PyroGenesis Canada Inc. (TSX:PYR) confirmed that further to the release of its third-quarter 2021 financial results, it has submitted a C$95 million to C$115 million (US$75 million to $95 million) cost estimate for 36 plasma torches (3 megawatt) to a client.
The company explained that the range in its estimate is due to “certain uncertainties” which will be more clearly defined in due course.
“We wish to emphasis that this announcement is a result of a previously announced request for a cost estimate by a client and in no way means, or implies, future revenues will result from this,” PyroGenesis CEO P Peter Pascali said in a statement.
As previously disclosed, the firm's prospective Client A, is a multibillion-dollar international producer of iron ore pellets and one of the largest in the industry. The firm didn’t disclose the prospect’s name due to competitive reasons.
The client, who has committed to reducing its GHG emissions, has over 10 plants, each possibly requiring up to 50 plasma torches (1 MW). PyroGenesis has the only patented process in the iron ore pelletization industry designed to replace “dirty” fossil fuel burners with environmentally-friendly plasma torches, thereby greatly reducing emissions.
Separately, PyroGenesis announced last week that a factory acceptance test is scheduled to be conducted between February 2-14, 2022, for the use of its plasma torches in iron or pelletization with Client A.
Pascali noted that the company is certainly moving in the “right direction with the right players.”
“Although we recognize that this is a request for a cost estimate, and that there is no guarantee that the order will ever be made and, if it is, that it will be made within the price range noted here, we also appreciate the fact that that this is a strong indication of interest following extensive due diligence by a multi-billion-dollar company,” said Pascali.
“What’s important to take away from our announcement today, and others made in the recent past, is not only that things are progressing as they should, and that we are conservatively ticking the boxes one by one, but the sheer magnitude of this opportunity for the company if we are successful," he added.
PyroGenesis estimates that worldwide pellet production of 400MMT consumes between 8,000-to-1,2000 MW of energy annually. The company estimates that the potential addressable market is over $10 billion, assuming a one-to-one replacement of fossil fuel burners with an estimated 10,000 1MW plasma torches, based on an assumed cost per 1MW plasma torch of approximately $1.5 million.
The Montreal-based company designs, develops, manufactures, and commercializes plasma atomized metal powder, environmentally friendly plasma waste-to-energy systems, and clean plasma torch products.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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