While we wait... Some thoughts leading up to contract announcements.
Peter has been all over the questions on Agoracom. He’s not under any obligation to do this, which to me indicates a few things:
1/ he really wants to give the investment community time and information to fully understand and digest the play.
2/ He wants existing investors to understand where he is coming from in terms of strategy (despite being handcuffed by the regulatory rules on commenting) for many reasons, but also because...
3/ he genuinely feels bad about the share price drop of late and wants to provide reassurance.
4/ Uplist is any day. He’s making an extra effort to summarize because of the close proximity to the uplist, as even more eyes will be looking to understand the model and these Q&As are a good opportunity to grease the runway a little prior to uplist -- for new retail and institutional invstors, and for financial media.
The draft contract with client A was stated as being in hand on Sept 1, exactly 11 weeks ago today. Alot has happened since.
It feels like forever, but clearly that negotiating period after client A’s modeling has been constructive for more than just this contract alone:
1/ During that time, other clients have been convinced to enter modeling phase, likely as a result of lessons learned from what PYR could tell them about client A’s results
2/ a quote request from client B was received
3/ A new financing option via 3rd party leasing was defined and rolled out, which allows for:
- much larger orders, via monthly payment plans rather than one-time giant payment
- orders from more and smaller companies, who couldn’t previously afford to be in the game
4/ The time spent meeting with bankers (and likely 3rd party leasing companies) during the overlapping share issuance process may have provided some valuable outside insight as well as additional confidence that PYR can play at a gargantuan financial level.
Despite the SP slide lately, the TSX beckons.
At $544MM, PYR still has the 13th largest market cap on the TSXV.
In terms of tech/industrial, only Xebec at $616MM (due to a recent run these past few weeks) and Facedrive at $1.449Bn have bigger. The 10 others above PYR are mostly mining.
All in all, PYR is plenty big enough for the TSX, and that’s even before the pending contract news.
The uplisting is not behind.
PYR’s conditional approval was three weeks ago as of yesterday. I tracked back a number of recent uplistings, and the majority have averaged a 2 – 4 week period between conditional approval and final approval. The ones that do it the fastest, in two weeks or less, had generally done their share issuance a fair bit prior to engaging in the uplist process (at least publicly). If the company hadn’t done a prospectus in many years (as PYR hadn’t, as I think their last one was in 2009 or something?), the requests by the regulators (i.e. paperwork) is monumental, which Peter confirmed on Agoracom.
Massive capitalization can take awhile, AND can also happen overnight.
The Navy payment in October got PYR $4.8MM, and the recent share issuance raise of approx. $12MM will then total $16MM cumulative. Other additional payments are expected soon. PYR is well capitalized now.
While those payments took some time, you never know how good a wait can be, making it seem like things exploded overnight, because if the biggest of big name companies is announced as a client, a stock can go parabolic at least short term. An example is Piedmont Lithium (PLL). They went from $6 to as high as $54 within a couple days after signing a deal with Tesla in mid Sept. Vale is the Tesla of mining, so a deal with Vale could be the parabolic we all hope for.
And then of course it could actually be Tesla with regard to the automotive company that HPQ / PYR are in discussion with about battery powders.
Vale and Tesla announced in the same month, imagine.
Investor sentiments vs trader sentiments.
Obviously the big share price leap in Spring brought in a lot of traders hoping for more fast turns, especially after reading about lots of impending contract news (it’s how I got here, frankly, as a momentum trader). As a result, trader perspective flooded the boards, and investor perspective got a little left behind. As time went on, and the SP eased back, traders started feeling the pain, shorters and bashers poured salt on those wounds, and it got ugly on here. That seems to have slowed in recent weeks with the long pause, as investors seem to be back in vogue, and mid-range traders have calmed down.
To that end, something that goes overlooked is that the long-lead sales cycle of industrial and growth phase companies like PYR can be unfamiliar (and aggravating) to a lot of the mid-range investors and traders who settle in. So much depends on one or two contracts, that take many, many months to negotiate. It takes some getting used to for alot of investors / traders, in these days of fast turnaround trading and tech.
Some positive macro developments while we wait, specifically in the carbon reduction space that PYR is playing in now with iron ore furnace torches:
Vale:
While in May, Vale announced an investment of US$2bn to reduce its direct and indirect emissions by 33% by 2030, two weeks ago it signed onto a partnership with the Carbon Disclosure Project (CDP), which encourage Vale’s suppliers to measure and report their greenhouse gas (GHG) emissions as well as well to help Vale meet its targets. The effort will evaluate the responses of 274 suppliers from Vale's base of 500 suppliers classified as high-GHG emitters and that correspond to almost 30% of the company's global expenditure. PYR would be very solid performers in this regard.
https://saladeimprensa.vale.com/en/Paginas/Articles.aspx?r=Vale_sets_partnership_to_engage_suppliers_to_measure_and_report_carbon_emissions&s=Environment&rID=1431&sID=2
Political:
With it looking like Biden won the election, and all politics aside, that could mean even more incentives (and signing of the Paris Accord) for companies who make carbon reduction efforts. Good news for PYR there.
Here in Canada, Mark Carney, former BofC and BofE Governor, reiterated in a series of speeches this past week that the "transition to net zero emissions is 'the greatest commercial opportunity of our age' ". Carney is an important guy, and despite being away in England for a few years now, his importance in Canada may grow. There's whispers in political and financial circles he's a major leadership candidate for a federal party, and he'll get a lot of backing, and if he’s already on that net zero boat then that bodes well for the PYRs of the world, both in terms of the further incentives that might come down the road, but also in getting the financial and corporate communities on board with funding and growing these kinds of companies.
https://financialpost.com/news/fp-street/carney-calls-net-zero-greenhouse-ambition-greatest-commercial-opportunity
EVs:
Tesla’s (and electric vehicle’s) prominence has increased even more. It was announced yesterday that Tesla is to be added to the S&P 500. As BNN said, it’s “a giant step toward blue-chip respectability” for both Tesla and the electric vehicle industry. Meanwhile, Volkswagen last week announced accelerated investment in electric cars, and GM is cranking out so many they have passed Tesla for the EV lead in China. The EV market -- and the subsequent demand for components like the battery powders made by PYR/HPQ -- is exploding.
Next up:
3rd Quarter financials
Final uplisting to TSX approval
Trading on the TSX
Client A contract news
HPQ/PYR powder delivery to initial orders in early December etc.