Gelion Regulatory News (GELN)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"). UPON PUBLICATION OF THIS ANNOUNCEMENT THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC.

6 July 2023

Gelion plc

("Gelion" or the "Company")

Zinc Bromide Cell Research Programme and Lithium Sulfur development update

Strong technological advances made for both Gelion technologies - Zinc Battery Solution and Lithium Sulfur

Gelion (AIM: GELN), the Anglo-Australian battery innovator, is pleased to provide an update on the strategic evaluation of its Zinc battery solution and on advances made on its Lithium Sulfur technology.

HIGHLIGHTS

Zinc Battery Solution

· The Company's match to market analysis to define the operational parameters of Gelion's zinc bromide ('ZnBr2') battery highlighted the need to balance three key priorities - safety, energy density and cost and consistent with this, the 12-month ZnBr2 research programme ("R&D Programme") was launched earlier this year.

· Strong early progress has been made on the anode side, with significantly improved zinc plating behaviour, achieving improved system behaviour (reducing and potentially eliminating the need to fully discharge the battery periodically for maintenance), however, the R&D Programme also identified potential safety concerns on the cathode side, arising from efficacy of the approach of sequestering bromine in the battery.

· Gelion continued R&D for the cathode, and it has now identified and is migrating to a zinc solution that avoids the potential safety concerns arising from sequestering bromine. Successful validation is expected to result in a technology with safety, energy density and cost ambitions achieved at the same time.

· Gelion expects to validate the potential of this technology over the next six months and report back in early 2024, keeping in line with the timelines communicated for the current R&D Programme.

· Management believes that this solution is highly desirable to Gelion's end market and will accelerate Gelion's ability to scale-up into commercial production.

Lithium Sulfur

· Management is encouraged by the progress being made toward realising the potential of intellectual property packages acquired from Johnson Matthey when combined with Gelion's existing technologies.

· Gelion therefore intends to increase the testing capacity of its research and development facilities in this regard by 50%.

· Based in Sydney, the site will have the capability to increase Gelion's prototyping toward cell development and is due to be operational in September 2023.

Commenting on the update, John Wood, CEO said: "Since joining Gelion, a key priority has been to understand how we could best adapt our Company's outstanding technology capabilities to meet industry requirements. This work has progressed at pace and the conclusions are exciting. We are confident that the migration of our Zinc technology path takes us to where our solutions will be safe and cost effective, with energy densities suitable for applications in the ecosystem surrounding lead acid today as intended. Satisfying all three requirements is extremely rare and we are confident that this will make our solution highly desirable.

"On the Lithium Sulfur side, the understanding of the enormous potential for Lithium Sulfur continues to be elevated in the industry and the marriage of the recently acquired Johnson Matthey IP with our own activities strengthens Gelion's position in this highly competitive field. This is why we have decided to expand our testing facility resulting in increased capacity to ensure we optimise development of this product for the rapidly growing market."

Zinc Battery Solution

On 16 March 2023, the Company announced that the match to market analysis had highlighted areas where further refinement was required in Gelion's technology to meet the primary key requirements of potential end customers - namely, safety, energy density and cost. To date, paths are available to satisfy two of these needs but satisfying all three together has been elusive for market participants.

For Gelion, further research into the particular prismatic format zinc bromide technology approach identified that the bromine sequestered as part of the cathode composition could compromise its safety under certain circumstances of duress e.g., external fire. In addition, research indicated that the zinc plating in the anodes was exhibiting dendritic growth which required the Company to operate systems with periodic maintenance to strip the anodes (by discharging the cell to zero) in turn compromising the performance and cost efficiency of the battery system solutions.

Gelion is pleased to report that it has now resolved a path toward resolving both issues thereby offering paths to enhanced safety, improved cost and either matching or exceeding our current energy density.

In relation to the bromine sequestration, Gelion has determined that the Company's ability to improve the safety of the existing battery will come at a cost of reduced energy density that will be below an industry-tolerable standard and resolving these will require a further lengthy research and capital expenditure plan. Accordingly, Gelion is adapting its technological solution to comprise a zinc cell with an alternate cathode technology (which does not utilise bromine). Early testing indicates that this solution has the potential to maintain the at least the same, if not more, energy density level as the Company's existing zinc bromide solution but with enhanced cost and safety aspects, making this a more compelling product. Gelion expects to validate the potential of this technology over the next six months and report back to shareholders in early 2024, keeping in line with the timelines communicated for the current R&D Programme.

In relation to the anode stripping, Gelion has formulated a technology that has diminished the dendritic growth and resulted in smoother zinc plating. This means that users are not required to "strip" the battery after every few cycles to replace the plating which in turn means that Gelion's batteries can run for increased cycles. This has positive implications for both efficiency and cost.

Lithium Sulfur

Further to the announcement of 25 May 2023, the Company has now received sample electrodes corresponding to the technology package acquired from Johnson Matthey earlier in the year. Gelion will now test these electrodes in isolation before testing them in combination with Gelion's pre-existing solutions.

The Company has continued to test its pre-existing technologies and has defined a testing programme that will benchmark the solutions to industry initiatives.

Given the strong progress in this area the Company intends to expand its R&D facility in Sydney by 50%. This facility, due to be operational in September 2023, will enable Gelion to accelerate its ability to formulate and test the Group's Lithium Sulfur cell technologies.

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