PyroGenesis Canada Inc (TSE:PYR) (NASDAQ:PYR) (FRA:8PY) said it has signed a contract for $4 million with HPQ Silica Polvere Inc, a wholly-owned subsidiary of HPQ Silicon Resources Inc (HPQ), a provider of low carbon emission silicon-based solutions.
The partnership is part of the larger government contract PyroGenesis announced earlier this year, that saw the maker of advanced plasma processes and products win a $700,000 grant from Sustainable Development Technology Canada to develop a novel production process using a plasma reactor to transform quartz into fumed silica.
The entire project is now valued at $5.3 million, with an added $630,000 coming for an additional government agency. PyroGenesis will also contribute $175,000.
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“This contract represents another significant milestone in our relationship with HPQ and, once again, underscores the many hidden opportunities within this partnership,” P Peter Pascali, president and CEO of PyroGenesis said in the statement.
He continued: “This contract is another testament to PyroGenesis’ solid position as an emerging leader in greenhouse gas (GHG) emissions reduction. In fact, this opportunity is a natural extension of what is being targeted by the company, and is well aligned with environmental initiatives currently taking place worldwide.”
The two companies will collaborate on the design, fabrication and operation of a novel pilot system to demonstrate the production of fumed silica, an inert and non-hazardous substance, using a plasma reactor. Fumed silica is used as a thickening agent in a wide range of applications, such as paints, cosmetics, coatings, inks and resins.
According to the company, the demand for fumed silica is growing at 6% compound annual growth rate (CAGR). The market for fumed silica is anticipated to sit at US$2.2 billion by 2022, up from US$1.5 billion in 2016.
If the technology proves successful, PyroGenesis’ innovative green solution would not only be economical, but would also eliminate the toxic by-products of conventional processes, and reduce GHG emissions by approximately 90%.
This process could be a game changer for the industry reducing the harm current environmentally damaging fumed silica production processes utilize.
The partnership includes the $3 million sale of a provisional patent application relating to the reactor and the exclusive use, by HPQ Polvere, of the intellectual property (IP) in the field of fumed silica manufacturing. As well as a 10% royalty on the client’s future sales.
PyroGenesis will retain a royalty-free, exclusive, irrevocable, worldwide license to use the IP for all activities outside of the field. The right to convert the royalty stream at any time into 50% ownership of HPQ Polvere is also reserved by the company.
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