1. PYR PLASMA TORCH MARGINS:

It was publicly stated that PYR wants to target 35-45% profit margins as a base minimum. However, deductive reasoning and examing previous sale contract demonstrates that the margins are much higher. 

The margins are going to be incredible at the recent just looking at Rise Energy of Sweden 900kw PYR plasma torch sale last year which sold for little over $1M for the same industry and purpose - replacing fossil fuel burners in the iron ore pelletization process w PYR torches w roughly the same spec. It was a competive bid process in which PYR bid their price w profit built in NOT for charity!
 
So let's say it was low margin of 10-20% based on a $1M contract order/torch. Even IF added costs to custom spec out for Client A and the second Client B were increased by 10-20%...deductive reasoning can conclude that $3M torch sale carries approx 67% net profit margin at base minimum.  Don't forget Peter stated could be even $4M per torch and possibly in USD as well.  So...no not less than $3M.


2. IF CLIENT A IS VALE:
(*Take this with a grain of salt but I still believe Client A is Vale)

Highest and best case with full swap out of all of Vale's 18 plants:

18 x 50 torches/plant = 900 torches. 900 torches x $3M/torch =$2.7B torch sale @67% margin = $1.809B profit [ based on Sweden Rise contract of $1M w small profit cab deduce $3M would carry 67% profit margine spread at base min].

Maintenance Revenue:

Add 5% recurring revenue for maintenance 20-30 years useful economic life of torches = $135M/year [very high profit margin as only one service center - PYR].

I will let you guys use your own P/E ratios of 20,30,40,50,60 etc.... and use your discounted cash flow analysys. 
 
PLUS Client B , C and beyond...till next time bc this is monterous huge enough for today and it would be hard to wrap our heads around this bc it is that huge.
 
3. TORCH COMPETION - NON EXISTENT FOR INDURATION FURNACE PROCESS:
Also here  is Pete's answer on torch competition PLEASE READ CAREFULLY to fully know and understand why there is of little concern : https://agoracom.com/ir/PyroGenesisCanada/forums/discussion/topics/740540-torch-competition/messages/2267431#message
 
Mr. Pascali, 
Congrats on the induration progress and hopefully contracts will be inevitable. 
Naturally though... I have a question(s). Since several other large companies manufacture plasma torches I wonder how big your moat is around this technology and market. 
With competition like ESAB and Komatsu in the torch business could these larger companies easily enter this market with their own variation? 
In comparison to Drosrite which appears to have a very strong moat, in that it would be difficult to create a variation or compete without a patent violation. How confident are you that the Induration torches will be able to gain market share and maintain competitive advantage? 
As always thank you for your time. 
HK 
 
Hilbertk,
 
Good to see you again. Good questions.
ESAB and Komatsu make torches for plasma cutting that have nothing to do with our torches: not the same type of technology (transferred arc vs. non transferred arc, much lower power than our torches.)
 
In my opinion they would have significant barriers to entry: they would need to develop technology development from scratch and they would need to obtain a license from us as our patent has pretty much prevented anyone from using torches in induration furnaces.
 
I am not concerned about them.
 
Of course, we do not rest on our laurels, and as such our goal is to leverage our first mover advantage into market share and increasing competitive advantage through continuous improvement (and of course: cross selling)
Hope that helps,
Peter