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Aiden MillsDo you ever think about where your old cell phone from 2006 is now? What about those rollerblades from the 1990s? Or that pair of platform shoes from decades earlier? The sad reality is, unless you are certain the products you are buying are biodegradable, or at least recyclable, they are somewhere you don’t want to know about or visit. Fact is, there are thousands of products like this for us all. But fortunately, some enterprising entrepreneurs are thinking about solutions to problems we don’t even think about. Take the roof of your house for instance. You probably didn’t know that more than 13-million tons of asphalt shingles are being ripped off homes every year, while only ten per cent of them don’t end up in landfills. Aiden Mills thinks of this every day. Mr. Mills is the CEO of Northstar Clean Technologies (TSXV:ROOF), a recently listed company that aims to solve the aforementioned problem by turning your old roof into commercially viable products and keeping it out of landfills. Cantech Letter caught up with Mr. Mills to about how the company got started and what’s next. Aidan, can you tell us how Northstar Cleantech came to be? Northstar Clean Technologies Inc. (TSXV:ROOF) (“Northstar”) first started developing its proprietary design process called the Bitumen Extraction and Separation Technology (“BEST”) as an internal project within the global construction materials company Lafarge approximately 10 years ago. From 2015 until today, Northstar has developed and advanced the technology at our fully constructed 20,000 sq ft Empower Facility in Delta, BC. We are now currently in the commissioning phase the Empower Facility and are driving towards full commercial production. In Q3 2021, we completed a go-public financing of C$12.24 million and subsequently listed on the TSX Venture Exchange under the symbol “ROOF” in July 2021. Just how large is this market? The market opportunity in both Canada and the United Sates enormous with ~13 million tons of asphalt shingles per year being ripped from homes each year. Approximately 90% of that waste is going to landfills. The sheer volume of this amount of shingle waste is staggering and there are no other companies we know of that is repurposing those shingles to useable end products. We believe that each tonne of shingles we collect from waste haulers is worth between $250 - $300 at a minimum, so when you start thinking about the opportunity, it’s absolutely staggering. What typically happens to used asphalt shingles today? Approximately 90% of single-use asphalt shingles are dumped in landfills and 10% are crushed and used in road mix. In landfills, the sand and asphalt in shingle tiles degrade extremely slowly – and will remain in landfills for hundreds of years. When roofing contractors and waste haulers remove the shingles from a roof of a home, they then dump the shingles in a landfill, where they are forced to pay a “tipping fee” to the municipal or private landfills. Tipping fees vary depending on region within North America. In Vancouver and Toronto, for example, tipping fees are approximately C$130 per ton and C$120 per ton, respectively (according to municipal data). In the Pacific Region of the United States (which includes Washington, Oregon and six other states), tipping fees average approximately US$72 per ton (according to the Environmental Research and Education Foundation). Our two-tiered revenue model is composed of both tipping fees (paid to Northstar) on the inputs of defective or discarded asphalt shingles, and outputs of our three primary components liquid asphalt, fiber and aggregate. Therefore, we can generate revenue from both inputs AND outputs, which is tremendous. How are the shingles repurposed? Do they become new shingles or other products? Our proprietary Bitumen Extraction and Separation Technology (BEST) is the process design technology that separates and recovers the three primary components (liquid asphalt, fiber and aggregate) of an asphalt shingle in its original forms. Once separated, our three commercial products (liquid asphalt, fiber and aggregate) are then re-sold back into the market for re-use, which is unique because to our knowledge there is no other company that has this capability to actually break down the asphalt shingles into their original forms. This is the definition of the circular economy. For the liquid asphalt, we have a one-year 100% commissioning-level off-take agreement with Lafarge Canada Inc., which is as a global leader in innovative and sustainable building solutions. Lafarge North America is the largest diversified supplier of construction materials in the U.S. and Canada. Lafarge operates more than 50 asphalt sites and is one of the top 10 global hot-mix asphalt producers. Lafarge is the leading cement producer in the United States. How do you scale this business, specifically how do you recover asphalt en masse? Our long-term business strategy is not actually focused on scaling up each individual facility, but rather focused on developing a modular design of the same size (up to 200 tons per day) that is fully optimized and can be deployed in any municipality in North America. In order words, rather than operating one larger facility for a larger city, we plan to build numerous facilities of the same size in one city. For example, rather than build one 800 ton per day facility in a large city like Dallas, Texas, we would build four 200 ton per day facilities. This is due to market supply, as a city of 1 million people can likely be sufficient supply for one of our facilities. You were brought in after an extensive executive search. How does your background help you lead in this space? As a professional engineer by training, with 30 years of global experience at the likes of BP, Goldman Sachs and Husky Energy, I was hired as CEO to lead the expansion of Northstar. Our process design technology has been in the “proof of concept” phase for the last 6 years and is finally entering the commercialization phase. We are fully funded to ramp up into steady-state production at the Empower Facility. I was particularly attracted to Northstar because this was an opportunity to join a cleantech company with a process that WORKS! Northstar is not years away from first revenue, like many other peers in the ESG / cleantech industry. Many companies in the clean tech space have struggled with commercialization, but Northstar has a technology that is in the commissioning stage RIGHT NOW. I saw the BEST technology as being extremely unique and knew that I needed to join the team. With engineering, commercial negotiation, trading and strategy implementation experience, I have a perfectly suited skillset to lead this company into the next phase of growth. You recently engaged Wellington Dupont Public Affairs to lead government engagement on the reduction of single-use asphalt shingle disposal. Do you think you can help various levels of government to be leaders in this initiative? Yes, absolutely. We plan to be a leader in asphalt shingle repurposing across North America. We are solving a REAL problem that many people are seldom aware of, yet politicians and waste management professionals fully grasp. The landfills across the country are being filled with asphalt shingles, the fourth largest category of construction waste. We are already in touch with various parties at all levels of government across the country to help them solve this massive landfill problem. Government leaders, no matter which party they represent, are all committed to diverting waste away from landfills and this is a major topic of discussion for political parties in Canada. We need to address this problem NOW and we think that our solution can help every municipality manage unneeded landfill waste. What does your balance sheet look like? Will you need to raise more capital to execute on your business plan? Northstar completed a C$12.2 million go-public financing in Q2 2021 and subsequently listed on the TSX Venture Exchange under the symbol “ROOF”. As of June 30, 2021, the company had C$10.3 million in cash on its balance sheet and thus is well-funded for the next 12-24 months as it evaluates expansion opportunities across Canada. Northstar’s healthy financial position allows us to complete the commissioning phase at the Empower Facility (expected by end of Q4 2021), complete the engineering study (expected by end of Q1 2022), and complete the market analysis to identify the ideal location for its first expansion facility (expected within H1 2022). Importantly our cash reserve contains limited debt ($0.9M as of June 30, 2021) and through the government engagement outlined earlier and the wide availability of “Green Debt” we feel there are significant number of options to add non dilutive funding to the balance sheet for the capital expansion program. Northstar’s first expansion facility in Canada will be based on the independent engineering design and will be completely optimized for a national rollout strategy. What do you hope to accomplish in the next four quarters? We have many objectives to accomplish in the next four quarters. We are going to be very busy! First and foremost, we are focused on ramping up to commercial production levels at the Empower Facility in Delta. That is our first priority. Second, we plan to complete our first sale to our off-take partner Lafarge Canada Inc., one of the largest construction materials companies in the country. Third, we plan to complete our independent environmental assessment, which will effectively quantify the net carbon savings our facility can off-set compared to virgin asphalt production, which may be a new additional revenue stream for the company. Fourth, we plan to commence the application process for government funding through our political partner Wellington Dupont. Lastly, and what we are most excited about is the plan for expansion at our next facility. This will be ongoing throughout the year 2022. We plan to complete our market analysis of all available jurisdictions and decide the ideal location for our next facility. Many exciting times ahead for Northstar! We are building a REAL business here based on a clean technology that actually WORKS and I look forward to watching the company grow. Disclosure: Northstar Cleantech is an annual sponsor of Cantech Letter

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