PyroGenesis Inc T.PYR

RE:New Agoracom Interview on HPQ Silicon

[BCONTVentures]

Thanks to @ordos for his summary of the interview:

@ordosMy notes from the latest interview with HPQ Silicon CEO:

- The "boring" R&D phase is finally completed for the fumed silica pilot plant. That's the phase where they often have to keep saying "we are getting closer" until it is finally done. While they had no doubt they will get here, this is unavoidable period of time which was "boring" but critical
- Our focus now is producing the 150 m2/g with the pilot plant, same as at lab scale. When we start making the higher grade material, e.g. > 150 m2/g up to 300 m2/g (pharma/food grade), the price of that material is higher and therefore margins are higher, as the cost of production stays the same (!)
- The new fumed silica production process is hands down disruptive
- Lower cost to produce
          - No toxic and expensive silane gas
- No massive capex for just 1 plant
- Ability to build a much smaller plant or multiple plants close to end
clients, therefore minimal to zero transportation and logistics costs
- "Simpler" process, 1 step conversion from raw quartz to fumed silica
- Margins going from industry maximum of 20% today to minimum
60%
- No toxic chemicals
- Minimal to zero emissions
- (!) Incremental scalability, where there is no need to build one
massive plant with large output, as is the only option today, and
therefore barrier to entry is very high
- At this time it is key to verify the numbers (efficiency, margins, energy, etc) that were published. Knowing the real numbers from real operating pilot plant producing consistent commercial grade material would allow HPQ
- While getting to the final numbers, there will be a lot of activity with news releases on testing, samples, etc. With each update the value of the technology will increase, things will become more concrete, and negotiation position will become very strong for HPQ Polvere. This should reflect in the HPQ Silicon value (and its stock)
- Canada alone requires about 16,000 tonnes of fumed silica per year, which will require 16 commercial 1,000 TPY fumed silica plants
- Each 1,000 TPY commercial pilot plant at current prices of $8 USD per kg can yield roughly $7MM per year for HPQ Polvere. Ultimately Canadian market alone, therefore, is worth $142MM per year for HPQ Polvere
- Global market is around 1MM tonnes per year and it is growing. Of course, there is no plan to take over the entire global market, at least not initially, it will take time
- (!) All commercial grade fumed silica out there right now has traces of hydrogen chloride, HPQ Polvere has none. This is very important, since some usages of the fumed silica may not be possible today because of this contaminant. HPQ Polvere's fumed silica is not only going to be cheaper, but purer
- Evonik signed an LOI just based on 40 gramms of material
- (!) Pilot plant is primarily there to demonstrate value of the technology and to generate deals (offtakes, licensing, royalties, etc)
- (!) Bernard mentioned "there is another one we are working on", e.g. not the 4 known business lines (QRR, FSR, SiOx, Metagene), but a 5th potential business lines

BCONTVentures wrote: Interview on today's news release:

https://youtu.be/3gP_47BpHeM?si=duQwxJOU4MA6bdUD