Mr. Peter Pascalie reports
PYROGENESIS ANNOUNCES FINAL SIGNATURE TOWARDS $20M CONTRACT DISCLOSED LAST JUNE; $6.4M PAYMENT EXPECTED WITHIN 2-4 WEEKS
PyroGenesis Canada Inc., further to its press releases dated April 29, 2019, and June 3, 2019, has revealed that the business line behind the $20-million contract, plus subsequent years revenues, is Drosrite and the client is Drosrite International LLC (DI). This contract meets PyroGenesis's gross margin requirements.
DI today announced that its client has received the final signature for aluminum dross processing services using Drosrite systems, which in turn triggers an exclusive arrangement between DI and PyroGenesis.
DI is a United Staes-based private company duly constituted and existing under the laws of Delaware, providing state-of-the-art waste management technologies to the aluminum industry. DI is duly licensed by PyroGenesis to manufacture, market, sell and distribute Drosrite systems and technology to Saudi Arabia and certain other countries in the Middle East, on an exclusive basis. All Drosrite systems supplied by DI are manufactured in the United States.
As part of the exclusive arrangement between DI and PyroGenesis, DI will pay PyroGenesis approximately $20-million within 12 months, plus $2.5-million per year (fixed) for the next two years, plus a variable amount for the subsequent 18 years based on certain international benchmarks, which the company is targeting to be approximately $2.5-million.
As a result of this payment schedule, PyroGenesis expects to receive a $6.4-million payment toward this exclusivity arrangement within two to four weeks and subsequent payments of, on average, approximately $3.4-million per quarter over the next 12 months. Future payments are expected yearly in advance and quarterly as the case may be.
"Drosrite is clearly the product of choice for those with a need to treat their dross," said P. Peter Pascali, president and chief executive officer of PyroGenesis. "We are proud to see the Drosrite technology being accepted by some of the leading primary smelters in the industry. We believe this news will have a profound effect in the marketplace, which will lead to many inquiries, and accelerate those discussions already taking place."
Of note, PyroGenesis's Japanese trading house tolling partner is not involved in this particular transaction as it was not part of the original strategy to move forward.
About PyroGenesis Canada Inc.
PyroGenesis Canada is the world leader in the design, development, manufacture and commercialization of advanced plasma processes and products. The company provides engineering and manufacturing expertise and cutting-edge contract research, as well as turnkey process equipment packages to the defence, metallurgical, mining, advanced materials (including three-dimensional printing), oil and gas, and environmental industries.
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