Arianne Phosphate Reports Financial Results for Q4 and YE 2020 DAN: TSX-V ( Canada ) JE9N: FSE ( Germany ) DRRSF: OTC ( USA )
Arianne Phosphate Reports Financial Results
for Q4 and YE 2020
DAN: TSX-V (
Canada
)
JE9N: FSE (
Germany
)
DRRSF: OTC (
USA
)
SAGUENAY, QC,
March 29, 2021
/CNW Telbec/ -
Arianne Phosphate (the "Company" or
"Arianne")
(TSXV: DAN) (OTC: DRRSF) (FSE: 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, 2020
. All
amounts are in Canadian dollars unless noted.
"In spite of the challenges of a multi-year decline in phosphate prices, Arianne has always been able
to weather the storm and advance its Lac à Paul project," said
Brian Ostroff
, the Company's CEO.
"This year was not any different and, despite the challenges of the pandemic, Arianne continued to
progress its asset towards development. Now, the tide has turned and, we believe that Arianne is
uniquely placed to take advantage of this much improved macro. Advancing grain prices and a
doubling of phosphate fertilizer prices over the last year has once again highlighted the value and
importance of our high-quality phosphate asset and, is driving efforts around securing the necessary
partners required to develop Lac à Paul. Additionally, our recent news surrounding the reduction of
our debt, has put us on a greatly improved financial footing. The deal has allowed us to reduce our
debt by
$12 million
, cut our annual interest by roughly
$2.5 million
and, extend the maturity of our
debt by 5 years."
Post 2020 Highlights
On
March 18, 2021
the Company announced restructuring of its current credit line and loans.
For the credit line, the Lender will exercise 26,780,000 warrants into the Company's common
shares, thereby reducing the credit facility from
$31,496,897
to
$24,892,949
, a reduction of
$6,603,948
. The credit facility will be extended for a period of 5 years at an annual interest rate
of 8%. The annual interest can be paid by the Company, at its sole option, either in cash or in
common shares of the Company. The Company will issue the 32,000,000 warrants at an
exercise price of
$0.33
per share for a period of 5 years. The Lender shall not be entitled to
exercise 2021 warrants which would result in the Lender holding, following such exercise, on a
partially diluted basis, more than 19.9% of the issued and outstanding common shares of the
Company. The Company will increase the buyback purchase price of the existing production fee
granted in favour of the Lender to
$11.25M
.
Arianne also announced the conversion of its existing loans and working capital facility. The
holders of
$5,970,155
of these facilities will have their debt converted into common shares of
the Company at a price of
$0.275
per share. As a result of the debt conversion, the Company
will issue a total of 21,709,655 common shares to such debt holders. The Company will also
cancel 11,028,584 warrants that were originally issued with the loans and working capital
facility.
2020 Highlights
In
February 2020
, the Company closed an equity financing in the amount of
$425,025
. Under
the terms of the financing, Arianne issued 1,700,100 units at a price of
$0.25
per unit. Each unit
is comprised of one common share and one-half warrant. Each full warrant entitles the holder to
purchase one common share at a price of
$0.40
until
February 13, 2023
.
In
April 2020
, Arianne received the final report from its partners for the optimization of the truck-
trailer design. The new design will now allow for a payload of
150Mt
as opposed to the original
120Mt
of phosphate concentrate providing for greater economies of scale. This increased
payload per run will both improve our profitability as we lower our FOB cost at port and, reduce
our environmental footprint as Arianne will require fewer trucks to haul the same annual output.
In
June 2020
, the Company closed an equity financing in the amount of
$1,500,000
. Under the
terms of the financing, Arianne issued 9,999,998 units at a price of
$0.15
per unit. Each unit is
comprised of one common share and one-half warrant. Each full warrant entitles the holder to
purchase one common share at a price of
$0.20
until
June 10
, 2023. As part of the financing,
the Government of
Quebec
subscribed for 3,333,333 units in this placement through
Investissement Quebec.
In
June 2020
, Arianne extended its secured credit facilities held with Mercury Financing Corp.
The extended secured credit facilities will have a maturity of
June 15
, 2021. 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 26,780,000 non-transferable warrants
with an exercise price of
$0.2466
per share until
June 15, 2021
.
In
July 2020
, the Company announced that it had received favorable results from metallurgical
tests performed at COREM Labs in
Quebec City, Canada
. In tests ran earlier in the year,
Arianne weighed the benefits of using a different collector agent sourced from NordChem, a
Canadian-based company that provides tailor-made chemicals to the mining industry. Results
received from these tests demonstrated that Arianne could produce a phosphate concentrate
averaging 40.25% P2O5 with recoveries ranging between 91.1% and 93.2% and, combined
with the rapidity with which this collector acts, would also produce cost savings in the production
of our high-purity concentrate.
In August and
October 2020
, the Company received further results from tests designed to
optimize its metallurgical process and reduce its operating costs. The tests, performed by
COREM Laboratories and, with the help of NORDCHEM, were designed to further evaluate our
new collector however, this time, the process was run at lower water temperatures to simulate
the water temperatures available at site through most of the operating year. Using water at
4˚C, as opposed to the originally tested 20˚C, showed no adverse effect on the recoveries or
quality of Arianne's phosphate concentrate and thus, will allow Arianne to produce the same
quality product while reducing the time and costs associated with heating.
Financial Summary
Arianne is a development-stage company and, as such, did not generate revenue or positive cash
flow in 2020. In the fourth quarter and full-year period ended
December 31, 2020
, the Company
incurred respective net losses of
$1.6M
and
$5.9M
, compared to
$0.5M
and
$2.1M
in the
comparable periods in 2019. The higher losses are explained by the borrowing costs that were
previously capitalized. Since the Company is currently in a period of raising funding for its project
through financing and offtake agreements and is not carrying substantial technical work, the
Company has suspended the capitalization of its borrowing costs until further technical work is done
on the project. They are noncash costs.
Liquidity
On
December 31, 2020
, the cash on hand will be allocated towards general working capital and
advancing development of the Lac à Paul project in 2021. Based on current spending estimates for
future project development, Arianne anticipates it will need additional financing before the end of
2021.
Outlook
In 2021, 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, 2020
, 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
171,688,003 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:
http://www.newswire.ca/en/releases/archive/March2021/29/c3000.html
%SEDAR: 00003556E
For further information:
Jean-Sébastien David, C.O.O., Tel. : 418-549-7316, j.s.david@arianne-
inc.com; Info: Brian Ostroff, C.E.O., Tel. : 514-908-4202, [email protected]
CO: Arianne Phosphate Inc.
CNW 16:00e 29-MAR-21