MazerRR wrote: [I’m prefacing this post with a
TLDR warning, because it’s the longest post I’ve written here to date… but felt that a comprehensive summary of Pyrogenesis’ many torch applications, with some thoughts added in between, would be beneficial to anyone who has had trouble following the many developments in the company over the last 2 years. And also serves as a primer for any new eyes coming onto the board. This will probably be the last lengthy post that I write until the next big use for Pyrogenesis’ technology comes along.]
I believe that a healthy message board has a range of opinions. Most here truly believe in the success story that Pyrogenesis is moving towards, and it shows in our excitement. Sometimes questions are asked, even valid ones (although just as often not), and these posters appear as short-sellers because of the negative tone of their commentary. Harboring doubt pushes us to better understand what we’re investing in, and the risks involved. That said, I haven’t been on this forum as long as most of you, but
I am already a huge fan of the company… especially after researching the technology and various current and future potential streams. I do see where the risks are as I evaluate the company, and want to share
why I believe they have been significantly lessened, more so than at any time in the company’s history. This is because, first and foremost,
Drosrite is now. The company is going to
make around 20 million in revenue alone this year ($25M over the first 18 months) on their Drosite contract with Drosrite International. Peter Pascali stated in the NR on July 3, 2019:
“This is indeed a watershed moment in PyroGenesis’ history. It is the single largest contract that the Company has been awarded,” commented Mr. P. Peter Pascali, President and CEO of PyroGenesis. “With the revenues from this Contract, we do not foresee raising capital for working capital purposes in the foreseeable future as the Company, with this Contract, which is cash flow positive from the start, will be profitable.” Now is the PERFECT time to be invested in the company. Peter has reassured investors and the Drosrite deal money is coming in, meaning the company has been
significantly de-risked for the next two years at least. Even if no there are no further developments from what has already been announced this year,
2020 revenues will be at least 300% greater than any year in its history!!!.
That said, the chance of no further developments is
extremely unlikely. Pyrogenesis can now boast of a strategic partnership with
3 multi-billion dollar company entities (Japanese tolling/Aubert & Duval AM/US Navy). I’ll be going over these, along with several other plasma technology applications in the company’s pipeline.
- US NAVY:
The US navy for a long time has been a reliable source of yearly revenue, and Peter has mentioned that the US Navy intends to purchase $12.5M for PAWDS systems for 2 aircraft carriers. He has mentioned ‘imminent’ in the past, so unless this project is straight up cancelled, it will eventually go through.
- Aubert & Duval AM partnership (Europe), and PyrogenesisAdditive:
Aubert & Duval partnership: Pyrogenesis has the best AM powder producing tech in the world in Plasma Atomization (and one of the cheapest production costs, due to their
NexGen Plasma Automization System. Aubert & Duval (A&D) is a multi-billion dollar, world leader in industrializing high-performance steel, super alloy, aluminum and titanium alloys for over a century, and a recognized supplier of metal powders of the AM industry. In 2019, the two parties signed a mutually exclusive partnership for A&M to supply Pyrogenesis’ powders to the EU market.
Since this announcement, we have not heard much, and as Peter has recently stated,
the companies they deal with like to play their cards closer to their chest. France has been hit hard by COVID, but things are starting to settle down, so we should be hearing further from A&D soon.
https://www.pyrogenesis.com/wp-content/uploads/2019/03/PyroGenesis-Signs-Mutually-Exclusive-Partnership-Agreement-with-Aubert-and-Duval-to-Supply-Plasma-Atomized-Titanium-Powder.pdf PyrogenesisAdditive (AM division): Pyrogenesis management has plans to spin-off their AM division, as PyrogenesisAdditive, which will benefit both the Pyrogenesis parent company and it’s shareholders.
Peter has said:
The reason to spin-off PyroGenesis Additive is primarily to attract an investor base best suited to their unique value proposition, particular business operations, and financial characteristics, thereby maximizing shareholders’ value and placing it in a better position to generate revenues and develop strategic relationships than had it remained part of the PyroGenesis stable of technologies. The spinoff will also help the parent company, PYR, focus on enhancing the value of its existing portfolio of offerings (US military waste-treatment systems, land-waste treatment systems, Drosrite sales, PUREVAP) and fully realizing the burgeoning number of new revenue streams, like Drosrite tolling, Torches for the iron, steel, metallurgy and perhaps Cement industry, Tunneling, etc.
Over the next few years, PyrogenesisAdditive is likely to steal a significant portion of GE additive’s Ti powder sales in Europe (AP&C is PYR’s biggest competitor in high-end Ti powder sales, they were acquired by GE through Arcam). They are also bound to snag a portion of the total Ti, Inconel & other powder sales (Ni/Al/etc.) from other regions than Europe,
and even if it is a very small (let’s say SUPER-conservatively 3-5% small) fraction of the total AM powder sales this is a nine-figure number by ~2024. https://www.aerospacemanufacturinganddesign.com/article/additive-manufacturing-metal-powder/ That doesn’t even take into consideration powders for MIM, thermal coating, etc. The potential is just astronomical!
- Drosrite (Saudi deal + Japanese tolling):
As mentioned earlier, the biggest reason for Pyrogenesis turnaround, is that they snagged a Contract with a total value of $55 million [25 million over first 18 months + 35 million distributed over subsequent years]. Now that they’ve made such a big sale, this will naturally draw the eyes of other big players in the aluminum industry who deal with dross. Zinc & Copper dross is next in line. Partnering with a multi-billion dollar Japanese international trading house opens a recurring revenue market of > $1B in tolling of Aluminum/Zinc/Copper smelter dross (see link below).
https://www.pyrogenesis.com/wp-content/uploads/2018/11/PyroGenesis-Announces-Signing-with-Japanese-Multi-Billion-Dollar-Corporation-to-Jointly-Toll-with-DROSRITE%E2%84%A2-1.pdf If they capture even 10% of that, which they can far exceed with a proper plan, that is $100 M in annual revenues. The following comment from Peter deserves repeating, because it explains the lag on the Drosrite Tolling front: “
our focus recently was ensuring the transaction with Drosrite International was a success” and “it is safe to assume we are moving forward on projects (with the Japanese tolling company) together”.
[As many on this board have stated, some of these new revenue streams
alone have the significance to turn into a blue-chip company. Along with the metal powders business - the Drosrite tolling, PUREVAP and high-powered plasma torches are HUGE, like 9-digit huge, potential money-makers.]
- HPQ PUREVAP:
Pyrogenesis in 2016 signed an $8.26M contract to provide HPQ Silicon Resources (Ticker: HPQ.V) a PUREVAP pilot system to produce silicon metal directly from Quartz.
HPQ is expecting to finalize commissioning and testing of their Gen3 PUREVAP reactor this year, and confirm the key working hypothesis of their Gen1 model’s theoretical calculations work at commercial scale, which will lead to big inquiries from big players in silicon metal and solar grade silicon (SoG Si) metal industries. They expect to confirm that their PUREVAP process can transform Quartz to SoG Si with significant
reductions in CAPEX (60% less than China and 80% than rest of the world) and OPEX (30% less than China and 60% ROW), as well as reduce the carbon footprint of the process by 96%. That’s an enormous cost advantage over the competition, and the
market for SoG Si expected to go from US $7.1B in 2018 to 11.8B in 2028.
https://hpqsilicon.com/wp-content/uploads/2019/03/HPQ-JAN-24-2019-Corporate-Update-Release-Ver_CL6F.pdf HPQ has stated:
The focus of HPQ is to become the lowest cost producer of Silicon Metal (Si), High Purity Silicon Metal (Si), Spherical Si nano-powders and silicon-based composites for next-generation lithium-ion batteries (PUREVAP SiNR), Porous Silicon Wafers for Solid states batteries and Porous Silicon Powders for Li-ion batteries. Perhaps you’re wondering, what will PYR get out of this long-standing partnership on PUREVAP development?
PYR owns 10% of HPQ’s shares at the moment, and will also receive royalties representing 10% of their revenues. If all pans out on the Gen3 PUREVAP Si commercialization results, and they can snag even a small percentage like 10% of the SoG Si market (I’m being conservative here, because I haven’t checked into competing technologies & companies working on reducing SoG Si cost), that’s $1.8B in 2028 and
Pyrogenesis gets $180M per year + they own a now gigantic value of HPQ shares (and surely they’ll buy more once the tests succeed).
- High-powered torches (Iron pellet/Steel/Metallurgy/Cement/etc.)
There’s been a lot said in recent weeks about this, so I’ll be brief and try to sum it all up in two sentences, the first of which is taken from Peter’s answer to one of my questions on Agoracom about targeted industries for burner replacement:
“
As you might imagine, there are quite a few industries we are targeting, but I do not want to identify specific ones just yet. Suffice it to say that we are finding it a bit challenging to keep up with the inquires coming in the door as a result of our recent announcements/success.” Peter’s words, not mine. – they are hearing from the Iron Ore Pellet producers / Steel producers / Metallurgical industry / Cement industry / etc!
Here are links to two NRs about the Iron Ore Pelletizing deal:
Today’s NR confirming final stages of negotiation supply of Torches to Iron Ore Pelletizing company:
https://www.globenewswire.com/news-release/2020/05/19/2035937/0/en/PyroGenesis-Enters-Negotiations-for-Supply-of-Equipment-with-Iron-Ore-Pelletization-Modeling-Client.html Recent NR where first phase of Torch modeling for the Iron Ore Pelletizing client was confirmed, along with a statement that the high-powered torches (~1 MW) will generate up to $3M in revenue for Pyrogenesis
(~50 torch per plant x $3M per plant = $150M revenue per plant (Client has > 10 plants! Total value of potential contract(s) with this Client could line be up to $1.5B in the long run!) https://www.pyrogenesis.com/wp-content/uploads/2020/04/2020-04-30-PyroGenesis-Successfully-Completes-First-Phase-of-Torch-Modelling-Geared-to-Reducing-Greenhouse-Gases-for-Major-Iron-Ore-Pelletization-Client.pdf - Tunneling torches:
PYR already signed an exclusivity agreement with this mysterious
US tunneling company and has already received $1M in the first few months. I posted my thoughts on this yesterday:
https://stockhouse.com/companies/bullboard/v.pyr/pyrogenesis-canada-inc?postid=31043504 Little clarification here,
the commitment of the Client to purchase exclusively from Pyrogenesis, and vice-versa on supply, hinges ‘Upon success’ of the project. So there is a risk that the project does not pan out and sales dry up from this avenue, however let’s think positively. Once the project is deemed a success, and the exclusivity kicks in, I believe we’ll get a NR telling us who it really is.
Whether this deal is with
The Boring Company, Robbins, Akkerman or another US company that deals with Tunnel Boring Machines (TBMs), if it succeeds, that’s another recurring revenue stream. I’d like it to be the Boring Company because at the rate they are innovating TBM technology, it’s highly likely that other than building TBMs for Loop & Hyperloop, that they start selling their TBMs elsewhere and take significant market share for traditional tunneling applications.
************* At this point, Pyrogenesis management would have to
actively mismanage the company in order for ALL of these prospective revenue streams to fail. I believe in the management team, and don’t think they will. 2018 was a big turnaround point in the company’s direction; what you’re seeing are the choices management made finally bearing fruit.
I tried to pack as much relevant detail as I could on all facets of the company’s technology offerings, but for those who want to delve further, there is plenty of interesting material in the posts and links that many have brought up on this board, as well as in the ‘News Releases’ section of Pyrogenesis website, and HPQ’s ‘PUREVAP Project milestones document’ prepared by HPQ in 2019:
https://www.pyrogenesis.com/releases/ https://hpqsilicon.com/wp-content/uploads/2019/03/HPQ-JAN-24-2019-Corporate-Update-Release-Ver_CL6F.pdf (Nice sumnmary of benefits of using Torches Iron ore pelletization by developbc):
https://stockhouse.com/companies/bullboard/v.pyr/pyrogenesis-canada-inc?postid=30991925 (Nice summary of 2019 HPQ developments by Topseeker):
https://stockhouse.com/companies/bullboard/v.pyr/pyrogenesis-canada-inc?postid=31014837 Peter also has a very active presence on Agoracom, both replying to questions from investors and doing interviews with the Agoracom staff, and these videos are available on Youtube for those who are interested.
To conclude: There is always a risk when investing. Don’t take for fact anything that is posted on the BB, because we can all make mistakes or misleading statements, whether it is from the most well-intentioned person (I’ve made a couple in one of my earlier posts on PYR Finances that were pointed out by others, and on the Iron-ore Pelletizing cost-analysis which I found myself and corrected), or a short-seller who is working to undermine the confidence of investors. The best we can do is to become as well-informed as possible, and trust that management and their team will succeed in realizing the potential within the idea that gave birth to the company. While things have not always gone as planned over the course of Pyrogenesis’ history, I believe in their management, and crucially in their ability to move the company into profitability and beyond. But more than that, I believe in the potential value to be unlocked within the field of plasma technology, and that Pyrogenesis is the best positioned company to do so.
Good luck to all, and congratulations for making it this far :P
MazerRR