HPQ Silicon Acquires PUREVAP(TM) Intellectual Property from PyroGenesis and Orders 200 Metric Ton Per Year Solar Grade Silicon Metal Pilot Plant
MONTREAL, QUEBEC--(Marketwired - Aug. 2, 2016) - HPQ Silicon Resources Inc ("HPQ Silicon") (TSX VENTURE:HPQ)(FRANKFURT:UGE)(OTC PINK:URAGD) (formerly Uragold) is pleased to announce the completion of a major Agreement with PyroGenesis Canada Inc. ("PyroGenesis") on July 29, 2016 as follows:

1. HPQ Silicon will acquire the intellectual property rights to the
PUREVAP(TM) process as it relates exclusively to the production of
silicon metal from quartz. PyroGenesis will retain a royalty-free,
exclusive, irrevocable worldwide license to use the process for purposes
other than the production of silicon metal from quartz.

2. HPQ Silicon will purchase a 200 metric ton/year PUREVAP(TM) Quartz
Vaporization Reactor ("PUREVAP(TM) QVR") pilot system to produce solar
grade silicon metal from HPQ Silicon quartz.

3. The total Purchase Price to be paid by HPQ Silicon over the next 30
months for the PUREVAP(TM) QVR Pilot Plant and related Intellectual
Property is CDN$8,260,000. HPQ Silicon has already paid over
CDN$1,000,000, or approximately 12% of the value of the agreement. An
additional CDN$300,000 will be paid through the immediate issuance of
1,363,636 Common shares of HPQ Silicon to PyroGenesis (subject to
standard regulatory approval) and an additional CDN$190,000 was paid
through a one million Units subscription made by HPQ Silicon in
PyroGenesis latest private placement.
UNIFICATION OF TECHNOLOGY AND RESOURCES DRIVEN BY INDUSTRY FEEDBACK
On June 29, 2016, Lab scale testing demonstrated the ability of the PUREVAP(TM) process to produce high purity silicon metal greater than 99.9% (>3N) in just one step, using quartz from HPQ Silicon properties.
Upon achieving this milestone, it became clear to HPQ Silicon from discussions with industry professionals and government officials that unification of the PUREVAP(TM) Intellectual Property with the feedstock quartz under one corporate umbrella was necessary for future commercial and financing purposes.
Bernard J. Tourillon, Chairman and CEO of HPQ Silicon stated "Today marks a major milestone for HPQ Silicon and its shareholders. By unifying this fantastic technology under our brand and successfully scaling it up, we can accelerate our plan of becoming the cleanest, greenest and lowest cost vertically integrated producer of Solar Grade Silicon Metal in the world. Thanks to our great working relationship with PyroGenesis, combined with our ownership of the PUREVAP(TM) QVR intellectual property, HPQ Silicon is uniquely positioned to become an agent of change in the Solar Industry and beyond".
With unification now having been completed, validating the scalability of the process becomes the next and most important priority of both HPQ Silicon and PyroGenesis. To this end, Pierre Carabin, Director of Engineering of PyroGenesis stated:
"We are very happy to be moving to the pilot scale with this process. Throughout PyroGenesis' history, we have successfully taken new concepts from the lab to commercialization. As we have done with the US Navy, developing the PAWDS technology from lab scale to finally being specified in the design of the new US Aircraft Carriers, and more recently, with our Drosrite technology. We plan to systematically and successfully ramp up the PUREVAP(TM) process to full commercial scale. Once successful, we believe the PUREVAP(TM) process portends to be a game changing, and enabling, technology."
FURTHER DETAILS PERTAINING TO PILOT PLANT
This agreement is for the design, fabrication, assembly, commissioning and testing of a 200 metric ton/year PUREVAP(TM) QVR pilot plant. The design, fabrication and assembly period for the pilot plant is expected to take 12 to 16 months, after which the pilot plant will undergo a commissioning phase expected to last an additional 2 months, with a final testing period expected to last 10 months. The pilot plant will initially be installed at PyroGenesis' facility in Montreal, Canada, and upon completion of the testing period, the pilot plant will be relocated to a permanent production site, chosen by HPQ Silicon.
"The pilot system represents a significant milestone in our relationship with HPQ Silicon and demonstrates our commitment to the advancement of the PUREVAP(TM) project," said P. Peter Pascali, President and CEO of PyroGenesis. "At PyroGenesis we believe in a conservative approach to development, and we only engage projects we feel have merit as well as a high probability of success."
FURTHER DETAILS PERTAINING TO ACQUISITION OF INTELLECTUAL PROPERTY
PyroGenesis will retain a royalty-free, exclusive, irrevocable worldwide license to use the process for purposes other than the production of silicon metal from quartz. Should PyroGenesis develop any other such application, HPQ Silicon shall have a right of first refusal in the event of any sale or otherwise disposal. PyroGenesis will retain all royalty payments owed by HPQ Silicon under the previously disclosed development and exclusivity agreement for the development of the PUREVAP(TM) process, payments of which represent 10% of HPQ Silicon metal sales, with set minimums, but with royalty payments being waived for 2017.
A MANAGEABLE FINANCIAL COMMITMENT OVER THE NEXT 30 MONTHS
Total Purchase Price CDN$8,260,000 is divided as follow:
-- CDN$1,000,000 for the purchase of the related Intellectual Property;

-- CDN$4,430,000 for the design, fabrication, assembly, cold commissioning
and testing;

-- CDN$520,000 for the hot commissioning of the pilot system; and

-- CDN$2,310,000 for testing and operating the pilot system during 10
months.
In addition to having sufficient liquidity, thanks to ongoing warrant exercise, as well as having made a $CDN1 Million payment to PyroGenesis, HPQ Silicon management deems the cash calls associated with the agreement a manageable risk for the following reasons:
-- The signature of the agreement and the stage of work with Pyrogenesis now
render the project eligible for government funding programs (Provincial
and Federal) that could cover up to 80% of the cost associated with the
Pilot Plant.

-- Over CDN$5,000,000 worth of warrants are in the money, a majority of
which controlled by Insiders and key investors,

-- With regards to this, investors are advised that Insiders may
decide to exercise warrants over the next 30 months to meet cash
call needs related to this project.



-- Availability of previously announced convertible debt financing of
CDN$1,750,000;

-- The acquisition of PUREVAP(TM) Intellectual property opens up additional
options for financing as many investors have demonstrated a reluctance to
invest in the Company while it did not have direct control over the key
intellectual property supporting its business plan.
PROJECTED CASH CALL FOR THE REMAINDER OF 2016 OF CDN$3,393,600
The CDN$1,000,000 the purchase of the related Intellectual Property has already been completed.
Of the remaining CDN$2,393,600, CDN$300,000 will be paid through the immediate issuance of 1,363,636 common shares of HPQ Silicon to PyroGenesis (subject to standard regulatory approval). An additional CDN$190,000 was paid through 1,000,000 Units subscription made by HPQ Silicon in PyroGenesis latest private placement.
As such, the balance of payments to PyroGenesis for the remainder of 2016 is just CDN$1,900,000.
The projected cash call for 2017 is projected at CDN$2,296,000. The projected cash call for 2018 is projected at CDN$2,570,000
About HPQ Silicon
HPQ Silicon Resources Inc (Formally Uragold Bay Resources) is a TSX-V listed junior exploration company planning to become a vertically integrated and diversified High Value Specialty Materials Company. Our Business model is focused on developing unique projects that can generate high yield returns and significant free cash flow within a short time line.
High Value Specialty Materials
In September 2015, PyroGenesis announced that it had filed for a provisional patent for the PUREVAP(TM) Quartz Vaporization Reactor (QVR) process, which it noted was able to produce silicon, at a lower cost, while generating less CO(2) emissions than current processes.
On April 19, 2016, PyroGenesis announced that early test results of the PUREVAP(TM) QVR process have demonstrated that it can transform high purity quartz into silicon metal. The PUREVAP(TM) QVR validation program his now in its second stage whereby the operational parameters of the reactor are adjusted in order to achieve the transformation of HPQ Silicon Quartz into Solar Grade Purity Si.
On June 29, 2016, HPQ Silicon announced that first pass analytical process confirms the ability of the PUREVAP(TM) process to create high purity silicon metal exceeding 99.9% and that samples are to be sent to a specialized laboratory in the United States to determine the precise purity levels of the Silicon Metal.
HPQ Silicon, with its worldwide exclusive usage of PyroGenesis' PUREVAP(TM) QVR, is endeavouring to become a vertically integrated Silicon Metal (98.5% Si), High Purity Silicon Metal (99.99% Si), Solar Grade Silicon Metal (6N Purity / 99.9999% Si) and/or Higher (9N Purity / 99.9999999% Si) producer.
The PUREVAP(TM) QVR process's big advantage is its one step direct transformation of Quartz into High Purity Silicon Metal Solar Grade Silicon Metal and/or Higher Purity product, thereby potentially allowing Uragold to manufacture high value material for the same operating cost presently being paid by traditional producers to make Metallurgical Grade Si (98.5% Si) using the traditional arc furnace approach.
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