Enters into a Memorandum of Understanding for the supply of sulphuric acid
DAN: TSX-V (Canada)
JE9N: FSE (Germany)
DRRSF: OTC (USA)
SAGUENAY, QC, Aug. 1, 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, is continuing its initial in-house review regarding the construction of a downstream phosphoric acid facility and, in conjunction with this review, the Company has entered into a Memorandum of Understanding ("MoU") for the supply of sulphuric acid.
Since first announced (see Press Release dated June 8, 2017), Arianne and potential partners have completed a preliminary look at the opportunity of constructing a phosphoric acid facility capable of producing high-purity phosphoric acid for domestic and international markets. Several potential sites have been reviewed and further work is currently being done to try and finalize on a potential location before doing greater work around the opportunity, namely, getting a better understanding around the logistics, economics and end-product specifics.
The decision on whether to move forward on this project comes down to several factors. Arianne believes that the most important component for a successful venture would be having access to a steady phosphate rock supply. With roughly 85% of all global downstream facilities vertically integrated, the ability to source phosphate rock is key and, it is the biggest challenge to the operations that do not have their own supply. An Arianne facility would be well positioned as it would have access to its own rock supply and would derive the economic benefits of vertical integration.
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 pricing, logistics and industry supply/demand trends; all necessary aspects in determining the project's viability.
Additionally, over the last year as Arianne has been studying the possibility of a downstream facility, the phosphate industry has started to improve, with demand for both phosphate rock and its by-products, such as acid, continuing to grow.
"The cure to a low commodity price is a low commodity price," said Brian Ostroff, CEO of Arianne Phosphate. "Demand for phosphate grows every single year, yet consistently lower prices for phosphate over the last five years affected supply growth with expansion plans curtailed and new projects being shelved. After a prolonged period of time, a lot of what was believed to be excess supply gets taken up and you go from excess supply to tightness and, the price correspondingly starts to increase, sometimes quite dramatically. Since the beginning of the year, phosphate prices are already up by 25% and most industry watchers believe there is more to come. Arianne, with its world-class Lac à Paul project, should be in a position to take advantage of the industry revival."
Arianne over the next few months will continue to move forward its due diligence and discussions with potential partners regarding the viability of constructing a phosphoric acid plant. With the overall environment of the phosphoric acid industry improving, Arianne is increasing its pace of due diligence and has an expanded list of potential partners. It will be from these results that the full extent of the opportunity can be assessed.
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 (Feasibility Study released in 2013) . 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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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.