PyroGenesis Canada Inc. announced that the Company has been selected by a an international producer of magnesium metal (the "Client"), to test PyroGenesis' zero-emission plasma torches as part of their process for transforming mining waste and recycled minerals into high-value metal. At this time, the name of the Client remains anonymous for confidentiality reasons. The contract outlines two separate initiatives, occurring at different points in the process.

First, at the request of the Client, PyroGenesis has developed a method to clean and decontaminate particulate matter produced during primary magnesium production. The cleaning of this by-product ? a hydrocarbon ?

is key to the Client's strategy to produce magnesium using the most sustainable methods available. This will allow the Client to achieve their goal to scale their operations while, at the same time, decreasing their environmental impact. The expectation is to conduct internal tests to remove any remaining uncertainties in the proposed concept, after which PyroGenesis will complete the detailed design to allow the implementation of the solution by PyroGenesis on-site at the Client's facility.

The second initiative is to process the metal waste stream known as dross, for the purpose of recovering valuable metal. Currently, as with many magnesium producers, the Client's dross is cleaned for storage, or disposal, with no efforts made to salvage remaining metals. With PyroGenesis' expertise in recovering high-value metal from dross in other industries (such as aluminum), the Company believes it can provide significant value to the Client while decreasing their environmental impact.

Metal recovery from dross is not widespread in the magnesium industry, due to the complexity of the process and the inherent challenges of working with magnesium ? a very combustible and volatile metal that is highly reactive to oxygen (which is why magnesium powders are used in pyrotechnics and fireworks). PyroGenesis believes it has the solution to the specific challenges posed by magnesium, potentially opening up a large opportunity for growth.

PyroGenesis has already received a small purchase order for the cleaning and decontamination initiative, with a Fourth Quarter 2022 targeted end date for the conceptual testing. The dross recovery initiative is still in the planning stages. Magnesium is the world's third-most used metal in construction.

Magnesium's popularity stems from the fact that it has the lowest density of all the metals used, and is the lightest structural metal known: 75% lighter than steel, 50% lighter than titanium, and 33% lighter than aluminum. Magnesium alloys have traditionally been driven by aerospace and medical industry requirements for lightweight materials, but with the shift to electric vehicles and the growth of lightweight consumer electronics, magnesium demand continues to increase. Perhaps most importantly, magnesium is a key component in aluminum production, used in combination with aluminum to create stronger alloys.

With the aluminum sector expected to rise by 80% over the next two decades, magnesium supply is expected to be further pressed. Complicating magnesium supply is that with up to 90% of magnesium produced in China, and with energy availability under pressure in China due to soaring energy costs plus a government-mandated carbon reduction initiative leading to power rationing, supply shortages of magnesium were seen throughout 2021. This highlights the importance for North American magnesium producers to find technologies to help increase their output and reduce their environmental impact.