Arianne Phosphate reports financial results for Q4 and YE 2016
DAN: TSX-V (Canada)
JE9N: FSE (Germany)
DRRSF: OTC (USA)
SAGUENAY, QC, March 22, 2017 /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, 2016. All amounts are in Canadian dollars unless noted.
"The year 2016 was one of hard work and advancement for the Company," commented Brian Ostroff, CEO of Arianne Phosphate. "Our recently announced agreements with Hydro-Québec, Constructions Proco Inc., Rio Tinto and ABB Inc. have all come about as a direct result of the team's hard work over the past year and has catapulted the project forward. Our belief is that we will be able to continue to negotiate and close on significant agreements, technical, financial and strategic, and see Lac à Paul advance."
2016 Financial and Operational Highlights
- In September 2016, the Company exercised options held on land at Sainte-Rose-du-Nord representing $709,650. The land is projected to be the future site of the port and is required for the development of the maritime terminal as well as the access roads and supporting infrastructure. It is from this site that Arianne will be shipping its high purity phosphate concentrate to customers around the world.
- In October 2016, the Company closed a second tranche of a loan financing representing $1.1 million with various third party lenders. The terms are the same as the first tranche (see below).
- In September 2016, the Company closed on a $3 million loan with various third party lenders (the "Loan"). The loan will bear interest at 8%, paid semi-annually and has a maturity of 3 years with the Company having the ability to repay the loan after one year at its option. As part of the loan, the Company has issued non-transferable warrants in the amount of 800 per $1,000 face value (for a total of 2,400,000 warrants), with each warrant entitling the holder to purchase one common share of the Company at a price of $1.25 per share for a term of 3 years expiring on September 28, 2019. Additionally, following the expiry of the regulatory hold period, should the closing price of Arianne's common shares on the TSX Venture Exchange (the "Exchange") be equal to or higher than $2 for 10 consecutive days, the Company shall have the right to force the exercise of the warrants by providing the warrant holders with a 30-day notice period, following which the warrants will automatically expire.
- In June 2016, the Company announced that they hired Endeavour Financial to act as their project finance advisor. Endeavour's role is to work with management in reviewing various financing strategies and assist in discussions with potential lenders and partners.
- In March 2016, the Board appointed Jean Lamarre as the new Chairman of the Board. He is highly skilled in international business development, finance and corporate strategy.
As well, the Company announced the appointment of a new CEO, Brian Ostroff. His past experience in finance and capital markets will help as the Company pursues partnerships and financing arrangements. - The Company met deadlines for the port facilities project currently being carried out by the Port of Saguenay. The environmental studies are underway for the Canadian Environmental Assessment Agency ("CEAA"). This significant stage in the project's development will allow Port of Saguenay to obtain the necessary government approval in order to begin the construction of the loading facilities and then obtain the permits requested.
Highlights Subsequent to Year-end
- In March 2017, Arianne signed a memorandum of understanding ("MOU") agreement with ABB Inc. to provide engineering, procurement and support services for integrated electrification and automated mining solutions. As part of this MOU, ABB has also committed to work with Arianne in helping to secure financing for this portion of the project and to that end, has already made introductions.
- In February 2017, the Company secured a favourable power agreement with the Ministry of Energy and Natural Resources. This agreement confirms that an additional power bloc of 14-MW from Hydro-Québec will be made available for the Lac à Paul project's ore processing facilities. This power bloc now totals 129-MW. With this additional power bloc, Arianne will be able to supply all of its processing facilities with hydroelectric power, making it the apatite concentrate producer with the lowest greenhouse gas (GHG) emissions on the market. A significant portion of the whole power bloc of 129-MW, i.e. 42-MW, will be used for the electric dryer to dry the apatite concentrate. The innovative technology integrated into the dryer will prevent the equivalent of 86,000 metric tonnes per year of CO2 emissions. It will also have a positive economic impact on the Lac à Paul project.
- In February 2017, Arianne signed an MOU with Construction Proco Inc. The agreement will cover structural and architectural engineering, steel fabrication and construction of the mill process and utilities buildings and, on-site stock pile storage.
- In January 2017, the Company signed a project agreement with Rio Tinto to review potential maritime services sharing. 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.
Financial Summary
Arianne is a development-stage company and, as such, did not generate revenue or positive cash flow in 2016. In the fourth quarter and full-year periods ended December 31, 2016, the Company incurred respective net losses of $0.7M and $3.1M, compared to $1.0M and $3.9M in the comparable periods in 2015. The Company's net loss and cash burn are consistent with other development stage mining companies.
The year-over-year decline in net loss was due to a series of measures that the Company undertook in order to reduce its expenses, as well as to primarily focus on permitting activities and financing alternatives, which required less working capital.
Liquidity
On December 31, 2016, the Company had $2.2M cash on hand and access to its $0.3M remaining on its credit facility. These funds will be allocated towards general working capital and advancing development of Lac à Paul in 2017. Based on current spending estimates for future project development, Arianne anticipates it will need additional financing before the end of 2017.
Outlook
In 2017, Arianne will be focused on the ongoing advancement and development of its Lac à Paul project. Expected milestones in 2017 include:
- Complete partnership and financing arrangements;
- Continue to enhance the value of the project through project optimization; and
- Assist the Port of Saguenay in receiving their approval from the CEAA to start the construction of the loading facilities;
- Continue our ongoing dialogue with First Nations.
Arianne's Management Discussion and Analysis and Financial Statements for the three- and twelve-month periods ended December 31, 2016, 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 97,648,080 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.
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, [email protected]; Medias: Joëlle Brodie, Tel. : 418-549-7316, [email protected]
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