SAGUENAY, QUEBEC – (November 18, 2015) – Arianne Phosphate (the “Company” or “Arianne”) (TSX VENTURE: DAN) (FRANKFURT: JE9N) (OTCBB: DRRSF), 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 the three and nine-month periods ended September 30, 2015. All amounts are in Canadian dollars unless noted.
“It was encouraging to see our efforts rewarded with the release of a positive BAPE and want to thank all our stakeholders for their continued support,” said Jean-Sebastien David, Arianne’s Chief Operating Officer. “Although the third quarter continued to be challenging for many companies in the resource space, Arianne has been able to continue to advance its Lac a Paul project, making additional operational improvements as well as attracting the financial support it has required through the successful expansion of its credit facility. It is through these combined efforts by all involved that we will see Lac a Paul come to fruition. ”
Q3 2015 Financial and Operational Highlights
- Continued jointly working with the Port of Saguenay and the Enviornmental Assessmsnt Agency to secure Federal permitting. This permit will allow the Port of Saguenay to construct a loading facility on the north shore of the Saguenay River that will benefit the maritime transportation of Arianne’s phosphate concentrate.
- Received approval for listing in Mergent TM Manual and News Reports. The listing provides the Company with Blue Sky exemption in 39 U.S. states for the purposes of market activities.
- The Company extended the term of 1,217,500 common share purchase warrants (“Warrants“) issued as part of a private placement which was closed on July 29, 2013. Each of the Warrants, which were part of the units being issued, entitles its holder to purchase one common share of the Company at an exercise price of $1.45 per common share until July 29, 2015. The Company has elected to extend the expiry date of the Warrants to January 27, 2017. No other Warrant terms were amended.
Highlights Subsequent to Quarter-end
The Company announced the release of the report by the Bureau d’audiences publiques sur l’environnement (“BAPE”) for the Lac à Paul project in Saguenay-Lac-Saint-Jean, Quebec which the Company considers to be favourable. The BAPE report raised no major objections to the development of the Lac à Paul project, and therefore there would be no reason for the Quebec Government to withhold support for the project. Furthermore, the Company was pleased to see that the commission highlighted many of the positive attributes of the Lac à Paul project. The BAPE report was recently submitted to the Quebec Minister of Sustainable Development, Environment and the Fight against Climate Change (“the Minister”). This report, along with the environmental assessment completed by the Ministry, will be taken into consideration by the Minister in order to formulate a recommendation on granting the main environmental permit for the Lac à Paul project which is anticipated before the end of 2015.
The Company secured an expanded Credit Facility from existing lenders now totaling $18,750,000. The new facility will be used to replace its current facility of $12,500,000 (plus any accrued interest). The new facility is set to mature on December 31, 2017 and will bear interest at an annual rate equal to 6.25% with all interest capitalized through the maturity date of the Credit Facility. The Company will issue the lender 7,500,000 warrants, of which 5,000,000 warrants have an exercise price of $0.86 per share and 2,500,000 warrants with an exercise price of $1.08 per share. All warrants are exercisable through December 31, 2017. All securities issued of Credit Facility are subject to a regulatory hold period of four (4) months and one (1) day expiring on February 21, 2016. In connection with this transaction, the Company will pay on closing an arrangement fee of $46,123 to the agent and a commitment fee of $91,338 to the lender.
Arianne is a development-stage company and, as such, did not generate revenue or positive cash flow in Q3 2015. In the third quarter ended September 30, 2015, the Company incurred a net loss of $2,942,601 for the nine-month period ended September 30, 2015. This compares favourably to a net loss of $4,303,108 in the comparable period of 2014. 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 focus primarily on permitting activities and financing alternatives, which required less working capital. The Company’s net loss and cash burn are consistent with other development stage mining companies.
At September 30 2015, the Company had $255,559 cash on hand that continues to be allocated towards general working capital and advancing the development of its Lac à Paul project. Based on current spending estimates for future project development and obtaining the new Credit Facility, Arianne will need financing during 2016.
Arianne remains committed to advancing the development of its Lac à Paul Project. The Company continues to work towards completing a number of milestones including:
- Continued optimization of operating and capital expenses;
- Securing environmental permitting from appropriate government agencies; and
- Securing strategic partners and appropriate levels of funding.
Arianne’s Management Discussion and Analysis and Financial Statements for the three and nine-month periods ended September 30, 2015 are available on the Company’s website and on SEDAR at www.sedar.com
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 95,325,755 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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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.