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PyroGenesis providing high-tech plasma products for a growing number of major industries

Snapshot

The Canadian company harnesses the unique properties of thermal plasma to melt and transform metal, carry out high temperature chemical reactions and convert waste into energy

PyroGenesis plasma torch

Quick facts: PyroGenesis Canada Inc.

Price: 7.72 CAD

TSX:PYR
Market: TSX
Market Cap: $1.23 billion
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  • A high-tech company that designs, develops, manufactures and commercializes advanced plasma processes
  • Three commercial business lines positioned for rapid growth through strategic partnerships with multi-billion-dollar entities
  • Revenue growth through internal and external sources

What PyroGenesis does:

PyroGenesis Canada Inc (CSE:PYR) (OTCMKTS:PYRNF) is a high-tech company that designs, develops, manufactures and commercializes advanced plasma processes.

Plasma, considered the fourth state of matter, comes from an ancient Greek word that means ‘moldable substance’ or ‘jelly.’ In the plasma state, the ionized gaseous substance is highly electrically conductive, making it incredibly useful in high tech manufacturing industries such as defense, metallurgical, mining, additive manufacturing (including 3D printing), oil & gas, and environmental industries.

The team is comprised of experienced engineers, scientists and technicians working out of its Montreal office and a 3,800-square-metre manufacturing facility.

The company develops and produces innovative plasma torches, plasma waste processes, high-temperature metallurgical processes, and engineering services to the global marketplace. Its three major business lines are military/environmental, toll manufacturing and additive manufacturing.

Essentially, PyroGenesis harnesses the unique properties of thermal plasma to melt and transform metal, carry out high-temperature chemical reactions and convert waste into energy.

PyroGenesis has also developed the DROSRITE system which is a proven, salt-free, cost-effective, sustainable process for maximizing metal recovery from dross, a waste generated in the metallurgical industry. PyroGenesis’ patent-pending process avoids costly loss of metal, while reducing a smelter’s carbon footprint and energy consumption, thus providing a high return on investment. The system has been designed to process and recover valuable metals such as aluminum, zinc and copper from dross.

The group has also developed PUREVAPTM, a patent-pending one-step proprietary process that uses a plasma arc within a vacuum furnace to produce high purity metallurgical grade silicon and solar grade silicon from quartz. It is expected that the silicon grades produced by PUREVAPTM could be used for different applications, including solar energy.

How is it doing:

PyroGenesis started 2021 with a bullish update in which it said it expects to report an uplift in revenue and earnings per share (EPS) for its fourth quarter to December 31 and for full-year 2020. 

Releasing guidance figures, the group said it expects revenue of between C$3 million and C$5 million for the fourth quarter and between C$14 and C$16 million for 2020 as a whole. That compares to revenue of C$1.07 million in the fourth quarter of 2019 and C$4.8 million for the full year 2019.

Earnings per share for the fourth quarter are forecast to come in between C$0.10 and C$0.12 per share, compared to a loss per share of C$0.04 in 4Q, 2019.

In December, the company revealed that it had submitted a formal application to list on the NASDAQ Stock Exchange, the second-largest exchange by market capitalization worldwide and home to many of the world’s best technology companies. Based on its typical review process, and according to NASDAQ’s website, the process usually takes 6 to 8 weeks. Therefore, it is expected that the company’s shares will be listed before the end of Q1 2021

PyroGenesis said it would continue to maintain the listing of its shares on the Toronto Stock Exchange, having only graduated to the mainboard from the TSX Venture Exchange on November 20, 2020.

The company ended 2020 with a batch of contract news. On December 16, PyroGenesis said it had signed an additional contract with a US tunneling company for around $1.1 million, which vaulted the total value of all contracts with this particular client to more than $3.6 million.

Based on the contracts, PyroGenesis will be designing, manufacturing, testing and supplying the client with a plasma torch (TT1 Torch) tailored specifically for tunneling. The TT1 Torch is expected to be delivered in the second half of 2021, at which time it will then be tested.

PyroGenesis’ high-powered plasma torch will be used to replace traditional tunneling methods. An important benefit in using plasma-based tools versus traditional methods is its potential to drill through all geologies with greater flexibility in size diameter, while at the same time being more economical, efficient and environmentally friendly.

Earlier, on November 25, the group had announced the signing of an initial contract to provide a high-powered, one-megawatt plasma torch with accessories to a major iron ore producer for around $1.8 million. 

PyroGenesis said the client is a “multibillion-dollar international producer of iron ore pellets, one of the largest in the industry, whose name will remain confidential for competitive reasons.” The client, which has committed to reduce its greenhouse gas (GHG) emissions, has over 10 plants, each possibly requiring up to 50 plasma torches, noted the company.

Away from the plasma torch, in December PyroGenesis said it had informed its partner HPQ Nano Silicon Powders Inc, a  wholly-owned subsidiary of HPQ Silicon Resources Inc (CVE:HPQ), that Phase 1 of the PUREVAPTM Nano Silicon Reactor development program has reached the commissioning stage, with the Gen1 PUREVAPTMNSiR now ready to start producing Silicon nano materials.

With the Gen1 NSiR now operational, HPQ NANO noted that it will be uniquely positioned to be able to offer industry participants a wide spectrum of products for testing to meet the anticipated emerging demands from battery, EV manufactures and other markets looking for nano silicon materials.

And in November, PyroGenesis announced that the first 5,000 TPY DROSRITE system successfully passed the Factory Acceptance Test (FAT) conducted by Drosrite International LLC (DI). The company said the testing was held at a DI supplier’s US manufacturing facility where the end-user evaluated the equipment during, and after, the assembly process. 

The end-user verified that the 5,000 TPY DROSRITE system was manufactured and operated in accordance with, amongst other things, design specifications. Based on this successful testing, the end-user decided to forego performing an additional FAT test on the second 5,000 TPY DROSRITE system. Both systems were expected to be shipped from the US to the Middle East four weeks, and expected to arrive about two months later.

Before shipping, PyroGenesis said it wa expected to receive around an additional $2.6 million from DI - representing total receipt from DI to date of over $10 million under the previously disclosed plus-$25 million DROSRITE contract to deliver five 5,000 TPY DROSRITE Systems, plus two 10,000 TPY DROSRITE Systems.

On the financing front, in November, PyrroGenesis closed a previously-announced, bought-deal equity offering, in which it issued 3,354,550 units of the company at a price of $3.60 per unit for total gross proceeds of $12,076,380.

The company said it will use the net proceeds for working capital and general corporate purposes. Each unit in the offering was comprised of one common share of the company plus one-half of one common share purchase warrant, exercisable at a price of $4.50 for a period of 24 months from the closing.

Inflection points:

  • Completion of NASDAQ listing end end-Q1 2021
  • More contract news for plasma torch
  • Further news on PUREVAPTM Nano Silicon Reactor development program

What the boss says:

In December's statement announcing the group's plans for a NASDAQ listing, said P. Peter Pascali, CEO & chair of PyroGenesis said: “We believe the Company is entering a heightened growth phase and the timing could not be better for uplisting our Shares to NASDAQ."

“We expect that the move to NASDAQ will increase awareness of PyroGenesis, and its offerings, both within the financial community and amongst potential clients. We believe this listing will also enhance trading liquidity by broadening our appeal to a larger shareholder base, in the US and internationally, as we execute our business plan and drive long-term shareholder value. We are very much looking forward to elevating the Company’s profile with this listing,” he added.

Contact the author at jon.hopkins@proactiveinvestors.com

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PyroGenesis Canada gives revenue guidance that more than doubles full year...

PyroGenesis Canada Inc (TSX:PYR) (OTCQB:PYRNF) (FRA:8PY) CEO Peter Pascali tells Proactive the high-tech plasma focused group expects to see an uplift in revenue and earnings per share in its fourth quarter to December 31 and for full-year 2020. Pascali says the group said it expects revenue...

on 19/1/21

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