PyroGenesis Provides Corporate Update on Aluminum Business Line
DROSRITE™ metal recovery systems in demand as supply shortages and increased prices impact Aluminum producers; PyroGenesis announces new-use markets as Aluminum industry eyes greater technological innovation
MONTREAL, Quebec (April 20, 2022) - PyroGenesis Canada Inc. (http://pyrogenesis.com) (TSX: PYR) (NASDAQ: PYR) (FRA: 8PY), a high-tech company (hereinafter referred to as the “Company” or “PyroGenesis”), that designs, develops, manufactures and commercializes advanced plasma processes and sustainable solutions which are geared to reduce greenhouse gases (GHG), is pleased to provide today a comprehensive update on its Aluminum business line.
After unveiling an initial Aluminum Industry Strategy in September 2020, the Company’s mandate has since expanded as global aluminum producers face increasing metal demand, rising energy costs, higher market prices for hiqh-quality aluminum, and approaching carbon emissions targets[i],[ii]. As a result, the Company has increased sales efforts and R&D, targeting innovative new uses of its ultra-high heat expertise and plasma-based solutions. All of these endeavors have reached client-discussion stage.
“Due to a series of macroeconomic and geopolitical factors that have intensified the already tightening market for aluminum – even now the world’s 2nd most widely used metal after steel, and whose demand is estimated to rise by 80% over the next two decades[iii] – aluminum prices have spiked, currently up almost 40% after rising as high as 56% year-over-year in March[iv],” said Mr. P. Peter Pascali, CEO and Chair of PyroGenesis. “As the metal has become more valuable and with raw material supply chains experiencing added volatility, producers are seeking technological answers to boost their production yield, and PyroGenesis solutions, most notably our Drosrite™ dross recovery system, provides an in-stream benefit.”
“We have entered an exciting stage in our aluminum business line”, continued Mr. Pascali, “Therefore, we decided to provide a timely update regarding all areas of this business line and the impact we are having with aluminum producers around the world.”
The Company is pleased to provide an update on both existing customers, as well as a selection of the many proposals and new-use developments that are currently ongoing:
Drosrite™ – Metal Recovery Systems
PyroGenesis’ Drosrite™ is a system that helps aluminum producers recover valuable metal from the smelting waste known as “dross” – a residual by-product generated throughout the metallurgical industry, when oxygen comes into contact with molten and solid impurities float to the surface to be skimmed off. Smelters typically lose anywhere from 2%-10% of their total annual melt production due to dross, as the material itself can be composed of as much as 80% metallic aluminum[v]. The valuable metals and chemicals within this waste can be recovered if processed correctly.
PyroGenesis’ Drosrite™ system modernized and significantly enhanced dross processing, introducing a method to recover much more – up to 98% – of the valuable aluminum left in dross, a 20% higher rate than the most commonly used process (the Rotary Salt Furnace)[vi], with a 50% lower operating cost, a lower carbon footprint and energy consumption, and a higher return on investment – all without the use of salt that can cause contamination, while also not creating salt cakes, another environmental problem as landfill bans multiply for this hazardous solid.
As a result, PyroGenesis’ Drosrite™ systems are in-demand, with the Company having successfully won some of the largest dross recovery projects internationally, making the Company one of the largest and certainly fastest-growing dross recovery solutions in the world.
The Company reports several key developments with regards to Drosrite™:
Drosrite™ / Middle East Client
- The first 3 PyroGenesis Drosrite systems, of the 7 total ordered by a Middle Eastern end-user – one of the world’s largest aluminum producing complexes – continue to perform exceptionally well. As producers have entered a period of heightened pressure to maximize output of existing operations, the output rate, quality, and purity level of PyroGenesis’ salt-free Drosrite™ metal recovery system has proven to be a differentiator.
- Additionally, with that client’s recent expansion achieved, the Company can report that the remaining 4 systems are completed, packed, and ready for shipping.
[In the accompanying image taken April 13, 2022, high-quality metal pours from a Drosrite system after being recovered.]
Recurring Client 1
It was noted in the Company’s February 2, 2022, news release that a $4 Million purchase order for the first of three 10-ton Drosrite™ systems from an existing client had been received.
The Company is announcing that procurement for production of this system has begun.
Recurring Client 2
The Company is also announcing an additional Drosrite™ system was completed and delivered to this client, already arriving at the client’s factory for commissioning at the time of this writing.
This represents the 14th Drosrite™ system either installed/in shipping (11) or newly ordered/requested (3).
Separately, the Company understands that, due to the confidential and recurring nature of some of our clients, it may be difficult for investors to measure the progress of Drosrite™ orders. The Company will therefore confirm that all systems – 11 in total – ordered and announced prior to the most recent purchase order for the first of 3 units that was received and announced in February 2022, have been completed and are either on-site at the clients’ location or in shipping.
Drosrite™ Joint Venture
Background
On September 27, 2021, the Company announced that it had signed a joint venture and license agreements (both agreements collectively the “JV”) with a leading residue processor to transform dross residues – the material left over after Drosrite™ metal recovery – into high-value chemical products (the process known as “valorization”), that can then be sold to demanding applications such as fertilizer production and water purification for global markets. The 50:50 JV will be geared towards building, installing and operating dross residue valorization facilities worldwide.
The Company believes this technology will not only make the Drosrite™ offering more appealing but could also be offered as a stand-alone service. PyroGenesis believes that valorizing the residues and producing these high-end chemical products will further define the Company as the go-to supplier for dross-related processing, and a one-stop shop for all aluminum producers to eliminate landfill waste streams and help meet their ESG mandates and targets.
Under the terms of the JV, the exclusive access to the technology initially applies to projects in North America and in the Gulf Cooperation Council nations. Upon successful completion of the first project, the exclusive access to the technology will expand to include, for all intents and purposes, most of the world. These dross residues are currently either being (i) landfilled (which is increasingly becoming banned by regulators) or (ii) dumped into the cement market to avoid landfill costs and liabilities.
Status
This joint venture is in the final due diligence phase, but the JV is already evaluating specific locations for the first plant in which a country decision has already been finalized. The joint venture has also started evaluating additional locations in other countries for further plants.
We expect the final agreement for the JV to be reached shortly. Of note, the pending JV has already attracted interest from both a major North American primary smelter as well as a South American primary smelter, to valorize their dross residues.
Drosrite™ Tolling Services
Background
The Company had previously announced a strategy to provide dross recovery through a tolling approach, meaning rather than sell a Drosrite™ system to a customer for them to operate, PyroGenesis would instead own and operate the Drosrite system on-site for the customer – charging a fee for service instead of the capital cost of an entire system.
New Developments
- The Company has been working on a tolling arrangement with a very large European integrated midstream aluminum producer and manufacturer.
- The Company has recently provided a quote for on-site tolling pilot trials for one of the largest scrap remelters in the world, also located in Europe.
- The Company has submitted a tolling proposal (at the request of the client) for one of the largest primary smelters in South America.
- The Company is currently developing tolling proposals for several other companies across several different countries.
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About PyroGenesis Canada Inc.
PyroGenesis Canada Inc., a high-tech company, is a leader in the design, development, manufacture and commercialization of advanced plasma processes and sustainable solutions which reduce greenhouse gases (GHG), and are economically attractive alternatives to conventional “dirty” processes. PyroGenesis has created proprietary, patented and advanced plasma technologies that are being vetted and adopted by multiple multibillion dollar industry leaders in four massive markets: iron ore pelletization, aluminum, waste management, and additive manufacturing. With a team of experienced engineers, scientists and technicians working out of its Montreal office, and its 3,800 m2 and 2,940 m2 manufacturing facilities, PyroGenesis maintains its competitive advantage by remaining at the forefront of technology development and commercialization. The operations are ISO 9001:2015 and AS9100D certified, having been ISO certified since 1997. For more information, please visit: www.pyrogenesis.com.
This press release contains certain forward-looking statements, including, without limitation, statements containing the words "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect", "in the process" and other similar expressions which constitute "forward- looking information" within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectation and assumptions and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, our expectations regarding the acceptance of our products by the market, our strategy to develop new products and enhance the capabilities of existing products, our strategy with respect to research and development, the impact of competitive products and pricing, new product development, and uncertainties related to the regulatory approval process. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties and other risks detailed from time-to-time in the Company's ongoing filings with the securities regulatory authorities, which filings can be found at www.sedar.com, or at www.sec.gov. Actual results, events, and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward- looking statements either as a result of new information, future events or otherwise, except as required by applicable securities laws. Neither the Toronto Stock Exchange, its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) nor the NASDAQ Stock Market, LLC accepts responsibility for the adequacy or accuracy of this press release.
SOURCE PyroGenesis Canada Inc.
For further information please contact:
Rodayna Kafal, Vice President Investor Relations and Strategic Business Development
Phone: (514) 937-0002, E-mail: ir@pyrogenesis.com
RELATED LINK: http://www.pyrogenesis.com/
[i] Aluminum Prices Can’t Keep Up With Energy Costs, Driving Wave of Closures, by By Rhiannon Hoyle and Joe Wallace, Jan 2022
[ii] Global Energy Crisis Piles Pressure on Aluminum Supply by Mark Burton and Jack Farchy, Bloomberg News, October 2021
https://www.bnnbloomberg.ca/global-energy-crisis-piles-pressure-on-aluminum-supply-1.1664646
[iii]World aluminium industry must cut emissions by 77% by 2050 -IAI, Reporting by Eric Onstad, Editing by Nick Zieminski, March 2021
[v] Sustainable & Profitable Aluminum Dross Practices by David D’Aoust, July 2019
[vi] Based on PyroGenesis’ Internal Calculations.