PHASE 1, VALIDATING AND IMPROVING THE PROCESS, MAKING SAMPLES BY END OF Q4 2020
The main goal of Phase 1 is modifying the existing Gen2 PUREVAPTM QRR reactor into the Gen1 NSiR for the purpose of producing nano silicon materials. The resulting new Gen1 NSiR will be a batch process system with a design production capacity of 30 kg/month of nano silicon powders. In order to meet the aggressive Phase 1 timeline agreed by the Parties, HPQ NANO will pay $200,000 to PyroGenesis over the next 15 weeks needed to complete the process engineering, mechanical engineering, fabrication and system commissioning.
Once the Gen1 NSiR is operational, as series of test runs will be done in order to produce nano Silicon materials. In addition to producing samples for potential customers, the nano Silicon material produced will be analysed and characterized in order to define important process parameters, fine tune operating parameters and assess the performance of all the components of the systems. HPQ NANO and PyroGenesis have agreed that each series of 10 tests would cost HPQ NANO $132,000.
PHASE 2, VALIDATING COMMERCIAL SCALABILITY, DELIVERING NANO SI MATERIALS
Phase 2 main objective is validating the commercial scalability of the PUREVAPTM NSiR. Using data collected during Gen1 NSiR testing phase a completely new Gen2 NSiR system will be designed and built. 35 weeks will be needed to complete the process engineering, mechanical engineering, fabrication and system commissioning and HPQ NANO will pay $210,000 to PyroGenesis for this phase.
The Gen2 NSiR will be a semi-continuous process system with a design production capacity of 300 kg/month (or about 3,5 MT/year) of nano silicon powders or nanowires, giving HPQ NANO a large enough production capacity to be able to start selling nano silicon materials. In addition to producing nano Silicon material, a series of Gen2 NSiR tests will be done to define the important process parameters and operating parameters required to allow the process and the systems to be scaled up to a commercial production capacity of about 2,500 MT of Nano-Silicon powders per year.
PUREVAPTM NSiR INTELLECTUAL PROPERTY AS IT RELATES TO NANO SILICON MATERIALS
The agreement also covers HPQ NANO acquisition of the intellectual property rights to the PUREVAP™ Nano Silicon (Si) Reactor process as it relates exclusively to the production of Micron size and Nano size Silicon Powders and Silicon Nanowires (the “Field”) from PyroGenesis. The acquisition cost of the PUREVAP™ NSiR IP is CAD$2,400,000 and HPQ NANO has 30 days from the effective date of the agreement to make the payment to PyroGenesis.
PyroGenesis will retain a royalty-free, exclusive, irrevocable worldwide license to use the process for purposes other than the production of Micron size and Nano size Silicon Powders and Silicon Nanowires. Should PyroGenesis be approached by any other parties for any research and development or commercial purposes outside of the Field, HPQ NANO shall have a right of first refusal, provided that, however, HPQ NANO exercise its right of first refusal within thirty (30) days of PyroGenesis receiving a bona-fide offer.
NSIR REVENUES SPLIT BETWEEN HPQ NANO AND PYROGENESIS FROM SALES OF NANO SI MATERIALS
HPQ and PyroGenesis evaluated the short and long-term advantages of forming, at the start, a stand-alone joint venture responsible for manufacturing and selling Nanoscale Silicon (Si) powders.
A gradual approach was deemed more efficient, therefore HPQ Silicon created a fully own subsidiary, HPQ NANO Silicon Powders Inc, to be the stand-alone Corporation that would finance the Research and Development programs and manage the future commercialisation of Nanoscale Silicon (Si) materials made with the PUREVAPTMNSiR with PyroGenesis being granted the right to convert, at any time and at its sole discretion, it Royalty into a 50% equity stake in HPQ NANO.
As a result of this, HPQ NANO agrees to pay PyroGenesis, on an annual basis, and until conversion, the following minimum royalty (Nano-Royalty) on the gross sales of nano materials produced with the PUREVAPTM NSiR Process and Systems:
- For 2021, the greater of 10% of HPQ NANO gross sales or fifty thousand dollars (CDN$50,000);
- For 2022, the greater of 10% of HPQ NANO gross sales or one hundred thousand dollars (CDN$100,000);
- For 2023, the greater of 10% of HPQ NANO gross sales or one hundred and fifty thousand dollars (CDN$150,000);
- For 2024 and beyond, the greater of 10% of HPQ NANO gross sales or two hundred thousand dollars (CDN$200,000).
About Silicon
Silicon (Si), also known as silicon metal, is one of today’s strategic materials needed to fulfil the Renewable Energy Revolution (“RER”) presently under way. Silicon does not exist in its pure state; it must be extracted from quartz (SiO2), in what has historically been a capital and energy intensive process.
About HPQ Silicon
HPQ Silicon Resources Inc. (TSX-V: HPQ) is a Canadian producer of Innovative Silicon Solutions, based in Montreal, building a portfolio of unique high value specialty silicon products needed for the coming RER.
Working with PyroGenesis Canada Inc.(TSX-V: PYR), a high-tech company that designs, develops, manufactures and commercializes plasma - based processes, HPQ is developing:
- The PUREVAPTM “Quartz Reduction Reactors” (QRR), an innovative process (patent pending), which will permit the one step transformation of quartz (SiO2) into high purity silicon (Si) at reduced costs, energy input, and carbon footprint that will propagate its considerable renewable energy potential;
- HPQ believes it will become the lowest cost (Capex and Opex) producer of silicon (Si) and high purity silicon metal (3N – 4N Si);
- The PUREVAPTM Nano Silicon Reactor (NSiR), a new proprietary process that can use different purities of silicon (Si) as feedstock, to make spherical silicon nanopowders and nanowires;
- HPQ believes it can also become the lowest cost manufacturer of spherical Si nanopowders and silicon-based composites needed by manufacturers of next-generation lithium-ion batteries;
- During the coming months, spherical Si nanopowders and nanowires silicon-based composite samples requested by industry participants and research institutions’ will be produced using PUREVAPTMSiNR.
HPQ is also working with industry leader Apollon Solar of France to:
- Use their patented process and develop a capability to produce commercially porous silicon (Si) wafers and porous silicon (Si) powders;
- The collaboration will allow HPQ to become the lowest cost producer of porous silicon wafers for all-solid -state batteries and porous silicon powders for Li-ion batteries.
- The plan is to deliver porous Si wafer to a battery manufacturer (under NDA) for testing in 2020.
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