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PyroGenesis Canada Inc
Symbol PYR
Shares Issued 157,910,592
Close 2020-11-24 C$ 3.93
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PyroGenesis signs $1.8M contract with iron ore producer

2020-11-24 16:43 ET - News Release

Mr. P. Peter Pascali reports

PYROGENESIS SIGNS INITIAL PLASMA TORCH CONTRACT WITH MAJOR IRON ORE PRODUCER

PyroGenesis Canada Inc. has signed an initial plasma torch contract to provide one high-powered (approximately one million watts) plasma torch with ancillary equipment with client A, a major iron ore producer, for approximately $1.8-million. This does not include continued after-sale services, which was not the subject of these initial negotiations. It is expected that future sales with this client will include a separate continued after-sale services agreement. 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 emissions, has over 10 plants, each possibly requiring up to 50 plasma torches.

"This is a major milestone for PyroGenesis as it is the first time we have sold a torch system to a major iron ore pelletizer. The first commercial sale is always the hardest in any industry. It is not a secret that the ultimate goal is to replace their fossil fuel burners with our plasma torches. Of note, the preamble to the contract states '...whereas [client's name] has demonstrated a willingness to replace its fossil fuel burners with PyroGenesis' proprietary plasma torches with the goal of reducing greenhouse gases in a furtherance of its stated policy to do so...,' which I believe sums up the significance of this announcement," said P. Peter Pascali, chief executive officer and chair of PyroGenesis. "We have indeed crossed a threshold. This was our preferred rollout strategy, as it now enables us to better quantify all outstanding aspects of replacing fossil fuel burners with plasma torches, and thus be better positioned to price any additional benefits into future orders. We cannot overemphasize the opportunity this presents. That is not to say that there are no risks moving forward, or that future contracts are guaranteed. That is definitely not true. There are no guarantees, however we can say with certainty that we are conservatively ticking the boxes one by one."

"With this announcement, PyroGenesis is on its way to assuming a leadership role in reducing greenhouse gas emissions using PyroGenesis's proprietary plasma torches," said Pierre Carabin, chief technology officer and chief strategist of PyroGenesis. "We look forward to leveraging this success into other industries and becoming a premier environmental company geared toward reducing greenhouse gas emissions across all our business segments."

The contract announced today is a direct result of the company's recent success in the previously disclosed modelling contract which confirmed, among other things, that replacing fossil fuel burners with PyroGenesis's proprietary plasma torches could potentially address the client's GHG reduction strategy/policy (press release dated Sept. 1, 2020).

As previously disclosed, PyroGenesis has the process patent to replace fossil fuel burners with PyroGenesis's clean plasma torches in the iron ore pelletization industry, thereby reducing GHG emissions (press release dated Sept. 1, 2020).

Management has estimated internally that a typical pellet plant producing 10 million metric tonnes of pellets annually emits approximately one million metric tonnes of carbon dioxide. The total world pellet production of 400 million metric tonnes of pellets represents a potential market for torch sales in excess of $10-billion worldwide. The world pellet industry generates about 40 million metric tonnes of carbon dioxide every year. The use of plasma torches running off a clean electrical grid would reduce these emissions significantly. For reference, 40 million tonnes of carbon dioxide represent the combined yearly emissions of 8.7 million U.S. passenger vehicles.

It is expected, with multiple orders, that PyroGenesis would source long lead items ahead of time and, as such, it is expected that the time from contract to final assembly/installation at a client's facility will be from a couple of weeks up to four months.

Pelletization is the process in which iron ore is concentrated before shipment, thus significantly reducing the cost of transportation, and providing a required feedstock for blast furnaces. In conventional technologies, the process heat is provided by fuel oil or natural gas burners (both environmentally damaging). The combustion, in the burners, of fossil fuels results in the production of greenhouse gases, mainly carbon dioxide. Plasma torches, by contrast, utilize renewable electricity and as such offer an environmentally attractive alternative to fossil fuel burners.

About PyroGenesis Canada Inc.

PyroGenesis Canada, a high-tech company, is a leader in the design, development, manufacture and commercialization of advanced plasma processes and products. The company provides its engineering and manufacturing expertise and its turnkey process equipment packages to customers in the defence, metallurgical, mining, advanced materials (including 3-D printing) and environmental industries. With a team of experienced engineers, scientists and technicians working out of its Montreal office and its 3,800-square-metre manufacturing facility, PyroGenesis maintains its competitive advantage by remaining at the forefront of technology development and commercialization. The company's core competencies allow PyroGenesis to provide innovative plasma torches, plasma waste processes, high-temperature metallurgical processes and engineering services to the global marketplace. PyroGenesis's operations are ISO 9001:2015 and AS9100D certified.

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