The client previously identified as Client A, a large international mining company which has also purchased a full plasma torch system for use in trials in its pelletization furnaces, continues its plasma torch initiative at its own pace, with no recent developments to report as per project timing or completion.
Pyro Green-Gas: The Company’s wholly owned subsidiary, Pyro Green-Gas, is in advanced discussions with an international steel company for a project with a value of approximately $1.1 million.
Aluminum Cast House Decarbonization: The Company is part of a tendered bid process for the testing of plasma within an aluminum cast house of a leading global aluminum company.
Mining Industry Parts Manufacturer Decarbonization: The Company is in advanced discussions with a global parts manufacturer that supplies the metals and mining industries, to test plasma as a heat source in the client’s cast furnaces.
Commodity Security & Optimization
New Laser Cut Titanium Metal Powder Order: the Company has received notice from a global organization for a potential initial order of titanium metal powder “laser cut” that, if completed, is expected to occur in Q2 2024.
Additive for Green Cement: the Company had previously announced a project with client Progressive Planet, for the development of amorphous silica from crystalline silica, for use as an additive to replace fly ash in cement, thereby creating green cement. With recent results announced by the Client showing promise, the Company expects additional information and next steps to be announced in Q2 2024.
Product Qualification Process for Global Aerospace Firm: As mentioned in the Q3 2023 Outlook, based on information flow between the Company and the aerospace client previously announced, the Company believes that the 2-year long qualification process to approve the Company’s titanium metal powers for use by a global aerospace firm and their suppliers, will conclude in the near term. The Company continues to have strong confidence in this endeavour and that the final decision from the client is slated for the very near future.
Of note, the Company previously confirmed that the qualification process includes both PyroGenesis’ “coarse cut” titanium metal powder, in addition to the “fine cut” titanium metal powder that had been previously discussed as undergoing the qualification process. The Company has some expectations that the course cut may receive qualification first, which would be advantageous to the Company, as the course cut has been produced and stockpiled in large amounts at the PyroGenesis facility, so delivery readiness would be enhanced.
“FSR” Project: Fumed Silica (also known as Pyrogenic Silica) is a particle-size food-safe additive with a large surface area, used worldwide as a thickening agent in thousands of products such as milkshakes, adhesives, powdered foods, paints, inks, cosmetics, and beverages, to increase strength, viscosity, and flow control.
PyroGenesis, on behalf of its client HPQ Silicon Inc., developed the Fumed Silica Reactor (“FSR”), a plasma-based process that creates fumed silica from quartz in a single and eco-friendly step. By eliminating the use of harmful chemicals generated by conventional fumed silica production methods, the groundbreaking FSR approach, if successful, will help contribute to the repatriation of silica production to North America while lowering the CO2 emissions and carbon footprint of the process.
In a major step towards commercial-scale production, PyroGenesis successfully deployed [news release dated Oct 3, 2023] the FSR on a laboratory scale to produce fumed silica. A subsequent independent analysis [news release dated Nov 9, 2023] of the material conducted by McGill University confirmed the commercial-quality and thickening efficiency of the fumed silica produced by the FSR.
The build of a pilot plant has commenced for pre-commercial sample batch production, for launch in Q2 2024.
In addition to being the engineering services provider and developer of the forthcoming pilot plant, PyroGenesis owns a 10% royalty of client HPQ’s eventual fumed silica sales, with set minimums. This royalty stream, can, at any time, be converted by PyroGenesis into a 50% ownership in HPQ Silica Polvere Inc., the wholly owned subsidiary of HPQ Silicon that controls the fumed silica initiative and rights.
Waste Remediation
SPARC Refrigerant Waste Destruction System: The Company is in the final phase of a tendered bid process for the safe destruction of hazardous end-of-life refrigerants, such as CFCs, HCFCs, and HFCs, for a contract amount of approximately $6.5 million. The Company’s Steam Plasma Refrigerant Cracking (SPARC) system is a finalist for this Asian client’s initiative.
Financial
Payments for Outstanding Major Receivables: The Company has remained in continuous discussions with Radian Oil and Gas Services Company regarding the outstanding receivable of approximately US$8.0 million under the Company’s existing $25 million+ Drosrite™ contract. As previously announced, PyroGenesis agreed to a strategic extension of the payment plan, by the customer and its end-customer, geared to better align the pressures on the end-user’s operating cash flows created by increased business opportunities.
These discussions have been positive, both in regard to the ongoing payment plan, and in regard to a potential new order of additional Drosrite™ systems, as the client’s cash flow situation and their new business opportunities move closer to resolution.
The Company now expects payment of this receivable to be received in full within Q2 2024.
Innovation Grants: as mentioned in the Q1 and Q2 Outlooks, the Company has applied for grants tailored to technology innovation and/or carbon reduction and expects to have results regarding these applications. Indications are positive and the Company expects to be in a position to make an announcement on these grants in Q2 2024. These grants are in the order of $1-2 million.
Business Line Developments: Mid Term (3 – 6 months)
