Mr. David Kratochvil reports

BIOTEQ REPORTS Q3 2016 FINANCIAL AND OPERATING RESULTS

Bioteq Environmental Technologies Inc. has released its financial and operating results for the third quarter ended Sept. 30, 2016. Further information on the quarterly results can be obtained from the company's third-quarter 2016 interim consolidated financial statements, and management's discussion and analysis (MD&A).

To ensure clarity and comparability with historic results, certain statements in this news release and in the MD&A are characterized as Bioteq's proportional share, which means the effective portion of results that Bioteq would have reported if each of its joint ventures had been reported in accordance with past accounting standards. For further details, please see non-generally accepted accounting principles financial measures in the company's Q3 2016 MD&A.

Q3 and year-to-date 2016 financial results:

• Revenues as reported under GAAP were $1.3-million compared with $1.6-million in Q3 2015. Year to date, revenues were $2.4-million, consistent with the prior year.
• Proportional revenues were $2.4-million compared with $3-million in Q3 2015. Year to date, proportional revenues were $6.1-million, consistent with the prior year.
• Net income as reported under GAAP was $117,000 compared with $279,000 in Q3 2015.
• Adjusted income before interest, tax, depreciation and amortization (adjusted EBITDA) was $414,000, marking a second consecutive quarter of positive adjusted EBIDTA.
• Adjusted EBITDA of $414,000 was virtually unchanged from 2015. Year to date, adjusted EBITDA was a loss of $102,000, an improvement over the prior year's loss of $119,000. The improvement is despite a 14-per-cent drop in copper prices compared with 2015.
• Proportional revenue and adjusted EBITDA are highly sensitive to changes in copper prices. Despite the decline in copper prices, Bioteq was able to improve total copper recovery and reduce its average cost per pound.
• Cash and cash equivalents reported under GAAP as of Sept. 30, 2016, was $1.8-million compared with $1.4-million at Dec. 31, 2015.
• Proportional cash and cash equivalents and short-term investments, which include the company's share held in joint ventures, as of Sept. 30, 2016, were $3.2-million compared with $2.1-million at the end of 2015.

Financing

During the quarter, Bioteq completed a convertible loan for gross proceeds of $1.5-million. The loans are secured and bear interest at a rate of 8 per cent per annum. Upon repayment of the loans, each lender may elect to convert all or any portion of the repaid principal into Bioteq common shares at a conversion price of six cents per share.

The proceeds of the loans will be used to finance general operating expenses and ensure Bioteq has the financial resources to continue executing on its longer-term growth strategy.

Water treatment operations

• During the quarter, Bioteq continued its 13th season of water treatment operations at the Raglan mine site in Quebec. During the quarter, Bioteq treated 715,000 cubic metres of water. In mid-November, Bioteq completed water treatment services for the season. Bioteq is currently discussing an extension to the operating contract.
• Bioteq's joint venture in China with partner Jiangxi Copper Company (JCC) operated three plants during the quarter. Two of the plants are located at the Dexing mine site and the third at the Yinshan mine site. Both mine sites are owned by JCC. The joint venture treated a total of 4.8 million cubic metres of water and recovered 891,000 pounds of copper from all three plants during the quarter.

Sales and new technology development

The following is an update on key sales opportunities in progress.

Design, construction and commissioning services

In Q3 2016, Bioteq continued providing services for a water treatment plant at the Silvertip project in Northern British Columbia.

Consulting

During the quarter, Bioteq continued to provide consulting services to several mining projects in Canada, Asia, Europe and Latin America. The services covered a broad spectrum of activities, including permitting support, development of site-specific water management strategies, and various stages of water treatment assessment for the removal of metals, sulphate and selenium. Bioteq expects that these activities will continue over the next several quarters and may lead to new activities as water management measures proceed to implementation.

Zinc and copper recovery -- joint venture

Bioteq completed its detailed technical and economic assessment of a new treatment plant to be installed at an active smelter in China. The proposed new treatment plant has completed environmental permitting, and Bioteq is working closely with a potential new partner on forming a joint venture to deliver the treatment plant for the smelter under a build-own-operate business model. Once final terms are agreed upon, Bioteq expects to commence construction in first quarter 2017, and to begin commissioning and operations in late 2017. Under current terms being negotiated, Bioteq expects to receive a fixed-fee, technical support contract and a continuing share of the profits from the operation.

Selen-IX pilot operation

Subsequent to the end of Q3, Bioteq secured a contract with a Canadian resource company for a pilot scale demonstration and evaluation of its Selen-IX technology to remove selenium from mine impacted water. The pilot follows a successful laboratory campaign completed earlier in the year directly at the client's site and will utilize Bioteq's existing mobile Selen-IX pilot plant. The objectives of the pilot campaign are to: demonstrate selenium removal to reach discharge targets on a continuous basis, generate design criteria for a full scale plant, and develop a preliminary capital and operating cost estimate. The pilot campaign is expected to be completed by the end of this year, and results will be reviewed with the customer in early 2017 to determine the advancement of the project. The total value of the contract is comparable to past pilot campaigns.

Q3 2016 commentary and 2016 outlook

Bioteq's results for the first nine months of the year reflect continuing positive changes to the company coinciding with a further drop in the price of copper and continued challenging environment for the resource industry globally. Specifically, the company achieved:

• A second consecutive quarter of positive adjusted EBITDA;
• Adjusted EBITDA improvement over 2015 despite a 14-per-cent drop in copper prices compared with 2015;
• Significant contracts booked for fourth quarter 2016 and Q1 2017 that are expected to generate higher revenue and cash flow than comparable, prior-year quarters.

So far this year, Bioteq has won new contracts for a broad range of water management and water treatment services. Furthermore, Q3 2016 financials do not reflect any of the booked revenue resulting from these small contracts that will contribute to revenues in the next few quarters, including the new selenium pilot project announced in October, 2016. Based on this, the management expects that the year-end 2016 results will bring a significant improvement over 2015 and the current sales pipeline will help improve performance further in 2017.

For a complete set of financial statements and management discussion and analysis, please go to the company's website.

 
                     Q3 2016 FINANCIAL HIGHLIGHTS SUMMARY
                    (in $000s except for per-share amounts)

                                       Three months ended   Nine months ended
                                                 Sept. 30,           Sept. 30,
                                           2016      2015      2016      2015

Revenues                                 $1,356    $1,620    $2,390    $2,418
Less plant and other operating
costs (excluding depreciation)              494       740     1,078     1,520
                                            862       880     1,312       898
General and administration                  410       472     1,301     1,454
Sales and development                       356       248       973       899
Stock-based compensation                     30         1        76       (18)
Depreciation and amortization                60        57       176       164
Share of results of equity-accounted
joint ventures                             (160)      (55)     (351)     (581)
Income (loss) from operations and
joint ventures                              166       157      (863)   (1,020)

Finance income, net                         (56)       (8)      (54)       34
Foreign exchange gain (loss)                  7        14    (1,435)       41
Bad debt recovery                             -       116         7       268
Net income (loss) for the period            117       279    (2,345)     (677)
Translation gain on foreign
operations                                   22       287     1,048       691
Comprehensive income (loss) for the
period                                      139       566    (1,297)       14
Net loss per share (basic and
diluted)                                   0.00      0.00     (0.02)    (0.01)
Proportional revenues (1)                 2,411     3,010     6,066     6,226
Adjusted EBITDA (1)                         414       496      (102)     (119)

(1) See non-GAAP measures in Q3 2016 MD&A.                                 

Bioteq corporate profile

Bioteq is a service provider that specializes in treating mining waste water and specific hydrometallurgical streams with a focus on reducing life cycle costs while achieving compliance and introducing sustainability into water management. The company has extensive expertise in the removal, recovery and/or recycle of a broad range of metals, sulphate, selenium, cyanide, ammonia and other nitrogen species.

We seek Safe Harbor.