With plenty of exciting developments happening in the alternative energy space, our team has been keeping an open eye on many of the junior players in the space, whether they are producers, manufacturers or other participants. One company we have been watching which, is on track to make a huge splash in the sector. HPQ Silicon Resources (“HPQ”) is listed on the TSX Venture Exchange, under the symbol HPQ, and the Company is at an exciting operational phase. Since 2015, the Company has been focused on creating and refining a revolutionary process, initially focusing on high-grade Silicon metal production, to be eventually used in the manufacturing of solar cells.
As the shift to alternative energy sources continues, renewable energy producers and parts suppliers must innovate to bring down costs, further appealing to end users who want to reduce their environmental impact but hope to do so at an affordable cost relative to the current options available.
HPQ Silicon is participating in the solar energy market, and the Company is excited about its growth potential, even though solar production has not reached the level of visibility or widespread adoption that most would have expected some decades ago. The Company attributes this reality to the lack of innovation and affordability in the space, two things they are trying to change in pursuing their new partnership with Pyrogenesis (“PYR”), another publicly listed company on the TSX Venture Exchange, under the symbol PYR. Pyrogenesis is a high-tech company that specializes in the design, development, manufacturing and commercialization of advanced plasma processes. Pyrogenesis is also a strategic partner to HPQ, since PYR owns a 10% stake in HPQ Silicon Resources. Pyrogenesis serves multiple sectors including but not limited to defense, mining, additive manufacturing and oil & gas. The two companies plan to combine their unique set of expertise and resources together, to solve problems that they could not tackle individually. More specifically, HPQ and PYR are innovating within the space, having recently focused on their new technology, PUREVAP Quartz Reduction Reactors (“QRR”).
The pair expect to be successful in pursuing this market and achieving the kind of innovation that they have deemed crucial in the alternative energy market, to not only succeed as a business venture but spur adoption and assist in the fight against climate change. As a result of this belief, the duo are confident that by 2035, the electricity market will double to $4T US (from $2T US in 2015), with solar growing nearly ten times from 2015, to $400B US.
As mentioned, the two companies have joined forces to pursue their PUREVAP technology, which is meant to improve the current process of transforming quartz into usable materials, to reduce the costs and environmental impact that are present today. The companies initially launched with a plan to produce solar grade silicon material from this raw quartz in a way that is low cost, will encourage new applications of the technology and retire the current practices in place today. Currently, the process to transform quartz into solar-grade material is inundated, requiring multiple steps and massive amounts of energy and resources to completion. Interestingly, the companies feel that the addressable market of their PUREVAP technology has widened since the origination of the product, where now there is an opportunity not only in solar grade silicon metal but also in high purity silicon metal, which have other applications. Silicon metal has been around for decades, but companies continue to discover potential uses of the material, from replacing graphite in battery packs to medical product use. As a result of discovering these expanded applications, the two companies feel confident that their initial investment and evaluation of the venture has become “significantly de-risked”.
To put it simply, the PUREVAP technology can produce a wide variety of valuable and useful end products, taking low grade, inexpensive quartz, into High Purity Silicon Metal, refining the process from multiple, timely steps to merely one step. Currently the machinery dubbed “GEN2” a proof of commercial scalability test bed is operational, while the “GEN3” pilot plant is nearly operational, which would allow for production of High Purity Si for solar cell production and other recently identified high value niche markets. The company has planned output capacity of 50 tonnes per year, with operations set to begin in late 2019 and his aiming to start selling during 2020 some of the high purity Silicon Metal produce into the high value niche markets recently identified. Their next target would be their expansion into a 2,500 tonnes per year plant, which is planned for 2021.
It will be worthwhile to see how much the work over the last 2 years will translate to shareholder value creation of HPQ Silcion’s stock. The stock has been nearly flat in the past year, despite encouraging announcements and updates and a considerable amount of time and capital invested.
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