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Arianne Phosphate Inc
Symbol DAN
Shares Issued 113,158,350
Close 2020-03-18 C$ 0.15
Recent Sedar Documents

Arianne allocates 2019 cash to project, working capital

2020-03-18 17:07 ET - News Release

Mr. Jean-Sebastien David reports

ARIANNE PHOSPHATE REPORTS FINANCIAL RESULTS FOR Q4 AND YE 2019

Arianne Phosphate Inc. has released its financial results for both the three- and 12-month periods ended Dec. 31, 2019.

2019 financial and operational highlights:

  • In October, 2019, Arianne has announced that it has received its initial findings back from a study regarding a downstream phosphoric acid facility. The company's phosphate concentrate responded extremely well to the beneficiation process and resulted in the production of up to a 60-per-cent-P2O5 (phosphorus pentoxide) merchant-grade acid (MGA) compared with the market typical 52-per-cent-MGA grade. Furthermore, due to the high-quality nature of the phosphate concentrate input, the gypsum byproduct produced during the process appears to have commercial value whereas traditional phosphate concentrates will produce contaminated waste.
  • In August, 2019, Arianne has closed on a $691,050 financing. Under the terms of the financing, Arianne has issued 1,256,455 units at a price of 55 cents per unit. Each unit is composed of one common share and a half warrant. Each full warrant entitles the holder to purchase one common share at a price of 75 cents until Aug. 21, 2021.
  • In July, 2019, the company announced that efforts surrounding transportation logistics have significantly progressed. Arianne partnered with several parties to look at greater integration of aluminum into the truck trailer design. Through this initiative over the past year, Arianne and its partners have advanced a design that will be able to reduce the weight of the transport trucks and allow for a greater payload per run. Once integrated, this will result in fewer trucks on the road, increasing safety and reducing the overall environmental impact. As well, this design will bring about greater economies of scale, resulting in a reduction in the cost of transporting Arianne's phosphate concentrate to port and, thus, the overall operating cost for its project. The initial assumption of the payload of trucks is 120 tonnes. With this effort, the company is working toward a payload of 150 tonnes by truck.
  • In June, 2019, Arianne entered into a non-binding memorandum of understanding (MoU) with Sinoconst, a large Chinese state-owned enterprise. Under the terms of the MoU, Arianne and Sinoconst have agreed to work toward a final binding agreement relating to the development of Arianne's Lac a Paul project, which would include full project financing. On a parallel track, efforts to secure offtake are expected to be undertaken by Sinoconst in support of the financing package discussed under the MoU.
  • In May, 2019, the company had closed a $1.5-million investment from the government of Quebec by way of a private placement into the common shares of Arianne. Under the terms of the offering, the government of Quebec is subscribing for 3,671,970 common shares of the company at a price of 40.85 cents per share. The securities issued in connection with the financing are subject to a regulatory hold period of four months and one day expiring on Sept. 6, 2019.
  • In March, 2019, the company announced that it has entered into an agency agreement with Compagnie Indo Francaise de Commerce (CIFC) to market and sell Arianne's high-purity, low-contaminant phosphate concentrate into the Indian market. Based in New Delhi, India, Compagnie Indo Francaise de Commerce Pvt. Ltd. is a private company, founded in 1967. CIFC's business includes the trading, sale, marketing and supply of critical raw materials to India, including fertilizers, agricultural chemicals and animal feeds.

Financial summary

Arianne is a development-stage company and, as such, did not generate revenue or positive cash flow in 2019. In the fourth quarter and full-year period ended Dec. 31, 2019, the company incurred respective net losses of $500,000 and $2.1-million, compared with $500,000 and $1.9-million in the comparable periods in 2018. The company's net loss and cash burn are consistent with other development-stage mining companies.

Liquidity

On Dec. 31, 2019, the cash on hand will be allocated toward general working capital and advancing development of the Lac a Paul project in 2020. Based on current spending estimates for future project development, Arianne anticipates it will need additional financing before the end of 2020.

Outlook

In 2020, Arianne will be focused on the continuing advancement and development of its Lac a Paul project. Expected milestones include:

  • Complete partnership and financing arrangements;
  • Continue to enhance the value of the project through project optimization;
  • Continue the company's continuing dialogue with stakeholders.

Arianne's management's discussion and analysis and financial statements for the three- and 12-month period ended Dec. 31, 2019, 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 P2O5 with little or no contaminants (feasibility study released in 2013).

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