REG - Gelion PLC - Trading update and two new agreements signed

GelionAnnouncement

15/08/2023 07:00

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RNS Number : 2892J  Gelion PLC  15 August 2023

15 August 2023

Gelion plc

("Gelion" or the "Company")

 

Trading update and new agreements for progressing Zinc-based Energy Storage
solution

 

Agreements signed with The University of Sydney and Professor Yuan Chen

 

Gelion (AIM: GELN), the Anglo-Australian battery innovator, today provides an
update on the Group's trading for the year ended 30 June 2023 and announces
the signing of two agreements with The University of Sydney and Professor Yuan
Chen for Gelion's Advanced Cathode Project, accelerating progress towards its
Zinc-based Energy Storage Solution. The agreements are to utilise Gelion's
recent zinc anode performance breakthroughs leading to Gelion's next
generation of energy solutions - Gelion's Gen 5 Zinc Hybrid Cell.

 

Gelion's advanced Zinc technology offers not only a low cost, safe and robust
chemistry, but by deploying it in a novel bromine-free hybrid cell format it
also offers an inherently non-toxic improved power capability (higher
currents) and cycle life performance. Initially, it is expected to be highly
competitive against lead acid batteries in applications such as Stand-Alone
Power Systems (SAPs), Voltage Regulation, Telecom, and home Uninterrupted
Power Supplies (UPS), with market size estimated to be over US$7 billion.
Following additional later development, Long Duration Energy Storage (LDES)
applications will be targeted as well.

 

Trading Update

 

Unaudited financial results for the year ended 30 June 2023 are expected to be
ahead of current guidance:

 ·         Revenues for the year are expected to be £2.0m ahead of current guidance of
           £1.7m.
 ·         Adjusted EBITDA loss* expected to be approximately £6.0m, lower than guidance
           of £6.4m.
 ·         Net cash at 30 June 2023 was £7.3m, marginally higher than the current
           guidance of £7.1m. The balance at 30 June 2023 is post the £3.0m cash used
           to acquire the Johnson Matthey Intellectual Property (IP) portfolio in March
           2023.
 ·         Since March 2023, the Company has been focused on reducing costs and has taken
           steps to reduce cash consumption by c. £1.0m on an annualised basis.

 

*Adjusted EBITDA loss (defined as the Earnings Before Interest, Tax,
Depreciation, Amortisation, & other non-recurring items)

 

Highlights of agreements with the University of Sydney to accelerate progress
of Gen 5 Zinc Hybrid Cell

 

 ·         Signed two agreements with The University of Sydney, centered on Professor
           Yuan Chen and his Laboratory for Advanced Carbon Research. Gelion's Advanced
           Cathode Project will work to jointly progress an advanced cathode for its Gen
           5 Zinc Hybrid Cell. These research streams are expected to generate
           commercially relevant prototypes by the end of 2023.
 ·         This programme leverages the learnings from the manufacture of 1,200 Zinc
           Bromide (ZnBr2) batteries at the pilot manufacturing facility in February 2023
           and the Battery Management Systems (BMS) development since then, as part of
           the R&D pathway to commercialisation.
 ·         Professor Chen will act as a consultant to Gelion, providing his guidance and
           experience to accelerate progress in both technical and commercial aspects of
           the Gen 5 Zinc Hybrid Cell development.
 ·         Any IP developed during the project will be retained by Gelion.

 

The two agreements follow the announcement on 6 July 2023, regarding the
achievement of significantly improved zinc plating behaviour that reduces cell
maintenance requirements. This breakthrough resulted from the 12‑month
ZnBr(2) research programme (R&D Programme) launched earlier this year to
achieve all three key objectives in the one design simultaneously, i.e.
safety, energy density, and cost.

 

Due to this zinc technology innovation, Gelion was able to identify and
migrate to a zinc-based energy storage solution that is bromine-free, i.e. a
Zinc Hybrid Cell. It will continue to validate this technology for the
remainder of 2023, consistent with the timelines communicated for Gelion's
R&D Programme earlier this year.

 

Commenting on the update, John Wood, CEO said: "Zinc is positioned to be a
very important battery element due to its abundance and low cost. We have now
modified the direction of our Gelion Zinc cell activities toward a hybrid cell
that is designed to both be readily scalable because of its safety, cost, and
the materials chosen, while delivering features important to the market
including robustness, a wide temperature tolerance, the ability to use a wide
range of charge and be stored and transported in a discharged state.

 

"We are very fortunate to be able to work with Professor Yuan Chen to
incorporate his research, understanding, and experience to move both quickly
and directly towards our goals. We are conducting an accelerated validation
until the end of this year before setting out our zinc commercialisation plan
and will update soon after. We are very confident this is a key positive
inflection point in our zinc activities.

 

"I am also very pleased with the progress we have made so far, be it the
strategic Lithium Sulfur IP acquisition, plans to expand the Lithium Sulfur
R&D facility, pivoting from Zinc Bromine to Gelion's Gen 5 Zinc Hybrid
Cell, or securing the collaboration with The University of Sydney. These are
all a result of focused efforts on product refinement to reduce costs to
market, improve processes and speed to market. I am also delighted to report
that we have slowed down our cash consumption considerably and will provide an
update on the cost saving measures and the 12-month plan at the time of
announcing our final results."

 

Professor Chen commented: "I am excited to be part of this programme as all my
research aims to develop efficient, cost-effective, and reliable energy
storage solutions. It is a perfect fit, underpinning Gelion's
commercialisation in a highly prospective space."

 

Background

On 6 July 2023, the Company announced that it had identified a Zinc Energy
Storage Solution which will comprise a zinc cell with an alternate cathode
technology to progress beyond challenges that had been identified with
dendritic growth and Bromine sequestration that were resulting in higher costs
and safety issues under forcing conditions.

 

Continuing with its progress on the R&D programme, the new Advanced
Cathode Project will aim to develop an advanced cathode for Gelion's Gen 5
Zinc Hybrid Cell with key research on carbon-based cathode materials, current
collectors, and advancements in electrolyte formulations that will directly
contribute to increased safety, higher energy density, and cost improvements.

 

Professor Chen has a PhD from Yale University and is a Fellow of The Royal
Society for Chemistry (UK), the Royal Australian Chemical Institute, and the
Institution of Chemical Engineers. He also serves as editor for a highly
regarded scientific journal Carbon (Elsevier) and has over 20 years of
experience in researching energy storage related materials, including
zinc-based systems.

 

The collaboration will initially run for up to two years as part of an
intensive commissioned R&D project including the initial validation of the
technology in 2023 followed by ongoing development work to progress to
commercialisation. This project will have combined teams from The University
of Sydney and Gelion's experienced zinc cell research team as well as strong
involvement from Gelion's Founder and Principal Technology Advisor, Professor
Thomas Maschmeyer. Importantly, the new system will leverage the progress
achieved with Gelion's zinc anode, prismatic cell design, and systems, and
intellectual property rights relating to key deliverables of the advanced
cathode project will be retained by Gelion.

 

CONTACTS

 

 Gelion plc                                                    via Alma PR

 John Wood, CEO

 Amit Gupta, CFO

 Thomas Maschmeyer, Founder and Principal Technology Advisor

 finnCap Ltd (Nominated Adviser and Sole Broker)               +44 207 220 0500
 Corporate Finance

 Christopher Raggett

 Seamus Fricker

 Fergus Sullivan

 ECM

 Barney Hayward

 Alma PR (Financial PR Adviser)                                +44 20 3405 0205

 Justine James                                                 gelion@almapr.co.uk

 Hannah Campbell

 Will Ellis Hancock

 

 

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