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.
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"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.
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 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.