- PyroGenesis Canada (PYR) has signed an initial plasma torch contract with a major iron ore producer and pelletiser
- Under the contract, the company will provide one high-powered plasma torch with ancillary equipment for approximately C$1.88 million
- The unnamed client has committed to reducing its greenhouse gas emissions, which PyroGenesis’ products will help achieve
- The company expects that final assembly and installation at the client’s facility could take between two weeks and four months
- Despite the milestone contract, PyroGenesis Canada is down 7.38 per cent and is currently trading for $3.64 per share
PyroGenesis Canada (PYR) has signed an initial plasma torch contract with a major iron ore producer and pelletiser.
The unnamed client is known as Client A, for confidentiality and competitive reasons. However, the client is a multi-billion-dollar international producer of iron ore pellets, and one of the largest in the industry.
Recently, in an update about its iron ore pelletisation plasma torch business, PyroGenesis reported that it had successfully completed a modelling contract with Client A, and subsequently received a draft contract from them.
The contract between the companies, for the provision of plasma torch products, has now been formalised and signed. Under the contract, PyroGenesis will provide Client A with one high-powered plasma torch with ancillary equipment.
Client A has committed to reducing its greenhouse gas emissions, a goal which the company’s products will help to achieve. As such, PyroGenesis will receive approximately C$1.88 million for the provision of the plasma torch products.
This amount does not include continued after-sale services, which were not discussed during initial negotiations. The company expects that future sales to Client A will include a separate continued after-sales services agreements.
Client A currently has over ten plants in its operations, each of which could require up to 50 plasma torches. With the possibility of additional sales and multiple orders, PyroGenesis is likely to source long lead items ahead of time.
This will result in the time from contract to final assembly and installation at Client A’s facilities being somewhere between two weeks to up to four months.
PyroGenesis’ CEO, P Peter Pascali, spoke excitedly about the plasma torch contract, which he believes represents the crossing of a threshold for the company.
“This is a major milestone for PyroGenesis, as it is the first time we have sold a torch system to a major iron ore pelletiser,” he said.
“it is not a secret that the ultimate goal is to replace their fossil fuel burners with our plasma torches,” he added.
Despite the milestone contract, PyroGenesis Canada is down 7.38 per cent and is trading for $3.64 per share, as of 10:35am EST.