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Arianne Phosphate reports 1Q21 operating and financial results

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World Fertilizer,

Arianne Phosphate, a company in the development stage of the Lac à Paul phosphate mine in the Saguenay – Lac-Saint-Jean region, Quebec, has reported its operating and financial results for the three-month period ended 31 March 2021 (1Q21).

“The positive trend continues for the Company as we move our Lac à Paul project towards development,” said Brian Ostroff, President of Arianne Phosphate. “Despite a very difficult environment in recent years, Arianne has managed to preserve herself and now finds herself in a leading position to benefit from the rise in the agricultural macroeconomics. Today, our project stands out from others in its category. Cereal and phosphate prices are at record highs for several years. This allows the acceleration of communications with potential investors and partners in order to realise the incredible value of the Lac à Paul project."

Operational and financial highlights

  • In March 2021, the company announced the restructuring of its debt and line of credit. The lender will exercise 26 780 000 warrants in common shares of the company, thereby reducing the credit facility from CAN$31 496 897 to CAN$24 892 949, a reduction of CAN$6 603 948. The credit facility will be extended for a period of 5 years at an annual interest rate of 8%. Annual interest may be paid by the company either in cash or in common shares of the company. The company will issue 32 million warrants with an exercise price of CAN$0.33 per share for a period of 5 years. The warrants are subject to a warrants lock-up clause. The company will increase the buyback price of the existing royalties granted in favour of the lender to CAN$11.25 million.
  • Arianne also announced the conversion of its debt and its working capital facility. Holders of CAN$5 970 155 of these facilities will have their debts converted into common shares of the company at a price of CAN$0.275 per share. As a result of the debt conversion, the company will issue a total of 21 709 655 common shares to the debt holder. The company also cancelled 11 028 584 warrants that were originally issued with debt and working capital.
  • In April 2021, the company announced that it had reached an agreement in principle with the Port of Saguenay concerning the future site of a marine loading facility on the north shore of the Saguenay River. This agreement will allow the company and the port to finalise details regarding the costs, construction and operation of the facility from which Arianne will ship its phosphate concentrate globally. The final agreement will cover the use of the facility for an initial period of 30 years, then renewable twice for periods of 10 years.
  • In April 2021, Arianne partnered with the Center de géomatique du Québec (CGQ) to advance the research and development of a new method for the design and future monitoring of the company's tailings management activities. This work will use remote sensing and geomatics tools associated with artificial intelligence, which should greatly improve the safety aspects of Arianne's operations.
  • In May 2021, Arianne announced that Jeffrey Beck will assume the role of CEO and has also joined the Board of Directors. Brian Ostroff becomes President of the company.
  • During 1Q21, the company mandated Red Cloud Financial Services and GRA Enterprises to support work with our investor relations given the market rise in the first months of 2021.
  • On 13 May 2021, Arianne entered into a agreement with a syndicate of underwriters pursuant to which the company will raise CAN$5 million by issuing 10 million units of the company under a private underwriter placement. The units are priced at CAN$0.50 per unit and consisted of one common share and half a common share purchase warrant valid for a period of 24 months at an exercise price of CAN$0.71.

Financial summary

Arianne is a development stage company and as such did not generate positive revenue or cash flow in 1Q21. During 1Q21, the company recorded a loss net of CAN$4.4 million for the three-month period. For the same period in 2020, the company recorded a loss of CAN$1.8 million. The higher losses are explained by the borrowing costs which were previously capitalised. As the company is in the financing phase for its project and in the phase of signing formal agreements for the sale of phosphate concentrate, it is not carrying out any major technical work. The company has suspended the capitalisation of its borrowing costs until technical work is carried out on the project.

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