Cielo Provides Operational Update and Production Forecast for Aldersyde and Fort Saskatchewan Facilities - Seite 4

Fort Saskatchewan R&D Facility Overview

Cielo previously announced the purchase of a 60-acre land and an approximately 32,000 square feet industrial building at Fort Saskatchewan, Alberta (the "Site"). Cielo intends to build a R&D Facility with a capacity of 60 litres per hour ("lph") at the Site, which will guide the planning and design for its full-scale waste-to-fuel facility to be located at Fort Saskatchewan, Alberta (the "Full-Scale Facility"). The R&D Facility will consist of a scaled-down version of a full-scale facility, equipped with the latest process control technology for data trending, system automation, remote monitoring and process analytics. The objectives of the R&D Facility will be to determine optimal reactor design for various biomass inputs and catalyst combinations in order to maximize distillate production, improve carbon intensity score, and determine the best operational practices (collectively, the "Data"). Given the size of the Aldersyde Facility, the Data cannot be obtained in a cost-efficient manner from the Aldersyde Facility.

Cielo previously estimated a full-scale facility would have a capacity of approximately 4,000-lph; however, the Company intends to assess the economics of establishing an even larger full-scale facility given the significant footprint offered by the Site. Since the R&D Facility has a smaller 60-lph capacity, it will be fabricated and constructed within the warehouse, while the Full-Scale Facility will be constructed on the currently vacant land.

Engineering output data from the R&D Facility will provide critical information to fully understand material balance, energy balance, thermodynamics and fluid mechanics for the system which is required for modelling and scale-up calculations. These calculations would then be provided to a qualified Engineering, Procurement and Construction ("EPC") firm capable of fabricating a full-scale, state-of-the-art, commercial waste-to-fuel facility.

R&D Facility Activities and Milestones

Current work at the Company's Fort Saskatchewan location is focused on the design, procurement and construction of the R&D Facility. The primary objective is to produce high quality engineering data for the front-end engineering design of a full-scale waste-to-fuel facility. Thereafter, the R&D Facility will undertake continuous testing of plastics, organics, railway ties, and other waste products. In 2021 the Company has made progress on meeting milestones related to construction and commissioning of the R&D Facility as follows: