PyroGenesis 1: Revolutionizing 3-D Printing

There is a secret in the world of technology, and its name is PyroGenesis Canada Inc. (TSX: V.PYR, OTCQB: PYRNF, FRA: 8PY, Forum).

What is PyroGenesis? That’s a question that can be answered on several levels. At the highest level, PyroGenesis is a Canadian hi-tech success story.

On the next level, PyroGenesis is the Master of Plasma. For many investors, that may not mean much.



Plasma is “the fourth state of matter”. We’re all familiar with the other three states: solids, liquids, and gases. With heat as a catalyst, matter can be converted (solid -> liquid -> gas -> plasma). Plasma can be volatile, but fully harnessed, plasma’s powerful properties offer vast commercial opportunities, spread across a multitude of sectors.

Plasma technology is also green technology. Not only is plasma-powered technology generally more efficient and cost-effective, these are clean technology applications.

Sounds complicated. It is hi-tech. But PyroGenesis’s technology is all derived (in one way or another) from the Power of Plasma. Stockhouse is going to lay out this hi-tech success story to our audience in a three-part series, giving investors the chance to digest PyroGenesis’s three unique – and thriving – divisions one at a time.

Are there any parallels in the marketplace with companies that are able to successfully move forward with multiple independent (technology-based) divisions? Ask P. Peter Pascali that question, the President, CEO and Founder of PyroGenesis Canada, and you may be surprised by the answer.

“We are a mini-GE. When you look at what we are doing, how diversified we are, there are not many companies that could make use of each one of our business lines. GE could. So from that aspect, we are a mini-GE.”

A Canadian GE? Really? Really. While PyroGenesis is a junior technology company, it is already teaming up with world-class partners in each of its three divisions.

• Additive manufacturing: a mutually exclusive Partnership Agreement with Aubert & Duval, a multi-billion dollar giant that is a European Union leader in the supply of the metal powders that drive the high end of 3-D printing technology
• Military/environmental: a 20-year relationship with the U.S. Department of Defense, with contracts that annually total in the millions of dollars
• Mining/metallurgy: a strategic partnership with a multi-billion Japanese partner to jointly provide tolling services, globally, for PYR’s patented DROSRITE™ technology

PyroGenesis is not merely a participant in these different and diverse sectors. As the Master of Plasma, PyroGenesis is a technology leader in each of its three specialties.

One measurement of this mastery comes in the form of the Company’s intellectual property. With over 70 plasma-derived patents issued or pending, PyroGenesis is a leading pioneer in plasma technology.

In this opening installment, the focus is on PyroGenesis’s Additive Manufacturing division.

Additive Manufacturing

For investors new to the tech sector, additive manufacturing may be another term that doesn’t convey much information. Such readers will probably be familiar with a much more common term: 3-D printing.

3-D printing has vast applications as a form of hi-tech manufacturing. However, fabricating the most useful, complex, and commercially valuable metal parts requires special “powders” as the primary input in such manufacturing: titanium powders.

Titanium itself (chemical symbol: Ti) is a metal with low density, high strength, and several other very desirable properties. For these reasons, it is an ideal substance for high end 3-D printing. This can be illustrated through market share alone. Over 50% of the metal powder currently used in this industry is titanium-based.

The difficulty is in producing the extremely small particles that are necessary, ranging from 5 µm to 106 µm (micrometers). Also, such manufacturing requires that these particles be both spherical and dense. PyroGenesis’s hi-tech solution to the challenges of producing these advanced powders was to incorporate the Power of Plasma: “plasma atomization”.

PyroGenesis invented the process of using plasma to make powders ideal for 3-D printing. Today, plasma atomization is now a household term in the 3-D printing sector. 3-D printing is already a multi-billion-dollar hi-tech industry. It’s going to get much, much bigger.


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With this massive projected growth rate (36.6% CAGR), merely being one of the players in this sector has extremely lucrative potential. However, the Company’s revolutionary (and patented) process for producing these titanium powders doesn’t only produce the highest quality powders, PyroGenesis’s advanced plasma technology provides unique flexibility to supply any Particle Size Distribution (PSD) required by the additive manufacturing industry.

It is this unparalleled expertise that was central to PyroGenesis’s January 8, 2019 announcement of a mutually exclusive partnership with Aubert & Duval. Aubert & Duval is a large European corporation, especially well known in the aerospace sector.

Aubert & Duval is a subsidiary of the Eramet Group (Paris Stock Exchange: ERA), which is a multi-billion dollar corporation. Eramet SA is a French mining/metallurgy multinational giant, founded over a century ago.

Aubert & Duval is a well established supplier of metal powders for 3-D printing, serving numerous industrial sectors, including Aerospace, Energy, Transportation, Medical, Defense and Automotive. It has been supplying a full spectrum of titanium powders globally – with one exception.

Aubert & Duval chose to partner with PyroGenesis in order to gain access to the highly coveted plasma atomized Titanium 64, the gold standard for this type of powder. This is a powder that PyroGenesis has expertise in producing and arguably cannot be produced to the same standard via other production methods.

For the very first time, Aubert & Duval has decided to partner with an external company rather than produce it internally. The principle reason being the proprietary technology and know-how required to produce plasma atomized Titanium 64. With titanium powders now accounting for 30 – 50% of the 3-D manufacturing market, it was an important void for Aubert & Duval to fill, considering they are a premier supplier of powders for 3-D printing.

Investors wanting to gauge the significance of this deal may get a better clue by looking at Eramet’s stock price rather than that of PYR. On January 7, 2019; ERA closed at €58.85. On January 8th (the day of the announcement) ERA closed at €61.55. On January 9th, ERA closed at €63.90. That nearly 10% move represented roughly €150 million in additional market capitalization (approximately CAD $225 million). As of this writing, ERA is now trading at €64.80.

In a conference call with Stockhouse Editorial, CEO P. Peter Pascali modestly refused to credit the entire jump in share price for Eramet to its deal with PyroGenesis. However, he was comfortable with PyroGenesis taking significant credit.


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Why didn’t PyroGenesis’ share price show the same, immediate appreciation? Lack of familiarity in North America with Aubert & Duval. As a very conservative business, Aubert & Duval maintains a low profile, with its strong reputation and long history in Europe speaking for itself. But the share price has been starting to track higher in recent days.

For investors, this disconnect in market valuation spells opportunity. Indeed, with PyroGenesis firing on all cylinders with each of its three divisions, investors taking an even longer term perspective may see the Company’s current share price ($0.65) as a superb entry point for this diversified technology leader.


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Ironically, one of PyroGenesis’s direct competitors in producing titanium powders for 3-D printing is General Electric itself. It’s here that the story – and the numbers – become particularly interesting for investors.

GE went out and bought market share in titanium powder production, spending US$599 million to acquire Concept Laser GmbH and US$696 million to acquire Arcam AB (both acquisitions in 2016). Prior to this, in 2013 Arcam acquired Advanced Powders & Coatings (AP&C).



General Electric ultimately paid US$696 million for this older-generation technology. Since that time, PyroGenesis’s operations have been certified AS9100D, the certification necessary to meet the exacting demands of (among others) the aerospace industry.

CEO Pascali shared further insights with Stockhouse Editorial concerning this transaction.

“The word in the industry is that GE got a steal here. It’s also interesting to note that as GE is divesting itself of a number of assets that it’s keeping its Additive Manufacturing division.”

The current market cap of PyroGenesis Canada is CAD$86.8 million (only US$64 million). PyroGenesis’s Additive Manufacturing division is just one of three equally dynamic business units. Given the CAGR for 3-D printing (and titanium powders), it doesn’t require a lot of imagination for investors to project a much higher valuation for this Company.

That’s just one branch of the PyroGenesis tree. Coming up in Part 2: how the U.S. Department of Defense is using PyroGenesis’s plasma technology (and paying the Company millions) to destroy waste: using these patented plasma-based processes to destroy toxic waste and destroy chemical weapons.

Appendix: comparison with PyroGenesis titanium powders





www.pyrogenesis.com




FULL DISCLOSURE: This is a paid article of Stockhouse Publishing.