MONTREAL, June 17, 2015 /CNW Telbec/ - PyroGenesis
Canada Inc. (http://pyrogenesis.com) (TSXV: PYR), a TSX Venture
50® clean-tech company (the "Company" or "PyroGenesis") that
designs, develops, manufactures and commercializes plasma
waste-to-energy systems and plasma torch products, announced today
that it has cancelled a previously announced exclusive marketing
license agreement with an unnamed Asian entity in favor of an
exclusive license agreement (the "Agreement") with Yasui
Facilities, Inc. ("Yasui") of Japan.
Yasui is a one of Japan's
preeminent Architectural/Engineering firms who works with a
consortium of companies that have, amongst other projects, built
incinerators. Yasui provides the needed local engineering and
permitting expertise that PyroGenesis requires to conclude various
contracts under discussion.
"This Agreement with Yasui has effectively enabled us to bypass
the traditional method of penetrating the Japanese market, which is
usually via local trading houses," said P.
Peter Pascali, President & CEO of PyroGenesis, "and as
such, will allow the Company to save a substantial amount paid in
middle-man fees."
The Agreement, which was reached recently, has been drafted for
final legal review by both parties, and has a completion deadline
of July 16, 2015. In the
interim, the parties will act according to provisions provided
therein and outlined in a MOU dated June 4,
2015.
The terms of this Agreement permit Yasui to exclusively market
PyroGenesis' line of plasma waste processing systems in
Japan for a period of five (5)
years with the possibility of an automatic five (5) year renewal
based on certain performance milestones. In exchange for this
exclusivity, Yasui undertakes to pay all costs associated with the
Japanese permitting process, which are estimated to run into the
$100,000's, and which have already commenced, and to reimburse
PyroGenesis for costs incurred in developing the Japanese market.
Furthermore, upon receipt of the permit, which is expected in less
than one (1) year, Yasui will pay PyroGenesis a onetime exclusivity
fee of $1.5MM in one
installment.
Mr. P. Peter Pascali provides
additional information regarding the transaction and its impact on
the Company in the following Q&A format:
When will Yasui start the permitting process, and marketing in
earnest?
It has already begun. Yasui has been actively pursuing the
permitting process for several weeks now. They have also been
actively involved in business development with us over the past two
(2) months. In fact, PyroGenesis' Business Development Officer
responsible for the Asian market is currently in Japan for approximately two (2) months in
support of Yasui's efforts.
What is the status of the contracts that were mentioned in
previous press releases? Are they cancelled as well? Are you
starting from zero?
Absolutely not. Negotiations are continuing to develop
with numerous prospective clients, and the Canadian consulate is
actively involved in supporting our marketing efforts in
Asia. Yasui has also been involved
in such efforts and their presence alone has added significant
credibility to PyroGenesis in Japan.
As previously mentioned, we are discussing sales in terms of
groupings of products, with each grouping being independent from
one another. For instance, we are currently discussing groupings of
50 TPD waste treatment systems, hospital/low level
radioactive waste systems, multiple small transportable mobile
systems, as well as several niche applications. We don't expect any
of these contracts to close before Q4-2015 however we are highly
confident that we will close something of significant value by year
end.
With respect to all the different business opportunities arising
from this venture, could you give us a sense of where the "low
hanging fruit" is and how far into the discussions you are?
Within the specialty niche groupings, there is an opportunity
to process 100 TPD of a specialty waste stream, with each 25 TPD
system costing approximately $15MM. We have been in discussions
with the end-user for quite some time now and the business case has
been accepted by them. The end-user is scheduled to visit
Montreal this September to witness
a test demonstrating the destruction of their waste stream, at
which time it is expected that an order will be placed. Of note, we
are currently negotiating the terms and conditions of an agreement
which will reflect their commitment to purchase a number of systems
from PyroGenesis upon the successful demonstration in
September.
You issued two press releases, one on March 4th, 2015, and the other on
April 13th, 2015.
Why was there so little news, particularly given the anticipation
created by the March 4th
press release?
The significance of the contract, which was the subject of
our March 4th press
release, obliged us to disclose its details. As we mentioned
subsequently, it was a legally binding contract with a credible
entity; however, as events unfolded, it became abundantly clear
that it would be better for all parties involved if we were to move
forward with Yasui, as we have. As one may well appreciate, in
the course of these discussions and negotiations it would have been
compromising to press release intentions and/or
expectations.
Why the change in direction from your March 4th, 2015 press release?
After careful study it became apparent to the Company that
Yasui's approach to the market place, their contacts, and their
expertise was more in line with PyroGenesis' needs and better
reflected PyroGenesis' business strategy.
We feel that a company should not be limited by what they
have previously disclosed. That is to say, if an opportunity
presents itself that is better suited for the Company, as is the
case with Japan, we cannot be
constrained by the expectations created by our previous
disclosures. We must take the time to do a full cost/benefit
analysis of any new opportunity that presents itself and, at the
same time, have the conviction to change course if that is what is
required.
Are there any other takeaways?
As we mentioned in our Press Release dated April 13th, 2015, which is something
that we cannot stress enough; the most important aspect of these
recent developments, and one that PyroGenesis' Board is highly
focused on, is the fact that this Agreement reflects a new reality
for PyroGenesis. The Company has progressed from signing agreements
for individual systems in the $1-5MM
range, to signing a multi-system contract in the $10-15MM range last year, to now negotiating
multi-system contracts in the +$100MM range. This transition is not
unexpected as it underscores the success PyroGenesis is having in
executing its strategic plan to diversify away from being an
environmental Company with significant exposure to the US military,
to one providing unique plasma processes to niche markets.
About PyroGenesis Canada Inc.
PyroGenesis Canada Inc., a TSX Venture 50® clean-tech company,
is the world leader in the design, development, manufacture and
commercialization of advanced plasma processes. We provide
engineering and manufacturing expertise, cutting-edge contract
research, as well as turnkey process equipment packages to the
defense, metallurgical, mining, advanced materials (including 3D
printing), oil & gas, and environmental industries. With a team
of experienced engineers, scientists and technicians working out of
our Montreal office and our 3,800
m2 manufacturing facility, PyroGenesis maintains its
competitive advantage by remaining at the forefront of technology
development and commercialization. Our core competencies allow
PyroGenesis to lead the way in providing innovative plasma torches,
plasma waste processes, high-temperature metallurgical processes,
and engineering services to the global marketplace. Our operations
are ISO 9001:2008 certified, and have been since 1997. PyroGenesis
is a publicly-traded Canadian company on the TSX Venture Exchange
(Ticker Symbol: PYR). For more information, please visit
www.pyrogenesis.com
This press release contains certain forward-looking
statements, including, without limitation, statements containing
the words "may", "plan", "will", "estimate", "continue",
"anticipate", "intend", "expect", "in the process" and other
similar expressions which constitute "forward-looking information"
within the meaning of applicable securities laws. Forward-looking
statements reflect the Company's current expectation and
assumptions, and are subject to a number of risks and uncertainties
that could cause actual results to differ materially from those
anticipated. These forward-looking statements involve risks and
uncertainties including, but not limited to, our expectations
regarding the acceptance of our products by the market, our
strategy to develop new products and enhance the capabilities of
existing products, our strategy with respect to research and
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product development, and uncertainties related to the regulatory
approval process. Such statements reflect the current views of the
Company with respect to future events and are subject to certain
risks and uncertainties and other risks detailed from time-to-time
in the Company's ongoing filings with the securities regulatory
authorities, which filings can be found at www.sedar.com. Actual
results, events, and performance may differ materially. Readers are
cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to publicly update
or revise any forward-looking statements either as a result of new
information, future events or otherwise, except as required by
applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE PyroGenesis Canada Inc.