Sio Silica go public in Business Combination with Pyrophyte
Sio Silica Corporation, a Canada-based company that seeks to become a global leader in the production and supply of environmentally and ethically produced high-purity quartz silica, and Pyrophyte Acquisition Corp, a special purpose acquisition company, announced today that they have entered into a definitive Business Combination Agreement. The terms of the business combination reflect an implied enterprise value of $708m and equity value of $758m for the combined company. Following the closing of the business combination, any proceeds are expected to be used to fully fund the construction of the first phase of Sio’s extraction and processing facility in Winnipeg, Manitoba. Upon closing, the name of the combined company will be Sio Silica Incorporated, and its common shares and warrants are expected to be listed on the New York Stock Exchange.
Environmentally-friendly extraction
Sio has approximately 15.2bn tonnes of in situ high-purity silica including an estimated 146 tonne measured and indicated resource and an estimated 345m tonne inferred resource and intends to initiate a mining plan that ensures a comprehensive and active environmental stewardship over the years to come. Once the processing facility becomes operational, Sio expects to become a leading environmentally friendly producer of high-purity quartz silica, a unique natural resource and critical mineral. Sio plans to leverage its patent-pending extraction process using proven technology to extract and process silica that exceeds 99.9% purity, providing a significant cost advantage within its industry. Sio’s extraction method will not require truck traffic, surface mining, tunnelling, dust generation, or chemical cleansing. In combination with its extraction and processing facility using renewable electricity, natural gas, and efficient processing, Sio expects to make considerable inroads to contribute to a low carbon future. Anticipated applications for Sio’s high-purity quartz silica include photovoltaics, solar panels, semiconductors, electronics and batteries.
A gift of nature
“We are excited to partner with Pyrophyte to become a leading producer of high-purity quartz silica,” said Feisal Somji, Chief Executive Officer of Sio. “Our streamlined approach to creating environmentally responsible solutions has attracted high profile strategic alliances, which puts us at an important inflection point in our growth trajectory. These solutions follow the Manitoba Clean Environment Commission’s recommendations, and the Company is working with the Province of Manitoba to finalise an extraction licence that will exemplify the commitment and practices of the Company to be a leader in environmental protection. We will continue to work with the Province of Manitoba and its stakeholders to put the Province on the global stage as a major contributor to achieving global net zero targets through decarbonisation initiatives that require high-purity silica.”
Chairman of Pyrophyte, Dr. Bernard J. Duroc-Danner, said, “Sio’s extensive high-purity quartz silica deposit just south of Winnipeg Manitoba is a remarkable gift of nature. Based on Stantec’s report, the deposit is very large and exceptionally consistent throughout. The silica ore comes out at naturally occurring high-purity levels with very low levels of contaminants. The deposit is very shallow allowing for a production process which is exceptionally simple, very low cost and environmentally low impact. The beneficiation needs are minimal, consisting of just a magnetic separation process and washing. No chemicals are required in the entire extraction and beneficiation processes while reclamation post production is immediate. We believe that Sio’s supply of high-purity quartz silica will benefit from very strong secular demand growth trends in North America and worldwide. Located next to extensive railroad infrastructure, the deposit is ideally located for ease of railway transportation to the West, South and East. Once operational, we expect Sio’s facility to combine an ideal transportation location, very low ore production costs, strong secular growth trends in demand and low-impact environmental footprint. We searched long and hard for the right candidate to combine with Pyrophyte and its energy transition mission. Sio fulfilled all our criteria. We are proud to join Sio on its journey to supply what is becoming in many countries around the world one of the most important strategic minerals for the world’s energy transition.”
Christopher Abbate, Co-Head of investment firm Riverstone Credit Partners, noted, “We are excited to support Sio in its mission to deliver this critical mineral that is required by a number of key growth areas, from semiconductors to several key industries driving decarbonisation, among others. As we evaluated the opportunity, we were particularly drawn to its vast, high-quality resource, with its low-cost development, guided by a high-quality management team that can draw upon the considerable experience from the Pyrophyte team in growing companies. We look forward to the bright future ahead.”
The Business Combination, which has been unanimously approved by the Boards of Directors of Sio and Pyrophyte, is subject to approval by Pyrophyte's and Sio’s shareholders and other customary closing conditions. CEO Feisal Somji will continue to lead Sio, supported by a team of experienced operators. Pyrophyte’s leadership team will actively introduce key relationships to help accelerate Sio’s growth.