PyroGenesis Canada Inc. (PYR-T) will be providing a 20-megawatt plasma torch to an undisclosed U.S. customer as part of a $27-million, three-year contract the Montreal-based company said will push its project backlog to a new record.

Announced Monday morning, PyroGenesis claims it is one of the most powerful plasma torches produced commercially.

“This landmark contract for a PyroGenesis-developed 20-megawatt plasma torch system raises the bar globally for plasma power and demonstrates the role PyroGenesis’ technology plays for significantly more challenging high, ultra-high, and now hyper-high temperature and power needs,” Peter Pascali, president and CEO of PyroGenesis, said in a release.

The need is specifically within the aerospace, defence and heavy industries, he added.

It is not the first time the company has serviced this client. In 2023, PyroGenesis was contracted to provide a 4.5-megawatt plasma torch system. The client has been described as having “extensive experience as an innovation hub, providing technology and test services to solve critical defence, military, and aeronautics challenges.”

Confidentiality agreements kept the uses of the system under wraps. That deal is reported to be worth $4.13 million.

As a result of the latest contract, PyroGenesis’ backlog has surpassed $55 million, an over-90 per cent increase from the $29.8-million announced in its Q2 earnings.

PyroGenesis’ plasma applications

Plasma, a highly charged state of matter, is generated by PyroGenesis’ torches using electricity. An alternative to natural gas-powered equipment, it produces less greenhouse gas emissions.

The company sees uses for the plasma torches in smelting, waste destruction, recovering aluminum and producing a low-carbon cement additive.

PyroGenesis also has a stake in HPQ Silica Polvere Inc., which applies plasma torches to transform quartz into fumed silica while producing just half the carbon emissions of traditional processes. Additionally, it reacquired the rights to a plasma-based technology that creates silicon-based powders that could be used to make batteries and green hydrogen.

Aerospace and defence clients have emerged as key supporters of PyroGenesis. In June, it signed a second contract with a Spanish aerospace client to sell titanium metal powder for use in additive manufacturing. Then in October, it received a $1-million purchase order from Newport News Shipbuilding, a firm that builds aircraft carriers for the U.S. Navy, for its shipboard waste destruction systems.

Elevating the strength of its plasma torch to 20 megawatts will enable expansion into other industries such as “glass, cement, petrochemical, and metal and mineral heating, as well as melting industries,” Pascali said.

Company inches to profitability in Q2

In Q2, PyroGenesis earned a comprehensive income of $1.4 million, compared to a loss of $6.3 million in Q2 2023. A year-over-year decrease in selling, general and administrative expenses and research and development was the primary reason for the change.

Revenue rose by $0.9 million from Q2 2023, to $3.9 million. The increase was attributed to projects related to its torch systems, sales of its aluminum and zinc recovery process named Drossrite, and biogas upgrading and polluting controls.

The management’s discussion of the latest financial quarter outlined a series of expected milestones. In the short-term of one to three months, PyroGenesis identified development on aluminum remelting furnace solutions, iron ore pelletization and bidding on an aluminum cast house.

Over the medium-term, it named negotiations with a North American entity to sell a “hyper power-level plasma torch system” between 15 megawatts to 25 megawatts in a contract that would be valued between $15 million and $25 million.

In the long-term of over six months, its plans involve:

• providing a waste-to-energy system to a European entity that would turn municipal solid waste into energy and chemical products, with a potential value between $120 million and $160 million;
• discussions with a European company to use PyroGenesis’ plasma torch for plastic pyrolysis; and
• potentially providing plasma torches to a European organization, partnered with a German technology company, which plans to develop 300 facilities expected to produce one million tons of hydrogen.