Cielo Announces Corporate Change and Provides Operational Update - Seite 2

Annual General and Special Meeting

Generally, Cielo has focused in recent months, in particular in line with its transition to the TSX Venture Exchange ("TSX-V"), on attracting qualified and dedicated directors and management to contribute to the advancement of the Company's objectives as a TSX-V listed issuer. In recent months, the Company has built what the board of directors (the "Board") and management believe to be a strong and qualified set of individuals. The Board and management may experience additional changes as it continues to grow and adjust to its objectives.

As a result of recent changes to the Board, the Company will be filing an Amended and Restated Notice of the Annual and General Meeting of the Shareholders, to be held on October 21, 2021, and a related Amended and Restated Management Information Circular and Form of Proxy (the "Proxy Materials"), however no other material changes to the Proxy Materials anticipated. The Board is actively engaged in the process of identifying new and suitable candidates who can bring the necessary skills and commitment needed to continue propelling the Company forward and will provide updates as they become available, including in the Amended and Restated Proxy Materials.

Operational Update:

The Company is pleased to also share an update concerning operations:

• The desulfurization process unit is still on track for warm-up and start-up before the end of September, 2021. Once the unit is on-line, the Company's primary objectives are to:
  • confirm the ability to produce diesel with a sulfur content that complies with road diesel requirements;
  • monitor, trend and measure system performance parameters for design purposes; and
  • gain an understating of expected operating costs.

While continual operation of the desulfurization unit is not critical to operation, we will operate the unit as required.

• The existing process at the Company's facility in Aldersyde, Alberta is currently undergoing design enhancements and system modifications. In the immediate term, attention is being directed to demonstrating the concept of a continuous steady-state operation. This includes the three process blocks of the system that are currently in design: (i) the inlet feed system, (ii) the reactor and, (III) the biomass waste management system. We will be able to update the market in the near future regarding the status, progress and tuning of this facility.
• Cielo is in the design stages of a scaled-down version (60-litres per hour ("lph")) of a complete process system that is intended to mimic a full-scale 4,000-lph facility. Based on the current timeline, management anticipates approaching the fabrication and construction phase by Q1-2022 which is planned to be constructed at Cielo's new, recently announced site at Fort Saskatchewan, Alberta. The purpose of this research facility is to achieve a very high degree of detailed performance characteristics, feedstock yields, optimum carrier fluid design, rector design, catalyst experimentation and a detailed material balance for the system. This system is expected to give Cielo the flexibility to experiment with a greater range of pressure and temperature regimes, reactor configurations and catalysts to greatly enhance the quality of the fuel yield. The detailed lab-grade engineering output is expected to facilitate the confidence to successfully design full-scale commercial plants with predictable performance, capital cost expectations and operating cost metrics.
• The Company has also made improvements in its processes, both in the corporate and operational contexts, taking steps to bolster the underlying strength and integrity of the organization overall.
  • As a responsible and trustworthy organization, Cielo is focused on ensuring the health and safety of its employees, contractors and partners, while also striving to minimize the environmental footprint of its operations. Under the leadership of Mr. Gegunde as COO, improvements to health and safety measures are being employed across Cielo's operations.
  • Cielo has also established a robust internal engineering team with the goal of minimizing reliance on external engineers or consultants, maintaining control over all intellectual property and processes, and driving down overall costs within the organization. As needed, Cielo has built a professional working relationship with a leading third-party engineering consulting firm to ensure the Company is ideally positioned to execute. Through the development and implementation of new and more rigorous engineering standards, management expects to have stronger business processes and feedback controls, which has been a primary focus over the last quarter and will continue to be a focus as Cielo continues towards commercialization.
• The opening of the Calgary office allows Cielo to attract additional professionals who are focused on creating effective cost controls, instituting budgeting processes and capturing synergies as a result of Cielo's team being centralized.

Release of Fiscal Q1, 2022 Results & Conference Call