HPQ Silicon Inc. (“HPQ” or the “Company”) (TSX-V: HPQ)
(OTCQB: HPQFF) (FRA: O08), a technology company
specializing in green engineering processes for silica and silicon
material production is pleased to announce the completion of an
internal technical and economic study (the “Study”) related to its
proprietary Fumed Silica Reactor technology. The study was prompted
by an inquiry from a participant in the Fumed Silica industry under
NDA.
The study assessed the technical and economic viability of
quickly scaling up the HPQ Silica Polvere’s Fumed Silica Reactor
(FSR) from the current 50 tonnes per year (TPY) pilot plant
configuration to a 1,000 TPY commercial configuration, following
the successful completion of the pilot plant testing phase.
The significance of this preliminary assessment lies in its
confirmation of the technical feasibility of rapid scaling up to a
1,000 TPY FRS [1] while preserving the best-in-class environmental
advantages inherent in the FSR technology [2]. Moreover, the study
unveiled its robust economic potential, emphasizing potential
EBITDA margins three times higher than the industry average of 20%
[3] and a capital investment 93% less than that required for
building a conventional Fumed Silica plant [4].
“The shift of interest in our Fumed Silica offering, from the
initial signing of our first NDA to explore the material commercial
potential to a current keen focus on the commercial scalability
potential of our proprietary Fumed Silica Reactor technology, marks
another major step forward for HPQ Silica Polvere," said Mr.
Bernard Tourillon, President and CEO of HPQ Silica Polvere Inc. and
HPQ Silicon Inc.
IMPLEMENTING AN INCREMENTAL COMMERCIALISATION STRATEGY
FOR HPQ POLVERE FUMED SILICA
To meet the anticipated demand for low carbon fumed silica
materials, HPQ Polvere commercialisation strategy is based on
building a 1,000 tonnes per year (TPY) Fumed Silica Reactor and
scaling up capacity to meet demand with an additional 1,000 TPY
Fumed Silica Reactor.
To prepare the internal economic study, HPQ Polvere management
used technology provider and equipment supplier PyroGenesis Canada
Inc. (TSX: PYR) (OTCQX: PYRGF) (FRA: 8PY)
(PyroGenesis) rough order of magnitude study regarding the cost of
building the first 1,000 tonnes per year (TPY) Fumed Silica
Reactor. HPQ management then used selling prices for the Fumed
Silica and potential operating costs from information derived from
third party sources and publicly available data.
The salient points of the internal economic study indicate that
the HPQ Fumed Silica Reactor will have:
- Capex between US$
9.00 and US$ 10.00 cost per Kg of annual capacity [5]
- Energy consumptions
between 10 – 15 KWh per Kg of Fumed Silica [6]
- EBITDA margins
between 60% and 65% [7]
- Payback period per
1,000 TPY Reactor of around 1.7 years [8]
“HPQ Silica is uniquely positioned to be the sole provider
capable of supplying the materials required to meet the increasing
demand for low carbon Fumed Silica products,” added Mr. Tourillon.
“This demand is anticipated to necessitate the deployment of
numerous 1,000 TPY Fumed Silica Reactors in the future."
While HPQ Polvere technology is the only ultra–low carbon
footprint process, no green premium was used when calculated the
selling price of the material used for the internal economic
study.
HPQ POLVERE DISRUPTIVE ADVANTAGES IN ONE
TABLE
“This table clearly shows that HPQ Polvere Fumed Silica Reactor
(FSR) has many disruptive advantages that can threaten
traditional Fumed Silica Manufacturing and can be a significant
opportunity for HPQ and its
shareholders,” continued Mr.
Tourillon.
HPQ management plans to update and further validate these
projections when more data is collected from an upcoming pilot
plant testing phase later in the year. This will be achieved with
the completion of an engineering cost and feasibility study that
will be conducted by an independent party at the appropriate
time.
REFERENCE SOURCES
[1] |
The scale-up from the 50 TPY pilot plant to a commercial 1,000 TPY
represents a factor of 20. Literature on the subject, such as
'Plant Design and Economics for Chemical Engineers' by Peters &
Timmerhaus, suggests that scale-ups of pilot equipment to
industrial scale, by a factor of 5, 10, or 20, are reasonable and
easily achievable. |
[2] |
HPQ Silicon June 13, 2023, and
November 8, 2023 releases. |
[3] |
Average EBITDA margins of 20% are
derived from two sources, with Link #1 leading to Source #1 and
Link #2 leading to Source #2 (Specialty Additives division).
Management has calculated the EBITDA margins for the Fumed Silica
Reactor (FSR) based on data derived from third party sources and
publicly available information. These figures will be updated upon
completion of the pilot testing phase. The 5% range in HPQ
Polvere's EBITDA margins takes into account PyroGenesis' option to
convert its 10% royalties into a 50% ownership stake in HPQ
Polvere's remaining equity. |
[4] |
Traditional Fumed Silica
manufacturing involves a complex three-step process. Step 1:
Conversion of Quartz to Silicon Metal (Si), with an average Capex
of around US$9.38 per kilogram of annual capacity (for reference,
the PCC BakkiSilicon Plant in Iceland cost US$300 million for an
annual capacity of 32,000 tonnes). Step 2: Conversion of Si to
Silicon Tetrachloride (SiCl4), with an average Capex of
approximately US$125.00 per kilogram of annual capacity (e.g.,
Wacker Chemie AG Polysilicon's US production plant cost US$2.5
billion for an annual capacity of 20,000 tonnes). Step 3: Burning
Silicon Tetrachloride (SiCl4) with Hydrogen and Oxygen to produce
Fumed Silica (SiO2), incurring an average Capex of around US$11.54
per kilogram of annual capacity (Wacker Chemie AG's US Fumed Silica
plant cost US$150 million for an annual capacity of 20,000 tonnes).
The combined Capex for these three steps averages at US$145.92 per
kilogram of annual capacity. According to a rough order of
magnitude study by PyroGenesis, our one-step process for making
Fumed Silica is estimated to have an average Capex per kilogram of
annual capacity between US$9.00 and US$10.00, which is
approximately 93% less than traditional processes. |
[5] |
According to a rough order of
magnitude study by PyroGenesis, our one-step process for making
Fumed Silica is estimated to cost about CAD$13 million, which
equals an average Capex per kilogram of annual capacity between
US$9.00 and US$10.00. |
[6] |
The 1 Kg eq of CO2 per Kg of
Fumed Silica is based on Hydro Quebec data that indicate in Quebec
1.3 g of CO2 are generated eq per KWh. While the
2.5 is based on the Canadian average for electricity generation
carbon intensity of 150 g per KWh. |
[7] |
Management has calculated the
EBITDA margins for the Fumed Silica Reactor (FSR) based on data
derived from third party sources and publicly available
information. These figures will be updated upon completion of the
pilot testing phase. The 5% range in HPQ Polvere's EBITDA margins
takes into account PyroGenesis' option to convert its 10% royalties
into a 50% ownership stake in HPQ Polvere's remaining equity." |
[8] |
Management has calculated the
Payback for the Fumed Silica Reactor (FSR) based data derived from
third party sources and publicly available information. These
figures will be updated upon completion of the pilot testing
phase. |
[9] |
Frischknecht, Rolf, et al. "Life
cycle inventories and life cycle assessment of photovoltaic
systems." International Energy Agency (IEA) PVPS Task 12
(2020). |
[10] |
PyroGenesis Canada Inc. |
[11] |
The Wall Street Journal article,
April 18, 2023, “World’s First Carbon Import Tax Approved by EU
Lawmakers” |
[12] |
Cai, H., Wang, X., Kelly, J. C.,
& Wang, M. (2021). Building Life-Cycle Analysis with the GREET
Building Module: Methodology, Data, and Case Studies (No.
ANL/ESD-21/13). Argonne National Lab. (ANL), Argonne, IL (United
States). |
Cautionary Statements
There can be no assurance that the economic projections upon
which this Study is founded will be realized. Not limited to the
viability of mass production scale-up, product optimization,
financial considerations, and macroeconomic and environmental
factors, several risks and uncertainties are inherently associated
with any nascent technology commercialization. The Study is
intended to be comprehended as a cohesive whole, and individual
sections should not be interpreted or relied upon in isolation or
without the accompanying context. Readers are duly advised to
consider all assumptions, limitations, and exclusions that pertain
to the information provided in the Study.”
About PyroGenesis Canada
Inc.
PyroGenesis Canada Inc., a high-tech company, is
a leader in the design, development, manufacture and
commercialization of advanced plasma processes and sustainable
solutions which reduce greenhouse gases (GHG) and are economically
attractive alternatives to conventional “dirty” processes.
PyroGenesis has created proprietary, patented, and advanced plasma
technologies that are being vetted and adopted by multiple
multibillion dollar industry leaders in three massive markets: iron
ore pelletization, aluminum, waste management, and additive
manufacturing. With a team of experienced engineers, scientists and
technicians working out of its Montreal office, and its 3,800 m2
and 2,940 m2 R&D and manufacturing facilities, PyroGenesis
maintains its competitive advantage by remaining at the forefront
of technology development and commercialization. The operations are
ISO 9001:2015 and AS9100D certified, having been ISO certified
since 1997. For more information, please visit:
www.pyrogenesis.com
About HPQ Silicon
HPQ Silicon Inc. (TSX-V: HPQ) is a
Quebec-based TSX Venture Exchange Tier 1 Industrial Issuer.
HPQ is developing, with the support of
world-class technology partners PyroGenesis Canada Inc. and
NOVACIUM SAS, new green processes crucial to make the critical
materials needed to reach net zero emissions.
HPQ activities are centred around the following
four (4) pillars:
- Becoming a green low-cost (Capex and Opex) manufacturer of
Fumed Silica using the FUMED SILICA REACTOR, a
proprietary technology owned by HPQ being developed for HPQ by
PyroGenesis.
- Becoming a zero CO2 low-cost (Capex and Opex) producer of High
Purity Silicon (2N+ to 4N) using our
PUREVAP™ “Quartz Reduction Reactors”
(QRR), a proprietary technology owned by HPQ being
developed for HPQ by PyroGenesis.
- Becoming a producer of silicon-based anode materials for
battery applications with the assistance of NOVACIUM SAS.
- HPQ SILICON affiliate NOVACIUM SAS is developing a low carbon,
chemical base on demand and high-pressure autonomous hydrogen
production system.
For more information, please visit HPQ Silicon
web site.
Disclaimers:
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 development, the impact of competitive products and
pricing, new 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 security’s
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.
This News Release is available on the
company's CEO Verified Discussion Forum, a moderated social
media platform that enables civilized discussion and Q&A
between Management and Shareholders.
Source: HPQ Silicon Inc.
For further information contact:
Bernard J. Tourillon, Chairman, President, and CEO Tel +1 (514)
846-3271Patrick Levasseur, Director Tel: +1 (514) 262-9239Email:
Info@hpqsilicon.com
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/7e4b613c-edf1-49e1-ac95-fe15c9d6a737
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