Arianne Phosphate Reports Financial Results for Q4 and Ye 2017
DAN: TSX-V (Canada)
JE9N: FSE (Germany)
DRRSF: OTC (USA)
SAGUENAY, QC, Feb. 28, 2018 /CNW Telbec/ - Arianne Phosphate (the "Company" or "Arianne") (TSXV: DAN) (OTC: DRRSF) (FRANKFURT: JE9N), a development-stage phosphate mining company, advancing the Lac à Paul project in Quebec's Saguenay-Lac-Saint-Jean region, reported its financial results for both the three and twelve-month periods ended December 31, 2017. All amounts are in Canadian dollars unless noted.
"The 2017 year was one of considerable advancement for our Company," said Brian Ostroff, Chief Executive Officer of Arianne Phosphate. "Throughout the year we executed numerous agreements, went through a comprehensive due diligence on the part of independent engineers and, continued to work with parties interested in participating in the Lac à Paul project. All of these efforts independently confirmed what we already knew, the Lac à Paul project is amongst the best in the world. This work also culminated in our final Information Memorandum being made available to those who had expressed an interest in partnering and financing our project. To date, we have been encouraged by the level of interest that has been shown and, I am hopeful that with everyone's continued support, we will see the Lac à Paul project in development, unlocking significant value for our shareholders and stakeholders."
2017 Financial and Operational Highlights
- In January 2017, the Company signed a project agreement with Rio Tinto Alcan ("Rio Tinto") to review potential synergies surrounding maritime services. This project agreement provides for discussions focused on Arianne's use of ships serving Rio Tinto to deliver phosphate concentrate to international markets and should provide both environmental and economic benefits.
- In February 2017, the Company secured a favorable power agreement with the Ministry of Energy and Natural Resources. This agreement confirms an additional power bloc of 14-MW from Hydro-Quebec will be made available for the Lac à Paul project bringing the total to 129-MW. This additional hydro-electric power will make Arianne the lowest global greenhouse gas emitter of any apatite concentrate producer and, by integrating this additional power into electric dryers for its concentrate, it will prevent the equivalent of 86,000 metric tonnes of CO2 emissions annually. This will also result in considerable cost savings.
- During 2017, the Ariane signed numerous MoUs on various aspects of the project;
Construction Proco Inc. for structural and architectural engineering, steel fabrication and the construction of several of the operational buildings.
Groupe Alfred Boivin for the trucking of the Company's phosphate concentrate between the mine site and the maritime terminal on the north shore of the Saguenay River.
ABB Inc. for engineering, procurement and support services for integrated electrification and automated mining solutions.
FLSmidth for the production equipment (processing line) and engineering for the production facility.
In the case of both ABB and FLSmidth, these agreements come with a commitment to assist in the financing associated with these respective agreements and, to that end, discussions have been underway with their respective export credit agencies (ECAs) to be involved in the financing.
- In June 2017, the Company signed a Memorandum of Understanding ("MoU") with a global producer of sulfuric acid to explore the possibility of setting up a downstream operation that would produce phosphoric acid. The MoU will allow for both companies to combine their respective market knowledge and review the various necessary components to better assess this opportunity. Any further decisions regarding the business venture will be made following that review.
- In October 2017, the Company announced that it had completed its Information Memorandum. This document is being provided to financial institutions who've expressed an interest in the project and want to assess the possibility of being included in the project finance syndicate. The Information Memorandum was completed after a comprehensive independent due diligence. All aspects were reviewed, including extraction, processing, infrastructure, environmental and Capex/Opex. As well, an independent analysis of the global phosphate market was undertaken. The report supports the need for additional projects as added supply will be required to meet the persistent growing demand projected over the next few years and, that Arianne's project compares very favorably on a cost and quality basis.
- In December 2017, Arianne appointed Mr. Dominique Bouchard as Executive Chairman of its Board of Directors. Mr. Bouchard has been a member of Arianne's Board since 2013 and his new position follows his previous role as Arianne's Executive Vice Chairman.
- In December 2017, the Company amended and extended its credit facility. The credit facility amounts to $19,642,554 as of December 31, 2017. Maturity of the facility was extended to January 15, 2019 and amends the present facility that was set to mature December 31, 2017.
- In August 2017, the Company announced that it had closed on a $2,306,000 financing. Under the terms of the financing, Arianne issued 2,882,500 units at a price of $0.80 per unit. Each unit was comprised of one common share and a half warrant. Each full warrant entitles the holder to purchase one common share at a price of $1.25 until August 22, 2020. If at any time after four (4) months and one (1) day following the closing date, the trading price of the Company's common shares on the TSX Venture Exchange (the "Exchange") is equal to or exceeds $1.60 for a period of ten (10) consecutive trading days, the Company would be entitled to notify each warrant holder of its intention to force the exercise of the warrants. Upon receipt of such notice, the warrant holders would l have 30 days to exercise the warrants, failing which they will automatically expire.
- In December 2017, Arianne closed on a private placement financing for gross proceeds of $1,915,219. The majority of the financing was subscribed for by current shareholders of Arianne, and included the participation of all of the Company's Board of Directors and several members of the management team. Under the terms of the offering, the Company issued 3,040,030 units at a price of $0.63 per unit. Each unit was comprised of one common share and one half of one common share purchase warrant. Each warrant entitles its holder to purchase one common share at a price of $0.85 per share until December 29, 2020.
Financial Summary
Arianne is a development-stage company and, as such, did not generate revenue or positive cash flow in 2017. In the fourth quarter and full-year period ended December 31, 2017, the Company incurred respective net losses of $1.0M and $3.4M, compared to $0.7M and $3.1M in the comparable periods in 2016. The Company's net loss and cash burn are consistent with other development stage mining companies.
The increase in losses during the past year is mainly due to the deferred income tax recovery of $0.7M compared to a deferred income tax recovery of $0.1M in 2016. This stems primarily from an adjustment from Revenu Quebec for the tax credit related to resources and the mining right related to the year 2012 and, received during the year 2017.
Liquidity
On December 31, 2017, the Company had $1.3M cash on hand. These funds will be allocated towards general working capital and advancing development of the Lac à Paul project in 2018. Based on current spending estimates for future project development, Arianne anticipates it will need additional financing before the end of 2018.
Outlook
In 2018, Arianne will be focused on the ongoing advancement and development of its Lac à Paul project. Expected milestones include:
- Complete partnership and financing arrangements;
- Continue to enhance the value of the project through project optimization;
- Assist the Port of Saguenay in receiving their approval from the CEAA to start the construction of the loading facilities; and
- Continue our ongoing dialogue with First Nations.
Arianne's Management Discussion and Analysis and Financial Statements for the three- and twelve-month period ended December 31, 2017, are available on the Company's website and on SEDAR at www.sedar.com.
Qualified Person
Jean-Sébastien David, P.Geo., Qualified Person by NI 43-101, has approved this release. Mr. David is also the Company's Chief Operating Officer.
About Arianne Phosphate
Arianne Phosphate ("Arianne Phosphate Inc.") (www.arianne-inc.com) is developing the Lac à Paul phosphate deposits located approximately 200 km north of the Saguenay/Lac St. Jean area of Quebec, Canada. These deposits will produce a high quality igneous apatite concentrate grading 39% P2O5 with little or no contaminants. The Company has 103,570,610 million shares outstanding.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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Resource Investing News: http://resourceinvestingnews.com/?s=Arianne
Cautionary Statements Regarding Forward Looking Information
This news release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable securities regulations in Canada and the United States (collectively, "forward-looking information"). Forward-looking information includes, but is not limited to, anticipated quality and production of the apatite concentrate at the Lac à Paul project. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects, "is expected", "budget", "scheduled", "estimates", forecasts", "intends", "anticipates", or "believes", or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will" be taken, occur or be achieved. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: volatile stock price; risks related to changes in commodity prices; sources and cost of power facilities; the estimation of initial and sustaining capital requirements; the estimation of labour and operating costs; the general global markets and economic conditions; the risk associated with exploration, development and operations of mineral deposits; the estimation of mineral reserves and resources; the risks associated with uninsurable risks arising during the course of exploration, development and production; risks associated with currency fluctuations; environmental risks; competition faced in securing experienced personnel; access to adequate infrastructure to support mining, processing, development and exploration activities; the risks associated with changes in the mining regulatory regime governing the Company; completion of the environmental assessment process; risks related to regulatory and permitting delays; risks related to potential conflicts of interest; the reliance on key personnel; financing, capitalization and liquidity risks including the risk that the financing necessary to fund continued exploration and development activities at Lac à Paul project may not be available on satisfactory terms, or at all; the risk of potential dilution through the issue of common shares; the risk of litigation. Forward-looking information is based on assumptions management believes to be reasonable at the time such statements are made, including but not limited to, continued exploration activities, no material adverse change in commodity prices, exploration and development plans proceeding in accordance with plans and such plans achieving their stated expected outcomes, receipt of required regulatory approvals, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is made as of the date of this press release, and the Company does not undertake to update such forward-looking information except in accordance with applicable securities laws.
SOURCE Arianne Phosphate Inc.
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