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Arianne Phosphate Inc
Symbol C : DAN
Shares Issued 105,803,943
Close 2018-08-23 C$ 0.46
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Arianne's cash on hand at $1.59-million on June 30

2018-08-23 17:54 ET - News Release

Mr. Brian Ostroff reports

ARIANNE PHOSPHATE REPORTS CORPORATE AND FINANCIAL RESULTS FOR SECOND QUARTER 2018

Arianne Phosphate Inc. has released its financial results for the three-month and six-month period ended June 30, 2018.

"We continue to move our project towards development," said Brian Ostroff, chief executive officer of Arianne Phosphate. "Since the beginning of the year, the industry has rebounded from a five-year slump with phosphate prices now up about 25 per cent year to date. This change in macro, coupled with Arianne's own advancements, has been very helpful in our negotiations with offtakers, financiers and partners, and we continue to see very tangible interest and support for our Lac a Paul project."

Second-quarter 2018 financial and operational highlights:

  • 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 fulfill 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.

Highlights subsequent to quarter-end:

  • 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, N.B. 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 August, 2018, the company announced that it 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.
  • In July, 2018, the company announced that Arianne shareholders have re-elected Dominique Bouchard, Brian Ostroff, James Cowley, David DeBiasio, Marco Gagnon, Siva Pillay and Steven Pinney as directors of the company during the annual general meeting of shareholders of the company held on July 10, 2018, in Montreal.
  • On July 12, 2018, the company extended the term of 2,815,500 common share purchase warrants issued as part of a private placement closed on July 31, 2014, for gross proceeds of $5,631,000. Each warrant, as part of the issued units, entitles its holder to purchase one common share of the company at an exercise price of $1.25 per common share until July 31, 2018. The company has elected to extend the expiry date of the warrants to July 31, 2019. No other term will be amended.

Financial summary

Arianne is a development-stage company and, as such, did not generate revenue or positive cash flow in Q2 2018. In the second quarter ended June 30, 2018, the company incurred net losses of $200,000 for the three-month period and $900,000 for the six-month period. This compares with a net loss of $800,000 for the three-month and $1.6-million for the six-month period in the comparable periods of 2017.

Liquidity

At June 30, 2018, the company had $1.59-million cash on hand. These funds will be allocated toward general working capital and advancing development of Lac a Paul in 2018. Based on current spending estimates for future project development, Arianne will need additional financing in 2018.

Outlook

Through the rest of 2018, Arianne will be focused on the continuing advancement and development of its Lac a Paul project. Expected milestones include:

  • Secure financing for construction and development of the Lac a Paul project;
  • Continue optimization of the Lac a Paul project, including reducing 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 environmental permitting from the Canadian Engineering Education Association (CEEA).

Arianne's management discussion and analysis, and condensed consolidated interim financial statements for the three-month period ended June 30, 2018, are available on the company's website and on SEDAR.

Qualified person

Jean-Sebastien David, PGeo, qualified person by National Instrument 43-101, has approved this release. Mr. David is also the company's chief operating officer.

About Arianne Phosphate Inc.

Arianne Phosphate is developing the Lac a Paul phosphate deposits located approximately 200 kilometres north of the Saguenay/Lac St. Jean area of Quebec, Canada. These deposits will produce a high-quality igneous apatite concentrate grading 39 per cent phosphorus pentoxide with little or no contaminants. The company has 105,803,943 shares outstanding.

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