Pyrogenesis: ride the ‘S’ curve

When investing in mining companies there is the concept called the ‘S’ curve or Lassonde curve that shows how the stock price of a mining company follows the development stages of a mine.

Source: https://www.visualcapitalist.com/visualizing-the-life-cycle-of-a-mineral-discovery/

This shows the stock price starts low as discovery work begins, then as the deposit is found the share price rises as they declare they have minerals in the ground. After this phase there is the boring phase of actually building / financing the mine and the share price goes down. Lastly when operational and producing the price goes back up as profits are made.

I bring this up as I think Pyrogenesis is following a very similar pattern though it’s a technology company rather than a mine. Here is the stock chart on Pyrogenesis:

Source: https://money.tmx.com/en/advanced-chart/PYR

I believe that the stock price right now is in the technology equivalent of the “orphan period” from the mining ‘S’ curve chart. The stock price peaked at just over $6 per share in July on the back of excitement for the iron ore pelletization deal they announced could be coming. This deal is super exciting as it has the potential to be an order of magnitude larger than the previous Drosrite deal they signed. In the following months though the share price has fallen to below $3.50 as the company is working on signing that deal and the original enthusiasm has faded. The company has been moving forward on all of it’s business lines and generally doing a great job including the recent signing of the air craft carrier deal. It seems though that all the market cares about is the iron ore deal. The CEO has come out and cautioned the deal may not be super large but said it is still on track to be signed within or close to the end of Q3 which is very soon.

What happens to the stock price in the near term will depend on if this deal is signed and how large it is. I think it is likely that the iron ore pellet producer will order at least enough torches to convert one of their facilities over which would be 50 torches for $150 million NPV. A deal this large being signed should push the stock price above it’s previous highs and could even push it up to $10 I think.

If you have not invested in Pyrogenesis on my previous advice I think right now is a golden opportunity to jump in. I personally plan to buy more shares in the coming week.

Disclosure: I own shares of (TSE:PYR)

3 thoughts on “Pyrogenesis: ride the ‘S’ curve

  1. It seems that retail investors are much more into HPQ, and upcoming news in December. Apollon generators, testing should come out in December, and NDA battery maker for electrical vehicle should come out with test results and possible contracts.
    The reason PYR dropped in price was BNN interview with Robert McWhirter and he downplayed PYR contract to only one torch and said that NDA customer is very slow one. The investors expect big order, so it’s very speculative. I think the truth will fall down in between, and it’s still a winner.

    To me likely outcome is HPQ wins new contracts, but in small quantity, and PYR very similar.
    Peter says that ultimate goal is to get customers on board, but the investors expect big contract.

    Like

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