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Vancouver, British Columbia–(Newsfile Corp. – June 20, 2022) –  ReGen III Corp. (TSXV: GIII) (OTCQB: ISRJF) (FSE: PN4) (“ReGen III” or the “Company”) is pleased to report the following progress with the Company’s first facility:

  • FEL-2 (pre-FEED) is complete. A subsequent Value Engineering (“VE”) review process, led by Koch Project Solutions (“KPS”), resulted in an updated capital cost of US$293 million for the Texas recycling facility. Final capital costs will be defined during FEL-3 (FEED). Inflationary escalation and scope changes were the drivers of this update.
  • Based on current data and bp contractual base oil prices, the Company is now forecasting first full year EBITDA[1] of approximately US$230 million for the proposed Texas recycling facility.
  • The final Lifecycle Assessment study (“LCA”) conducted by GHD Services Inc. (“GHD”) estimated that CO2e emissions from the Company’s ReGen™ process are 82% lower than comparable, traditionally refined base oils combusted at end of life.
  • Draft Phase 1 Red Flag Due Diligence Report conducted by EDC’s Independent Engineer has been successfully submitted, with no red flag concerns identified.
  • The Company was recently awarded three new process patents, bringing its total to 14.
  • Now that FEL-2 is complete, the Company has established a non-exclusive financial and exclusive advisory services relationship with one of Canada’s leading banking and financial services institutions.
  • The Company continues to negotiate with the PE Firm and provide bp with regular project updates.

ReGen III has established a non-exclusive financial and exclusive advisory services relationship with one of Canada’s leading banking and financial services institutions (the “Canadian Financial Institution”). The relationship has been established to assess appropriate levels of project and public company funding to advance the Company’s proposed Texas recycling facility. The Canadian Financial Institution will also advise on ReGen III’s strategic objective of acquiring additional UMO recycling projects. This relationship will augment the previously announced financing work underway with Export Development Canada (“EDC”) and the U.S. based multi-billion-dollar green energy infrastructure-focused private equity firm (“PE Firm”).

Greg Clarkes, Chairman and CEO of ReGen III stated, “The past few months have been nothing short of intense as our team continued to mobilize and provide numerous deliverables to our financiers against a background of inflationary pressure and shifting global financial markets. Fortunately, the economics of our Texas recycling facility are robust and this, coupled with the strength and skills of our project partners, has enabled us to continue making steady progress. With the recently added bench strength of a multi-disciplinary team from a major Canadian Financial Institution, we see an increased capacity for securing project funding that will advance not only our Texas recycling facility, but other expansion opportunities. Our business is a marathon and not a sprint. I am pleased to say we are continuing to deliver the fundamentals that position us to succeed globally.”

Financing Update

With the objective of securing final term sheets for the Texas recycling facility, ReGen III continues to deliver due diligence materials to EDC, the PE Firm, several other potential debt providers, and the Canadian Financial Institution.

Further to the Company’s update on April 8, 2022, the draft Phase 1 Red Flag Due Diligence Report by EDC’s Independent Engineer has been submitted to EDC with no red flag concerns identified. ReGen III also continues to advance the contractual engagement process for the independent market advisor selected by EDC.

Four draft definitive agreements have been received from the PE Firm and the Company continues to negotiate final investment terms. Further details, including the name of the PE Firm, will be made available upon signing of definitive agreements.

Engineering Update

FEL-2 engineering packages for the Texas project are complete and the Company is currently negotiating FEL-3 completion fees and timelines with KPS. KPS has also advised that initial geotechnical field work for the Texas recycling facility is complete with an initial geotechnical report expected in June. KPS’s work to prepare a preliminary air emissions permit is also ongoing.

Between April and June, an intensive nine (9) week VE review process was undertaken by KPS to address inflation driven cost escalation and project scope changes resulting from site-specific conditions. The VE process resulted in approved savings of approximately US$68 million to reach a capital cost proposal of US$293 million. Based on updated cost estimates, other factors and bp current contractual base oil prices, the Company is currently forecasting first full year EBITDA[2] of approximately US$230 million for the proposed Texas recycling project.

In addition, ReGen III continues to advance contractual arrangements with Advario Galveston County, LLC, an affiliate of Advario North America, LLC (“Advario”, formerly known as Oiltanking North America, LLC). A draft throughput service agreement has been received for the Advario Galveston County Terminal site (“AGAL”), in addition to the previously announced draft site lease. Both agreements are currently under review.

Life Cycle Assessment Study

ReGen III is pleased to report the Lifecycle Assessment study (“LCA”) conducted by GHD Services Inc. (“GHD”) is complete. GHD is part of GHD Group Pty Ltd., a global technical professional services firm providing advisory, architecture and design, buildings, digital, energy and resources, environmental, geosciences, project management, transportation and water services. Founded in 1928, GHD Group Pty Ltd. employs approximately 10,000 professionals with operations in 200 offices and 14 countries. https://www.ghd.com/en-ca/index.aspx.

In its report, GHD used greenhouse gas (“GHG”) lifecycle analysis to compare the global warming impact of ReGen III’s process to the production and end of life scenarios of base oils. Based on GHD’s Scope 1-3 emissions analysis, GHD concluded that the lifecycle CO2e emissions from the Company’s ReGen™ process are expected to be 82% lower than traditionally refined base oils combusted at end of life. Furthermore, GHD stated that using the ReGen™ process may reduce up to 903,000 mt CO2e / year from entering the atmosphere by preventing combustion at end-of-life and by producing base oils more efficiently than the equivalent production from virgin crude oil. This would be the equivalent of removing 195,000 passenger vehicles from the road for a year.[3] Based on these findings, the Company continues to explore opportunities to monetize GHG credits from its Texas facility.

Figure 1: GHD LCA results

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/128296

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