PyroGenesis Announces MOU Toward Joint Venture for Commercial Scale Fumed Silica Plant

Executive Summary

• PyroGenesis and its client HPQ Silicon, via subsidiary HPQ Silica Polvere Inc., have signed a non‑binding MOU to create a joint venture (JV) that will build and operate a 1,000 TPY fumed silica production plant.
• Under an exclusive manufacturing arrangement, PyroGenesis will supply the Fumed Silica Reactor (FSR) for US$20 million; financing is to be provided by the JV partner.
• The JV aims to commence construction within 12 months of definitive agreement execution (targeted no later than Q2 2026), with potential for additional plants thereafter.

Key Details

• MOU Parties: PyroGenesis Inc.; HPQ Silicon Inc. (through wholly‑owned subsidiary HPQ Silica Polvere Inc.); unnamed JV partner (confidential).
• Project Scope: Design, build and operate a commercial‑scale fumed silica reactor with 1,000 tonnes per year capacity.
• Equipment Cost: US$20 million (≈ CA$27.3 million) for the FSR supplied exclusively by PyroGenesis.
• Financing: To be secured and provided by the JV partner; terms not yet finalized.
• Ownership Structure: PyroGenesis is exercising an option to acquire a 50 % interest in HPQ Silica Polvere Inc.; final JV ownership percentages to be determined in definitive agreements.
• Revenue Model:
• Royalty payable by HSPI on each kilogram of fumed silica sold (price per kg not yet set).
• Profit‑sharing distribution among JV partners (terms pending).
• Implied off‑take agreement between the JV partner and the JV to support commercial viability.
• Timeline: Definitive agreements expected to be signed no later than end of Q2 2026; plant delivery anticipated within 12 months after JV formation.
• Contingencies: JV formation contingent on successful verification of chemical/compositional characteristics from pilot‑plant samples and execution of definitive contracts. No guarantee that the JV will materialize or be commercially viable.
• Strategic Rationale (CEO Quote): “Localized production at, or near, the point of use fundamentally restructures the supply chain… This MOU is an important first step…” – P. Peter Pascali, President & CEO, PyroGenesis.

Notable Quotes

“On‑site production using our FSR plant would represent a significant development for manufacturers that rely on fumed silica… this MOU is an important first step, but it must be noted that only upon successful completion of negotiations and the signing of definitive agreements by all parties will the joint venture and the production plant project(s) proceed.” – P. Peter Pascali, President & CEO, PyroGenesis.