RE:RE:RE:RE:RE:RE:Leasing And the money they save on the ghg emissions pays the lease, instead of going to the government, without having to pay all that cash upfront and wait for the savings to replace it
Stubbyinsider wrote: No it makes sense, they are just double dippin on the advantages, they will still get the green energy tax breaks from the government im sure!
pystocker wrote: Q5. What is your business model for replacing fossil fuel burners with plasma torches, specifically in the iron ore pelletization industry which seems to be the low-hanging fruit? A. This is a very good question.
Our offering is geared to address the need to develop fossil fuel free energy-mining-iron-steel value chain and thereby provide a basis for governance and industrial strategies for transformative change. Until recently, the business model was simply to sell torches (with an internal target of $3MM NPV per torch) with the recurring revenue derived from typical maintenance and spare parts contracts.
We now have come to appreciate the economics of leasing torches instead of an outright sell. This model has clear advantages to both parties; little-to-no CAPEX to the buyer, healthy recurring revenue stream to the seller. At this stage, we see this to be the fastest way to grow this business segment, and is a significant strategy-shift for the Company as it relates to this offering, and which we expect will play a key role in our position/ongoing discussions with clients.
Q6. Wouldn’t this leasing model be capital intensive?
A. Yes and no.
It is capital intensive of course, however, there are major leasing companies we can team up with to provide this service. Given the size and credit worthiness of the client, together with a proven technology, we do not see this to be an issue. Had the client been small, their credit worthiness not be conducive to leasing, or the technology not be proven, then the burden would be on PyroGenesis to provide that capital, and we do not see ourselves engaging in that type of financing.
Basically, big guys said we will not buy, give us an option of leasing. It works for us also when it comes to taxing. Even though taxing part for me does not make sense. If it's clean energy there should be bunch of tax relieves for the purchaser.