Strategic Resources and Cipher Neutron (CN) have executed a collaboration agreement to study supplying the BlackRock Project's metallurgical facility (owned by Strategic), located in Saguenay, Québec (Canada) with anion exchange membrane (AEM) electrolyzers. These AEM electrolyzers manufactured by Cipher Neutron will be designed to produce green H₂ to support the transition to green steel.

As per Strategic's recent NI 43-101 feasibility study, Strategic plans on using natural gas for its Tenova HYL Energiron direct reduction plant, which can also use H₂. The collaboration will enable Strategic to accelerate its H₂ development roadmap and move towards producing near emissions free iron metallic products for use in electric arc furnaces and steel foundries.

The agreement allows Strategic to consider the use of AEM electrolyzers from CN for the BlackRock project including its iron, titanium and vanadium production at its metallurgical processing plant to be located adjacent to the Port of Saguenay, Québec, in Canada. Cipher Neutron's innovative products, such as its proprietary AEM electrolyzers, have unique advantages over other green H₂ production technologies and, more specifically, these are as follow:

• CN AEMs provide greater electrical efficiency versus its technology peers, leading to lower H₂
• CN AEM electrolyzers are free of platinum and iridium materials, harmful polyfluoroalkyl substances (PFAS) chemicals and polluting metals, leading to lower costs, enhanced availability and shortened lead times and delivery schedules.
• CN's AEM membranes have demonstrated longer life, leading to lower sustaining capital and operating costs.
• CN's green H₂ is provided at pressures of up to 30 bar, reducing the need for compressors and excess power required by compressors, further reducing the capital and operating costs.

The BlackRock project's leased industrial site at the Port of Saguenay provides an ideal location to deploy Cipher Neutron's green H₂ AEM electrolyzers. Strategic can utilize the green H₂ in its H₂-ready Tenova HYL Energiron direct reduction plant for the production of high purity, clean metallic iron products, a key component of green steel. Strategic has an established business footprint in Québec and CN's supply of AEM electrolyzers for this multi-Megawatt capacity project is well-suited for Strategic, Cipher Neutron, the Province of Québec and North America.

Strategic has completed a bankable feasibility of the fully-permitted BlackRock project, which, along with its Environmental Certificates of Authorization from the Province of Quebec, demonstrate significant achievements of advanced greenhouse gas (GHG) reduction with proven technologies. The work contemplated by CN and Strategic for the first phase of the collaboration will consider the possibility of further advancing the GHG reduction achievements of Strategic towards even lower emissions. CN will provide the design for the initial implementation of approximately 84 250-kW AEM green H₂ electrolyzers to produce approximately 10 tpd of green H₂ gas to be utilized in the reduction of iron and potentially other purposes for the BlackRock project.

If the initial project phase is implemented, the supply of AEM green H₂ electrolyzers could represent meaningful revenue to Cipher Neutron and subject to the supply of available electrical energy and other factors, could eventually scale up to more than 200 250-kW electrolyzers to produce up to 30 tpd of green H₂ for the BlackRock project.

Sean Cleary, CEO of Strategic Resources said, "Cipher Neutron's AEM technology has significant game-changing potential and is an excellent fit with the developing H₂ strategy of Strategic's BlackRock project. We look forward to incorporating the AEM electrolyzer technology, such as that of Cipher Neutron, to foster a greener and more sustainable future in line with global reduction of GHG. Strategic Resources has a long history of fostering green and sustainable technology and we welcome the opportunity to be a part of the development of the growing green H₂ economy and support the transition to green steel for the western world."

Gurjant Randhawa, President and CEO of Cipher Neutron said, "Cipher Neutron welcomes this very significant alliance with Strategic Resources on its ongoing energy projects. Approximately 7% of the total carbon dioxide produced in the world emanates from the iron and steel industries. We commend Strategic Resources for its leadership in green H₂ adoption which can considerably change forever these highly intense GHG emissions sectors. We believe that carbon emissions and other harmful impacts on our environment can be reduced drastically in the Province of Québec and across the globe by deploying CN's AEM electrolyzers."