PyroGenesis clears JV testing milestone

Executive Summary

• PyroGenesis Inc. has confirmed that its fumed silica reactor (FSR) successfully passed independent third-party testing, meeting a critical material requirement for a proposed joint venture with HPQ Silicon Inc. and an industrial partner.
• The joint venture aims to establish a 1,000-tonne-per-year (TPY) fumed silica production plant, with PyroGenesis receiving $20 million (U.S.) to build the reactor under an exclusive manufacturing arrangement.
• The JV partner has purchased 50 kg of fumed silica for further testing, with technical due diligence expected to conclude within four weeks and definitive agreements targeted for completion by the end of Q2 2026.

Key Details

• Testing Results: An independent U.S.-based lab confirmed the fumed silica produced by the FSR meets fundamental characteristics required to advance the joint venture.
• JV Structure & Financials:
  • PyroGenesis is in the final stages of exercising an option to acquire a 50% interest in HPQ Silica Polvere Inc. (HSPI).
  • The JV will operate a 1,000 TPY fumed silica production plant.
  • PyroGenesis will receive $20.0 million (U.S.) (approx. $27.3 million CAD) to build the FSR.
  • The FSR will be bought by the JV and financed by the JV partner (specific terms to be agreed).
  • HSPI will charge a royalty per kilogram of fumed silica sold by the JV (price/kg to be agreed).
  • Profit-sharing distributions to JV partners are to be agreed upon.
  • An implied off-take agreement exists between the JV partner and the JV.
• Timeline & Next Steps:
  • The JV partner purchased 50 kg of fumed silica for additional testing.
  • All testing is expected to be completed within six weeks.
  • Technical due diligence is expected to be completed within the next four weeks.
  • Definitive agreements are expected to be signed no later than the end of Q2 2026.
  • The plant is expected to be delivered within 12 months of JV formation.
• Technology Specifications:
  • The FSR converts quartz (SiO2) into commercial-grade fumed silica in a single, eco-friendly step.
  • The process eliminates harmful chemicals, reduces CO2 emissions, lowers capital and operating costs, and simplifies logistics.
  • PyroGenesis holds exclusive rights as the sole supplier of equipment for any commercialization of the FSR.
• Market Context: Fumed silica is used in thousands of products including cosmetics, pharmaceuticals, batteries, and construction materials.

Notable Quotes

• "Our fumed silica process represents a fundamental shift in how fumed silica can be produced... PyroGenesis has demonstrated that fumed silica can now be produced with a materially lower CO2 footprint, reduced energy intensity and, more importantly, at a scale that remains economically attractive without requiring massive capex." — P. Peter Pascali, President and CEO, PyroGenesis Inc.