PyroGenesis Canada Inc. has announced that further to its press releases dated April 29th, 2019 and June 3rd, 2019, the business line behind the $20 million contract, plus subsequent years revenues, is DROSRITETM, and the client is Drosrite International LLC (DI).
This contract meets PyroGenesis’ gross margin requirements.
DI announced that its client has received the final signature for aluminium dross processing services using DROSRITETM systems, which in turn triggers an exclusive arrangement between DI and PyroGenesis.
DI is a US based private company duly constituted and existing under the laws of the State of Delaware, providing state-of-the-art waste management technologies to the aluminium industry. DI is duly licensed by PyroGenesis to manufacture, market, sell and distribute DROSRITETM systems and technology to the Kingdom of Saudi Arabia, and certain other countries in the Middle East, on an exclusive basis. All DROSRITETM systems supplied by DI are manufactured in the USA.
As part of the exclusive arrangement between DI and PyroGenesis, DI will pay PyroGenesis approximately $20M within 12 months, plus $2.5 M per year (fixed) for the next two (2) years, plus a variable amount for the subsequent 18 years based on certain international benchmarks which we are targeting to be approx. $2.5M.
As a result of this payment schedule, PyroGenesis expects to receive a $6.4M payment towards this exclusivity arrangement within 2-4 weeks, and subsequent payments of, on average, approximately $3.4M/quarter over the next 12 months. Future payments are expected yearly in advance and quarterly as the case may be.
“DROSRITETM is clearly the product of choice for those with a need to treat their dross,” said Mr. P. Peter Pascali, President and CEO of PyroGenesis. “We are proud to see the DROSRITETM technology being accepted by some of the leading primary smelters in the industry. We believe this news will have a profound effect in the marketplace, which will lead to many inquiries, and
accelerate those discussions already taking place.”
Of note, PyroGenesis’ Japanese trading house tolling partner is not involved in this particular transaction as it was not part of the original strategy to move forward.