PyroGenesis Canada Inc. (http://pyrogenesis.com) (TSX: PYR) (OTCQX:
PYRGF) (FRA: 8PY), a high-tech company (the “Company” or
“PyroGenesis”) that designs, develops, manufactures and
commercializes advanced plasma processes and sustainable solutions
which are geared to reduce greenhouse gases (GHG) and address
environmental pollutants, is pleased to announce that, further to
the press release of HPQ Silicon Inc. (“HPQ”) dated January 10,
2024, the recent completion of an internal economic and technical
study produced more favorable results than were previously
indicated by HPQ for its Fumed Silica Reactor (FSR) technology
project. This latest study was carried out at the request of a
third-party corporation, which will not be named pursuant to the
terms of a non-disclosure agreement. According to HPQ, this latest
study confirms the viability of, and advantages from, scaling up
the FSR from the current 50 tonnes per year (TPY) pilot plant
configuration to a 1,000 TPY commercial configuration. [1] [2]
According to HPQ’s release, “the study unveiled
its robust economic potential, emphasizing potential EBITDA margins
three times higher than the industry average of 20% [3] and a
capital investment 93% less than that required for building a
conventional Fumed Silica plant [4]”.
As stated in PyroGenesis’ news release dated
November 9, 2023, the production of the fumed silica reactor pilot
plant is already underway, with a planned completion by Q2 2024.
The Company confirms this timeline to be on track.
The FSR, another plasma-based process developed
by PyroGenesis, converts quartz into commercial-grade fumed silica
(or Pyrogenic Silica) in a single and eco-friendly step. By
eliminating the use of harmful chemicals generated by conventional
methods, the groundbreaking FSR approach, if successfully applied
on a commercial scale, will contribute to the repatriation of
silica production to North America.
With respect to the results of this latest
study, the Company, in conjunction with management of HPQ Polvere
(the HPQ subsidiary which owns the FSR technology), used a rough
order of magnitude study regarding the cost of building the first
1,000 TPY Fumed Silica Reactor. HPQ’s management then used selling
prices for the Fumed Silica and potential operating costs from
information derived from third party sources and publicly available
data.
The salient points of the internal economic
study indicate that the FSR will have:
- Capex between US$ 9.00 and US$
10.00 cost per Kg of annual capacity [5]
- Energy consumptions between 10 –15
KWh per Kg of Fumed Silica [6]
- EBITDA margins between 60% and 65%
[7]
- Payback period per 1,000 TPY
Reactor of around 1.7 years [8]
“If these salient points of the internal
economic study are proven out, then HPQ will be able to build
facilities with significantly lower CAPEX and energy consumption
while generating significant margins,” said Mr. P. Peter Pascali,
President and CEO of PyroGenesis. “The payback of approx. 1.7 years
will enable them to roll out significantly faster and with less
capital. Not only does this speak for significant financial gains,
but given this revolutionary plasma-based technology eliminates all
harmful chemicals, it is environmentally friendly. It also
underscores PyroGenesis' commitment to sustainable development.
This once again, reflects the potential of HPQ Polvere's fumed
silica reactor which we developed, and aligns perfectly with our
commitment to environmental responsibility. Conventional fumed
silica processes, which rely on silicon metal (Si) as raw material,
not only have a significant carbon footprint of around 9.5 tonnes
of CO2 equivalent per tonne of fumed silica, but also present
complex process challenges which include, but are not limited to,
using hazardous materials.[9] These latest economic and technical
indicators provide more evidence that the technology developed by
PyroGenesis for HPQ Polvere will offer significant economic and
environmental advantages over conventional manufacturers –
improving profitability, but also reducing the environmental
footprint associated with fumed silica production.”
PyroGenesis is an exclusive service provider for
HPQ Polvere in respect of the FSR project. As part of the terms on
their commercial engagement, PyroGenesis will receive royalty
payments representing 10% of HPQ Polvere’s eventual sales, with set
minimums. In addition, PyroGenesis may, at any time, convert its
right to this royalty stream into a 50% ownership stake in HPQ
Polvere remaining equity in HPQ Polvere.
PyroGenesis’ involvement in developing fumed
silica from quartz is part of PyroGenesis’ three-tiered
solution ecosystem that aligns with economic drivers that are
key to global heavy industry. High-purity silicon is part of
PyroGenesis’ Commodity Security & Optimization tier, where the
recovery of viable metals and the optimization of production to
increase output helps to maximize raw materials and improve the
availability of critical minerals. Silicon has been identified
as a critical mineral by many governments worldwide.
REFERENCE SOURCES
[1] |
The scale-up from the 50 TPY pilot plant to a commercial 1,000 TPY
represents a factor of 20. Literature on the subject, such as
'Plant Design and Economics for Chemical Engineers' by Peters &
Timmerhaus, suggests that scale-ups of pilot equipment to
industrial scale, by a factor of 5, 10, or 20, are reasonable and
easily achievable. |
[2] |
HPQ Silicon June 13, 2023, and November 8, 2023 releases |
[3] |
Average EBITDA margins of 20% are derived from two sources, with
Link #1 leading to Source #1 and Link #2 leading to Source #2
(Specialty Additives division). Management has calculated the
EBITDA margins for the Fumed Silica Reactor (FSR) based on
proprietary operational data accumulated over the years. These
figures will be updated upon completion of the pilot testing phase.
The 5% range in HPQ Polvere's EBITDA margins takes into account
PyroGenesis' option to convert its 10% royalties into a 50%
ownership stake in HPQ remaining equity in HPQ Polvere." |
[4] |
Traditional Fumed Silica manufacturing involves a complex
three-step process. Step 1: Conversion of Quartz to Silicon Metal
(Si), with an average Capex of around US$9.38 per kilogram of
annual capacity (for reference, the PCC BakkiSilicon Plant in
Iceland cost US$300 million for an annual capacity of 32,000
tonnes). Step 2: Conversion of Si to Silicon Tetrachloride (SiCl4),
with an average Capex of approximately US$125.00 per kilogram of
annual capacity (e.g., Wacker Chemie AG Polysilicon's US production
plant cost US$2.5 billion for an annual capacity of 20,000 tonnes).
Step 3: Burning Silicon Tetrachloride (SiCl4) with Hydrogen and
Oxygen to produce Fumed Silica (SiO2), incurring an average Capex
of around US$11.54 per kilogram of annual capacity (Wacker Chemie
AG's US Fumed Silica plant cost US$150 million for an annual
capacity of 20,000 tonnes). The combined Capex for these three
steps averages at US$145.92 per kilogram of annual capacity.
According to a rough order of magnitude study by PyroGenesis, our
one-step process for making Fumed Silica is estimated to have an
average Capex per kilogram of annual capacity between US$9.00 and
US$10.00, which is approximately 93% less than traditional
processes. |
[5] |
According to a rough order of magnitude study by PyroGenesis, the
one-step process for making Fumed Silica is estimated to cost about
CAD$13 million, which equals an average Capex per kilogram of
annual capacity between US$9.00 and
US$10.00. |
[6] |
The 1 Kg eq of CO2 per Kg of Fumed Silica is based on Hydro Quebec
data that indicate in Quebec 1.3 g of CO2 are generated eq per KWh.
While the 2.5 is based on the Canadian average for electricity
generation carbon intensity of 150 g per
KWh. |
[7] |
Management has calculated the EBITDA margins for the Fumed Silica
Reactor (FSR) based on operational data accumulated over the years.
These figures will be updated upon completion of the pilot testing
phase. The 5% range in HPQ Polvere's EBITDA margins takes into
account PyroGenesis' option to convert its 10% royalties into a 50%
ownership stake in HPQ Polvere's remaining
equity." |
[8] |
Management has calculated the Payback for the Fumed Silica Reactor
(FSR) based on operational data accumulated over the years. These
figures will be updated upon completion of the pilot testing
phase. |
[9] |
2012 – Executive summary: “SILICON-CHEMISTRY CARBON BALANCE, AN
ASSESSMENT OF GREENHOUSE GAS EMISSIONS AND REDUCTIONS”, Covering
the Production, Use and End-of-Life of Silicones, Siloxanes and
Silane Products in Europe, North America, and Japan. [Pages 20 to
21] (Commissioned by Global Silicones Council, Centre Européen des
Silicones, Silicones Environmental, Health and Safety Council of
North America Silicone Industry Association of Japan). |
About PyroGenesis Canada
Inc.
PyroGenesis Canada Inc., a high-tech company, is
a proud leader in the design, development, manufacture and
commercialization of advanced plasma processes and sustainable
solutions which reduce greenhouse gases (GHG) and are economically
attractive alternatives to conventional “dirty” processes.
PyroGenesis has created proprietary, patented and advanced plasma
technologies that are being vetted and adopted by multiple
multibillion dollar industry leaders in four massive markets: iron
ore pelletization, aluminum, waste management, and additive
manufacturing. With a team of experienced engineers, scientists and
technicians working out of its Montreal office, and its 3,800 m2
and 2,940 m2 manufacturing facilities, PyroGenesis maintains its
competitive advantage by remaining at the forefront of technology
development and commercialization. The operations are ISO 9001:2015
and AS9100D certified, having been ISO certified since 1997. For
more information, please visit: www.pyrogenesis.com.
About HPQ Silicon
HPQ Silicon Inc. (TSX-V: HPQ) is a Quebec-based
TSX Venture Exchange Tier 1 Industrial Issuer.
HPQ is developing, with the support of
world-class technology partners PyroGenesis Canada Inc. and
NOVACIUM SAS, new green processes crucial to make the critical
materials needed to reach net zero emissions.
HPQ activities are centred around the following
four (4) pillars:
- Becoming a green low-cost (Capex
and Opex) manufacturer of Fumed Silica using the FUMED
SILICA REACTOR, a proprietary technology owned by HPQ
being developed for HPQ by PyroGenesis.
- Becoming a zero CO2 low-cost (Capex
and Opex) producer of High Purity Silicon (2N+ to 4N) using our
PUREVAPTM “Quartz
Reduction Reactors” (QRR), a proprietary technology owned
by HPQ being developed for HPQ by PyroGenesis.
- Becoming a producer of
silicon-based anode materials for battery applications with the
assistance of NOVACIUM SAS.
- HPQ SILICON affiliate NOVACIUM SAS
is developing a low carbon, chemical base on demand and
high-pressure autonomous hydrogen production system.
For more information, please visit HPQ Silicon
web site.
Cautionary and Forward-Looking
Statements
This press release contains “forward-looking
information” and “forward-looking statements” (collectively,
“forward-looking statements”) within the meaning of applicable
securities laws. In some cases, but not necessarily in all cases,
forward-looking statements can be identified by the use of
forward-looking terminology such as “plans”, “targets”, “expects”
or “does not expect”, “is expected”, “an opportunity exists”, “is
positioned”, “estimates”, “intends”, “assumes”, “anticipates” or
“does not anticipate” or “believes”, or variations of such words
and phrases or state that certain actions, events or results “may”,
“could”, “would”, “might”, “will” or “will be taken”, “occur” or
“be achieved”. In addition, any statements that refer to
expectations, projections or other characterizations of future
events or circumstances contain forward-looking statements.
Forward-looking statements are not historical facts, nor guarantees
or assurances of future performance but instead represent
management’s current beliefs, expectations, estimates and
projections regarding future events and operating performance.
Forward-looking statements are necessarily based
on a number of opinions, assumptions and estimates that, while
considered reasonable by the Company as of the date of this
release, are subject to inherent uncertainties, risks and changes
in circumstances that may differ materially from those contemplated
by the forward-looking statements. Important factors that could
cause actual results to differ, possibly materially, from those
indicated by the forward-looking statements include, but are not
limited to, the risk factors identified under “Risk Factors” in the
Company’s latest annual information form, and in other periodic
filings that the Company has made and may make in the future with
the securities commissions or similar regulatory authorities, all
of which are available under the Company’s profile on SEDAR+ at
www.sedarplus.ca, or at www.otcmarkets.com. These factors are not
intended to represent a complete list of the factors that could
affect the Company. However, such risk factors should be considered
carefully. There can be no assurance that such estimates and
assumptions will prove to be correct. You should not place undue
reliance on forward-looking statements, which speak only as of the
date of this release. The Company undertakes no obligation to
publicly update or revise any forward-looking statement, except as
required by applicable securities laws.
Neither the Toronto Stock Exchange, its
Regulation Services Provider (as that term is defined in the
policies of the Toronto Stock Exchange) nor the OTCQX Best Market
accepts responsibility for the adequacy or accuracy of this press
release.
For further information please contact:
Rodayna Kafal, Vice President, IR/Comms. and
Strategic BD Phone: (514) 937-0002, E-mail: ir@pyrogenesis.com
RELATED LINK: http://www.pyrogenesis.com
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