Q. Interesting. In your press release dated January 15th, 2018, you announced that your GEN-2 process is now operating “semi-continuously under vacuum”. What does that mean exactly, “under vacuum”? And what difference does it make?
A. This is a huge development. Essentially it means that rather than operate at normal pressure, the PUREVAP™ process can operate at very low pressure when converting quartz into high grade silicon metal. Lowering the operating pressure favors something called volatilization of impurities. Without getting too technical, this volatilization of impurities essentially improves the purity of the end product by forcing the impurities out of the reacting system thus leaving behind a purer silicon metal. It effectively enhances the removal efficiency of impurities. Bottom line: the main advantage of being under vacuum is the fact that impurities don’t accumulate in the silicon phase. This is a huge development on our road to success. To our knowledge, there is no other process that produces silicon metal directly from quartz under vacuum. Don’t get me wrong, vacuum refining does exist in the market to remove certain impurities from silicon that has already been produced (i.e., silicon is produced, re-melted, then it goes under vacuum), but it is a total different animal altogether. It requires a post-treatment process which is limited and thereby adds additional costs. As far as we know, we are the only players to operate under vacuum in the production of silicon metal. As I said, this is huge, and the impact of which has not really been fully understood by the market.
Q. How transferable are the results obtained from GEN-2 to the pilot plant?
A. We believe they are very transferable. In fact, we expect the results to be even better at larger scale. By increasing the scale, we are increasing the production rate. Theoretically, this will give us a better conversion yield according to our results so far.
As you can imagine, we are already extremely excited about the results we have had with GEN-2, and we can only imagine what the results will be with the pilot plant. As mentioned, at a larger scale, the production rate is automatically higher which, we have proven with GEN-2, should lead to a higher conversion yield and better purity.
Q. Tapping tapping tapping… Everyone is asking for tapping. Why hasn’t it occurred and when will it occur?
A. It is an interesting question because it reflects a belief that there is a connection between tapping and success to date. The accomplishments noted above with GEN-1 and GEN-2, in my opinion, are more reflective of success than tapping.
Tapping will come naturally. When liquid accumulates enough, tapping can occur. The purity of silicon in liquid form is expected to be very high. Tapping was not part of the GEN-2 objectives and, as such, we never operated with the goal of creating the conditions to tap. At this point, we spent our time and money on testing that had a direct impact on production, purity, and design. Tapping, as nice as it would be to see, and possibly a nice press release, has more value to our knowledge and progress in the pilot phase. As such, rest assured, that at the pilot plant phase tapping will be demonstrated as production and conversion yields should be higher.
Q. An often-asked question is, how comfortable are you with the patent application?
A. The short answer is: very comfortable. PyroGenesis has never failed in obtaining a patent when we have applied for one, and we have extensive experience over many years doing so.
It is understandable that a person unfamiliar with our history, patents in general and the patent process specifically, may get hung up or side tracked by this question.
I answered this type of question once before, in another forum, by describing the players and the process. It basically works something like this: when one applies for a patent it behooves one to try and describe in as much detail what the patent can uniquely do and, at the same time, get the best coverage surrounding the patent claims. That is the role of one who applies for a patent. The examiners role, on the other hand, is to challenge the patent and/or limit the claims. That is their role. Of note is that the examiner cannot be expected to be an expert in every field so oftentimes, the challenges are more of a “please explain why…” type of a challenge. We have faced on numerous occasions extremely negative comments from the examiner at the PCT level. This is quite common, and it has never prevented us from obtaining patents at the end of the day.
As I said, we feel very comfortable with the patent application and, without getting into specifics, we have a very well thought out and articulated patent and IP strategy regarding the PUREVAP™ technology. Just remember, this is a costly and time-consuming process and we don’t have either to waste. Rest assured, if we did not think we would succeed we wouldn’t waste our time or money. It’s not more complicated than that.
Q. Some investors/shareholders are skeptical about the whole process. Do you have any comments?
A. …and so they should be. Seriously, we are talking about a process that potentially could be game changing beyond description. Who wouldn’t be skeptical? You would have to be a fool not to be. Adding to this is the fact that the results to date are beyond our expectations which, in a weird way, fuels the skepticism, no? It’s almost too good to be true…makes one think that a little bit of bad news might put people at ease. Just joking, but you get my drift.
On the other hand, how many chances do you get to invest into such potential, at 10 cents a share and market cap of under CAD$20 million? I am talking about HPQ here. Anyways, just food for thought.
Q. PyroGenesis is a shareholder of HPQ, isn’t it?
A. Yes, we are. We currently hold over 5 million common shares and over 3 million warrants which are reflected on our balance sheet.
Q. Would you invest more into HPQ?
A. Yes, we would consider it if it made sense, but let me be very very clear on this point. PyroGenesis is investing each and every day into HPQ. I have said this before and I will say it again, PyroGenesis does not have time or money to waste on projects that do not have future potential. Each and every day PyroGenesis has to decide where to allocate its resources, the most important of which is its time. Plasma expertise, such as ours, does not grow on trees and we must be very discerning as to where we dedicate this valuable resource. Do we dedicate it to Additive Manufacturing (powders for 3D printers), DrosriteTM, other development projects…or HPQ? The profit from the HPQ contract does not in and of itself justify dedicating such scarce resources to the project, the royalty from the success of the project, does.
Q. And that is a good segue into our last question. Some investors of HPQ have accused them of paying PyroGenesis for a project that has no risk to PyroGenesis. How would you respond to them?
A. Besides my answer above, where I describe the opportunity cost of the HPQ contract and the risk associated with that, I would have to add that PyroGenesis is not a charity and we are in the business of making money. Our expertise is unique and arguably, it is that exact expertise that has given this project, and HPQ, a life and a future. In short, you get what you pay for and we would not have done it for less…in fact, we wanted more and were negotiated to the current arrangement.
My final comment to any detractor of HPQ and HPQ management is: wake up. Wake up to the unique management you have, a management that was not only able to identify this opportunity, but also the players required to carry out the project. In fact, it took a lot of convincing by HPQ management to get PyroGenesis’ interest as HPQ did not fit our client/risk profile at all. All this to say that, take it from experience, encouraging management and getting behind it goes a long way to getting management up in the morning…to do it again and again …which, can do nothing but help the stock…. then bashing them with perverted 20/20 hindsight. Just a thought.
