Rodney

Hi, good morning, Frank.

I'll start things off with a…

I think we should have a little quiz to start things off.

I got the cheat sheet in front of me, but…

Can you give me the definition for white hydrogen?

Frank

Hello?

Rodney

Yeah.

Frank

How's the weather in Ontario?

Rodney

It's perfect here.

It's the best weather you'll ever get.

Frank

Oh, well…

Rodney

I think you're supposed to complain, but no.

It's like no heating, no air conditioning, gentle breeze, leaves are turning colors, nice and sunny, blue skies.

Frank

It's okay.

I was north of the 52 parallel in Quebec last week.

And on, I think, a Thursday morning, when I went out to make coffee at five-something,

on the little gas stove, my hand got stuck on the gas tank, on the propane tank.

Water was frozen, so it was the first, you know, the first frozen ground of the year.

Rodney

First heavy frost, yeah.

Frank

Yeah, yeah, first frost.

So, we're back at it again.

That means that, you know, things should be starting to move.

Fall is in front of us.

It's going to be a few days.

And I think we're going to have an interesting quarter coming in for, at least for hydrogen and alternative energy.

We're getting calls from people, from brokers that are looking to do some financing.

They're testing the water, I would say, see if they can raise some money for their clients.

For some of the issuers that are into the, even gas, like right now, gas, hydrogen, stuff like that.

So, it's interesting because these people were, you know, we mentioned that before,

but a lot of these retail brokers, for the few that are still left and then leave the business

in favor of the no-fee, large discount brokerage firm out there,

they start to work again and they want to work again.

And we've said they've been in a fetal position for a while with this retail market

and with this micro-cap, small-cap market.

And now, for the last few weeks, they wanted to work and they're slowly moving down the chain of what's next should be financed.

It looks like alternative energy is coming back in favor.

So, your topic today was on point, I would say.

Rodney

Well, I'm hearing from, you know, multiple government sources and multiple issuer sources in Alberta that there's a real focus there on upgrading hydrocarbons into higher value products.

And, hydrogen is definitely seen as part of that.

And also a push towards, I mean, they want to be integrated.

They see data centers as a result of AI.

But probably just, I mean, every year we tick away, we need more cloud storage, we need more bandwidth.

I mean, that just ticks away.

That's a growing thing.

So, the political will to get this sort of thing done in Alberta that I'm seeing firsthand is a lot different than it is in other sectors.

It gives you a lot of cover to build a business.

Frank

You're looking at the Minister of Energy over there in that (?) source who's gone, oh, it's about alternative energy.

And it's mostly about value added for carbon-based, you know, resource.

And the, forget ESG and all that, that lingo.

For them, it's really bottom line.

It's expensive to go to tidal water to try to sell their hydrocarbon to foreign markets.

They're kind of hostage of either the Canadian energy policies and the federal government and the other provinces,

or they're stuck with the Americans, which, you know, buy at deep discount what they produce.

So, if they suddenly can start to do transformation in-province, it makes a big difference.

I've looked at a project, for example.

There's a project in my bird town, if you can say that, in Baie Comeau, on the Quebec North Shore.

I've got a large electrical block, a block of electricity.

They're setting up a 300 megawatt electrolysis hydrogen project.

And put aside what I think of electrolysis, it's really not the most, it's actually not the most profitable way to produce hydrogen.

It's very expensive, and outside of grants or secondary transformation, this is not an economical proposal in any way, anywhere on the planet right now.

But their approach is a bit different.

They say, look, we're going to produce the hydrogen on-site.

We're not going to try to sell it outside of maybe a few boats accessing the deep sea port there and maybe having some marginal buyers on that topic.

But they want to do green ammonia.

Now, what's not been into the media yet, and I don't know if it's confidential or not, but it's too late.

They should(n't?) have told me.

But they're going to do green ammonia, that's been announced already, but they're also going to do ammonium nitrate.

Now, ammonium nitrate, that goes into civilian explosives, another type of application.

And in the current context, there's a shortage there, or even for the mining industry, these explosives are in demand.

We're going to need a lot more for construction, for different things.

And right there, there's two levels of value added.

They convert that hydrogen that's very expensive right away into green ammonia, which starts to make a little bit of a profit without the support of the government.

And then moving to ammonium nitrates and eventually to other type of products on-site.

That's the way to go.

And I think you're going to see that in the Western provinces also, where the hydrogen is going to be converted, you know, in fertilizers.

And then energy for consumption on-site, you know, in-province.

It makes a big difference because you reduce, especially if you go and you use natural gas to do your hydrogen.

They're talking about a lot of blue hydrogen, where they capture the carbon gas, the carbonic gas, or the CO2, and re-inject it.

And then they end up with an hydrogen that's fairly green.

And they don't need to deal with the likes of the carbon tax or the carbon impact or carbon pricing.

So they've understood that very well.

And they understand it.

And that's a strategy.

But they're not making a big fuss about it.

This is not greenwashing.

They really realize, okay, there's a way to make good money out of this and not be penalized on the carbon pricing.

Rodney

Well, Canada is the fifth largest exporter of ammonia in the world, according to the government of Alberta.

Frank

And that's just going to increase.

You're starting to make green ammonia.

That's massive.

Now, there's also all the steel industry, all the different industries that need a calorific, high-calorific source of energy for metallurgy and things like that.

And hydrogen is a nice way to go because you can do it with SMR technology.

It's an old proven technology.

You add an add-on on it where you can do carbon capture.

And you've got something green suddenly that you can change the whole outlook of your industry and reduce drastically cement factory, steel mill, even fuel and gas and distillery.

This is massive.

And we have a big market in North America for fertilizers, even on the West Coast in the U.S.

And they're not at a bad place.

They do have some infrastructure to move this around.

And at least, I would say, semi-locally or regionally, they're going to do well with this.

Rodney

Yes, it looks like Alberta is a net, in spite of significant usage within Alberta, it's a considerable net exporter of anhydrous ammonia.

Frank

The other thing is also, all the techs are coming online, so you probably have a few hundred carbon capture approach.

Some people are actually using some of the carbon that's captured.

If you want to do ammonia, for example, if you're going to do your hydrogen, you put aside some of that carbon.

It's going to be reused when you do your ammonia.

So that's another way also to say even the carbon is part of the value chain there.

And there's a value to that carbon now.

If you go to technology where the carbon becomes a solid, you're going to have carbon black that goes in pretty much everything that we use, from car(s), rubber, to anything.

And that's fairly interesting.

So they've looked at this whole thing and realized, okay, this is something that's, I don't want to say easy, it's still a challenge, but it's not pipe dreams.

It's something that's…

Rodney

Dare I say that it's easier than getting Quebecers on board to build more pipe-wise?

Does that really stir the pot?

Frank

I think, I think yes, definitely.

You know, you would, and we'll see how things move because you're going to have many governments changing over the next two, three years.

And you're talking about projects that take five to ten years to be deployed.

So we'll see how policy change and how the support for these technologies and these operations evolve.

But, uh, it's, uh, it's interesting.

It's, we're at the beginning of this thing.

We've got to push and, um, I always use the term retail, but we're going to push in micro cap, small cap, uh, in the hydrogen, uh, domain, uh, back in, toward, from 20, I would say, 2015 to 2021.

At the peak of the micro cap market, uh, where everybody wanted to be, or a lot of people wanted to be into, uh, hydrogen.

And a lot of people got burned because a lot of projects were basically, uh, the equivalent of, you know, the guys that you remember probably that said, oh, we're going to make money with the internet back in 1997.

Uh, and we're getting 50 million market cap because they would have a website eventually.

Uh, so, uh, the, uh, these, these, the first wave of, uh, anything goes has happened.

And now we're coming back with projects that, uh, you know, make more sense.

And, and, and mostly investors, including retail investors, that are more educated, they've got burned into these other things.

I said, okay, uh, now I'm going to take the time to calculate, uh, you know, or to evaluate, uh, in a realistic manner, a very pragmatic manner, these projects.

And, uh, so we're going to see.

Rodney

I mean, the parallels to, I mean, you and I know that there's already been two crypto booms because we lived through both of them.

And the first one didn't last very long and wiped out a lot of the real pretenders.

And then the second one was a lot different.

It had a lot bigger players in it.

It had a lot more, uh, practical applications that were, that it was used for.

So we can see how these things happen.

Um, you know, I didn't really live the, uh, you know, as a market participant in the dot-com boom, but it felt like it was a longer boom and there was really only one.

Now it seems like we kind of get the pretend boom out of the way.

Uh, and then we go into the real boom after that.

So perhaps we're launching the real boom, uh, that's going on in, in the hydrogen space.

Frank

Well, you're going to see some project coming online.

So, uh, I know they've suffered a lot of small, uh, you know, small, small players, but with disruptive tech, uh, been able to finance, although it was a grind for them to raise a little bit of money.

You know, and then the contacts that pre 2021, they could raise tens of millions and now they

have to go to, uh, their mother-in-law to, to, to get 50 grand, you know, on this one, uh, but, but they're there.

And, and also they've, they become wiser.

They've learned to control their costs.

You know, you operate, uh, you bootstrap bootstraps there, uh, and, and you realize, okay, um, there's maybe certain things that it can come at.

You know, at the later stage that we don't need to have, we don't need to have the perfect solution.

What we have to have is something that people will want to buy.

Who's scratching a check.

Can I make money out of this?

And, um, that attitude is, is, uh, no, it's, it's a neat thing that it has percolate, uh, in the domain and the culture of the promoters that are pushing these projects.

And, um, you've seen a lot of the, uh, electrolysis projects that are gone.

By now, and, uh, they might not know they're gone, but they're not going to get electrical allocation.

They're not going to get, um, the, uh, the support that they expected, uh, five, ten years ago, and, uh, they're gone.

So what's left is the people that come in and can say, well, we're, we're different.

This is what we have.

This is how much can it cost.

And we have a payback period.

That's not on the generation, but it's, uh, without even, uh, large help from the government.

We can actually make money out of this.

And suddenly the serious people or the people that were very conservative, the oil and gas industry, uh, promoters that have stranded assets are now coming to hydrogen, which is fantastic.

Because that, that was the key to unlock this thing in my mind is to say, okay, all these stranded assets could be converted to, uh, a first transformation of the product on site.

So they're pumping gas, they're pumping oil, and they can make alternative, uh, green, uh, fuels with it and, uh, you know, have, have a better value chain, make more money and, and mitigate the issue of, uh, infrastructure and transport.

So that, that's, that's, that's the encouraging aspect of this business now.

Rodney

And it's, it's, it's, this isn't necessarily your background, but I quite like doing business with people that have an oil and gas services background.

Sorry, getting a message coming in.

Um, they tend to be very practical.

People, they've got a lot of, a lot of reps in at mobilizing, uh, you know, they, they tend to think very well in terms of value added markets.

So, you know, seeing a lot of people from that background get involved in this space, uh, gives me a lot of, uh, a lot of encouragement.

And there was a little bit of a trial run with this.

I know there was a few people, um, you know, four or five years ago running around with the idea that they were going to put a, uh, a Bitcoin miner at the end of a natural gas, a stranded natural gas well.

And I think, you know, I don't know how many of those really got done, but it certainly opened up the possibility.

And I think it's a lot easier to get government support for building a server farm at the end of, around stranded natural gas than it is to, to get around, you know, uh, a Bitcoin mining.

operation, which is a little bit more, um, you know, it's just a bit more out there.

It's a little bit less tangible.

Frank

I would say one of the biggest advantage of Canada is the legacy of, uh, the sum of all our mistakes over the last 30 years.

Uh, I'm going back to, uh, the Photonic era, uh, Nortel and, and the different, uh, uh, company we had in Canada, including Ericson, Lucent, Lola that were all in, and all, uh, you know, Brampton and, and Montreal.

Well, uh, we've invested in infrastructure for communication.

So it's already there, um, at least to the lower part of Canada, uh, we're, we're really covered, we're really connected.

We have, uh, satellite companies, we have, uh, uh, large data pipes, uh, companies that, uh, can connect us to the world.

Well, we have a cold climate in the winter, which obviously reduce the cost of running the server.

Uh, you just open the window and you don't have to cool down as much as, uh, you would in other places.

Uh, and, and, and, and for a lot of the, uh, and partitioning of, uh, crunching numbers.

So, uh, data that needs to be sent somewhere to be, uh, treated and then, uh, serve as, as, as, uh, as a product.

Uh, we have, uh, we have a massive advantage.

You're, you're not going to get that in Singapore.

You're not going to get that in, uh, in, uh, you know, close to, (???) you know, so, and today it's easy.

Like a millisecond, that data is somewhere in Alberta and Red Deer and, uh, they can process it and it's back to you.

And the cost of it per (qubit?) is, is nothing compared to, you know, we're a factor of one to 10, one to 15, uh, in the cost of processing that data.

And now, uh, connect that to, uh, some, uh, localized, uh, production of energy to power it.

Um, it's worth the, uh, green, uh, and, and the premium for the green, uh, energy aspect of it.

Uh, it's a winning, it's a winning thing, but it, we're building this on the, uh, the ashes of other people that fail for many reasons that are totally unrelated to, to what the business is going to be in five years from now.

Rodney

So you think there might be some, some stranded natural gas plants and things around out there that can be plugged into the, into the hydrogen economy?

Frank

Well, you're looking sometimes at putting natural gas on the grid with, uh, and you don't have a big, big consummation market around you.

Uh, you have to spend 15, 20, uh, sometimes 50 million dollars to put, uh, some transport capacity and you're going to get still a discount.

You know, unfortunately in Canada, all our hydrocarbon is sold at discount, no matter where it is, except maybe some very marginal, barely anecdotal, uh, uh, uh, there are anecdotes when, when they actually sell for, for spot price.

Uh, but now suddenly with that first very simple transformation, they're making big money.

Uh, and for, for little amount of investment for fraction of what just connecting to the grid would be.

Yes, absolutely.

Like, and, and, and, and, you know, we're already talking, uh, to some of these guys that, uh, want to have, uh, want to make, you know, their mind about, uh, how and where, and, and which one could be, uh, converted into a proposal like that.

And so it is serious.

This is not us, uh, talking to some journalists at Wired and saying, oh, in the future, in 20 years from now, this will happen.

There's people right now, uh, putting good money behind and generating firms to do the feasibility study on projects like that.

We're going to see them start to pop up and the more they're going to pop up, the more they're going to need hydrogen, the more they're going to need, uh, natural gas.

Uh, and so whomever has a company out there, if you can identify the company with stranded assets, they trade for a fraction of what they should be trading.

Some of them even make some revenue and they trade below revenue.

Uh, well, you know, if you have some change in the drawer somewhere, buy a few shares of these companies, they're either going to be bought or are they going to move to that field

They're going to be approached to move in that field.

And that, that's the one interesting transformation of that industry.

Rodney

Let me just take a step back.

Um, I mean, I obviously know what, uh, Wintech Energy's proprietary microwave plasma technology is.

Um, but you, you can, you can explain it better than me.

And I think maybe some of our listeners would appreciate that.

Frank

Well, that, that, that one's interesting because what we, what the idea is it can take any type of methane gas or biogas or natural gas.

And that you don't have to put the, you know, that 30, 40, 50 million dollar, uh, carbon capture, uh, technology with it to start to, to, to, to get green hydrogen.

Uh, you can, uh, compete with SMR because you just grab natural gas like they do.

And for, uh, something around, you know, between 15 to, uh, to 50 million dollars, you can have a significant production of hydrogen locally, obviously.

Then you have to deal with transport infrastructure and all that.

Uh, and that's when you start to talk about either data center or fertilizer production or other transformation on site that can be done through partnership.

But what you have on the side, with that technology is you have a solid carbon.

So you have another product and in the recent, uh, quarters, a technology like that, at least on paper, uh, would have, uh, made more money out of the solid carbon than from selling the hydrogen.

Sounds interesting.

It's not going to last, it's not going to last.

So I cannot say to people, Hey, there's going to be a revolution because the price of from carbon black to solid carbon is going to come down, including bad carbon, uh, synthetic graphite and stuff like that.

That's made with that type of carbon. It's a pure carbon.

So you don't have to deal with, uh, with, uh, with a lot of the, uh, contamination and the process of refining that, uh, the, the natural graphite people have to deal with.

You don't have to deal with the size either.

You don't have to go out there with a very front end, uh, you know, business where you have to develop a resource, go through all the mining process, all the pushback from, um, the communities, the social acceptability or not.

And, uh, and, uh, and having a, uh, a mine in cottage country where then you have to, to truck this thing, train this thing, move this thing around to be processed elsewhere and purified before you finally get some battery carbon.

Uh, you just have battery carbon that drops off the, uh, cyclones, um, and the reactors and, and it's already a product.

You bag it, you ship it, it's, it's usable.

Rodney

And there's a number that I think you're right about the pricing because I know of a number of groups that are, you know, some, some very, very sharp groups technically, uh, that are moving towards this space.

Uh, and it's something, you know, I sort of started to hear about a year and a half ago.

Um, so yeah, I think, I think that pricing won't be permanent, but probably gets more efficient and there's probably a lot of money to be made in the meantime.

Frank

Well, it's a premium for the, uh, the first mover.

Well, people will be able to start to do that kind of, uh, and we're, we're talking about Wintech and H2SX there, but, uh, there's probably, uh, another 10 competing technologies that are similar, not exactly the same, but are similar out there in the world.

And, uh, uh, they'll be able to, uh, locally produce, uh, uh, pure carbon and use it in their local industry.

But, uh, the, the first, uh, and another caveat is that when you know 10 of them, there's probably a hundred of them out there, but as they slowly come all online, uh, that this pricing is going to come down, but not fast enough.

Probably to, uh, to, uh, to not be used like I think it's, it's not, uh, fraudulent.

It's actually absolutely fair to say that in their projection, they can use the current pricing, even if it's a little bit of a discount and say that it's, it's going to pay the infrastructure.

It's going to pay their capex and if you have your capex paid in the first few years, then after that, you know, you're, you're very tough to compete with.

Rodney

Yeah.

And there's, I mean, you need a considerable amount of technical expertise to do this.

So there, there is a motive around the industry that way, um, you know, maybe not like some other industries that, um, you know, people can understand the basics of it.

I guess I'm coming to cannabis where, um, you know, there, there's a lot of that, you know, that market was flooded by amateurs.

Um, you know, nobody's going to stumble into this.

You need, uh, significant education and experience to even get started, uh, in this industry.

Frank

Oh, but it's always the same thing.

Uh, and it's not a matter of just a small cap, micro cap, uh, people blue chip have fell for that.

Nortel was putting projections, uh, in the, in the, the peak of, uh, of their days in the, uh, late nineties, early 2000, where they were announcing, for example, an agreement with Mobicom in Bulgaria.

And when you were looking at the numbers, everybody from the newborn to the, uh, great, great grandmother would have had to have a phone very quickly, uh, so that, uh, they would hit the milestones and get paid the price they were expecting or announcing they would get paid.

Obviously it never materialized.

So, uh, you're going to see a lot of these people using these numbers, but the, the difference here probably is that these number might be right at the beginning.

Um, it will come down.

It's not going to be an eternal, uh, uh, situation and it's going to quickly come down and quickly in relative term in, in economic sense, uh, like five, 10 years, you're going to see drastic drop of these price.

Uh, but if your capex is paid and that's always the thing, uh, the reason why SMR is unattainable in term of, uh, you cannot compete with SMR right now, uh, if you have, uh, electrolysis or, or other type of hydrogen, including white hydrogen, uh, is that their capex for most of these operation are already paid.

Uh, we're talking about a production plant that sometimes are 40, 50 years old, uh, so, uh, they can organically improving an upgrade.

They don't need to, uh, to, to, to take the, the big, uh, hit at the beginning.

So, yeah, that's, that's, uh, how it's, it's, it's the advantage certainly of that one business is that (???) is going to allow them to, uh, give them, give them the leverage to, uh, deploy the tech.

Uh, and make money and pay themselves fairly quickly so that, uh, the, they can be profitable when, when the pricing comes down, they'll be profitable on the hydrogen production.

And, uh, I'll say also, I'm speaking like they're not profitable doing the hydrogen.

They're still profitable.

Most of them, if you look at their projection, they're profitable in the hydrogen.

And this is the commodity that's not going to come down because if you were to just convert, for example, the steel-making industry,

you need to double the current production.

That's not, uh, an argument to say that hydrogen is going to come down.

Rodney

And do you have, do you want to talk about white hydrogen and what's going on there?

Or is that, uh, do we leave that for another time?

Frank

I don't know.

We can probably talk about it.

Um, you know, it's, uh, you should have invited, uh, Sheldon for that.

He has this, uh, company, uh, Quebec innovation.

So QI, um, is it QICM?

MC, I have a blank (???).

Uh, but they've-

Rodney

QI-MC, Quebec Innovative Minerals Corp.

Frank

Yeah.

So, so you're talking about a company that went on and, and strike a deal with the Quebec,

um, the, uh, National Institute of Research.

The, uh, uh, and, uh, they've developed technology to, to detect and capture.

And there's a few others that are in the process of coming online.

You're going to see this fall, a few of these company announce, uh, deals.

And, uh, I would say, look at the one with the tech.

Uh, and that would be my, my, uh, I don't want to say an advice, but it would be my approach.

If I had some money, uh, to deploy, that's where I would look at, the companies that also, that are looking for either resource or looking for a stream of production.

Uh, I have the agreement to do so because there's no really, uh, there's no real framework for this at this point for white hydrogen.

Um, but, um, the, uh, the technology, uh, can be proved fairly quickly in the field.

And you're going to see a lot of people, uh, gaining interest for that.

Like you look at anywhere in the world where you have bands of, uh, different minerals, uh, mixed with sedimentary, uh, uh, you know, topsoil or cement, sedimentary domes.

Uh, you got some, some reaction.

You got some chemical reaction that can be activated.

Think of, uh, think of, uh, the natural gas, uh, produced by fracking.

It's a bit similar. Hydrogen exists in its natural form.

That's the white hydrogen for the people that don't know the semantics there.

Um, it's, it's hydrogen that occurs, uh, in, uh, in nature and there is two approach to it.

There's people that will go out and try to identify faults or naturally occurring reservoir where hydrogen has accumulated itself.

And, uh, at the origin, it's almost all the same thing.

It's a reaction of certain type of minerals and, uh, certain type of chemicals and, and physical reaction at depth that will, uh, leak hydrogen, uh, over time and, and gets accumulated.

At these faults often around, uh, carbonatites or, uh, rare earth projects, some gold mines, uh, found some, uh, especially some of the funniest thing.

Uh, there's a gold mine in Quebec that got, uh, deep flooded and put back into production and they totally missed the opportunity.

It happened a few years back.

They missed the opportunity that water was acting as a, uh, a container or reservoir, uh, to accumulate, uh, white hydrogen.

They could have produced from that, probably make more money than trying to produce that gold.

Um, though, sometimes you have to look at all, all the aspects of your project, but, uh,

Rodney

They could have ramped up production of natural hydrogen.

Frank

So, so you're going to get two things there.

You're going to get the people that will produce hydrogen from reservoir.

And that goes back to 51, 101 rules.

And how do you, uh, how do you establish a resource?

And the, the norms, the national instrument will have to be adjusted.

This is not something that's, uh, well, uh, documented enough.

Uh, you're going to have to be careful when people report resource in that field, because it might be recanted.

It might be, uh, reviewed by the regulators over time.

Um, you're going to have some people that will put their finger on the scale, I'm guessing.

Um, if you look at the, the, the deal Sheldon is involved (in), uh, my, uh, perception of it right now,

I'm not involved in the details.

I know a little bit because I've, I've been looking at it, but they have some technology.

So they have that component that's important.

And they're looking for a source or reservoir of it.

Now the advantage of, um, hydrogen is that if that reaction has been going for thousands of years

and you have X amount of, uh, hydrogen captured in these reservoir, these reservoir are still active.

They're still being fed new hydrogen.

If you had a reaction that create them initially.

Now you're going to go to other place(s).

Uh, and I'm guessing a lot of the, uh, lithium guys in Nevada, for example,

they're dealing with, uh, finds and, uh, they're looking with, with clay and domes that, uh,

can imprison, uh, hydrogen, uh, they're going to look at in-situ production.

So not a few wells, uh, and, and well-known reservoir, but many, many, many shallow, small wells,

uh, uh, producing in-situ.

So small production, but with many, many, many wells that, uh, will, uh, amount to a good production at the end.

And, and that's something that they won't be able to come up with a, uh, with a resource.

It's, it's quasi impossible.

And if they do, the resource is going to be minuscule and it's going to be a resource for six months.

Well, you were going to see these guys probably producing for, for, for decades.

Rodney

Yeah.

So it's not going to fit very well with the regulatory structure of Canadian capital markets.

Frank

Well, if I look at Quebec, which, or Ontario, the two ones I know very well right now,

uh, on that topic, if you look at Quebec, there is a, uh, they have restrict(ed) the capacity to do,

uh, that type of operation.

So, uh, it's not under the mining, uh, framework.

So you cannot go and get claims and say, okay, I'm producing hydrogen.

Uh, you don't own that hydrogen at this point.

That's important.

And, uh, the thinking is that you will have to negotiate with the government.

Uh, and I think the government is going to be very open to negotiate.

They've, they've said that in the, uh, when I asked a few times, the different, uh, civil servant(s)

that are in position to influence the politician on this, uh, there is an exception

to the, uh, hydrocarbon framework in Quebec, where they say that if you're to produce

other gas being, uh, either naturally occurring, uh, and hydrogen or, uh, helium

that you can ask and you would most probably get the authorization to produce it.

And they want that production to occur, by the way.

There is a political will behind it, supporting it.

So, uh, I, I think it's the two type of company you're going to have to

look at the three, three elements is that do they have a tech or are they dependent?

Uh, do they are in a position where they can produce this thing?

They have the authorization, they have the partnership.

They have the surface rights, the backing of the government.

And I'd say, uh, strictly, and I don't want to expend too much on it, uh, uh, that, uh, you

know, Sheldon's deal right now, uh, it's 90% of it already kind of put in place.

So, uh, there's a blue sky potential on, on that company.

That's, uh, that's, uh, seriously, uh, interesting.

Rodney

No, interesting.

Are you, are you familiar with the, according to the CBC, there's only one, uh, natural hydrogen well in production in Mali.

It's not quite Timbuktu, but, uh, Baraka, uh, Bagu, Baraka Bagu?

Frank

Well, right now, right now it is the, uh, biggest production.

Um, there's wells, there's probably, uh, at least 30 wells that are, I would say, in, uh,

data collection or scientific production or semi-production where they are accumulating

data, testing technology.

Um, and that, that's, for example, what, uh, QI, uh, MC is doing, uh, but, uh, you, uh, you're

gonna get a few of these that will be converted over the next six to 12 months.

You're gonna get a few of these people, uh, starting to produce small hydrogen production.

Why not?

They have it.

It's there.

It's coming out.

Either they put a cap on it or they start to put it in, in, in, in containers and start

to find a market for it.

It's not the biggest, in Mali, it's not the biggest resource.

It is probably the easiest resource found so far.

And that's the reason why they can produce from it.

Uh, what they found in France is humongous.

Um, and that would probably be, uh, the, uh, the one to watch, the one to

follow to see how, uh, uh, how imaginative they're going to be with, uh, the, the rules

of how you establish, how you define a resource.

Uh, although it's not 51 101, it's going to be probably under the, either the (geo RC?) framework

or some other framework, but, uh, that's going to be an interesting, um, an interesting, uh, topic

to follow.

There's challenge and the scientific challenge, reporting challenge.

The engineer, the reservoir engineer will have.

But, uh, uh, uh, again, I'm saying, and I don't want to, to talk too much.

Obviously I'm, I'm, I'm in touch with a few people that I'm under NDAs and they ask me for opinions.

Uh, and, uh, you're going to see two or three, uh, projects coming online, probably maybe one

or two getting listed this fall in Canada.

And, uh, they're going to be, uh, interesting project to follow.

So there is, there is, there's a lot of space.

I think there's a lot of space to grow, uh, for the company that we mentioned.

It's going to become very big, uh, in my mind.

That's my personal opinion there.

Uh, but, uh, and they have the right backers, uh, financially, uh, from the, the, you know, regulatory

side of things and, uh, and you're going to see some other guys also coming in and, uh, some, some

other groups, uh, coming online and, uh, putting these things in place.

And there's, there's abundance.

There is a potential to probably carry 50 of these, uh, junior, uh, you know, energy companies out there.

And, and if they're serious, if they have a serious plan in place and they move at a good pace,

there's money to be made, that's going to be interesting.

And that might be one of the greatest way to make money with hydrogen, uh, over the next, uh, two years.

Rodney

Yeah.

And it looks like the market's already started in Australia, that there's, uh, there's significant

investor interest there.

Frank

I didn't get any call for that from Australian promoters.

And that's, uh, I'm not saying it's not going to happen.

But it's early stage. You're really at the beginning of something. That business does not even exist yet. Again, it's an anecdote in the energy industry.

Rodney

So of the plasma upgraders that exist, that are in use today, do most of those upgraders have potential to produce hydrogen? Or is that something that's come online recently?

Frank

Well, hydrogen via plasma is not, and you have to be careful again, when you talk about plasma, you're talking about not only different technology, but different families of technology.

Plasma is basically like saying, oh, we have a flame. Keep it like this. Lighting a match is not a technology in itself, and that's the best analogy here.

It's how you capture, how you bring it to a certain critical point, what's your efficiency, and how much electricity you need to bring in, and what do you use, how much you recuperate energy, and what's your byproduct.

So a lot of plasma guys will become component(s). I'm thinking of one company in mind that developed plasma to do silicium batteries, and they have very good plasma technology on the equipment side of things.

Now that plasma equipment is probably going to find a new market, and you're going to see them with a few of these players, future players.

But if you look, for example, at Wintech, they're using plasma as an intellectual reduction, as a way to make things simple and stupid to be understood.

But it's really, it's a microwave process, so we're not talking about your usual plasma that comes from burning something or from creating a flame.

Eventually, you see a flame, there's a reaction, but it's not the flame that will trigger the reaction. The flame is the reaction, and that's a big difference in terms of energy consumption.

It's massive, it's from, it's an order of 1 to 50, or 1 to 40, so for one unit of energy that you use, the competition is using 40 units of energy.

And that, at the bottom line, makes a big difference. Forget the environment. It does, obviously, make wonders for the environment, but just for your pocketbook, it makes a big difference.

Rodney

And that's compared to electrolysis. You're saying it's like 40 times more efficient.

Frank

Well, that would be even the theoretical, in theory, if there's any physicists on the call, they could probably correct me here.

But you will have a physical–the law of physics apply–and you will have a limitation of what you can do with electricity.

And because you're splitting an atom of water, and there's a minimum amount of energy that needs to be applied to split that molecule, not the atom, but I mean

You're splitting the two atoms, you're splitting the hydrogen out of the water.

But if you're able to do that directly, you know, you end up with a lot of oxygen, for example, when you do that, you're going to need to find a way to monetize that oxygen.

And maybe it's a way to recuperate it as energy, but it's not the most efficient.

And most of the projects I've seen, I would say all the projects I've seen, will use one unit of energy to produce anywhere between 0.6 to 0.9 unit of energy of hydrogen.

So you lose energy.

So that means that you have to go to hydro, Hydro One, or two, you have to go to the big electricity producer and tell them,

stop selling to the Americans for twice, three times, four times your production costs, selling to us close to your production costs,

so that we can destroy some of your units of energy and make them, you know, it makes no sense for them.

Right there, that means that you're going to have to produce your own electricity.

Rodney

Yeah, so it's nowhere close to being ready for peak shaving or anything like that for overnight grid storage to put back in the system.

It's not nearly efficient enough for that.

Frank

Right now, it's not even, what, it's, it's, I didn't look at the recent numbers.

I don't want to mislead anyone, but we're talking a single digit percentage of what it represents in terms of hydrogen production.

And I think that's in 50 years, if we have that call again, it's going to be the same thing.

You're never going to get through electrolysis more than 10% of the production in the world.

It's never going to be close to, uh, uh, to compete with, uh, SMR technology.

So hydrogen has to come from other source.

Now, the cheapest and greenest way to do it, uh,

Um, outside of specific technology, I'll make it very simple.

Um, because if you look at, for example, microwave plasma will compete with SMR, uh, capex and all.

Uh, it actually, it's either equivalent or lower, depending where you are.

And, um, but if you look at, uh, white hydrogen, well, that becomes a very good alternative,

especially that white hydrogen is potentially everywhere.

Like Africa's potential.

That's massive.

And now suddenly that means that they can do a green energy in, in Africa that is close to, uh, the population centers, close to the consumer.

And that's, that's important again where it's like, uh, iron ore, it's like oil and gas.

Yes, it's all seaborne.

It's all tidal water.

It's all infrastructure.

It's nice to find a discovery, but how do you transport it, how do you move it around?

Rodney

Well, and you know, to go to a broader standpoint that, you know, the Haber-Bosch process has essentially allowed, you know, humanity to surpass, I mean, I think without the Haber-Bosch process with nitrogen fertilizers and so on, you know, we wouldn't get past a billion people.

So fundamentally, you know, these processes add a lot of value to humanity that, uh, you know, I always, I always shudder a little bit, you know, from my vanadium one days as people were like, oh, well, what's, what's vanadium?

Like, how come I've never heard of it?

But vanadium is, you know, critical to, to cars and to buildings and to steel of all sorts.

So with, you know, vanadium has a history that goes past, it's, um, the time it's been known as an element.

So I think if you look at these processes and the upgrading of hydrocarbons into something that's more useful, um, you know, even if you're talking about at the electrolysis level, that that happens, that energy gets back, made back, and then some on the fertilizer side.

When you add the, you know, the photosynthesis and the sun's energy and whatever else that overall, these are very, very beneficial processes to society.

Frank

So, uh, at this point, it's been almost an hour, uh, and the, uh, I don't know if you have any other aspect you want to discuss on, but as an introduction, I think that, uh, people will have to learn the concepts, you know, the different types of colors.

It's not a perfect science.

There's different school of thought, but from the gray hydrogen, which would be the, uh, SMR-produced one with no carbon capture, the blue hydrogen, which is the, uh, same thing with capture or some capture element.

the green hydrogen, which usually referred to electrolysis and similar technology to the, uh, you know, purple, indigo, whatever they call it, which becomes, uh, another way to produce it without, uh, without water.

And that's another element also, you know, uh, I've not seen anyone produce, uh, from salt water.

So water, uh, water access is going to be important for this type of tech, um, obviously a place like Iceland, a place like Norway, and a place like that have plenty of water, have cheap hydroelectric.

They could go with, uh, with electrolysis, but you know, there's so much you can do and a lot of them would be in a better position to just take one 40th of the, uh, of the, the hydroelectric production, which is kind of green and match it with, uh, with natural gas or with even methane from garbage and produce hydrogen.

So these, uh, these, the, the category are important, uh, in terms of how deals are done.

It's a matter of, you know, the company you want to invest in, uh, it's also a matter of seeing what type of technology they have.

And do we, uh, do they have anything proprietary that will allow them to do what they want and not be blocked by a competition or not be squeezed by large player in five to ten years from now.

But, uh, uh, so look for, uh, technology and then look for, uh, how it will evolve, uh, the framework, the authorization to, to, to, to explore the authorization to produce.

And, and, uh, and, uh, then reservoir issue or resource issue.

So that, I think that's the type of thing that I can bring to the table in terms of the limited knowledge I have of this, uh, business.

And after that, uh, look into stranded, uh, natural gas producers.

Rodney

Yeah.

And the, uh, you know, one of the, the better chartists on Bay Street, who I keep in touch with, he's very, very bullish on natural gas right now.

I'll get that long bottoming process made in the chart with, uh, relatively low inventories for this time of year.

So it could be, uh, it could be a pretty wild, uh, winter for natural gas with a bit of a cold snap.

Frank

Well, I'll, I'll let you go on this and finish your call.

I have to jump on a few other things, but, uh, it was a nice call.

I think as a, as a first real discussion about, uh, junior(s) and hydrogen, uh, unfortunately we only had one company we could mention, but, you know, let's, let's do this in a month or two and see, uh, who are the new players coming to the table.

Rodney

Yeah.

There'll be, there'll be a bunch on their way.

I'm sure.

All right.

Thanks Frank.

Frank

Have a nice day, everyone.

Thank you for coming.