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%
P2O5 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.