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Arianne Phosphate announces 4Q19 and fiscal 2019 results

Published by
World Fertilizer,


Arianne Phosphate, a company in the development phase of the project Lac à Paul phosphate mine, in the Saguenay — Lac-Saint-Jean region, in Quebec, Canada, has published its operating and financial results for the three-month and twelve-month periods ended 31 December 2019.

2019 corporate and financial highlights

  • In October 2019, Arianne announced that it had received the results of a study on a phosphoric acid manufacturing facility. Arianne's igneous phosphate concentrate reacted extremely well during the process and was capable of producing a quality phosphoric acid titrating to 60% P2O5 (MGA) unlike the MGA usually sold on the market of 52%. In addition, due to the high quality of Arianne's phosphate concentrate, the gypsum by-product produced during the acid production process may have commercial value, as opposed to the contaminated products typically generated by use. from traditional sources of sedimentary phosphate.
  • In August 2019, Arianne entered into private placement financing for gross proceeds of CAN$691 050. Under the terms of the placement, the company issued 1 256 455 units at a price of CAN$0.55 per unit. Each unit consists of one common share and half of one common share purchase warrant. Each warrant gives its holder the right to purchase one common share at a price of CAN$0.75 per share, until 21 August 2021.
  • In July 2019, the company announced that its efforts in transportation logistics have progressed considerably and will benefit the entire project and its profitability. Arianne and its partners have developed a design that will reduce the weight of transport trucks and increase the load. Once integrated, this will result in fewer trucks on the road, which will increase safety and reduce the overall impact on the environment. In addition, this design will generate economies of scale, which will lower the cost of transporting the phosphate concentrate from Arianne to the port and generate overall savings in the project. The initial assumption for truck payload is 120 t. With this effort, the company are working towards a payload of 150 t per truck.
  • In June 2019, Arianne signed a non-final memorandum of understanding with SINOCONST, a large Chinese public company. Under the terms of the agreement, Arianne and SINOCONST agreed to put in place a final agreement relating to the development of the Lac à Paul project, which would include full funding for the project. In parallel, efforts to secure product taking contracts are planned to be implemented by SINOCONST in order to support the overall financing of the project. SINOCONST's participation in the development of Lac à Paul is directly linked to project financing commitments.
  • In May 2019, the company announced that the Government of Quebec has made an investment of CAN$1.5 million by way of private equity placement. Under the terms of the placement, the Québec government subscribes 3 671 970 common shares of the company at a price of CAN$0.4085 per share. This price represents the volume-weighted average price over the 5 days preceding the closing of the financing. All securities issued at the end of the placement are subject to a holding period provided for by applicable regulations of four (4) months and one (1) day which ends on 6 September 2019.
  • In March 2019, the company announced the signing of a marketing contract with the Compagnie Indo-Française de Commerce (CIFC) in order to sell and market high purity phosphate concentrate with low content of contaminants Arianne on the Indian market. Based in New Delhi, India, CIFC is a private company founded in 1967. The activity of CIFC includes the negotiation, sale, marketing and supply of raw materials for India, including fertilizers, agricultural chemicals and animal feed.

Financial summary

Arianne is a company in the development phase and therefore generated no income or positive cash flow in 2019. In 4Q19 and for the year ended 31 December 2019, the company experienced respective net losses of CAN$5 million and CAN$2.1 million, compared to CAN$0.5 million and CAN$1.9 million for the same periods in 2018. The company's net loss and cash outflows correspond to those of other companies mining at the development stage.

Liquidity

As of 31 December 2019, available funds will be allocated to current expenses and to the advancement of the Lac à Paul project in 2020. According to estimates of current expenses for the development of the project in 2020, the company anticipates that it will need additional funding during 2020.

Outlook

In 2020, Arianne will focus its activities on advancing the Lac à Paul project. Its main objectives are:
  • Complete partnership and financing agreements.
  • Continue to improve the value of the project by optimising it.
  • Continue ongoing discussions with stakeholders.

Read the article online at: https://www.worldfertilizer.com/phosphates/20032020/arianne-phosphate-announces-4q19-and-fiscal-2019-results/

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