Arianne Phosphate Reports Financial Results for Q4 and YE 2018 DAN: TSX-V ( Canada ) JE9N: FSE ( Germany ) DRRSF: OTC ( USA )
Arianne Phosphate Reports Financial Results
for Q4 and YE 2018
DAN: TSX-V (
Canada
)
JE9N: FSE (
Germany
)
DRRSF: OTC (
USA
)
SAGUENAY, QC,
March 20, 2019
/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, 2019
.
All amounts are in Canadian dollars unless noted.
"The fourth quarter was a strong finish to what was a very good year," said
Brian Ostroff
, Chief
Executive Officer of Arianne Phosphate. "During the quarter, Arianne was able to conclude two
offtake agreements that, not only demonstrate commercial interest in our product but, at premium
prices that account for the high-quality nature of our concentrate. As well, during the quarter,
approval was received for a maritime facility on the north shore of the Saguenay River which, will
allow for global shipping of our product. These two major events, coupled with our other
accomplishments throughout the year, are the milestones needed to advance our shovel-ready
project through the financing stage and interest many of the strategic players that we are talking to."
2018 Financial and Operational Highlights
In
March 2018
, the Company announced that it has received an investment from the
Government of
Quebec
by way of private placement of
$1,407,000
into the common shares of
Arianne. Under the terms of the offering, the Company issued 2,333,333 units at a price of
$0.63
per unit. Each unit is 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
March 14, 2021
.
In
March 2018
, the Company announced, the start of research and development work to
integrate aluminum in the design of the trailer that will transport the phosphate concentrate from
the Lac à Paul mine to the deep-water port that will be located in
Sainte-Rose-du-Nord
. The
work will be done by the
National Research Council
of
Canada
(NRC) and Alcoa Innovation. In
order to carry out this major work, Arianne will be able to rely on confirmed financial support
from the
Centre québécois de recherche et de développement de l'aluminium
(CQRDA) and
the
Société de la vallée de l'aluminium
.
In
April 2018
, the Company announced that it received a grant of
$1.5 million
from the Ministry
of Energy and Natural Resources of
Quebec
. This funding has been provided as part of the
Government's plan to help advance the
Quebec
phosphate (apatite) sector. Arianne will be
using this funding in support of its previously announced program to produce additional high-
purity phosphate concentrate to fulfil demand from potential customers and, to conduct further
pilot-scale tests. The tests will be conducted at COREM (Research Consortium for the
Treatment and Processing of Mineral Substances) in
Quebec City
, where the Company
conducted its previous pilot-scale tests, and, materials will be sent to parties that have
expressed a strong interest in pursuing some form of offtake and/or a strategic partnership with
Arianne.
In
August 2018
, the Company announced it has entered into a Memorandum of Understanding
("MoU") for the supply of sulphuric acid. Aside from phosphate rock, a phosphoric acid plant
would also require a supply of sulphuric acid that could be consistently delivered in timely
fashion. It is on this basis that Arianne has entered into an MoU with a large marketer of
sulphuric acid. This agreement will allow the Company to work with a strong industry player that
can provide the venture ongoing guidance on sulfuric acid pricing, logistics and industry
supply/demand trends; all necessary aspects in determining the project's viability.
In
August 2018
, the Company announced that it has partnered with the Province of
New
Brunswick
to further its review of constructing a phosphoric acid plant in
Belledune, New
Brunswick
. As part of this agreement, the Government, through Opportunities New Brunswick
("ONB"), will provide a financial contribution toward the cost of a prefeasibility study, the next
step in Arianne's assessment of its downstream opportunity.
In
September 2018
, the Company announced the formal execution of its first offtake agreement.
Under the terms of the Agreement, the buyer has entered into a long-term contract to purchase
Arianne's high-purity phosphate concentrate which, will be shipped to the buyer's processing
plant for further processing into downstream phosphate products. The offtake agreement also
has a mechanism whereby it can be extended beyond the initial contract period and applies
pricing that accounts for the high quality of Arianne's concentrate.
In
October 2018
, the Company announced that the Port of Saguenay received a favorable
decision with regards to the construction of a maritime terminal facility on the north shore of the
Saguenay River. Granted by the Minister for the Environment and Climate Change, the
Honorable Catherine McKenna, this decision now paves the way forward for the construction of
a terminal that will allow for the shipping of Arianne's phosphate concentrate to customers
around the world. In light of this announcement, the Company determined that the technical
feasibility and commercial viability of the Lac à Paul property had been established and,
accordingly, the Company reclassified capitalized costs associated with the Lac à Paul property
from exploration and evaluation assets and mining properties to mineral property under
development within property, plant and equipment.
In
December 2018
, the Company extended its secured credit facility with Mercury which will
now have a maturity of
June 30, 2020
. These credit facilities will continue to bear interest at an
annual rate of 15%, with all interest capitalized through maturity. The Company has also issued
Mercury 22,417,458 non-transferable warrants with an exercise price of
$0.425
per share. The
warrants are exercisable through
June 30, 2020
. As required under the policies of the TSX
Venture Exchange, 17,338,739 non-transferable warrants originally issued to Mercury have
been cancelled as a result of the new extension.
Arianne has also closed on an unsecured loan in the aggregate amount of
$1.5 million
with third
party lenders. This loan will bear interest at a rate of 12% per annum and mature on
December
19, 2019
. In conjunction with the loan, Arianne issued the lenders 2,117,646 non-transferable
warrants at an exercise price of
$0.425
per share, exercisable until
December 19, 2019
.
In
December 2018
, Arianne announced its second formal offtake agreement for the purchase
and marketing of its high-purity phosphate concentrate. Under the terms of the agreement, the
buyer has a commitment to purchase a specific annual quantity of phosphate concentrate and,
has been granted an option to purchase additional amounts under certain terms and conditions.
Financial Summary
Arianne is a development-stage company and, as such, did not generate revenue or positive cash
flow in 2018. In the fourth quarter and full-year period ended
December 31, 2018
, the Company
incurred respective net losses of
$0.5M
and
$1.9M
, compared to
$1.0M
and
$3.4M
in the
comparable periods in 2017. The Company's net loss and cash burn are consistent with other
development stage mining companies.
The decrease in net loss over the last 2 years is explained by internal work made toward the project
finance and secure off-take agreements. During the past year the Company recorded a deferred
income tax recovery of
$0.08M
compared to a deferred income tax recovery of
$0.66M
in 2017.
Liquidity
On
December 31, 2018
, the Company had
$2.07M
cash on hand. These funds will be allocated
towards general working capital and advancing development of the Lac à Paul project in 2019.
Based on current spending estimates for future project development, Arianne anticipates it will need
additional financing before the end of 2019.
Outlook
In 2019, 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;
Continue our ongoing dialogue with Stakeholders.
Arianne's Management Discussion and Analysis and Financial Statements for the three- and twelve-
month period ended
December 31, 2018
, 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% P
2
O
5
with little or no contaminants (Feasibility Study released in 2013). The Company has
105,803,943 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.
Follow Arianne on:
Facebook:
https://www.facebook.com/ariannephosphate
Twitter:
http://twitter.com/arianne_dan
YouTube:
http://www.youtube.com/user/ArianneResources
Flickr:
http://www.flickr.com/photos/arianneresources
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 be 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 approval, 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.
View original content to download multimedia:
http://www.newswire.ca/en/releases/archive/March2019/20/c5389.html
%SEDAR: 00003556E
For further information:
Contact Information: Source: Jean-Sébastien David, C.O.O., Tel. : 418-
549-7316, [email protected]; Info: Brian Ostroff, C.E.O., Tel. : 514-908-4202,
CO: Arianne Phosphate Inc.
CNW 17:00e 20-MAR-19