PyroGenesis Canada Inc (CVE:PYR) (OTCMKTS:PYRNF) has received the final signature necessary to initiate a $20 million contract with Drosrite International LLC (DI), which the company says will pay it $6.4 million within two to four weeks.
The deal, which the company first teased back in June, licenses PyroGenesis to manufacture and sell aluminum dross processing DROSRITE systems and technology to Saudi Arabia and other Middle Eastern countries. Aluminum dross is a byproduct of smelting, that, with treatment, can be recycled.
Under the terms of the agreement, DI will pay PyroGenesis approximately $20 million within the next 12 months, plus $2.5 million annually for the next two years. In addition, PyroGenesis will receive a variable amount — the company is targeting another $2.5 million — based on international benchmarks over the subsequent 18 years.
PyroGenesis shares, which resumed trading at 2:45 pm ET after a three-day halt, jumped 13% to C$0.61 in Toronto and 14% to US$0.47 in New York.
What triggered the agreement on Wednesday was an announcement from DI that its partner, Radian Oil & Gas Services Company, signed a deal to provide aluminum dross treatment for Ma’aden Aluminum.
When those companies put pen to paper, that set off DI’s deal with Montreal-based PyroGenesis to manufacture DROSRITE systems.
“DROSRITE is clearly the product of choice for those with a need to treat their dross,” PyroGenesis CEO Peter Pascali said in a statement. “We are proud to see the DROSRITE 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.”
Radian, the party treating the aluminum dross, is a private Saudia Arabaian company oil and gas company focused on helping its customers save energy and operate more efficiently.
Ma’aden is a multi-billion-dollar mining company, the largest in Saudi Arabia.
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