presentation - teaser - silicon 2011_se

Polycrystalline Silicon / Si14 - NAIG Teaser presentationPolycrystalline Silicon / Si - Teaser presentation

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May 1st. 2011

ECONOMIC INVESTMENT OPPORTUNITYEconomic Diversification- Abu DhabiPresented To Masdar Abu Dhabi-UAEIn latest generation non-polluting cost-efficient

Polycrystalline Silicon / Si

By Dr. Shereef Ellaboudy – Professor of EconomicsZayed University Abu Dhabi-UAE

Polycrystalline Silicon / Si14 - NAIG Teaser presentation

Official announcements and articles

Orkla sells Elkem to China National BluestarIosil Energy Corporation Secures First Close on $13.5M

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Orkla sells Elkem to China National Bluestar

Orkla ASA has signed a binding agreement with China National Bluestar (Group) Co., Ltd (Bluestar) for the purchase and sale of Elkem. The transaction comprises Elkem Silicon Materials, Elkem Foundry Products, Elkem Carbon and Elkem Solar.

According to the agreement, the sales price is USD 2 billion for Elkem before closing- and capital structure adjustments. The agreement includes the 1.5 TWh/year power contract Orkla acquired last year which will ensure that Elkem’ssmelting plants in Norway will have a secure and long-term competitive power base.

Iosil Energy Corporation Secures First Close on $13.5M in Equity Financing to Build Pilot Manufacturing PlantThursday, Mar 18, 2010

ALBUQUERQUE, N.M., March 17 /PRNewswire/ -- IosilEnergy Corporation ("Iosil"), an innovator in the production of high-purity solar grade polysilicon for the photovoltaic industry, announced today that it has secured $13.5 million in equity financing in an oversubscribed round. New investors BankInvest New Energy Solutions, SiC Processing, Bekaert, Epic Ventures, and Gideon Hixon joined existing investors EnerTech Capital, Cycad Group, and Espirito Santo Ventures, Milcom Technologies, Applied Ventures, Phoenix Fire, and Merrimaker. The initial tranche allows the company to specify and engineer its pilot plant facility in one of several locations under consideration. The full investment will be used by the company to build out a pilot manufacturing plant and prepare for commercial introduction.

Iosil is uniquely positioned in the solar industry with a breakthrough technology for the production of high-purity (99.99999% pure) polysilicon. The company has demonstrated its ability to produce high-purity polysiliconfrom the waste material (or "kerf") created by wafer sawing operations, a market opportunity awaiting such a solution as well as via upgrading metallurgical grade silicon.

"Iosil is now moving from a successful research and development phase to a manufacturing scale-up of its technology. The solar market needs innovation throughout the value chain to reduce costs and enable growth in one of the largest segments of the renewable energy industry" said Earl Fuller, Chief Executive Officer of Iosil Energy Corporation. "We're thrilled with the quality of silicon recovered from our industry's waste stream, and this enabled us to achieve investment from important strategic players in the industry value chain, as well as financial investors."


Story behind polycrystalline silicon

Since 1974 a team of International Academics has been working on simplifying the

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Since 1974 a team of International Academics has been working on simplifying the production of polycrystalline silicon while reducing pollution inherent in the process.

As a result, we are now able to produce pure “Si” (5-6n) at significantly lower production cost than with existing production methods, and without the high costs required to utilize the pollution associated with current processes.

The obtained product is of the highest quality and purity suitable for use within the PV industry. Among others, the quality has been verified and tested by top Scandinavian scientists and laboratories.

Patents protect the technology and know-how.


Fact on Silicone use today

http://www.epia.org/events/past-events/epia-events-within-the-last-year/7th-european-pv-industry-summit.html

Currently used technology is based on knowledge and concepts that are 40-50 years old. This type of production is using and spreading a lot of “tri chlorine silan" (SiHCl3), “bromine” and “phosphorus”. Comparatively NAIG technology produces “hydrogen” H2, which is pure and clean energy. Furthermore, traditional technology uses about 230mio kW/year electricity, compared with 7mio kW/year needed to produce 2.000mt of “Si” using NAIG new

According to statistics, solar photovoltaic in 2005 supplied less then 1% of the global power generation. It is predicted by the PV industry that by 2020 about 12% of the EU electricity demand will be met by Photovoltaic power.

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2.000mt of “Si” using NAIG new technology. Moreover a 2.000mt/year facility, by the traditional production requires considerable investments in filters to utilize the 6.000mt. of “chlorine” yearly.

Investment requirements, for a traditional facility, built by Siemens, producing 2.000mt. of finished product per year is between euro 300-400mio, and will take min 4 years (including obtaining governmental approvals) to set up in a facility of 90.000 m2. This is about 10 times the size required by NAIG.

Production cost using this system is estimated at Euro 25-30/kgs.

NAIG’s production is based on using mainly ammonia (NH3), which does not pollute, as the process runs in a fully closed and re-circulated loop system. As described above this process saves more than 90% of the energy required with the traditional systems.

A new plant, with a production capacity of 2.000MT/year can be set up at cost of less then EUR 60 mio, and will take aprox. 12-18month. The NAIG installations require a facility of about 7.500m2 under roof.

Production cost using NAIG system estimated at: Euro 10-12/kgs.


Comparison

Based on an established yearly production of 2.000/MT “Si”

Name of

Technology

Raw

Material

Quality Production cost

Euro/Kg

Cost of establish.

production

in Mio Euro

Electricity use

Notes

SIEMES MG Si EG Si 25-30 300 - 400 230mio kW/hours

Pollution need to utilize

6.000mt

chlorine

Our

Technology

(NAIG)

MG Si SG Si -(93%)

EG Si -(7%)

10-12 60 7mio

kW/hours

No pollution

Using NH3 in closed system

World market price today - EUR 40-

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World market price today - EUR 40-60/kgs. for solar quality Si

Annual demand of 80.000MT.

*As all production for solar panel quality is running at full capacity on long-term contracts, expectations are that prices will increase – please see Siemens intro

Very conservative estimated gross profit is Euro 60-100 million per year.

http://www.photon-magazine.com/http://www.photonconsulting.com/http://www.yole.fr/

NB:

This process can use ANY kind of sand

A trial facility is in place and producing 3kgs./hour

Principle explanation of technical differences:

Traditional method of purifying Si is by use of “three chlorine silan" (SiHCl3), which leaves a huge amount of (airborne and liquid) Chlorine (Cl), which afterwards needs to be utilized by use of costly filters.

NAIG production is based on using ammonia "NH3". NH3 is added to SiO2 in a closed-loop system from which SiH4 (mono silan) is derived. Afterwards Mg2Si (di silicid of magnesium) is added to the process, and pure Si and MgH2 (di hydrid of magnesium) is obtained. The MgH2 is used in a secondary process. As all is done in a closed system the only bi-product is pure H (hydrogen), which is sold separately.


SIEMENS Indicator

Answers from Industry Sector Consultants,

21st of July 2010 at 12.39.27

1.) What would be the approximate turnkey investment required to establisha facility in Denmark producing 2.000mt. finished product a year? 300-400 Mio €

2.) What size of land does such project require, and how long would it take from confirmation of investment till production start-up? approx 300x300

3.) What would the approximate production price be? 25-30€

4.) What is today the approximate selling price? 40-60€

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TEST RESULT done by Top Lab in Scandinavia

Monitored and Verified by: Silicon Consultant, Jan V.

Scanning Electron Microscop test

“Dear Sirs,Here are the first results.They have looked at the dust with a Scanning Electron MicroscopesThis way they can get a feel for whether there is anything other than silicon in the sample. It appears that there is only silicon and oxygen, so far it is promising. Oxygen can not be avoided when the dust is easily oxidized in air.

The chemical analysis is coming later this week - he has promised again.

Jan V.”


TEST RESULT done by Top Lab in Scandinavia 2

Chemical analysis

“Dear Sirs,

We have now received the chemical analysis of the last sample.It really looks quite good.

Neither Boron or Phosphorous was detected in this sample which is extremely important as these elements are very difficult to remove later in the process. The equipment used for this analysis has a detection limit around to 0.2 ppmw which mean that we cannot say if the concentration is just below this detection limit, i.e. 0.19 ppmwor much lower than this limit i.e. 0.001 ppmw. However as most customers have a need to buy silicon with Boron and Phosphorous concentrations below 0.3 ppmw, we will be below this important limit in any case.

As for the other elements identified, the metals iron and aluminum are a little high. Often such numbers can be reduced when the manufacturing batch size are increased and also by use of dedicated equipment, so this is not regarded as a high priority issue at this initial stage.

Some calcium has been detected, which also must be kept under further inspection.

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Light elements as Oxygen, Carbon and Nitrogen are not included in this analysis with this equipment. Oxygen is an issue that must be handled. Due to the very small particle size the amount of oxygen that oxidizes the surface is very high. Hopefully this problem will be solved once the particle size is increased. As mentioned earlier, it’s very important that the particle size is increased a lot, as the current small size makes it impossible to use the current product (melting is not possible).

However the main conclusion from these chemical analysis is, that the overall purity is quite good. If these measurements had represented larger bulk-like samples without oxygen it would absolutely have been useful for the manufacturing of ingots and wafers and solar cell.

However the main conclusion from these chemical analysis are, that the overall purity is extremely good. If these measurements had represented larger bulk-like samples without oxygen it would certainly be useful for manufacturing of ingots and wafers and solar cell. I look forward to conduct such a verification test once you can provide something like 1 kg of material based on a particle size of minimum 0.5 mm and the same chemical properties (besides the reduced oxygen).


TEST RESULT done by Top Lab in Scandinavia 2

Element Blind/sn Sample #1 Sample #2 Sample avg.(excl. blind)

Std. Dev.

Al 0,54 5,64 3,45 4,01 1,55

Ca 1,36 4,64 4,05 2,99 0,41

Cr 0,29 2,59 2,35 2,19 0,16

Cu 0,17 0,51 0,38 0,27 0,10

Fe 0,55 18,64 14,45 16,00 2,96

Mn 0,12 0,34 0,31 0,21 0,02

Ni 0,17 1,79 1,67 1,56 0,08

P -0,14 -0,02 0 0,14 0,01

B - <0,15 <0,15 - -

Ti 0,18 0,44 0,42 0,25 0,01

V 0,08 0,08 0,08 0 0

Mg 0,21 0,91 0,48 0,49 0,31

Ga 0,44 0,42 0,41 -0,02 0,01

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Ga 0,44 0,42 0,41 -0,02 0,01

All concentrations are presented in ppmw.

Boron measured by ICP-MS all other measurements by GDMS

Purity: 99,997 % (When excluding oxygen, carbon, nitrogen and other elements that are not included in the current chemical analysis)


Business model

Technology Innovation Company (NAIG), is owner of all 9 major patents and related know-how, and is ready to establish the first production facility at a location in accordance with a joint agreement.

Further facilities can be either set up as separate legal entities or under licensing.

As per assessment made by expert auditor, (Certified Valuer by The European Group of Valuers' Associations) A production facility of 1.000mt., would have an estimated value of between euro 500-1.200mio.

NAIG is looking for a long-term joint venture partners, or a financially strong investor, who can bring this technology to the benefit of any major player in the PV industry. Alternatively NAIG would consider selling the full patent and know-how, in case the investor can convince NAIG that the technology will be brought to the market and the general benefit of the world population, and that the financial commitment is equivalent to the potential of this technology.

NB:

In the beginning of 2010 Angela Merkel signed a nat ional program initiative whose goal is to have 1.000.000 roofs in Germany by 2020 providing energy

from photo element panels.

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Suggested business model

January 2011 the technology, proof of concept and actual product, has been tested, confirmed and verified by a AAA laboratory, under the monitoring and verification of SC, by Jan . (AAA references among Elkem Solar, Topsil, Dong Energy, CaliSolar & Sunsil – member of the board in Danish Solar-Cell Association and Danish Energy Invest)

Any potential investor should, together with NAIG, describe their plans, goals and suggestions towards NAIG and the product.

The minimum amount required to benefit from the offer of becoming a part of the project is EUR 2mio. for first Phase of the project + EUR 30mio. for the Second phase

A proof of funds (EUR 2mln.) is required before going into detailed discussions.


Annex 1 - Pre-Reinvestment Questions by Investor Group

June 2010:

Critical comments from potential investors, who did technical and markets/competition due diligence, and the relevant objective answers from Jan V., SC

Comments/Questions: Questions before reinvestment in June 2010While preparing the background note, we realised that the quality of Silicon obtained using NAIG process is of SG grade (Silicon grade) and not EG grade (Electronics grade). Technically, EG grade of Silicon is much more purer than SG grade and has widespread applications and uses in electronics, telecom and semiconductor industries. Big heavyweights such as Nokia, Sony, Ericsson, Motorola and Semiconductor companies like Intel and AMD look for huge supplies of EG grade Silicon. Use of Solar grade Silicon is restricted to the Photovoltaic industry and even though there is huge hue and cry regarding the supply position of Polycrystalline Silicon there are actually very few takers at a given point of time due to the volatility and cash crunch that exists in the solar industry.

Even established companies in the solar segment such as Hemlock, Elkem Solar, Wacker and REC had, couple of years ago, initiated steps to beef up their production facilities and additionally set up new manufacturing lines for SG grade of Silicon. These companies were followed by new entrants like RSI Silicon, 6N Silicon and PV Crystalox Solar to name a few. One of the key points which we

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Silicon and PV Crystalox Solar to name a few. One of the key points which we intended to highlight to prospective investors was the radical clean and green process developed by NAIG. All the above companies claim that their plant costs are 1/10th, plant build time is half and product cost is 1/3rd in comparison with the traditional process pioneered by Siemens.

Out of the above, RSI Silicon was awarded the first place in MIT’s energy business plan contest in 2007 and subsequently had won the “People’s Choice” award for developing an ultra-disruptive process which provides solar grade silicon at a fraction of the cost of current silicon process plants. All this does not sound well for NAIG and I personally believe that they no longer can enjoy the first mover advantage which they assume they will once they forge alliances with like-minded investors. The other disturbing aspect is that established companies like Hemlock and Elkem Solar are finding it difficult to navigate their way after the recent financial meltdown. I therefore feel it would be worthwhile for NAIG to do a reality check about where they stand in comparison with the above companies before we go further. I am glad that these issues have cropped up at the right time and we need to address them before proceeding any further.

Reply on the following page


Annex 2 - Reply to Questions by Investor Group

I’ve read the two last paragraphs of the letter and do have some comments to the presentation of the current market situation for purified silicon:

Although that I’ve not seen any chemical analysis of the NAIG material, I presume that the NAIG processes qualify for the purification type: Solar Grade, i.e. 6 N purity with low boron and phosphorous content. If this is the case, I’m confident there will be an application for the product also in large quantities.

The fact that the product is not of Electronic Grade purity is not disturbing, as it anyhow is extremely difficult to enter this market segment as the semiconductor industry might be as demanding from a quality and reliability point of view as the pharmaceutical industry. They do not want to test a replacement product manufactured by alternative methods unless there are significant advantages – not to save a little money.

Anyhow the market growth for silicon is dominated by the PV industry and this is where the customers are open to test and qualify new products and where the cost focus is becoming more and more intense.

Hemlock, Wacker and REC (and MEMC and Mitsubishi) all represent old players that are using the well proven and actually reasonably cost effective Siemens production method. These companies never intended to use any other purification method than distillation of a gaseous hydrosilane compound, but some of these have included Fluidized bed deposition as the last gas-to-solid conversion method. With some challenges but still successful according to my understanding. These manufactures are all successful and do supply Electronic Grade quality products or somewhat downgraded fractions that they call Solar Grade – but still of very high purity and quality.

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The other group of companies are those dealing with alternative (UMG) purification methods. In this area we have seen several with severe quality problems, simply because the products were never fully developed before they were entering the market (Dow, Becancour, SolarValue etc.).

Others simply are still in the development and pilot scale operation (Iosil, RSI, Fesiletc.).I do believe that one should categorise both Elkem Solar and 6N as successful UMG manufactures. They both are in full scale industrial production and seem to be confident that the product is of acceptable quality and the cost position is reasonable. As ElkemSolar is a 100% daughter of Elkem group they do not seem to have any financial problems and also 6N being a 100% daughter company of CaliSolar seem to be heading towards a safe integrated business case.

As a market leader with loyal customers that have accepted pre-payment in return for long term contracts I’m not aware that Hemlock should have any financial problems. They are running a safe case where the facility expansion is paid by advanced payment from their customer. And with Dow corning and Shin-Etsu in among their strategic investors, they also should be quite well secured financially.

A reality check of NAIG against the current and future market conditions is anyway always relevant, and should include a detailed technical analysis of the current quality of the silicon and the expectations regarding the final manufacturing capability, reliability and cost, as well as a updated market analysis with emphasis of the potential of UMG manufactured solar feedstock in the future marketplace. Exactly when such an in-depth investigation should be performed probably more depend on the progress of other negotiations, but could be included as conditional to finalising the contract. - Best regards Jan V.


Cases

Orkla sells Elkem to Chinesse Bluestar at usd 2 billion cash

Comments: The Elkem production capacity is 6.000mt. per year, at a facility costing usd 600mio. to build, which is the same as a Siemens plant. The product costs are indicated to be euro 20-25/kgs. and the quality is proven to be less clean from Bromine and Phosphorus than the NAIG products. Key issue is that this technology is still very costly to establish, with the disadvantages connected to such investment.

IOsil secures usd 13.5 mio to build pilot manufacturing plant (we are waiting to have the calculation for the actual share value)

Comments: IOsil was at this time, at a stage prior to where NAIG is today.

IOsil had only done a minor lab trail execution, where NAIG can do actual minor production.

IOSil concentrate their technological development on demonstrating their ability to produce solar grade polysilicon from waste products, but

Presentation of newly executed cases, demonstrating the evaluation, the potential and the pricing of NAIG and its unique pa tens at this stage.

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the NAIG technology is to produce Silicium solar grade with no pollution and cost efficient.

Iosil Energy Corporation Secures First Close on $13.5M in Equity Financing to Build Pilot Manufacturing PlantThursday, Mar 18, 2010

Orkla sells Elkem to China National Bluestar

Contact:

Dr. Shereef EllaboudyCollege of Business SciencesZayed UniversityP.O Box 4783Abu Dhabi , UAEMobile +971-50-925-5174Email: [email protected]

presentation - teaser - silicon 2011_se

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