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TRANSFORMATIVE AND REVOLUTIONARY

A Solution Provider and Emerging Leader in GHG Reduction

Making Sustainability Sustainable

Frankfurt am Main, September 3rd, 2021: PyroGenesis Canada Inc. (NASDAQ: PYR; TSX: PYR; FSE: 8PY) (“PyroGenesis” or the “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 (3D printing). The Company is based in Montreal, Canada.

PyroGenesis is in a rapid growth phase. As seen in the table below, in Q2 2021, revenues were over € 5.5 million, an increase of more than 289% compared to the same period in 2020. Revenues for the six months of fiscal 2021 increased 411% compared to revenue during the same period in 2020, greater than whole of 2019.

Moreover, the Company has a backlog of signed contracts, at August 16, 2021, of € 21.6 million.

PyroGenesis is generating record revenues, with an overall gross margin of 59.6%, while increasing the backlog of signed contracts. CEO and Chair Peter Pascali “expects this trend to continue.”

PyroGenesis has emerged as a global leader assisting the iron ore industry in reducing greenhouse gas (GHG) emissions. The iron ore pelletization industry has historically used fossil fuel burners that emit large amounts of CO2 and greenhouse gases, to burn iron ore into pellets so they can easily be transported. Globally, governments are mandating that materials processing plants reduce or eliminate greenhouse gases.

What is plasma torch technology? Very simply, it converts gases to plasma matter and is considered as the 4th state of matter after solid, liquid and gas. A plasma torch can reach more than 5,000 degrees Celsius (as hot as the Sun) and is an excellent tool for transforming materials to value added products.

There are many value drivers, competitive advantages, and key-milestones for PyroGenesis, which are likely to drive shareholder value and investors returns over the next 12 months.

Value drivers, competitive advantages, and key-milestones

The Company has strong competitive advantages in the global marketplace due to over 25 years of working at the cutting edge of Plasma technology, over 110 worldwide patents, over 85 employees and one of the highest concentrations of plasma expertise under one roof. These competitive advantages provide PyroGenesis with a strong and compelling first mover advantage.

PyroGenesis is globally recognised as leader in 4 massive markets:

1. Iron Ore Pelletization
2. Aluminum Industry (DROSRITETM)
3. Waste Treatment / Environmental
4. Additive Manufacturing (Plasma Atomized Powders for 3D Printing)

1. Iron Ore Pelletization

PyroGenesis could enable the world’s largest mining companies to reduce greenhouse gas emissions to meet carbon neutrality goals in a cost-effective manner. The globally patented process ensures that iron ore can be reduced to pellets (pelletization) for transportation without any greenhouse gas emissions and eliminating the need for highly polluting diesel or fossil fuel burners. This is transformational and the addressable market for this technology is over € 6.5 billion1). Whilst the Company only has the patent for the Iron Ore Pelletization Industry, the Company believes that it has the technological expertise and the first mover advantage in the cement, steel, aluminum, and automotive industries.

The plasma torch technology replacing fossil fuel burners in the Iron Ore Pelletization industry is expected to grow revenues substantially in the forthcoming years. The Company recently received a request for a cost estimate from major iron ore producer for 36 plasma torches. Another client order (between 1-5 torches) is expected to come forth with strong visibility. PyroGenesis expects that the iron ore pelletization industry will be a large user of its plasma torches.

2.  Aluminum Industry (DROSRITETM)

New technologies designed by PyroGenesis allow Aluminum producers to recover salt free dross from the smelting process. This is a significant competitive advantage and is likely to also drive revenue growth. In 2016 there was one order for this technology at around € 402,000, in 2019/2020 orders were over €13 million.

The Company is currently bidding on an up-stream opportunity, valued at approximately € 26.9 million. This process is plasma based, and not only reduces GHG, but seems to be cheaper than alternate technologies.

3.  Waste Treatment / Environmental

The company has patented technology to convert waste into inert non-toxic residues or create valuable by-product from the waste. This technology is being used by the US Navy on high-tech aircraft carriers. The US Navy has put PyroGenesis’ technology into the design of aircraft carriers and ordered another two systems of PyroGenesis in september 2020 in a € 7.7 million contract.

PyroGenesis recently signed a € 810,000 contract for two Air plasma torch systems with an existing Asian customer. These torches will be incorporated into the Customer’s medical waste destruction systems and could replace inefficient medical incinerators, which are widely criticized for generating greenhouse gases.

4. Additive Manufacturing (Plasma Atomized Powders for 3D Printing)

Through patented technology, PyroGenesis has developed procedures to enhance additive manufacturing using high-purity spherical and speciality powders. The global 3D printing market is expected to grow exponentially from around € 516 million in 2019 to € 2.13 billion in 20242). Of interest for European investors, the company has a mutually exclusive distribution with Aubert & Duval in France (a division of giant Eramet) with major customers in the aerospace industry among others. The contract involves the sale of titanium powders in Europe.

The Company has a patented technology called NEXGEN™ to produce plasma atomized powder for the additive manufacturing. This has the potential to produce about double the amount of powders per hour than most competitors. As soon as the NEXGEN™ production line was completed, a major top tier 1 aerospace company concluded a qualification agreement with PyroGenesis.

Developments & Commercialization

PyroGenesis has discussed multiple opportunities for material revenue streams in the future. These include:

1. Conversion of silica (Quartz, SiO2) to high purity silicon metal
2. Conversion of silicon (Si) into nano silicon powders

• The goal is to increase performance and storage capacity in lithium-ion batteries by replacing graphite with these nano silicon powders

3. Conversion of silica (Quartz, SiO2) quartz into fumed silica
4. Pot lining waste recovery process (in Partnership with Aluminerie Alouette)

-          In May 2021, the Company received €467,000 grant from Sustainable Development Technology Canada to develop a novel process to transform quartz into silica. In July 2021, the company announced a € 2.2 million contract from HPQ Silica Polver Inc. to design, develop and manufacture downstream business opportunities by converting quartz into fumed silica using a novel one step plasma-based reactor. The demand for fumed silica is substantial with an addressable market of around € 1.9 billion3).

-          In August 2021, the company acquired AirScience Technologies Inc. (AST) for a maximum total cash consideration of € 2.9 million.  AirScience is a Montreal-based company that offers technologies, equipment, and expertise in upgrading biogas into pipeline ready renewable natural gas. AST currently has approximately € 6.7 million in backlog all of which is expected to be completed within 18 months, € 9.4 million in pipeline, and has posted an average gross margin over the last four years (2016-2019) more than 40%. The company was profitable in 2019 on approx. € 3.2 in revenues.

-          The acquisition enhances the market opportunities from designing and building systems and processes using gas-upgrading such as biogas to renewable natural gas, helping PyroGenesis expand its GHG emissions reduction portfolio. PyroGenesis considers the AST’s experience with biogas upgrading combined with PyroGenesis engineering and technical skills, will provide a catalyst and major growth opportunity from the increasing demand for clean biogas.

Anticipated Catalysts

Near term catalysts are expected to drive significant shareholder value:  

-          Plasma Torch / Iron Ore Pelletization:

• Torch orders from additional iron ore pelletizer clients
• Commitment for iron ore pelletizer for long term purchases

-          DROSRITETM

• Closing of aluminum dross residues Joint Venture
• Upstream DROSRITETM contract (est. € 26.9 million)

-          Land-Based Units / Environmental

• Non-military land-based waste destruction contract(s)

Investment Highlights

PyroGenesis is well positioned to deliver and drive near, and long-term shareholder value as outlined above and summarised below:

-          Proprietary, patented advanced plasma technologies – vetted and adopted by multiple multibillion dollar industry leaders

-          Fully commercialized solutions being actively marketed in four massive markets

-          Long-tail of potential additional large-market applications

-          Strong balance sheet allows acceleration of organic growth strategy as well as synergistic mergers and acquisitions

-          Focus on GHG emissions reduction

-          Near Term Catalysts

Further information

Further information on PyroGenesis Canada Inc. can be found in the following links:

1. YouTube Video: DGWA Video with President and CEO Peter Pascali

https://www.youtube.com/watch?v=Gyi5sV1kN4o&t=171s

2. German Investor Presentation: PyroGenesis – Präsentation für Investoren

https://dgwa.org/wp-content/uploads/2021/04/PyroGenesis-IR-Deck-13-04-2021_DE.pdf

3. PyroGenesis Website: PyroGenesis Corporate View / Progress Report - https://www.pyrogenesis.com/corporate-view-progress-report/

References

1)      Company internal calculation estimates based on: https://www.eia.gov/outlooks/ieo/pdf/industrial.pdf & https://www.iea.org/commentaries/clean-and-efficient-heat-for-industry

2)      “3-D Printing Metals Market by Form, Technology, Metal Type, End-Use Industry, Region - Global Forecast to 2024” Report, Feb. 2020

3)      Source: Marketandmakerts.com

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