularly highly contaminated and complex wastewater

§ More cost effective compared to many existing wastewater treatment methods

§ HTX process enables wastewater to be on-sold, re-used for other commercial or agricultural uses, or safely discharged to the environment

§ HTX provides a Water-as-a-Service solution where the client only pays for the volume of wastewater treated

§ HTX units are installed and operated by HTX or other approved service providers and are remotely monitored in real-time, which reduces labor costs and provides significant OHS management capability

§ HTX technology is applied to complex wastewater issues across a multitude of industries globally

§ No additional capex is required for a customer as HTX units are mobile, scalable and relocatable

§ Provides significantly better cost, operational and wastewater treatment outcomes compared to other wastewater treatment methods

Why is HTX disruptive? HTX offers three core wastewater treatment services that can be applied across industries

• Safe Environmental Discharge : to achieve regulatory prescribed standards

• Commercial Re-use / Sale: to remove specific contaminants to meet internal company standards for operational reuse or sale

• Value Added / Metal & Mineral Recovery: Re-use and extracting valuable minerals and metals

HTX is current targeting four key sectors in the USA, Canada and Australia

Mining: gold, silver, lithium and cobalt

Landfill: Waste collection, landfill, local municipals

Oil & Gas: Upstream and mid stream operators

Hauling: Industrial corporations

Customers are targeted directly or via strategic alliance partners

• HTX has a strategic alliance with Caterpillar Inc to develop a wastewater treatment industry offering. Caterpillar is providing introductions to CAT dealers, customers and industry leaders

DEALER

HTX offers an end-to-end “Water-as-a-Service” solution charging clients a treated volume fee

• Each unit can generate between $0.8m - $1.5m per year

• HTX expects to have at least 55 units in the field by the end of 2019


Industry wastewater issues

• Increase in lower grade mining means more water is required for processing• Trend in greater extraction from sulfide rock (vs oxide) means higher levels of sulfate in tailings

• New extraction methods (e.g. hydro blasting) means more water is required• Outflow from acid mine drainage contains metals that can poison downstream surface waters, and there inhabitants

• Additives used in the mining process are required to be removed prior to environmental release (which can be complex and costly to achieve)

• Continued tightening of environmental regulations will require the quantity of stored wastewater to be reduced

Mining

• Complex and variable chemical and microbiological composition makes treatment difficult

• Rapidly accumulating leachate volumes are leading to increasing operating costs to manage high volumes

• Publicly owned treatment works (POTWs), the traditional treatment option for Landfill operators for treatment are facing tighter discharge regulations and are imposing more stringent quantity and quality requirements for influent landfill leachate

• POTWs have the ability to rapidly raise disposal rates and impose new discharge limits

• High costs for trucking landfill leachate to POTWs

• Stakeholder pressure on listed landfill operators to enhance wastewater practice management standards

Landfill


Industry wastewater issues (cont.)

• Varying wastewater quality, hard to treat contaminants, water scarcity and tightening environmental regulations

• Removal of scale inhibiting chemicals to protect infrastructure (cooling towers, blowdown, make-up water etc.)

• Limited footprint available for adding water treatment equipment• Potential for significant sludge generation• Significant capex required for current treatment methods

Manufacturing and Production

• Water reuse has always been complicated, given that water used in the hydraulic fracturing process can quickly become unusable. The less pure the water gets, the more unusable it becomes

• Current processes are using increasing produced water volumes• There is significant variability in produced water composition, volume and quality causing

complexity with wastewater management and treatment • Large volumes of source water needed for hydraulic fracturing, requiring higher reuse

rates of produced water• Costly over-reliance on freshwater sources, hauling and disposal of produced water• Reinjection of water can contribute to earthquakes and contamination of aquifers

Oil & Gas


HTX has advanced and patent protected, new electrochemical wastewater treatment technology

• HTX successfully commercialised an 100-year old water treatment technology previously only had mixed results. The technology, commonly referred to as electrocoagulation, was first developed in 1906 and only experienced minimal technology enhancements, predominately in the 1980s.

• Hydrus has spent 12 years perfecting the use of electrocoagulation technology and we are now able to understand the technology at an ionic level, i.e. how the technology works for water treatment, how to control it, how to improve it and how to predict treatment outcomes across a broad range of complex high value wastewater and fluid streams, how to reduce operation and maintenance costs.


… the technology is able to target and remove problematic wastewater contaminants more effectively

• Hydrus Technology (“Company” or ”HTX”) can alter the electrochemical properties of minerals, such as iron oxyhydroxides, to remove chemically combined ion species and enable changes to the physical properties to allow beneficiation or further low-cost processing using the specific additives developed by HTX.

• HTX removes problematic wastewater constituents: Ammonia, Arsenic, Boron, Barium, Chromium, Cyanide, Iron, Lead, Manganese, Mercury, Nickel, Nitrate, Phosphate, Sulphate, Selenium, Silica, Strontium, Zinc, H2S, soluble & insoluble hydrocarbons & greases, BTEX, MTBE, PCB, TOC, COD, bacteria, viruses and suspended & dissolved solids


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HTX treats complex wastewater where competition is low and client value and pricing is set at a premium HTX provides unique solutions for industries and clients where existing treatment methods are cost prohibitive, inefficient or unable to achieve water treatment outcomes. The HTX WaaS solution offering attracts a premium pricing model and a smaller competitive landscape.

HTX

Competition

Value


HTX offers clients a solution that achieves attractive removal rates

Name Element HTX Removal Rate % (1)

Name Element HTX Removal Rate %(1)

Name Element HTX Removal Rate %(1)

Metallic Cations Metallic Cations - continued Suspended Solids

Silver Ag+ 97 Tin Sn 91 Silicon Dioxide (Silica) SiO2 99 - 95

Aluminum Al3+ 99 Uranium U 95 Biological

Arsenic As 97 Vanadium V 99 BOD 95 - 85

Gold Au 98 Zinc Zn2+ 99 Bacteria 99.9

Boron B 85 Calcium Ca2+ 98 Viruses 99.9

Barium Ba 99 - 93 Potassium K+ Minimal Polar Compounds

Beryllium Be 90 Magnesium Mg2+ 99 - 95 Ammonium Ion NH4+ 99 - 25

Cadmium Cd 97 Sodium Na+ Minimal Cyanide 99

Chromium Cr 99 Anions and Salts Oils

Cobalt Co 83 Fluoride F- 95 - 62 Petroleum / Oils / Grease 99

Copper Cu2+ 99 Chloride CI- Minimal Benzene C6H6 99

Iron Fe2+ / Fe3+ 99 Chlorine Gas CI2=CIO-=ClOH 99 Ethyl Benzene 99

Mercury Hg 98 Bromide Br- Minimal M&P Xylene 99

Manganese Mn 98 Iodide I- Minimal O-Xylene 99

Molybdenum Mo 92 Carbonate/Bicarbonate CO32-=HCO3- 99 - 95 Toluene 99

Nickel Ni2+ 99 Nitrite NO2 9 - 958 MTBE 99

Lead Pb2+ 99 Nitrate NO3 9 - 958 PCB Arochior 1248 86

Platinum Pt 85 Phosphate PO43- 99 - 90 Water Properties

Antimony Sb 95 Sulfates SO4- 98 - 95 Total Dissolved Solids TDS 90 - 5

Selenium Se 98 Calcium Carbonate CaCO3 99 - 95 Conductivity EC 90 - 5

Strontium Sr 95 - 75 Hardness MgCa(CO3)2 99 - 95 Total Suspended Solids TSS 99

(1) : All removal rates are indicative only, and are subject to water matrix / interference effects and require lab testing for final confirmation.

Suspended Solids Turbidity 99

COD 95 - 85


HTX technology is mobile, scalable, can be remotely operated and is suitable across industries • HTX provides a mobile solution for clients

• HTX systems and technology is contained within a 40 foot unit

– Units are scalable and can be remotely operated

– Real-time water analysis

– Onboard laboratory

– Long service intervals

– Treats wastewater at or near waste waste source

– Manages contaminant variation in real time without unit recalibration

– Automated safety management & EHS shutdown procedures

• HTX will use proprietary and generic equipment to deliver a complete end-to-end water treatment solution for a client


HTX offers clients an end-to-end ‘Water-as-a-Service’ wastewater treatment solution …

HTX Mobile Unit/s

HTX Clarifiers

Other equipment

HTX Clarifiers

• Closed mines

• Operational mines

• Tailings ponds

• Landfill sites

• Industrial

• Upstream O&G

• Midstream O&G

HTX end-to-end client solution

Wastewater sourcesTreated water use

Other outputs

• Safe environmental discharge

• Operational re-use

• Sale of water

• Agricultural use

• Benign sludge • Capture high-value minerals

and metals (e.g. gold, silver, cobalt, lithium)

• Removal of targeted contaminants


… the HTX service model offers clients significant benefits compared to existing treatment methodsü No client capex

ü Enhance operational efficiency

ü Client can outsource wastewater treatment management

ü Ability to achieve treatment targets for particularly highly contaminated toxic wastewater

ü Solution is provided as a “Water-as-a-Service” model where clients pay for the quantum of treated water (e.g. bbl, gal)

ü Ability to release environmental bonds attached to wastewater ponds, and environmental remediation

ü More cost effective compared to many existing wastewater treatment methods (e.g. chemicals, chlorination, R/O)

ü Enable treated water to be sold, re-used or safely discharged to the environment

ü Ability to extract high-value minerals and metals from some wastewater sources


HTX has a patent, design and trademark program implemented to protect all IP• HTX has retained Spruson & Ferguson (incorporating Cullens) to develop and manage its patent, design and trademark program

• HTX has a patent and design program for:

– HTX electrochemistry systems and technology

– HTX electrochemistry treatment methodologies

– HTX clarifiers

– HTX Iron Ore beneficiation applications

– All new industry applications

• HTX was granted its first electrochemistry patent in Australia in 2017, obtained registered Australian designs for the components of the HTX system in 2016, and obtained a US design patent for components of the HTX system in 2018

– Other relevant countries are at various stages of lodgment and examination

• All staff have strict employment and NDA contracts implemented to ensure all technology developed is for the sole benefit of HTX


HTX offers three core wastewater treatment services that can be applied across industries • Treatment of wastewater to achieve prescribed regulatory standards for safe environmental discharge (e.g. river system, lake, surface)

• Each Country, State and Industry can have different regulatory standards

• Treatment standards are considered challenging for most incumbent treatment methods

Safe Environmental

Discharge

Value Added / Metal & Mineral

Recovery

Commercial Re-use / Sale

• Treatment of wastewater for re-use and extracting valuable minerals and metals from the water

• For example, this process can be used to extract residual high-valued metals within a pond or tailings dam

• Treatment of wastewater to remove specific contaminants to enable the water to meet internal company standards for operational reuse

• Wastewater can also be treated to meet standards for external sale (e.g. sale to other industrial operators, sale to agricultural companies)


Caterpillar Inc. is a strategic alliance partner and provides introductions to Cat Dealers and clientsHTX has a strategic alliance with Caterpillar Inc. to develop a wastewater treatment industry solution:

– Caterpillar Inc. is an investor in Hydrus Technology (the holding company of HTX Solutions)

– Caterpillar Inc. has manufactured the first eight HTX commercial units and has manufacturing facilities available when demand significantly increases

– Caterpillar Inc. is providing introductions to CAT Dealers, clients and industry leaders

There are 172 independently owned and operated Cat Dealers worldwide with more than 157,000 employees. Cat Dealers have deep relationships with target clients, are sales-lead organizations, have significant field services capabilities

– HTX is working closely with a select number of North American (USA and Canada) Dealers to assist with targeting prospective clients in defined regions and industries (e.g. Nevada and hard rock mining)

– Within the next 3 months, HTX intends to develop formal contractual relationships with Cat Dealers (and other alliance partners) in geographic regions to provide: sales leads, field services support, logistics management and equipment supply

DEALER


Three successful US based pre-commercialization engagements have been conducted

Midstream operator handles water from O&G producers• Daily volume up to 40,000 bbls/day, with a disposal capacity of 25,000

Bbls/day (Max)• Produced Water & Frac Flowback• Client was seeking solution to reduce opex costs (chemicals, pumps etc) and

demand on disposal well• Hydrus was able to treat water to specification required for fracing operations Upstream operator – Produced water treatment facility• Produced Water & Frac Flowback• Client was seeking to remove Ammonia and targeted contaminants so

water can be discharged into the Platte River and scale-up the solution to be able to treat 25,000 BWPD

• Hydrus was able to remove ammonia and meet operator requirements for river discharge

Mining company – Gold / Silver • Water stored in an idle mine pond (~3m gal) contained elevated sulfates,

silver, TDS and other metals• Client seeking to treat mine pond water for safe environmental discharge • Hydrus was able to achieve NDEP (Nevada Department of Environmental

Protection) specifications for surface discharge


Industry Geography Potential Clients Typical Water Issue

Mining

• USA (National)• Canada • South America • Australia

• Gold, Silver, Lithium and Cobolt companies

• Acid Mine Drainage• Water contaminated with heavy metals• Strict surface discharge requirements• EPA limits for: Selenium, Arsenic, Cyanide,

Lead, Zinc, Mercury

Industrial : Landfill

• USA (National) • Canada

• Waste collection companies

• Landfill sites • Local municipals

• Problems associated with decomposition, namely Ammonia, Organics, PFCs, Metals

• Seasonal variation in flow rates and contamination levels

• High operating costs and fixed capital costs

Oil & Gas

• USA (Marcellus, Colorado)

• Canada

• Upstream and midstream operators

• High TDS, Iron and Bacteria levels• Very large volumes with high variability• Short “turn-around” needs for

drilling/completion operations

Industrial : Hauling

• USA (National) • Canada

• Industrial corporates • Operators lack capital for on-site treatment solutions

• Small volumes with very high variability• Dependent upon 3rd party treatment firms

and Municipal treatment facilities/costs

HTX is currently targeting four key sectors

22 HTX Solutions, LLC © 2018 / Confidential

Landfill Leachate Project• Landfill site in Minnesota in need of leachate treatment

• Client’s municipal credit rating: IG1

• High need in this market segment for wastewater treatment solution

• Waste Management credit rating: Baa1 (Moody’s) and A- (S&P)• 2017 Revenues of ~$14.5B• 42,300 employees*• Own or operate 249 landfill sites, (largest network of landfills in North

America)* & Manage 305 transfer stations*

*Source: http://investors.wm.com - 2017 Annual Report

First Major Landfill Project – ONLINE THIS WEEK

23 HTX Solutions, LLC © 2018 / Confidential

Landfill Market Size§ There are 2,455 landfills in the US

§ 7.2 billion gallons of wastewater to be treated

§ The addressable market = USD $576M/year, or ~ 10,000 HTX units

Size of Total Landfill Market

WM Locations


Currently Seeking Investors

Hydrus Technology is current seeking investors for its next round of growth capital

To express your interest please contact: Eric Dyer [email protected]

www.hydrustech.com

mailto:[email protected]


Important NoticeThis presentation has been prepared by Hydrus Technology Holdings Pty Ltd (the “Company ”) in good faith but the information in it has not been formally verified and no representation or warranty is made as to its accuracy, completeness or reliability. The information should not be relied upon as a promise or representation as to any matter.

The forecasts, estimates, opinions or projections contained or reflected in this presentation involve elements of subjective judgment and analysis. There is no guarantee that any such matters will be achieved or prove accurate. Actual results will vary from projections contained in this presentation and such variations may be material.

This presentation is not a prospectus, product disclosure document or other offering document under US, Australian or under the law of any other jurisdiction. It has been prepared for information purposes only and does not constitute an offer or invitation to apply for any securities, including in any jurisdiction where, or to any person to whom, such an offer or invitation would be unlawful. Recipients should inform themselves of and observe any applicable legal requirements in their jurisdiction.

This document is not an offer, solicitation or recommendation with respect to the purchase or sale of any assets or financial products, nor is it circulated to invite offers to purchase or sell any assets or financial products. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation or any information, opinions or conclusions expressed in the course of this presentation.

Certain information in this presentation has been obtained from publicly available information. While steps have been taken to review that information, no representation or warranty, expressed or implied, is made as to its fairness, accuracy, correctness, completeness or adequacy. Certain market and industry data used in connection with this presentation is based on research, surveys or studies conducted by third parties, including industry or general publications. Neither the Company nor its representatives have independently verified any such market or industry data or industry or general publications. This presentation may contain forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of past and present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this presentation, are expected to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors many of which are beyond the control of the Company, its Directors and management. Although the Company believes that the expectations reflected in and the assumptions underlying the forward looking statements included in this presentation are reasonable, readers are cautioned not to place undue reliance on them, as the Company cannot give any assurance that the results, performance or achievements covered by the forward-looking statements will actually occur.

To the maximum extent permitted by law, the Company and its professional advisors and their related bodies corporate, affiliates and each of their respective directors, officers, management, employees, advisers and agents and any other person involved in the preparation of this presentation disclaim all liability and responsibility (including without limitation and liability arising from fault or negligence) for any direct or indirect loss or damage which may arise or be suffered through use of or reliance on anything contained in, or omitted from, this presentation. Neither the Company nor its advisors have any responsibility or obligation to update this presentation or inform the reader of any matter arising or coming to their notice after the date of this presentation document which may affect any matter referred to in the presentation. Readers should make their own independent assessment of the information and take their own independent professional advice in relation to the information and any proposed action to be taken on the basis of the information.

The contents of this presentation (together with any further related information) are strictly confidential and may not be distributed, reproduced, disclosed or used other than with the prior approval of the Company.

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