PyroGenesis Canada Inc. (TSX:PYR, OTCQX:PYRGF) has provided additional information in response to investor questions regarding its announcement of the receipt of a C$4.1 million payment under its Drosrite contract, which has a total value of C$25 million.
The company was contracted by Drosrite, which was in turn contracted by Radian Oil and Gas Services Company, for an order of seven Drosrite aluminum dross recovery systems.
The first three systems were manufactured and delivered by PyroGenesis, and have been in full commercial operation since April 2022 for the Ma’aden aluminum plant in Ras Al-Khair Saudi Arabia, a joint venture with Alcoa (NYSE:AA).
PyroGenesis said that over the course of the contract, it has agreed to delay payments in favor of such amounts being allocated by Radian to “efforts which both parties agreed would be best for all involved and could result in additional business in the mid-term.”
The amount outstanding is approximately C$6.2 million plus storage fees. Of this amount, approximately C$1.375 million has been postponed to 2025 to match the delivery of spare parts.
PyroGenesis said that once the payment of the remaining balance of C$4.8 million plus storage fees have been secured, the remaining four systems, which have been manufactured and are in storage, will be shipped.
It is expected that all seven systems will be up and running by the year-end.
Further, C$1.375 million related to the original contract is yet to be invoiced and will be recognized as revenue once completed.
“I believe that our position, as a result of our patience with the challenges that faced our client, bodes well for our future in the region. We have proven that we are not a fair-weathered friend and that we support our clients when it is called for,” PyroGenesis CEO P. Peter Pascali commented.
“This has given us a level of credibility and trust which will portend well for any future arrangements in the region. There are already plans afoot to not only expand our Drosrite presence, but also to cross-sell our other offerings."
He added that the client has repeatedly told the company that the Drosrite systems have been operating exceptionally well.
“While there have been some agreed upon delays, for which we received significant criticism with respect to our strategy, the Board and I are very pleased with the outcome,” the CEO said. “We look forward to expanding our presence in the region.”