Q1 2024 PureCycle Technologies Inc Earnings Call
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Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Christian Bruey.
I'd now like to hand, the conference over to your first speaker today Christian brewery.
Christian Bruey: Thank you, Jacinda. Welcome to PureCycle Technologies' first quarter 2024 corporate update conference call. I'm Christian Bruey, Director of Corporate Communications for PureCycle. And joining me on the call today are Dustin Olson, our Chief Executive Officer, and Jaime Vasquez, our Chief Financial Officer. This morning, we will be highlighting our corporate developments for the first quarter of 2024. The presentation we'll be going through on this call can also be found on the investor tab on our website at Purecycle.com.
Christian Bruey: Thank you Sandra and welcome to pure cycle technologies first quarter 2024, corporate update conference call I'm Brewster Brule director of corporate communications for pure cycle and joining me on the call today are dusting Olson, our chief Executive Officer, and Jamie Vazquez, Our Chief Financial Officer. This morning, we will be highlighting our corporate developments for the first quarter 'twenty.
Christian Bruey: 24.
Christian Bruey: Patients will be going through on this call can also be found on the investor tab on our website at pure cycle Dot com. Many of the statements made today will be forward looking and are based on management's beliefs and assumptions and information currently available to management at this time.
Christian Bruey: Many of the statements made today will be forward-looking and are based on management's beliefs and assumptions and information currently available to management at this time. The statements are subject to known and unknown risks or uncertainties, many of which may be beyond our control, including those set forth in our Safe Harbor provisions and forward-looking statements that can be found at the end of our first quarter 2024 corporate update press release filed this morning, as well as in other reports on file with the SEC that provide further detail about the risks related to our business.
Christian Bruey: The statements are subject to known and unknown risks or uncertainties, many of which maybe beyond our control, including those set forth in our safe Harbor provisions and forward looking statements that can be found at the end of our first quarter 'twenty 'twenty four corporate update press release filed this morning as well as in other reports on file with the SEC provides further detail about the risks.
Christian Bruey: Weighted to our business. Additionally, please note that the company's actual results may differ materially from those anticipated and except as required by law. We undertake no obligation to update any forward looking statements.
Christian Bruey: Additionally, please note that the company's actual results may differ materially from those anticipated, and, except as required by law, we undertake no obligation to update any forward-looking statements. Our remarks today may also include preliminary non-GAAP estimates and are subject to risks and uncertainties, including, among other things, changes in connection with quarter-end and year-end adjustments.
Christian Bruey: Our remarks today May also include preliminary non-GAAP estimates and are subject to risks and uncertainties, including among other things changes in connection with quarter end and year end adjustments any variation between tiers cycles actual results in the preliminary financial data set forth herein may be material, you're welcome to follow along with our slide deck or joining us by phone.
Christian Bruey: Any variation between Purecycle's actual results and the preliminary financial data set forth herein may be material. You're welcome to follow along with our slide deck or, if joining us by phone, you can access it at any time at Purecycle.com. We're excited to share updates from the previous quarter with you, and I'll now turn it over to Dustin Olson, Purecycle's Chief Executive Officer. Thank you, Christian.
Dustin Olson: You can access it at anytime at pure cycle Dot Com, we're excited to share updates from the previous quarter with you and I'll now turn it over to Dustin wholesome gear cycles, Chief Executive Officer.
Dustin Olson: We wanted to start this call by thanking those who came to Ironton to participate in the showcase and also thank those that attended virtually. We're proud of our facility, our team, and our progress. I hope you're able to get a better understanding of our operations by seeing the steel in the ground with your own eyes. Leading into the outage, we were able to establish rates and feed longer periods of time and semi-continuously pelletize at approximately 6,000 to 7,000 pounds per hour.
Dustin Olson: Thank you Christian.
Dustin Olson: Wanted to start this call by thanking those who came to iron to participate in the showcase that also thank those that attended virtually we're proud of our facility our team and our progress I hope youre able to get a better understanding of our operations by seeing the steel in the ground with your own eyes.
Dustin Olson: Leading into the outage, we were able to establish rates and feed longer periods of time and semi continuously pelletize at approximately 6% to 7000 pounds per hour. We successfully removed coproduct wanted co product too and we're able to ramp up our sample deliveries to customers we.
Dustin Olson: We successfully removed coproduct one and coproduct two and were able to ramp up our sample deliveries to customers. We were building good momentum as we entered the audit. We are closer to making the promise of Purecycle a reality today than we've ever been before. We've demonstrated our ability to run the plant, test different feeds, and make good products. We know the technology works at a fundamental level, and our job now is to leverage the improved reliability, expand the capacity of CP2, and run the plant continuously so we can start pushing pellets out of the facility at scale. Our Q4 to Q1 progress was substantial. We increased overall production by six times and continue to learn.
Dustin Olson: We are building good momentum as we entered the outage, we're closer to making the promise of pure cycle, a reality today than we've ever been before we've demonstrated our ability to run the plant test different feeds and make good products. We know the technology works at a fundamental level and our job now is to leverage the improved reliability.
Dustin Olson: To expand the capacity of CPE, two and run the plant continuously so we can start pushing pellets out of the facility at scale.
Dustin Olson: Our Q4 and Q1 progress was our Q4 to Q1 progress was substantial we increased the overall production by six times. We continue to learn we continue to improve the overall efficiency and while this was a significant improvement quarter over quarter as we move forward post outage, we should quickly see these levels.
Dustin Olson: We continue to improve overall efficiency, and while this was a significant improvement quarter over quarter, as we move forward post outage, we should quickly see these levels as inconsequential. As we began to produce higher levels of pellet production, we did stumble a bit when we first learned how to load railcars at scale. We cross-contaminated some of the product between silos on the way to filling railcars. This is part of the learning process, and we've made improvements to prevent it from happening again.
Dustin Olson: As inconsequential.
Dustin Olson: As we began to make higher levels of pellet production, we did stumble a bit when we first learned how to load railcars at scale, we cross contaminated some of the product between silos on the way to filling railcars. This is part of the learning process and we've made improvements to prevent it from happening again.
Dustin Olson: As discussed before, we continue to test the facility by running exclusively post-consumer curbside waste. This feedstock stream has both Co-Product 1 and Co-Product 2 present and allows us to test the boundaries of the facility. We learn something every time we run a new feedstock. We are getting better at product quality. This is the net result of a lot of activity and requires operational stability to get the best results. We have seen high quality products during times of our operation, but since our reliability has been up and down, we've struggled some with consistency.
Dustin Olson: As discussed before we continue to test the facility by running exclusively post consumer curbside waste. This feedstock stream has both co product one and co product to present and allows us to test the boundaries of the facility. We learn something every time, we run into feedstock.
Dustin Olson: We're getting better at product quality. This is the net result of a lot of activity requires operational stability to get the best results. We've seen high qualities of product during times of our operation, but since our reliability has been up and down we struggled some with consistency.
Dustin Olson: When we've got the entire machine running, we start to see quality improve. We expect to see improvements as we restart the plant following the outage. Our outage was very comprehensive. Every learning, every headache, every challenge, and every reliability and blip that we've experienced over the past five months was formulated into a reliability improvement. During the outage, we executed over 100 projects, some big, but mostly medium and small jobs that required less than a day or two. And each job, no matter how big or how small, was important to the facility's continued improvement. It's difficult to explain the team's feeling when you're almost there, or you are there, and then something minor creates an interference and slows you down.
Dustin Olson: When we got the entire machine running we start to see quality improve we expect to see improvements as we restart the plant following the outage.
Dustin Olson: Our outage was very comprehensive every learning every headache every challenge and every reliability a blip that we've experienced over the past five months was formulated into a reliability improvement plan.
Dustin Olson: During the outage, we executed over 100 projects, some big but mostly medium and small jobs that require less than a day or two and each job no matter how bigger how small was important to the facilities continued improvement.
Dustin Olson: It's difficult to explain that teams feeling when you're almost there or you are there.
Dustin Olson: It's depressing, but with this outage, we found a lot of room for optimism because we believe we've taken a lot of those items off the table and have improved the reliability of our facility. We did extend the outage, partly because we had more cleanup than expected, but mostly because we wanted to give ourselves the best possible chance to run more reliably post-outage. We're currently two days away from finishing the last project and restarting the plant, and we expect to start making product next week.
Dustin Olson: And then something minor creates an interference and slows you down it is deflating, but with this outage. We found a lot of room for optimism because we believe we've taken a lot of those items off the table and have improved the reliability of our facilities.
Dustin Olson: We did extend the outage, partly because we had more clean up than expected, but mostly because we wanted to give ourselves the best possible chance to run more reliably post outage. We're currently two days away from finishing the last project in restarting the plant and we expect to start making product next week.
Dustin Olson: On the commercial side, we're making steady progress. We continue to advance trials across the board with the goal of final commercial product acceptance. If there is one theme that remains steady, the industry supply of recycled products is underserved, and the demand for them remains very, very high.
Dustin Olson: On the commercial side, we're making steady progress we continue to advance trials across the board with the goal of final commercial product acceptance. If there is one theme that remained steady the industry supply of recycled product is underserved and the demand for product remains very very high we continue.
Dustin Olson: We continue to seek new lanes as well. Given our ability to remove CP1 and CP2 from the feedstock, we have naturally better mechanical and technical properties. This gives us a differential opportunity to sell into both film and fiber. Film and fiber represent a very challenging product application and have been traditionally underserved by the recycling supply.
Dustin Olson: To seek new lanes as well given our ability to remove CB, one and <unk> two from the feedstock we have naturally better mechanical and technical properties. This gives us the differential opportunity to sell into both film and fiber <unk>.
Dustin Olson: <unk> fiber represent a very challenging product application and have been traditionally underserved by the recycle supply we've tested numerous applications, both internally and externally and found early success early success.
Dustin Olson: We've tested numerous applications, both internally and externally, and found early success. The pictures on the right of this slide show the progress. At the showcase, we showed two spools of polypropylene twine and a blanket that was manufactured from our product. Today, we show a colored rug made by a third party and a spool of film produced in our Durham lab.
Speaker Change: Excuse me.
Dustin Olson: The pictures on the right of this slide show the progress at the showcase we showed two schools of polypropylene twine and a blanket that was manufactured from our product.
Dustin Olson: Today, we show a colored rug made from a third party and a spool of film produced in our Durham lab.
Dustin Olson: There is no better feeling than seeing your resin be transformed into products that people will use. On the financing side, we're doing what we said we would do. We are marketing these bonds as a cash instrument for our operations. We've reached an agreement on the sale of bonds that will bring $30 million of new cash to the operation, as well as refinance an outstanding loan.
Dustin Olson: There is no better feeling and seeing your resident b transform into products that people will use.
Dustin Olson: On the financing side, we're doing what we said we would do.
Dustin Olson: We are marketing these bonds as a cash instrument for our operations. We've reached an agreement on the sale of bonds that will bring forward $30 million of new cash to the operation as well as convert an outstanding loan both are positive for pure cycle and I'll, let Jamie speak to the details, but this is again another indication of the confidence that.
Dustin Olson: Both are positive for Purecycle, and I will let Jaime speak to the details. But this is, again, another indication of the confidence that our core shareholders have in our technology. The Q1 performance of Ironton can be categorized in two areas. First, site reliability, and second, Co-Product 2 removal. We focused the outage to address both of these areas. I would like to note that every time we take an outage, we make substantial improvements. The first outage in June of 2023 mitigated the adsorbent bead leak. The second outage in July of 2023 mitigated the seal leak on the Chabacar.
Dustin Olson: Our core shareholders have in our technology.
Dustin Olson: The Q1 performance of Ironton can be categorized in two areas.
Dustin Olson: First site reliability and second co product to removal, we focus the outage to address both of these areas I would like to note that every time, we've taken outage, we make substantial improvements the first outage in June of 'twenty three mitigated the absorbent bead leaks. The second outage in July of 'twenty three.
Dustin Olson: <unk> mitigated the ceiling on the <unk> the third outage in November and installed the screen changer for the final product distributor in each case, we ran into constraints identified the root cause and then fix the problems for.
Dustin Olson: The third outage in November installed a screen changer for the final product extruder. In each case, we ran into constraints, identified the root cause, and then fixed the problem. For example, while other areas did impact overall reliability, we didn't have a single Shiba Column-related downtime event from July until March. Additionally, we haven't had any problems with our adsorbent bead plugging on the final product extruder since the November outage. Once the problems are known, we implement solutions to prevent the reoccurrence. We believe this outage will be no different.
Dustin Olson: For example, the other while other areas did impact overall reliability, we didn't have a single Shiloh column related downtime event from July until March we haven't had any problems with our ads b plugging on the final product distributors since the November outage once the problems or no.
Dustin Olson: One we implement solutions to prevent the reoccurring.
Dustin Olson: We believe this outage will be no different.
Dustin Olson: We addressed the known reliability challenges and also implemented projects that should improve the overall CoProduct2 performance. If you focus on the table at the top right, you will find numerous reliability challenges that we have faced since the November outage. This shows the number of days that were lost to fixable reliability items. We use metrics like this to guide our activities and upgrade projects. We implemented a lot of improvements. These problems were known operational headaches.
Dustin Olson: We attacked the known reliability challenges and also implemented projects that should improve the overall co product to performance.
Dustin Olson: If you first focus on the table at the top right you will find numerous reliability challenges that we face since the November outage. This shows the number of days that were lost to fixable reliability items, we use metrics like this to guide our activities and upgrade projects, we implemented a lot of improvements these problems.
Dustin Olson: In the case of the final product transfer valve, that valve was first oversized in the original design and then damaged by adsorbent bead contamination. As a result of those two items, we were forced to run that one valve in a semi-continuous operation. We were batching these transfers to the final product extruder, which is operationally very challenging. This has now been upgraded.
Dustin Olson: We're known operational headaches in the case of the final product transfer valve that valve was first oversize and the original design and then damaged by Absorbant bead contamination.
Dustin Olson: As a result of those two items, we were forced to run that one valve and semi continuous operations.
Dustin Olson: We were batching these transfers to the final product extruder, which is operationally very challenging this has now been upgraded.
Dustin Olson: Another major improvement to our facility is the settler level indication repair. This was actually an outage discovery item and led to more work and a new project. Our level indication was damaged in a way that provided an incorrect level indication to the plant. This negatively impacted numerous aspects of CP2 operations.
Dustin Olson: Another major improvement to our facility is the settler level indication repair.
Dustin Olson: This was actually an outage discovery item and lead to more work and a new project.
Dustin Olson: Our level indication was damaged in a way that provided an incorrect level indication to the plan.
Dustin Olson: This negatively impacted numerous aspects of <unk> operations.
Dustin Olson: We added it to the scope list after the outage was started, but it was important to get it fixed. We upgraded the level to prevent similar failures, and it's now back in place and ready for service. I'm confident that it will provide much better reliability to the Co-Product 2 operation going forward. A final series of improvements were made to the SEAL systems. We continue to add incremental small improvements to these systems to bolster their reliability. This is a central focus area for our site management team and an operation that we watch closely every day.
Dustin Olson: It was a new item we added to the scope list. After the outage was started but it was important to get it fixed we upgraded the level to prevent similar failures and it's now back in place and ready for service.
Dustin Olson: Im confident that it will provide much better reliability to the co product to operation going forward.
Dustin Olson: A final series of improvements were made to the <unk> systems, we continue to add incremental small improvements. These systems to bolster their reliability. This is a central focus area for our site management team and an operation that we watch closely every day.
Dustin Olson: With respect to Co-Product 2, we made good progress. We advanced the original planning for the Q2 improvements, but we also completed a separate project that we hope will provide immediate Co-Product 2 relief. It's important to reset at first.
Dustin Olson: With respect to co product two we made good progress we advance the original planning for the Q2 improvements, but we also completed a separate project that we hope will provide immediate co product to relief.
Dustin Olson: It's important to reset at first.
Dustin Olson: As we moved into the outage, we were focused on two items. First, processing low-coproduct 2 feeds in order to minimize how much we had to take out of the feed and maximizing the manual removal of CP2 from the vessel. We were in a good position with these activities entering the outage. As we started the outage, we thought we had the vessel fully empty. However, unexpectedly, we found material in the bottom of the vessel because of the broken level indicator.
Dustin Olson: As we moved into the outage, we were focused on two items first processing low co product two feeds in order to minimize how much we had to take out of the feed.
Dustin Olson: And maximizing the manual removal of CPE to from the vessel.
Dustin Olson: We were in a good position with these activities entering the outage.
Dustin Olson: As we started the outage we thought we had the vessel fully empty. However, unexpectedly we found material in the bottom of the vessel because of the broken level indicator. While this took time to clean and prepare for maintenance and ultimately it did extend the outage. It also gave us emerge.
Dustin Olson: While this took time to clean and prepare for maintenance, and ultimately, it did extend the outage, it also gave us measurable insight into the overall system and required improvement. We used this information to pivot and to initiate and finalize a separate project that we believe will increase our CP2 removal capacity. In addition to this one project, we also implemented several other minor reliability improvements that should improve the overall system reliability.
Dustin Olson: <unk> insight into the overall system and required improvements we use this information to pivot and to initiate and finalize a separate project that we believe will increase our CPT removal capacity and.
Dustin Olson: In addition to this one project we also implemented several other minor reliability improvements that should improve the overall system reliability.
Dustin Olson: In the end, today we have options, and we have more options than we expected to have post-outage. We can rely on our original solution, which provided approximately 3,000 to 5,000 pounds per day of removal capacity. But now we can add to that the new capacity, which we estimate at 10,000 to 20,000 pounds per day. We believe these improvements, coupled with lower coproduct 2 feedstocks, give us the opportunity to eliminate Coproduct 2 removal capacity as a plant limitation coming out of the outage. This is earlier than we originally forecast.
Dustin Olson: At the end today, we have options and we have more options than we expected to have post outage. We can rely on our original solution, which provided approximately three to 5000 pounds per day of removal capacity.
Dustin Olson: But now we can add to that the new capacity, which we estimate at 10% to 20000 pounds per day. We believe these improvements coupled with lower co product to feedstocks give us the opportunity to eliminate the co product to removal capacity as a limitation coming out of the outage.
Dustin Olson: This is earlier than we originally forecasted.
Dustin Olson: We used commercial production from Q1 to initiate final qualifications with our growing customer base. We have many customer samples out for review, and we are working directly with them to gain final approval. We still show good improvement in our product quality. The fact that we can successfully remove both CP1 and CP2 from the feedstock is the best indication of our product value over mechanical recycling alternatives. And while we had some challenges with product quality during the quarter, most of this was due to learning the new operations of moving product through the site supply chain and inconsistency due to reliability challenges.
Dustin Olson: We used commercial production from Q1 to initiate final qualifications with our growing customer base. We have many customer samples out for review and are working directly with them to gain final approval.
Dustin Olson: We still show good improvement on our product quality.
Dustin Olson: Fact that we can successfully remove both CP one in CPG from the feedstock is the best indication of our product value over mechanical recycling alternatives.
Dustin Olson: And while we have had some challenges with product quality during the quarter. Most of this was due to learning the new operations of moving product through the site supply chain and inconsistency due to reliability challenges.
Dustin Olson: During the last few weeks of March, between the Ironton Showcase and the outage, we were able to demonstrate much more consistent quality by managing the site supply chain more smoothly. Our commercial team continues to look for new customer lanes and improved market destinations. And we know that our product has superior properties to mechanical recycled alternatives that are currently being sold between 80 and 120 cents per pound. Two areas of particular interest are film and fiber. Film and fiber are very challenging applications and traditionally underserved markets due to their high technical requirements.
Dustin Olson: During the last few weeks of March between the Ironton showcase in the outage, we were able to demonstrate much more consistent quality by managing the site supply chain more smoothly. Our commercial team continues to hunt for new customer lanes and improved market destinations and we know that our product has superior proper.
Dustin Olson: These two mechanical recycled alternatives that are currently being sold between 80 and 120 per pound.
Dustin Olson: Two areas of particular interest our film and fiber.
Dustin Olson: Film and fiber are very challenging applications and traditionally underserved markets due to the high technical requirements.
Dustin Olson: We continue to show good progress both internally at our Durham facility and externally in developing these products. These products are important for the market and represent approximately 40% of the global supply. In other words, approximately 40% of the global market is currently without significant recycling supply due to existing technical limitations. As discussed on prior calls, we continue to work within FDA requirements to define our process and work toward expanding the conditions of use and available feedstock to make FDA-quality products, but we wanted to highlight the information that was shared during the Ironton Showcase.
Dustin Olson: We continued to show good progress both internally at our <unk> facility and externally developing these products. These products are important for the market and represent approximately 40% of the global supply in other words, approximately 40% of the global market is currently without significant <unk>.
Dustin Olson: Recycle supply due to existing technical limitations.
Dustin Olson: As discussed on prior calls we continue to work within FDA requirements to define our process and work toward expanding the conditions of use and available feedstock to make FDA quality product, but we wanted to highlight the information that was shared during the irons and showcase.
Dustin Olson: Our internal studies show that regardless of whether the feedstock is food grade or non-food grade, we show substantial reductions of key substances. The graph shows the effectiveness of our process. We have already received LNOs for our process and are looking to expand with additional data reviews and submission to the FDA. As you can see from the 2023 data... The recycling supply is lagging behind total production. Today, the industry averages less than 10% of recycling supply to the market. The discussion is the same around the world.
Dustin Olson: Our internal studies show that regardless of the feedstock is food grade our non food grade we show substantial reductions of key substances of interest the graph shows the effectiveness of our process.
Dustin Olson: We have already received <unk> for our process and are looking to expand with additional data reviews and submission to the FDA.
Dustin Olson: As you can see from the 2023 data.
Dustin Olson: The recycle supply is lagging the total production.
Dustin Olson: Dave the industry average is less than 10% of recycle supply to the market the.
Dustin Olson: The discussion is the same around the world.
Dustin Olson: And while I'm proud of our industry's efforts with PET and HDPE, there is still a lot of opportunity with polypropylene, and the regulations are coming. Several states have already adopted requirements for recycling, and we expect more will follow. All of this indicates that the marketing timing for Purecycle is good, the demand for our product is strong, and we are well positioned to take advantage of it. At this point, I will transition the presentation to Jaime for the financial update. Thank you, Dustin.
Dustin Olson: And while I am proud of our industry's efforts on <unk> and HD P/e.
Jaime: There is still a lot of opportunity with polypropylene.
Jaime: And the regulations are coming.
Jaime: Several states have already adopted requirements for recycling and we expect more of a follow.
Jaime: All of this indicates that the market marketing timing for pure cycle is good the demand for our product is strong and we are well positioned to take advantage of it at this point our transition the presentation to Jamie for the financial update thank.
Jaime Vasquez: On slide 11, we show our liquidity position at the end of the third quarter compared to year end 2023. At the end of the recent first quarter, we had approximately $25 million of unrestricted cash, excluding cash collateral. Our day-to-day cash outlays, shown in the second and third bullets on the side of the table, totaled $27.6 million, which was in line with expectations in the fourth quarter of 2023. And lastly, on May 6, we reached an agreement with Pure Plastics LLC for the sale of $37.5 million of notional value of bonds, at a price of $800 for every $1,000 of notional value, will provide additional liquidity of $30 million
Jaime: Thank you Dustin on slide 11, we show our liquidity position at the end of the third quarter compared to year end 2023.
Jaime Vasquez: At the end of the recent first quarter, we had approximately $25 million of unrestricted cash excluding cash collateral.
Jaime Vasquez: Our day to day cash outlays shown in the segment third bullets on the side of the table totaled $27 $6 million, which was in line with expectations in the fourth quarter of 2023.
Jaime Vasquez: And lastly on May six we reached an agreement with pure plastics LLC for the sale of 37 $5 million notional value of bonds at a price of $800 for every $1000 of notional value.
Jaime Vasquez: We'll provide additional liquidity of $30 million.
Jaime Vasquez: The raising of additional liquidity includes an exchange of the Pure Plastics Term Loan, which has a maturity date of December 2025, into revenue bonds, and the Pure Plastics Term Loan has an outstanding balance of $45.5 million, which includes paid-in-kind interest. The exchange also values the revenue bonds at $800.
Jaime Vasquez: As a additional liquidity includes an exchange of the pure plastics term loan, which has a maturity date of December 2025 into revenue bonds and the pure plastics term loan has an outstanding balance of $45 5 million, which includes paid in kind interest. The exchange also values the revenue bonds at $800.
Jaime Vasquez: $1,900 for every $1,000 notional value.
Jaime Vasquez: For every $1000 notional value.
Jaime Vasquez: The early termination of the Pure Plastics Term Loan results in a prepayment penalty as required in the Pure Plastics Loan Agreement. However, both parties agreed to warrants in lieu of cash for the prepayment penalty, which helps to preserve cash.
Jaime Vasquez: The early termination of the pure plastics term loan results and a prepayment penalty as required in the pure plastics loan agreement and both parties agreed to warrants in lieu of cash for the paint prepayment penalty, which helps to preserve cash.
Jaime Vasquez: Overall, we are pleased with the agreement as it helps to simplify the capital structure and importantly provides additional liquidity as Ironton comes out of the planned outage. And as Ironton is able to demonstrate production of meaningful volumes, we believe that there will be more opportunity to sell additional revenue bonds. Now, I'll turn it back to Dustin for concluding remarks.
Jaime Vasquez: Overall, we are pleased with the agreement as it helps to simplify the capital structure and importantly provides additional liquidity as ironton comes out of the planned outage and as Ironton is able to demonstrate production of meaningful volumes. We believe that there will be more opportunity to sell additional revenue bonds.
Jaime Vasquez: And now I'll turn it back to Dustin for concluding remarks. This was a very active quarter for pure cycle. We made considerable operational progress we opened our doors and hosted a large group for our showcase and we executed a significant outage to improve continuous operations. Our site is now ready to go we are excited about.
Dustin Olson: This has been a very active quarter for Purecycle. We made considerable operational progress, we opened our doors and hosted a large group for our showcase, and we executed a significant outage to improve continuous operations. Our site is now ready to go. We are excited about the next steps and will now open the floor to questions. Thank you.
Dustin Olson: The next steps and we will now open the floor to questions.
Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A list. Our first question comes from Hassan Ahmed at Ellimbic Global Advisors.
Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Operator: Sure.
Speaker Change: Our first question comes from Lasalle Ahmad Al.
Hassan Ijaz Ahmed: Alembic Global advisors.
Hassan Ijaz Ahmed: Morning Dustin. Dustin, obviously, you know, a super busy quarter. A few guys, you know, really appreciated the Ironton showcase. Obviously, you know, rightly so, the focus right now is on improving operations, you know, fixing all the stuff that you guys are fixing. But my question is more about, you know, as you're sort of coming up the learning curve, you know, just the communication side with the street. What are you guys thinking in terms of more consistency with regard to how you communicate with the street?
Hassan Ijaz Ahmed: Good morning, Justin.
Hassan Ijaz Ahmed: Duston, obviously super busy quarter for you guys.
Hassan Ijaz Ahmed: Really appreciate it and showcase.
Hassan Ijaz Ahmed: Obviously rightly so the focus right now is on improving operations.
Hassan Ijaz Ahmed: Fixing all the stuff that you guys are fixing but my question is more about as as you are sort of coming up the learning curve.
Hassan Ijaz Ahmed: Just the communication side with the street.
Hassan Ijaz Ahmed: What are you guys thinking in terms of more consistency with regards to how you communicate with the street, meaning.
Dustin Olson: Meaning, you know, would it be sort of the right strategy to maybe give monthly sort of production updates? Because, look, I mean, in the last update, we heard that in January and February, you guys produced around a million pounds, right? And then today, it's roughly close to 1.3 in Q1. So, you know, March was around 300,000. So, you know, just broadly speaking, how are you thinking about consistency with regard to, with regard to, communications and what form will that take?
Dustin Olson: Would it be sort of the right strategy to maybe gave monthly sort of production updates because look I mean in the last update we heard that in January and February you guys produced.
Dustin Olson: Around a million pounds right and then today.
Dustin Olson: Roughly close to one three in Q1, so March was around 300000.
Dustin Olson: Broadly speaking how are you thinking about consistency with regards to with regards to communications and what form would that take.
Dustin Olson: Yeah, yeah, thanks, Hassan. I appreciate the question.
Speaker Change: Yes, yes, thanks Hassan I appreciate the question.
Dustin Olson: If you think about the timeline of Q1 for US it's only been a few short weeks since we since we had the irons and showcase and so we had to let's say big <unk>.
Dustin Olson: You know, if you think about the timeline of Q1 for us, it's only been a few short weeks since we had the Ironton Showcase. And so we had two, let's say, big communications to the market during Q1, both with the fourth-quarter review and then shortly after that, the Ironton Showcase. And then we rolled right into the outage. And so for us, we had expected to do some communication following the outage, but the timing between this review and the end of the outage was too short. So, what you can expect going forward is that we will do more periodic updates to the market over the course of Q2.
Dustin Olson: Communications to the market during Q1, both with the first the fourth quarter review and then shortly after that.
Dustin Olson: Yes.
Dustin Olson: The irons and showcase.
Dustin Olson: And then we rolled right into the outage and so for us.
Dustin Olson: We had expected to do some communication following the outage, but the timing between this review and the outage and was too short. So what you can expect going forward is that we will do more periodic updates to the to the market over the course of Q2.
Dustin Olson: Fair enough, fair enough. And now a two-part question, one on sort of you guys sort of flexing the system per se, meaning, you know, you guys talked about how the recent sort of improvements that you guys have carried out, you know, with regard to CP2 removal capacity, your sort of operating rates will improve by, call it, 10 to 20 thousand pounds per day, you know, so obviously, you know, your production will improve.
Speaker Change: Fair enough fair enough and now its two part question one on.
Dustin Olson: You guys sort of flexing the system does say, meaning you guys talked about how the recent sort of improvements that you guys have carried out.
Dustin Olson: With regards to <unk>.
Dustin Olson: CB two removal of capacity.
Dustin Olson: Sure.
Dustin Olson: Sort of operating rates will improve by call. It 10 to 20000.
Dustin Olson: Pounds per day.
Dustin Olson: So obviously your production will improve.
Dustin Olson: My question is, are you sort of considering flexing the feedstock side of things as well, where maybe procuring certain feedstocks, maybe potentially at a higher price, which may not have the same amount of CP2 in them? So that's one part, and a little sort of divergent from that, you know, as you're going through all of these processes, how should we think about, you know, Augusta, and, you know, lessons learned from Ironton, and how potentially quickly you may be sort of up and running.
Dustin Olson: My question is that are you sort of also considering flexing the feedstock side of things as well where may be procuring certain feedstocks, maybe potentially at a higher price, which may not have the same amount of CP to win them. So that's one part and.
Dustin Olson: Sort of diverging from that as Youre going through all of these processes, how should we think about.
Dustin Olson: Augusta and.
Dustin Olson: Lessons learned from <unk> and how potentially quickly you may be sort of up and running in Augusta.
Dustin Olson: Yeah, so let's talk about feed rates and the impact of Co-Product 2. You can imagine when we started the system, when we were limited to the manual removal of CP2 to 3,000 to 5,000 pounds per day. If you end up with any Co-Product 2 in the feed, let's say 5% to 10% Co-Product 2, your overall feed rate will be substantially limited. And that's effectively what we saw when we started up out of the November outage, is we saw considerable, let's say, restrictions on Co-Product 2 removal, which throttled our feed. We're really excited.
Speaker Change: Yes, so lets talk about fee rates and the impact of co product. Two you can imagine when we when we started the system. When we were limited to the manual removal of CB two to three to 5000 pounds per day. If you. If you end up with any co product too and the fee, let's say 5%.
Dustin Olson: To 10% co product to your overall fee rate will be substantially limited and that's effectively what we saw when we started up out of the November outage as we saw.
Dustin Olson: <unk>.
Dustin Olson: Say restrictions on co product to removal, which throttles our feed we're really excited I mean, we're really excited about.
Dustin Olson: I mean, we're really excited about the improvements we made during the outage. Not only have we, let's say, incrementally improved the reliability of Co-Product 2's extrusion process throughout the quarter, but during the outage, we implemented a lot of, let's say, small improvements to improve reliability. But more importantly, we modified the system based on what we learned so we can increase the amount of volume that we can take out. And that's going to directly translate, once we get it up and running successfully, that will directly translate to improve feed rates to the plant. Okay, so we're very excited like that.
Dustin Olson: The improvements we've made during the outage not only have we let's say incrementally improve the reliability of co product to extrusion process throughout the quarter, but during the outage, we implemented a lot of let's say small improvements to improve the reliability, but more importantly, we modified the system based on what we learn so we can increase.
Dustin Olson: The amount of volume that we can take out and thats going to directly translate once we get it up and running successfully that will directly translate to improved feed rates to the plant.
Dustin Olson: Okay. So we're very excited like that on the feedstock side, we continue to see lots of opportunities here. Okay. The market has been.
Dustin Olson: On the feedstock side, we continue to see lots of opportunities here. Okay, the market has been, and there's an ample supply of feedstock in the market. It gives us the flexibility to choose what we want to run, and so we will be looking at different feedstocks to bring into the plant to minimize the CP2 limit. Having said that, with respect to price, it is true that some of the feeds come at an increased price.
Dustin Olson: There's ample supply of feedstock in the market. It gives us the flexibility to choose what we want to what we want to run and so we will be we will be looking at different feedstocks to bring into the plant to minimize the CPT limit.
Dustin Olson: Having said that with respect to price it is true that some of the feeds.
Dustin Olson: I'm at an increased price.
Dustin Olson: Okay, and we may choose to purchase some of those depending on our situation in the plant, but it should also be noted that there are more affordable solutions that we can deploy at the plant and off-site through tolling partners to reduce the amount of CP2 and low-priced fees. So I mean, if you look at the number five bill price right now, it's on the order of $0.04 to $0.06 per pound.
Dustin Olson: And we may choose to purchase some of those.
Dustin Olson: Depending on our situation in the plant, but it should also be noted that there are.
Dustin Olson: More affordable solutions that we can.
Dustin Olson: Deploy at the plants and Offsite through tolling partners to reduce the amount of CPE, two and low priced feed.
Dustin Olson: So I mean, if you look at the number five Bale price right now is on the order of.
Dustin Olson: Four to six cents per pound and.
Dustin Olson: And we have the flexibility then to either toll that to remove CP2 or potentially process it on site to remove CP2 at very affordable prices. All right, and so that still allows us to purchase the low-priced feed removed, quite a lot of the co-product two out of that stream and also have the same impact on rates to the plant. Okay, so we're chasing all of those avenues, and I think that we're gonna find a nice balance. There might be a little bit of feedstock purchasing at the beginning, but then quite a lot of focus on tolling to remove CP2 as we move forward.
Dustin Olson: And we have the flexibility then to either told that to remove <unk> or potentially process. It onsite to remove <unk> at very affordable prices.
Dustin Olson: And so that still allows us to purchase the low priced feed remove.
Dustin Olson: Quite a lot of the co product to out of that stream and also have the same impact on rates through the plan. Okay. So we're chasing all of those avenues and I think that we're going to find a nice balance there might be a little bit of feedstock purchasing at the beginning.
Dustin Olson: But then quite a lot of focus on tolling to remove CPE too as we move forward.
Dustin Olson: With respect to Augusta, really... When an outsider would come in and look at our plant today, they would say, well, it looks the same to me. But the reality is that when you look inside the pipe, you look inside the equipment, you really get into the details of the operation, we've made a lot of really small changes that will improve operability. These are things, Hassan, that help the operator to be more successful, help the operator to have higher reliability so they don't have to focus on this one valve.
Dustin Olson: With respect to Augusta really.
Dustin Olson: When you win an outside or would come in and look at our plant today, They would say well it looks the same to me.
Dustin Olson: But the reality is that when you look at.
Dustin Olson: Inside the pie if you look inside the equipment you really get into the details of the operation. We have made a lot of really small changes that will improve operability.
Speaker Change: Thanks Hassan that helped.
Dustin Olson: Help the operator to be more successful healthy operator to have higher reliability. So they don't have to focus on this one about that product transfer valve is a great example of this is something that will cost no more money for August up it will cost no more money for our site, but it will relieve cigna.
Dustin Olson: That product transfer valve is a great example of something that will cost no more money for Augusta, it will cost no more money for our site, but it will relieve significant pressure on operations to operate that valve. All of these small projects that we're doing across the plant are advising the final design for Augusta. While we're not in a position today to talk about the impact on price, the impact on capex per pound, or any of that, we believe that we're seeing substantial, and we're learning a lot about what our plant can do, which will advise us to be smarter about future designs that will help us improve the overall project standards.
Dustin Olson: Difficult pressure on operations to operate that out and so all of these small projects that we're doing across the plant are advising the final design for Augusta and and while we're not in a position today to talk about.
Dustin Olson: The impact on price and the impact on Capex per pound or any of that we believe that we are seeing substantial we're learning a lot about what our plant can do which will advise us to be smarter about the future designs that will help us improve the overall project standing so what we're doing currently with the guest is.
Dustin Olson: So what we're doing currently with Augusta is we continue to work closely with KBR. KBR has turned out to be a very good partner for us to find good, novel, effective, and efficient solutions to not only integrate the learnings from Ironton into Augusta but to even improve upon.
Dustin Olson: We continue to work closely with KBR KBR has turned out to be a very good partner for us to find good novel effective and efficient solutions to not only integrate the learnings from ironton into Augusta, but to even improve upon them closer.
Operator: Thanks a lot, Hassan. Very helpful, Dustin. Thank you. Thank you. One moment for our next question.
Dustin Olson: Those are two good questions. Thanks, a lot very helpful to us. Thank you.
Speaker Change: Thank you one moment for our next question.
Gerard J. Sweeney: Our next question comes from Jerry Sweeney at Ross.
Operator: Our next question comes from Gerry Sweeney at Roth.
Operator: Hey Jamie, Dustin, thanks for taking my call. Hey Jerry. Hey Jerry.
Gerard J. Sweeney: Hey, Jamie Thanks for taking my call.
Gerard J. Sweeney: Hey, Jerry Hey, Gerry.
Dustin Olson: Sticking with CP, the CP2 question. Looking at slide number six. The way I understand your commentary and looking at the slide, you've made some improvements for the removal of CP2 to an amount of 10 to 20,000 pounds a day, right? Remove a higher amount. I would assume that reduces the need, maybe not eliminate, but reduces that need for lower. Stock as well. Am I looking at that correctly? Yeah, I see
Gerard J. Sweeney: Sticking with CP CB two questions.
Dustin Olson: Looking at slide number six.
Dustin Olson: The way I understand your commentary looking at the slide you've made some improvements for the removal of <unk> TP two to amount of 10 to 20.
Dustin Olson: 20000 pounds a day.
Dustin Olson: Right.
Dustin Olson: Got.
Dustin Olson: It is enough that you can run the system you may have to include low CPI to feedstock material to optimize it but it also appears that later this summer or Q2, you can make additional improvements to remove a higher amount of CP to which.
Dustin Olson: I would assume.
Dustin Olson: Reduces the need.
Dustin Olson: Maybe not eliminate but reduces that need for lower <unk> feedstock as well am I looking at that correctly.
Dustin Olson: Yeah, Gerard, I think it's a good line of questions, and let's do some math on CP2 just to get the basic volumes and potential here. So, if we purchase a feedstock that has 10% CP2, and we're able to remove 5,000 pounds per day, that means you can feed 50,000 pounds per day of feed. And that's about, I don't know.
Dustin Olson: Yes.
Dustin Olson: I think it's a good it's a good lineup questions and let's let's do some math on CPE to just to get the basic volumes and potential.
Dustin Olson: Potential here, so if we purchase a feedstock that has 10% CP too.
Dustin Olson: And we're able to remove 5000 pounds per day that means you can see 50000 pounds per day of feed and Thats about.
Dustin Olson: 20% capacity, you know, 15 to 20% capacity. If you're able to remove 20,000 pounds per day of feed... then that would, and it's a 10% co-product two stream, then you would be able to feed effectively 200,000 pounds per day of feed, okay? Now look, we're not giving guidance on where we will be exactly on the feed.
Dustin Olson: I don't know.
Speaker Change: 20% capacity, 15% to 20% capacity.
Dustin Olson: If you are able to remove 2000 pounds per day of feed.
Dustin Olson: And that would and it's a 10% co product to stream than you would be able to see effectively 200000 pounds per day of feed. Okay. Now look we're not giving guidance on where we will be exactly on the feeds.
Dustin Olson: Because the feed concentration for CP2 moves around, it can be anywhere from, you know, as low as 2% to as high as 15% on the feedstocks. Okay, so you can imagine how that can create quite a variability in the overall rate to the plant. But given where we are, the improvements that we've made, we believe it'll be a, you know, once we put it in service and prove that it works, we believe that it'll be a substantial improvement to our ability to remove coproduct.
Dustin Olson: The feed concentration for CB two moves around it can be anywhere from as low as 2% to as high as 15% on the feedstocks. Okay. Okay. So you can imagine how that can create quite a variable to the overall rate to the plan.
Dustin Olson: But but given where we are the improvements that we made we believe it'll be a.
Dustin Olson: Once we put it in service improve that it works, we believe that it will be a substantial improvements our ability to remove co product too.
Dustin Olson: Okay, and this will have a direct impact on our overall rate regardless of feed, and if the feed is at the five percent or lower level, which is very feasible, it gets you to a point where cp2 is no longer a constraint for feed for the facility.
Dustin Olson: And this will have a direct impact on our overall rate regardless of feed and and at the fee.
Dustin Olson: 5% or lower level, which is very feasible.
Dustin Olson: Gets you to a point, where <unk> is no longer a constraint for feed for the facility.
Speaker Change: Got it.
Dustin Olson: The other question was, "Have you been able to run... The System?"
Dustin Olson: Perfect.
Speaker Change: The other question was have you been able to run.
Dustin Olson: Have you been able to run any parts of the system during the shutdown? I get that you have to power it up and different things, but specifically around the CP2 removal enhancements, have you been able to test it out, run it? to troubleshoot things, et cetera.
Dustin Olson: The system.
Dustin Olson: And have you been able to run any parts of the system trying to shut down I get that you have to power it up and different things, but specifically around.
Dustin Olson: The CP tattoo removal enhancements have you been able to test it out and run it.
Dustin Olson: Troubleshoot things et cetera.
Dustin Olson: Yeah, so we have run portions of the plant, primarily on the prep side. We continue to run the prep periodically to fill our silos and be ready for feed. We have also, over the last week and a half, done a lot of work for pre-startup checks and Ready to Start activities. So these are largely operational and mechanical final checkouts to make sure that the systems are ready to run, and our team has done that.
Speaker Change: Yes, so we have run portions of the plant primarily on the prep side, we continue to run.
Dustin Olson: The prep periodically.
Dustin Olson: To fill our silos and be ready for feed.
Dustin Olson: We have also over the last week and a half.
Dustin Olson: <unk> done a lot of work for pre startup checks and ready to start activity. So these are largely operational and mechanical final checkouts to make sure that the systems are ready to run and our team has done that we've already pressure checked the facility to know that it isn't it.
Dustin Olson: We've already, you know, pressure checked the facility to know that it is in, you know, it's ready for operation. So some of the traditional start procedure items we did ahead of time because we could do it in parallel. But to answer your question, I think a bit more directly is, you know, when you have the plant down like we did for this outage, you're really not able to run portions of purification because it's all interconnected. And so we did individual equipment checks, but we didn't run any pieces of the process in a sizable way during the outage.
Dustin Olson: Ready for operations. So some of the traditional startup procedure items. We have done ahead of time, because we can do it in parallel but but to answer your question I think a bit more directly is when you have the plant down like we did for this outage you are really not able to run portions of pure.
Dustin Olson: Vacation because its all interconnected and so we did do individual equipment checks, but we didn't run any pieces of the process.
Dustin Olson: In a sizable way during the outage.
Speaker Change: Okay, that's fair.
Dustin Olson: One more, or... No, no, go ahead, Jerry. It's fine.
Speaker Change: One more or.
Jerry: Jump back in line.
Dustin Olson: No no go ahead, Jerry is fine okay.
Jerry: I wasn't sure if it was limited to two but.
Jerry: Despite last question, though on the trial side, obviously youre working with.
Speaker Change: Off takers et cetera can you, maybe just give us a little bit of detail.
Jerry: Where some of those potential off takers are in their qualification process.
Dustin Olson: Yeah, I probably won't get into the specific details about specific customers, but maybe I can describe the process a little bit.
Jerry: Yes, I, probably won't get into the specific details about specific customers, but maybe let me describe that process a little bit. Okay. We have we have.
Dustin Olson: Okay, we have made a lot of product at the feedstock evaluation in preparation for the commercial plan. And we had, you know, very good quality, but we had a very limited volume, to share that with our customers. And so that was primarily focused on core customers and less on the broader market. And so as we started to make commercial products, even our core customers, they had an interest in seeing the commercial-grade product at scale. So they can have confidence that it is sufficient or similar enough to the FEU so that they can bring it into their operation.
Dustin Olson: <unk> made a lot of product at the feedstock evaluation unit in preparation for the commercial plant and we had very good we had very limited volume.
Dustin Olson: To share that with our customers and so that was primarily focus on core customers.
Dustin Olson: And less to the broader market and so as we started to make commercial products.
Dustin Olson: Even even our core customers they have an interest in seeing the commercial grade product at scale.
Dustin Olson: So they can have confidence that it is sufficient or similar enough to the to you that they can bring it into their operation.
Dustin Olson: But as we start to talk to customers outside of that core network, like they haven't had a chance to run our product yet because it was in such limited volume during the FEU, we're starting to get that material out to a much wider base of customers. Many, many customers, when you talk to them, are like, hey, we're ready for Purecycle. We're excited to start testing your materials because they haven't been able to do so yet. And so we are at the beginning of those stages with those customers, and I'll tell you, it's very difficult to predict.
Dustin Olson: As we start to talk to customers outside of that core network.
Dustin Olson: They haven't they haven't had a chance to run our product yet because it was in such limited volume during the <unk> and so we're starting to get that material out so a much wider base of customers. Many many customers. When you talked and really we are ready for pure cycle. We're excited to start testing your materials.
Dustin Olson: Because they haven't been able to yet and so we are at the beginning of those stages with those customers now.
Dustin Olson: Now I'll tell you, it's very difficult to predict.
Dustin Olson: Let's say the curve for adoption of the products. Each customer is very unique. Each customer has a different level, a different standard for analysis and approval. And so we're working with many, many, many of them in different places. I will say that we have expanded our supply into compounding and polypropylene compounders, a pretty significant portion of the market, and they are, let's say, notorious for taking lots of different types of feed and blending them together to make a good product.
Dustin Olson: The let's say the curve for adoption of the products each customer is very unique.
Dustin Olson: Each customer has a different level a different standard for analysis and approval and so we're working with.
Dustin Olson: Many many of them that are at different places.
Dustin Olson: I will say that we have.
Dustin Olson: Expanded our.
Dustin Olson: Our supply into compounding.
Dustin Olson: And polypropylene compounds with pretty significant portion of the market and they are let's say notorious for taking lots of different types of feed blending them together to make a good product and so let's just call them like recipe experts and they are often.
Dustin Olson: And so they're, let's just call them recipe experts, and they are often quicker and more adaptable to variations in product quality or early adoptions. And so we feel good about that as an outlet for sales over the course of Q2 and Q3.
Dustin Olson: Quicker and more adaptable to variations in product quality.
Dustin Olson: Our early adoptions and so we feel good about that as an outlet for sales over the course of Q2 and Q3.
Operator: Got it. That's very helpful. I appreciate it.
Speaker Change: Got it that's very helpful. I appreciate it.
Operator: All right, Jerry, thanks a lot. Thank you.
Brian Joseph Butler: Thank you. One moment for our next question. Our next question comes from Brian Butler at Stifle.
Speaker Change: Alright, Thanks, a lot.
Speaker Change: Thank you one moment for our next question.
Brian Joseph Butler: Our next question comes from Brian Butler at Stifel.
Operator: Alright guys, thank you for taking my questions this morning.
Brian Joseph Butler: Hi, guys. Thanks for taking my questions. This morning.
Dustin Olson: Hey, no problem, Brian. How are you doing? Doing well, doing well. First one, just when you think about the post-Position 6 plan. Is there a long-term solution for CPT that's still...
Brian Joseph Butler: No problem, Brian how are you doing.
Dustin Olson: Doing well and well.
Dustin Olson: First one just when you think about the post.
Dustin Olson: Six plan is there a long term solution for CPT, that's still our CPT too that's still supposed to be implemented and what kind of timeline is that on.
Dustin Olson: Yeah, so that's a good question. Let's maybe kind of go back to what we said previously. And let's say we could originally manually remove 3,000 to 5,000 pounds per day of products. Okay. And we told the market that we had a solution in mind that we would implement during the course of Q2, but we were not more descriptive on the timing than that. Okay.
Speaker Change: Yes. So that's a good question, let's maybe kind of go back to what we've said previously in let's say reset the stage there.
Dustin Olson: We originally could manually remove three to 5000 pounds.
Dustin Olson: Per day of products, Okay, and we told the market that we have a solution in mind that we will implement during the course of Q2, but we were we were not more descriptive on timing than that okay that project is still in play that project is executable.
Dustin Olson: That project is still in play. That project is executable over the course of May if we choose to do it. Most of the equipment has arrived.
Dustin Olson: Over the course of May if we choose to do it on most of the equipment has arrived most of the engineering is complete and we've even started to take the foundations for that.
Dustin Olson: And that project is.
Dustin Olson: Kind of let's say ripe for execution and if we do choose to execute it it will not take another outage because we've made all the proper tie ins during this outage to do it.
Dustin Olson: Most of the engineering is complete, and we've even started to dig the foundations for that. And that project is kind of, let's say, ripe for execution. And if we do choose to execute it, it will not take another outage because we have made all the proper times during this outage to do it. Having said all that, we added another project to this outage based on what we learned from discovery during the outage. I mean, when we opened the settler, quite frankly, we expected it to be empty, but it wasn't.
Dustin Olson: Having said all of that we added another project to this outage based on what we learn from discovery during the outage I mean, when we opened the settler we quite frankly, we expected it to be empty, but it wasn't.
Dustin Olson: And what we found is that there was a level indication device in that vessel that just wasn't working properly. And so when we learned that, we were able to then pivot, think through what we had seen over the last four months, and then... refocus our efforts on another project that we implemented during the outing. Okay, so.
Dustin Olson: And what we found is that there was a level indication device and that vessel.
Dustin Olson: Just wasn't working properly and and so when we learned that we were able to then pivot.
Dustin Olson: Through what we had seen over the last four months and then.
Dustin Olson: Refocus our efforts into another project that we implemented during the outage.
Dustin Olson: So, the long-term solution. The question you ask is, is there a plan for a long-term solution? The long-term solution may have been installed during the outage.
Dustin Olson: Okay. So.
Dustin Olson: So the long term solution.
Dustin Olson: The question, you're asking is is there a plan for a long term solution, but the long term solution may have been installed during the outage, we still have to test. It we sought to make sure. It works, but we have more confidence in its ability to work now than we did before and we're very optimistic about it.
Dustin Olson: We still have to test it. We still have to make sure it works. But we have more confidence in its ability to work now than we did before, and we're very optimistic about it. If it works properly... then we may have the long-term solution already in place. If it doesn't do everything that we need, or we need more capacity to remove CP2, well, then we'll go ahead and execute the project that we planned on implementing in Q2 anyway. But we're holding back on that until we see the progress of this implementation to see how it works. Okay, that's a good caller. Thank you. And then maybe we can talk?
Dustin Olson: If it works properly.
Dustin Olson: Then we may have the long term solution already in place.
Dustin Olson: If it doesn't do everything that we need or we need more capacity to remove <unk>. Well then we'll go ahead and execute the project that we plan on implementing in Q2 anyway, but were holding back on that until we see the progress of this implementation to see how it operates.
Speaker Change: Okay. That's good color. Thank you and then maybe can we talk about now that youre going to roll. This.
Dustin Olson: About now that you're going to roll this into ramping up production at some level in 2Q, is this...
Dustin Olson: Ramp up production at some level in <unk> is this going to be a revenue generating quarter and how should we think about maybe facility cost as well as.
Dustin Olson: We're going to talk a little bit about the idea of revenue-generating quarters and how we should think about maybe facility costs as well as corporate costs in the second quarter. Yeah, that's a good question, Brian.
Speaker Change: Corporate costs in the second quarter.
Dustin Olson: We are excited about our ability to ramp the plant up once we finish the outage. We did extend the outage. Okay, we know that we extended it on purpose because we wanted to make sure we had as many of the reliability headaches resolved as we could to give us the best chance possible to move forward, okay?
Speaker Change: Yes, that's a good question Brian.
Dustin Olson: We are excited about our ability to ramp the plant up once we finish the outage we did extend the outage. Okay. We know that we extended it on purpose because we wanted to make sure we had as many of the reliability headaches resolved as we could to give us the best chance possible to move forward okay.
Dustin Olson: With respect to revenue generation and commercial sales, this gets back a little bit to Jerry's question, okay? You know, we are sampling the product to a lot of customers. Okay, like, and we get feedback from all of them. And typically, the way it works is they ask for a small sample, then they ask for a bigger sample, then they ask for a truck, then they ask for a rail car, and then they ask for a lot. Okay?
Dustin Olson: With respect to revenue generation and commercial sales this gets back a little bit to Jerry's question. Okay.
Dustin Olson: We are sampling product to a lot of customers okay like.
Dustin Olson: And we get feedback from all of them and typically the way. It works is they ask for a small sample then they asked for a bigger sample then they ask for a truck and they asked for a railcar and then ask for a lot. Okay and we're in that process of ramping up what I can tell you is that we've got a lot of we got a lot of folks on the line.
Dustin Olson: And we're in that process of ramping up. What I can tell you is that we've got a lot of hooks in the line, with a lot of customers, and we listen to them; we work with them to advance the qualification process, the approval process as quickly as possible. I'll maybe hand over part of the question to Jaime with respect to the facility cost and where we stand from that perspective. Hey, Brian. You know, we've been running probably around eight and a half million dollars.
Jaime Vasquez: With a lot of customers.
Jaime Vasquez: And we're we're listening to them, we're working with them to advance the qualification process the approval process as quickly as possible.
Jaime Vasquez: I'll, maybe hand over part of the question to Jamie with respect to the facility cost and where we stand from that perspective, Okay, Brian we've been running.
Jaime Vasquez: Probably around $8 $5 million a.
Jaime Vasquez: Month in terms of just cash expenses.
Jaime Vasquez: A month.
Jaime Vasquez: It seems to be a steady state. I'd like to think, as we're operating more efficiently, that those costs will come down somewhat. It's hard to tell because we haven't been running continuously, but just based on some of the things that we're seeing, we think that costs will come down a bit.
Jaime Vasquez: In terms of just cash expenses and it seems to be a steady state.
Jaime Vasquez: I'd like to thank as we're operating more efficiently.
Jaime Vasquez: Those costs will come down somewhat.
Jaime Vasquez: It's hard to tell because we haven't been running continuously but just based on some of the things that we're seeing we think that costs will come down a bit.
Jaime Vasquez: Okay. And with the new debt, that's sufficient capacity to run for how long?
Jaime Vasquez: Okay.
Jaime Vasquez: With the new debt that sufficient capacity to run for how long.
Jaime Vasquez: With the additional liquidity, well, that additional liquidity, the $30 million, you know, if we're running, call it 8 million a month, that gives us several months. And in the interim, you know, we're still actively looking at marketing the bonds. So hopefully, as Ironton continues to operate, you know, the opportunity
Jaime Vasquez: With the additional liquidity.
Jaime Vasquez: Additional liquidity.
Jaime Vasquez: $30 million.
Jaime Vasquez: Running call it $8 million.
Jaime Vasquez: That gives us several months and in the interim.
Jaime Vasquez: We're still actively looking at marketing the bonds. So hopefully it's ireton continues to operate.
Jaime Vasquez: The opportunities We'll have more opportunities to sell additional bonds.
Jaime Vasquez: The opportunities that will have more opportunities to sell additional bonds.
Dustin Olson: Okay, and then maybe one last one. Just when you think about, you know, you talked about Augusta a little bit, and as we reset expectations...
Speaker Change: Okay, and then maybe one last one just when you think about you talked about Augusta, a little bit and as we reset expectations on the ramp of Iron 10, how should we think about the ramp and I guess the build out of our Gulf Star as well as kind of your development projects beyond Augusta, what what is the right way to think about that.
Dustin Olson: Productions on the ramp of Ironton. How should we think about the ramp and, I guess, the build out of a
Dustin Olson: I guess the build out of Augusta, as well as your development projects beyond Augusta. What is the right way to think about that timeline-wise, just at a very high level?
Dustin Olson: Timeline wise, just even at a very high level.
Dustin Olson: Yeah, at a high level, the work that we've been focusing on the last several months has been on finalizing the engineering packages for Augusta to ensure that all of the Ironton implementation has been included in that design, okay? And so that really has been the focus as we change engineering companies and partner with KBR. We're finding that relationship to be quite good, quite helpful, and we're implementing a lot of good learnings there.
Speaker Change: Yes at a high level.
Dustin Olson: The work that we've been focusing on the last several months has been on finalizing the engineering packages for Argos to ensure all of the Ironton implementation has been included in that design, Okay, and so that really has been the focus as we change engineering companies and partner with.
Dustin Olson: KBR, we're finding that relationship to be quite good quite helpful.
Dustin Olson: And we're implementing a lot of good learnings there.
Dustin Olson: When it comes to the overall expansion of the business, I mean, look, it's fair to say that everybody is waiting and watching for Ironton. So, all of our partners, in some cases, have been extremely helpful on the technical side. I'll speak specifically to SK in that respect.
Dustin Olson: When it comes to.
Dustin Olson: The overall expansion of the business look it's fair to say that everybody is waiting and watching for ironstone. Okay. So so all of our partners in some cases, our partners have been extremely helpful.
Dustin Olson: On the on the technical side I'll speak specifically to SK.
Dustin Olson: We've spoken about this in the past. SK comes with a lot of technical expertise, and they've been helpful as we have worked through some of the startup challenges.
Dustin Olson: Respect we've spoken about this in the past SK comes with a lot of technical expertise and they have been helpful. As we have worked through some of the startup challenges.
Dustin Olson: So, in varying degrees, our partners are helping us get Ironton going. They are also waiting and watching for Ironton to take off. And they're continuing to progress the ground game to be ready when we're ready. So the way I would project it, we're not going to give guidance on dates for Augusta or dates for JVs, but the way that I would describe it is this. We are very excited about our growth potential, and so are our partners.
Dustin Olson: So in varying degrees our partners are helping us get iron thing going they are also waiting and watching for irons, indigo and they're continuing to progress the ground game to be ready when we're ready.
Dustin Olson: So the way I would project that we're in.
Dustin Olson: Not going to give guidance on dates for ADESA.
Dustin Olson: Our dates for jbs, but the way that I would describe it as.
Speaker Change: We are.
Dustin Olson: Very excited about our growth potential.
Dustin Olson: Once we show Ironton can operate reliably and at scale, okay, and so we believe that we've got the, let's say, dock loaded and ready to go, and ready to move forward once we get past the early operational reliability challenge.
Dustin Olson: And so are our partners once we show irons and can operate.
Dustin Olson: Reliably and at scale.
Dustin Olson: Okay, and so we believe that we've got.
Dustin Olson: Let's say, the Doc loaded and ready to go and ready to move forward once we get past the early operational reliability challenges.
Operator: Okay, thank you for taking my question. Thank you. One moment for our next...
Speaker Change: Okay. Thank you for taking my questions.
Thomas Gordon Boyes: Thank you. One moment for our next question. Our next question comes from Thomas Boyes at T.D. Cohen.
Speaker Change: Thank you one moment for our next question.
Thomas Gordon Boyes: Our next question comes from Thomas Boyes at TD cooling.
Operator: I appreciate you taking the time. Most of the questions were asked, but maybe if you could just give a bit more color on the cross-contamination that you would experience, was this...
Thomas Gordon Boyes: I appreciate you taking the time.
Operator: Most of my questions were asked but maybe if you could just give a bit more color on the cross contamination that you would experience was this just mixing of say tier five rated resident with lower quality when you were looting.
Thomas Gordon Boyes: Loading everything up or how does that come about.
Dustin Olson: Yeah, I mean, that's right, Thomas. I mean, basically, as we were learning how to operate the facility, to be honest with you, we had a lot of challenges with that final product valve, that transfer valve. I mean, that product transfer valve forced us into semi-continuous operations because the valve was oversized and not working properly. And so that meant that we had to have the final product extruder up and down a lot. And as you do that, you do a lot of things that are difficult; you make life more challenging than it needs to be.
Operator: Yes.
Dustin Olson: That's right Thomas I mean, basically as we were learning how to operate the facility.
Dustin Olson: To be honest with you we had we had a lot of challenges with that the final product valve that transfer valve I mean that.
Dustin Olson: Product transfer valve forced us into semi continuous operations because the valve was oversized and not working properly and so that meant that we had to have.
Dustin Olson: The final product and shooter up and down a lot and as you do that you you do a lot of things that are you make life more challenging that needs to be so so in some cases, we had reliability issues with additive packages to where not all products were were made with additive and in some cases, we were on one feedstock.
Dustin Olson: So in some cases, we had reliability issues with additive packages to where not all products were made with additives. And in some cases, we were on one feedstock moving into one silo. And as we were transitioning to another feedstock, we didn't move out of that silo quickly enough in order to minimize cross-contamination. And so, you know, I would say that the majority of the issues that we faced there were, let's say, equipment reliability, meaning the extruder was up and down, and then also learning how to more effectively predict the transition moments between feeds and then operationally manage them in the silo. And, you know, at the end of the day, this is a...
Dustin Olson: Moving into one silo and as we were transitioning to another feedstock we didn't move out of that silo quickly enough in order to minimize the cross contamination and so I.
Dustin Olson: I would say that the majority of the issues that we faced there.
Dustin Olson: It was was on let's say equipment reliability, meaning the trigger was up and down and then also learning how to more effectively predict the transition moments between feeds and then operationally manage it and the silos.
Dustin Olson: And at the end of the day. This is a fairly small amount of volume that was cross contaminated and we're working to move that material to the market.
Dustin Olson: To move on but.
Dustin Olson: Those were some of the early challenges, we don't expect that to be a concern going forward.
Dustin Olson: Got it. And then not to put too fine a point on it, but even for the portions that, you know, kind of were cross-contaminated, sounds like there are potential customers that are kind of willing to still trial or use that as the basis of them, you know, making some decisions longer term on using
Speaker Change: Got it and then not to put too fine a point on it but even for the portions that kind of work cross contaminated it sounds like there are.
Dustin Olson: Potential customers that are kind of willing to still trial or use that as the basis has been making some decisions longer term on using the final product is that correct.
Dustin Olson: Yeah 100% yes. I mean, when you think about the options for mechanical supply, let's say not mechanical, recycling supply into the market, they're limited, and so there's a heavy appetite for recycled material in the market, and so when you compare our material to what they're used to using, it's still a pretty good improvement. And so even when we're not making fully on-prime products, like the color is a little bit high or the opacity is a little bit off, it's still a very good product.
Speaker Change: Yes, 100%, yes, I mean, so look I mean, when you think about the options for mechanical supply.
Dustin Olson: Not mechanical recycle supply into the market.
Dustin Olson: There are limited and so there's a heavy appetite for recycled material in the market and so when you compare our materials to what they're used to using its still a pretty good improvement and so even when we're not making fully on prime product like the the color is a little bit high or the.
Dustin Olson: <unk> is a little bit off.
Dustin Olson: It's still a very good product it's still.
Dustin Olson: It's still better than the gray and black material that is largely seen in the mechanical recycling market, and we're seeing really good interest in our material from the customer base. I mentioned that we have made, let's say, different qualities of product across the facility. We have made prime material. We have made good quality material that met both color and opacity throughout the process, but because we were up and down a bit, because we were on a little bit of a learning curve on managing it on the back end, we cross-contaminated quite a bit of that material. Now, having said all of that, we also learned a lot about the capability that we have at the facility, and as we grow into it, we'll be able to expand our capability to move product more efficiently.
Dustin Olson: Better than the gray and black material that is largely seen in mechanical recycling market and we're seeing really good interest in our material.
Dustin Olson: From the customer base.
Dustin Olson: I mentioned that we've made let's say different qualities of product across facility. I mean, we have made prime material. Okay. We have made good quality material that met both color and opacity.
Dustin Olson: Throughout the process, but because we were up and down a bit because we were.
Dustin Olson: A little bit of a learning curve on managing out on the backend.
Dustin Olson: We we cross contaminated quite a bit of that material now having said all of that we also learned a lot about capability that we have at the facility and as we grow into it we'll be able to expand our capability to move product more efficiently.
Dustin Olson: Got it. And then for my follow-up question, you talked a lot about fiber and, you know, kind of the unique attributes that you have that make that a possibility. Is that kind of the same logic for film, where the impurities and different melting points kind of make that difficult to produce? Is that really kind of the same dynamic that's at play there?
Speaker Change: Got it and then for my follow up just on the site to that you had talked a lot about.
Dustin Olson: Fiber and kind of the unique attributes of <unk>.
Dustin Olson: That makes that a possibility is that kind of the same logic for film what are the impurities in different multi points kind of make it difficult to produce is that the kind of the same dynamics of the program.
Dustin Olson: Yeah, so here's a good way to visualize it. When you're making fiber, it's a very thin stream of polypropylene. And if you have contaminants in your feedstock or in your product, then those little contaminants can have a big impact on the string. And when you have an impact on that string, you end up breaking it, and the producers of fiber have a very difficult time managing it consistently. They're up and down way too much.
Speaker Change: Yeah. So.
Dustin Olson: Here's a good way to visualize it when youre, making fiber, it's a very thin stream of polypropylene.
Dustin Olson: And if you have contaminants in your feedstock or in your product than those little contaminants can have a big impact on the strength and when you have an impact on that string and you end up breaking the string and the producers of fiber or have a very difficult time, managing it consistently they are up and down way too much.
Dustin Olson: They don't like the product quality, so they can't do it reliably. And so that's why they have traditionally moved away from mechanical recycled products. The same is basically true for film as well. As you make film, it's typically a long, wide sheet, very thin, of polypropylene, and if you have any inclusion of Co-Product 1 or Co-Product 2 in that film, then it can create an interference in the film and break the film or cause problems with the film.
Dustin Olson: They don't like the product quality is they can't do it reliably.
Dustin Olson: So that's why they have traditionally moved away from mechanical recycled product.
Dustin Olson: Same is basically true for film as well as you make film.
Dustin Olson: And typically a long wide sheet <unk>.
Dustin Olson: <unk> Sen of polypropylene and if you have any inclusion of co product, one or co product too and that film then it can create and interference in the film and break the film our cost problems with film and so what we're doing and what we're seeing is that the.
Dustin Olson: And so what we're doing and what we're seeing is that the better we are at removing Co-Product 1 and Co-Product 2 from the process, the better the product quality will be. The better the product quality is, the better we are at being able to make film and fiber. And we are really excited about this, okay? Those are very big markets for very big global markets. And if our product can prove technically and mechanically competent to run in those services, it gives us a pretty nice differential advantage in the market.
Operator: Great, thanks for answering the questions. I'll hop back in queue. Thanks, Thomas.
Operator: The better we are at removing co product, one and co product to from the process.
Speaker Change: Better product quality will be the better the product quality is the better we are at.
Operator: Being able to make film and fiber and we are really excited about this okay. Those are very big markets for very big global markets and if our product can improve technically and mechanically competent to run in those services. It gives us a.
Speaker Change: Pretty nice differential advantage to the market.
Thomas: Great. Thanks for answering the questions and I'll hop back in queue.
Eric Andrew Stine: Thank you. One moment for our next question. The next question comes from Eric Stine at Craig Hallam Capital Group.
Speaker Change: Thanks Thomas.
Speaker Change: Thank you one moment for our next question.
Eric Andrew Stine: Our next question comes from Eric Stine at Craig Hallum Capital Group.
Eric Andrew Stine: Hey, that's been hedging.
Eric Andrew Stine: Hey, Eric Eric.
Operator: Hey, so I'll sneak in a few at the end. I'm just curious.
Eric Andrew Stine: Hey, so ill sneak a few in here at the end to end just curious.
Jaime Vasquez: Any detail you can give on the interest in those bonds and your ability to resell those bonds to give you a little bit longer runway. And then also, I would love details on the warrants, if you're able to provide those pricing terms, et cetera.
Eric Andrew Stine: Any detail you can give on interest.
Jaime Vasquez: In.
Jaime Vasquez: In those bonds and your ability to resell those bonds to give me a little bit longer runway.
Jaime Vasquez: And then also would love details on the warrants if youre able to provide those pricing terms et cetera.
Jaime Vasquez: Yeah, on the revenue bonds, you know, based on discussions we've had, we know Ironton has to run for a period of time. We do think there is an interest in it, we've got ongoing discussions. So, you know, my personal view is that if we can get Ironton to run for a couple of months...
Jaime Vasquez: Yes.
Jaime Vasquez: Yes.
Jaime Vasquez: Revenue bonds.
Jaime Vasquez: Based on discussions we've had we know ironton has to run for a period of time.
Jaime Vasquez: We do think there is an interest in it we've got ongoing discussions.
Jaime Vasquez: So my personal view is that if we can get ironton to run for a couple of months.
Jaime Vasquez: In a couple of months, we'll have opportunities to sell additional bonds.
Jaime Vasquez: We will have opportunity to sell additional bonds.
Jaime Vasquez: With respect to the warrants, the details I can provide, I mean, they extend to December of 2030, and they have a strike price.
Jaime Vasquez: Yeah.
Jaime Vasquez: With respect to the warrants the warrants the detail I can provide.
Jaime Vasquez: They extend to December of 2030.
Jaime Vasquez: They have a strike price of $11.50, and they're basically at fair market value for those warrants.
Jaime Vasquez: They have a strike price.
Jaime Vasquez: At 11 50.
Jaime Vasquez: There is basically a fair market value of those warrants.
Jaime Vasquez: Okay.
Dustin Olson: Got it. And then maybe just last one, and I realize this is difficult. And you know, look, I can appreciate this is a new technology. You're ramping things up, you're learning a lot.
Speaker Change: Got it.
Dustin Olson: And then maybe just last one and I realize this is difficult and look on a per share I can appreciate because of that new technology Youre ramping things up we are learning a lot, but I mean any thoughts on when new innovation when you take down the plant.
Dustin Olson: But I mean, any thoughts on when you anticipate that when you take down the plant, it is more of a proactive You know, this part of regular maintenance versus taking it down, such as the outage that you just did. I mean, is this, given what you know today, do you anticipate that this is a 3Q event? Do you think it's more of an early 2025 event where things are where you ultimately want them to be from a production perspective? Any thoughts there would be helpful.
Dustin Olson: More and more proactive.
Dustin Olson:
Dustin Olson: This part of regular maintenance versus taking it down such as the outage that you've just.
Dustin Olson: Given what you know today do you envision that today.
Dustin Olson: Three Q event do you think it's more of a tool early 2025, and where things are where you ultimately want them to be from a production perspective any thoughts there would be helpful.
Dustin Olson: Yeah, look, I mean, we're always going to do the evaluation to see if there's value in taking the plant down to do repairs or if there's value in continuing to run it. In this case, there were numerous items that had been building up since November that we needed to address.
Speaker Change: Yes look I mean, we.
Dustin Olson: We're always going to do the evaluation to see if there is value in taking the plant down to do repairs or if theres value in continuing to run in this case.
Dustin Olson: There are numerous items that have been building up since.
Dustin Olson: In November that we needed to address and we did a really good job. During this outage, we executed the outage very well there are some discovery items, which got in the way.
Dustin Olson: We did a really good job during this outage. We executed the outage very well. There were some discovery items which got in the way.
Dustin Olson: Honestly, weather had a pretty significant impact on the overall timeline of this outage, but we implemented a number of improvements that will improve reliability. Okay, so we're very excited about that. With respect to, when will we do it again?
Dustin Olson: Honestly, whether it was a pretty significant impact on the overall.
Dustin Olson: Timeline of this outage, but we implemented a number of improvements that will improve the reliability. Okay. So so we're very excited about that with respect to when will we do it again.
Dustin Olson: You know, we do not have plans to take the plant down again in 2024. However, I will caveat it by saying, if we learn things as we run it more consistently and reliably and with more pounds to the plant that advises us that we need to do something again, then we will, okay? But at this point, we don't see a need to bring the plant down, quite frankly, because we did such a thorough job of planning this outage and completing the work that we had in front of us.
Dustin Olson: <unk>.
Dustin Olson: We do not have plans to take the plant down again in 2024.
Dustin Olson: However, I will caveat it by saying if we learn things as we run more consistently and reliably and with more pounds to the plant.
Dustin Olson: That advisers is that we need to do something again, then we will okay, but at this point, we don't see a need to bring the plant down quite quite frankly, because we did such a thorough job of planning this outage and completing the work that we had in front of us.
Dustin Olson: And I think the other thing, Eric, is, look, I mean... We will continue to extend the time between outages over the life of the project, over the life of the site. We will always be open to new ideas, new improvements, reliability, big, small, medium, whatever, to improve the site. Okay, so, I don't think that, you know, even in traditional plants that have been running for 50, 60 years, they still implement reliability improvement projects on those plants every time they shut down.
Dustin Olson: The other thing Eric is look I mean.
Dustin Olson: We will continue to extend the time between outage over the life of the project or the life of the site.
Dustin Olson: We will always be open to new ideas, new improvements reliability big small medium whatever to improve the site. Okay. So so I don't think that even in traditional plants have been running for 50 60 years, they still implement reliability improvement projects on those plants every time they shut down.
Dustin Olson: Now, the percentage of improvement versus the percentage of maintenance will change, and it will happen for us as well, but we're never going to stop growing, learning, or getting better, and we'll continuously add things to this facility to help us operate more. You should note that the majority, the majority of the projects that we did during this outage were very small. But even those small dollar items issues. When an operator is in the field having to deal with something that's abnormal, it's not good for the reliability of the plant. And so, by making some of these small improvements, we will help the operator quite a lot in the field to be more successful.
Dustin Olson: Now the percentage of improvement versus the percentage of maintenance will change and it will it will happen for us as well, but we're never going to stop growing learning are getting better and we will continuously add things. So this facility to help us operate more effectively you should note that the majority the.
Dustin Olson: We already have the projects that we did during this outage.
Dustin Olson: We're very small dollar items, but even though small dollar item issues.
Dustin Olson: When an operator is in the field having to deal with something that's abnormal.
Dustin Olson: It's not good for reliability of the plant and so by some of these small improvements we will we will we will help the operator quite a lot in the field to be more successful.
Operator: All right, very helpful. Thanks.
Speaker Change: Alright very helpful. Thanks.
Operator: Sure.
Christian Bruey: Thank you. I'm showing no further live questions at this time. I will turn the call over to Christian.
Operator: Thank you I'm showing no further questions at this time I will turn the call over to Christian.
Dustin Olson: We are going to read one question that we received through investor questions at purecycle.com. This comes from Don Matthew. Dustin, do you anticipate the need for continuing occasional plant stoppages to keep improving the process? Yeah, first of all, Don, yeah, thanks for the question.
Christian Bruey: We are going to read one question that we received through Investor question, a pure cycle Dot com is coming from Don Matthew Dustin do you anticipate the need for continuing occasional plant stoppages to keep improving process. Yes first of all Don Thanks for the question and thanks for sending in an early we very much.
Dustin Olson: Yeah, first of all, Don, thanks for the question and thanks for sending it in early. We very much appreciate that. And I think that Eric asked that question just before. So we don't anticipate needing to take the plant down for any future outages in 2024, but we're going to see how the plant runs. We're going to see what the plant's telling us, and we'll make decisions throughout the year.
Speaker Change: Appreciate that.
Dustin Olson: And I think that Eric asked that question just before so we don't anticipate needing to take the plant down for any future outages in 2024.
Dustin Olson: But what we're going to see how the plant runs we're going to see what the plant is telling us and we'll make decisions throughout the year, but thank you for the question.
Dustin Olson: But thank you for the question. With that, I believe that's the end of the questions for this call. I'd like to close the meeting with a few short remarks. Look, I mean, the success of this company will depend on our team's resolve to solve problems and make improvements every single day. You know, 1% improvement every day is a common thing that you hear out there.
Dustin Olson: So.
Speaker Change: With that I believe that's the end of the questions for this call I'd like to to.
Dustin Olson: To close the meeting with a few a few short remarks look I mean, the success of this company will depend on our team's resolve to solve problems and make improvements every single day.
Dustin Olson: 1% every day is a common thing that you hear out there we execute that all the time, we opened our doors to you just a few weeks ago and you've got to see the culture and the energy behind everything we do with full transparency.
Christian Bruey: We do that all the time. We opened our doors to you just a few weeks ago, and you got to see the culture and the energy behind everything we do with full transparency. We grind, we push through, we solve problems, and we improve every day. From the outside looking in, the plant might look the same to you, but for us, we have removed so many reliability headaches that prevented us from consistent forward momentum.
Christian Bruey: We grind we pushed through we saw problems and we improve every day.
Christian Bruey: From the outside looking in might look the same to you but for US we removed. So many reliability headaches that prevented us from consistent forward momentum.
Christian Bruey: During this outage, we took the time to make those improvements that we believe will improve our operation. We couldn't be more excited to restart our facility and run this plant, and we look forward to talking to you all again next time. Thank you very much for your time today.
Christian Bruey: During this outage, we took the time to make those improvements that we believe will improve our operation we couldnt be more excited to restart a facility and run this plant and we look forward to talking to you. All again next time. Thank you very much for your time today.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Operator: Okay.
Operator: [music].