SAGUENAY, QUEBEC – (November 22, 2017) – Arianne Phosphate (the “Company” or “Arianne”) (TSX VENTURE: 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 the three- and nine-month periods ended September 30, 2017. All amounts are in Canadian dollars unless noted.
“To date, 2017 has been a very productive year for us,” said Brian Ostroff, CEO of Arianne Phosphate. “One of our most recent announcement regarding the completion of our Information Memorandum for interested financing parties follows on to what has been a rapid progression of positive news that has materialized throughout the year. Discussions continue to progress with potential partners, both strategic and financial, as we look to conclude the agreements that will make Lac à Paul a reality.”
Q3 2017 Financial and Operational Highlights
- In August 2017, the Company announced that it has closed on a $2,306,000 financing. Under the terms of the financing, Arianne has issued 2,882,500 units at a price of $0.80 per unit. Each unit is 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, as evidenced by the price at the close of market, the Company shall 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 shall have 30 days to exercise the warrants, failing which they will automatically expire.
- In July 2017, the Company announced, subject to regulatory approval, the extension on the term of 2,815,500 common share purchase warrants issued as part of a private placement which closed on July 31, 2014 for gross proceeds of $5,631,000. Each of the Warrants, which were part of the units being issued, entitles its holder to purchase one common share of Arianne at an exercise price of $1.25 per Common Share until July 31, 2017. Arianne has elected to extend the expiry date of the Warrants to July 31, 2018.
Highlights Subsequent to Quarter-End
- In November 2017, the Company has initiated the work required to produce additional phosphate concentrate. Arianne has taken this step to meet the growing interest it has been receiving from parties looking to secure Arianne’s high-purity concentrate for testing. The increased demand in many cases has come from parties that had originally received samples and are now looking to follow up with considerably larger quantities. As well, the Company is seeing increased interest from organizations in Europe that may be affected by stricter environmental legislation and, are looking to diversify their supply towards a “cleaner” high-purity phosphate.
- In October 2017, the Company completed a due diligence with independent parties that have come in to evaluate and confirm the project from the lenders perspective. The role of the independent parties was to subject the Lac à Paul project to a full due diligence process. Every aspect of the project from extraction, processing, infrastructure and environmental were subject to review. From this, projected Capex and Opex were built into a broad financial model that will allow the respective finance partners to assess their interest in moving forward and participating in the project finance. In conclusion, the Company received a positive report from the independent parties. Lastly, as part of the review process, an independent analysis of the global phosphate market was undertaken. The report supports the need for additional projects as added supply will be required if we are to meet the persistent demand growth projected over the next few years.
- In October 2017, the Company announced that it has 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.
- In October 2017, the Company announced the expanded roles of two directors.
- Mr. Dominique Bouchard, already director of Arianne, will become Executive Vice Chairman and work closely with Arianne’s COO and Chicoutimi based team, taking an active role in many of the day to day activities and assisting with the regional, provincial and national efforts underway. Mr. Siva Pillay will also be taking a more active role, working closely with Arianne’s CEO, CFO and advisors in securing project financing. Mr. Pillay is a board member and currently chairs Arianne’s audit/finance committee.
- In October 2017, the Company announced, subject to regulatory approval, the extension on the term of 1,184,500 common share purchase warrants issued as part of a private placement which closed on October 16, 2014 for gross proceeds of $2,369,000. Each of the Warrants, which were part of the units being issued, entitles its holder to purchase one common share of Arianne at an exercise price of $1.25 per Common Share until October 15, 2017. Arianne has elected to extend the expiry date of the Warrants to October 15, 2018.
Arianne is a development-stage company and, as such, did not generate revenue or positive cash flow in Q3 2017. In the third quarter ended September 30, 2017, the Company incurred net losses of $0.8M for the three-month period and $2.4M for the nine-month period. This compares to a net loss of $0.8M for the three-months and $2.4M for the nine-months period in the comparable periods of 2016.
At September 30, 2017, the Company had $1.47M cash on hand. These funds will be allocated towards general working capital and advancing development of Lac a Paul in 2017. Based on current spending estimates for future project development, Arianne will need additional financing in 2018.
Through the rest of 2017 and into 2018, Arianne will be focused on the ongoing advancement and development of its Lac a Paul project. Expected milestones include:
- Secure financing for construction and development of the Lac a Paul project.
- Reduce cash operating production costs and capital expenses;
- Sign an “Impact and Benefit Agreement (IBA)” with the First Nations;
- Assist the Port of Saguenay in securing their environmental permitting from CEEA; and
Arianne’s Management Discussion and Analysis and condensed consolidated interim financial statements for the three- and nine-month periods ended September 30, 2017 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.