DAN: TSX-V (Canada)
JE9N: FSE (Germany)
DRRSF: OTC (USA)
SAGUENAY, QC, March 29, 2021 /CNW
Telbec/ - Arianne Phosphate (the "Company" or
"Arianne") (TSXV: DAN) (OTC: DRRSF) (FSE: JE9N), a
development-stage phosphate mining company, advancing the Lac à
Paul project in Quebec's
Saguenay-Lac-Saint-Jean region, reported its financial results for
both the three and twelve-month periods ended December 31, 2020. All amounts are in Canadian
dollars unless noted.
"In spite of the challenges of a multi-year decline in phosphate
prices, Arianne has always been able to weather the storm and
advance its Lac à Paul project," said Brian
Ostroff, the Company's CEO. "This year was not
any different and, despite the challenges of the pandemic, Arianne
continued to progress its asset towards development. Now, the
tide has turned and, we believe that Arianne is uniquely placed to
take advantage of this much improved macro. Advancing grain
prices and a doubling of phosphate fertilizer prices over the last
year has once again highlighted the value and importance of our
high-quality phosphate asset and, is driving efforts around
securing the necessary partners required to develop Lac à
Paul. Additionally, our recent news surrounding the reduction
of our debt, has put us on a greatly improved financial
footing. The deal has allowed us to reduce our debt by
$12 million, cut our annual interest
by roughly $2.5 million and, extend
the maturity of our debt by 5 years."
Post 2020 Highlights
- On March 18, 2021 the Company
announced restructuring of its current credit line and loans. For
the credit line, the Lender will exercise 26,780,000 warrants into
the Company's common shares, thereby reducing the credit facility
from $31,496,897 to $24,892,949, a reduction of $6,603,948. The credit facility will be extended
for a period of 5 years at an annual interest rate of 8%. The
annual interest can be paid by the Company, at its sole option,
either in cash or in common shares of the Company. The Company will
issue the 32,000,000 warrants at an exercise price of $0.33 per share for a period of 5 years. The
Lender shall not be entitled to exercise 2021 warrants which would
result in the Lender holding, following such exercise, on a
partially diluted basis, more than 19.9% of the issued and
outstanding common shares of the Company. The Company will increase
the buyback purchase price of the existing production fee granted
in favour of the Lender to $11.25M.
- Arianne also announced the conversion of its existing loans and
working capital facility. The holders of $5,970,155 of these facilities will have their
debt converted into common shares of the Company at a price of
$0.275 per share. As a result of the
debt conversion, the Company will issue a total of 21,709,655
common shares to such debt holders. The Company will also cancel
11,028,584 warrants that were originally issued with the loans and
working capital facility.
2020 Highlights
- In February 2020, the Company
closed an equity financing in the amount of $425,025. Under the terms of the financing,
Arianne issued 1,700,100 units at a price of $0.25 per unit. Each unit is comprised of one
common share and one-half warrant. Each full warrant entitles the
holder to purchase one common share at a price of $0.40 until February 13,
2023.
- In April 2020, Arianne received
the final report from its partners for the optimization of the
truck-trailer design. The new design will now allow for a payload
of 150Mt as opposed to the original
120Mt of phosphate concentrate
providing for greater economies of scale. This increased
payload per run will both improve our profitability as we lower our
FOB cost at port and, reduce our environmental footprint as Arianne
will require fewer trucks to haul the same annual output.
- In June 2020, the Company closed
an equity financing in the amount of $1,500,000. Under the terms of the financing,
Arianne issued 9,999,998 units at a price of $0.15 per unit. Each unit is comprised of one
common share and one-half warrant. Each full warrant entitles the
holder to purchase one common share at a price of $0.20 until June
10, 2023. As part of the financing, the Government of
Quebec subscribed for 3,333,333
units in this placement through Investissement Quebec.
- In June 2020, Arianne extended
its secured credit facilities held with Mercury Financing
Corp. The extended secured credit facilities will have a
maturity of June 15, 2021.
These credit facilities will continue to bear interest at an annual
rate of 15%, with all interest capitalized through maturity.
The Company has also issued Mercury 26,780,000 non-transferable
warrants with an exercise price of $0.2466 per share until June 15, 2021.
- In July 2020, the Company
announced that it had received favorable results from metallurgical
tests performed at COREM Labs in Quebec
City, Canada. In tests ran earlier in the year, Arianne
weighed the benefits of using a different collector agent sourced
from NordChem, a Canadian-based company that provides tailor-made
chemicals to the mining industry. Results received from these
tests demonstrated that Arianne could produce a phosphate
concentrate averaging 40.25% P2O5 with recoveries ranging between
91.1% and 93.2% and, combined with the rapidity with which this
collector acts, would also produce cost savings in the production
of our high-purity concentrate.
- In August and October 2020, the
Company received further results from tests designed to optimize
its metallurgical process and reduce its operating costs. The
tests, performed by COREM Laboratories and, with the help of
NORDCHEM, were designed to further evaluate our new collector
however, this time, the process was run at lower water temperatures
to simulate the water temperatures available at site through most
of the operating year. Using water at 4˚C, as opposed to the
originally tested 20˚C, showed no adverse effect on the recoveries
or quality of Arianne's phosphate concentrate and thus, will allow
Arianne to produce the same quality product while reducing the time
and costs associated with heating.
Financial Summary
Arianne is a development-stage
company and, as such, did not generate revenue or positive cash
flow in 2020. In the fourth quarter and full-year period ended
December 31, 2020, the Company
incurred respective net losses of $1.6M and $5.9M,
compared to $0.5M and $2.1M in the comparable periods in 2019. The
higher losses are explained by the borrowing costs that were
previously capitalized. Since the Company is currently in a period
of raising funding for its project through financing and offtake
agreements and is not carrying substantial technical work, the
Company has suspended the capitalization of its borrowing costs
until further technical work is done on the project. They are
noncash costs.
Liquidity
On December 31,
2020, the cash on hand will be allocated towards general
working capital and advancing development of the Lac à Paul project
in 2021. Based on current spending estimates for future project
development, Arianne anticipates it will need additional financing
before the end of 2021.
Outlook
In 2021, Arianne will be focused on the
ongoing advancement and development of its Lac à Paul project.
Expected milestones include:
- Complete partnership and financing arrangements;
- Continue to enhance the value of the project through project
optimization;
- Continue our ongoing dialogue with Stakeholders.
Arianne's Management Discussion and Analysis and Financial
Statements for the three- and twelve-month period ended
December 31, 2020, are available on
the Company's website and on SEDAR at www.sedar.com.
Qualified Person
Jean-Sébastien
David, P.Geo., Qualified Person by NI 43-101, has approved this
release. Mr. David is also the Company's Chief Operating
Officer.
About Arianne Phosphate
Arianne Phosphate ("Arianne
Phosphate Inc.") (www.arianne-inc.com) is developing the Lac à
Paul phosphate deposits located approximately 200 km north of the
Saguenay/Lac St. Jean area of Quebec, Canada. These deposits will produce a high
quality igneous apatite concentrate grading 39%
P2O5 with little or no contaminants
(Feasibility Study released in 2013). The Company has 171,688,003
shares outstanding.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Follow Arianne on:
Facebook: https://www.facebook.com/ariannephosphate
Twitter: http://twitter.com/arianne_dan
YouTube: http://www.youtube.com/user/ArianneResources
Flickr: http://www.flickr.com/photos/arianneresources
Resource Investing
News: http://resourceinvestingnews.com/?s=Arianne
Cautionary Statements Regarding Forward Looking
Information
This news release contains "forward-looking statements"
and "forward-looking information" within the meaning of applicable
securities regulations in Canada
and the United States
(collectively, "forward-looking information"). Forward-looking
information includes, but is not limited to,
anticipated quality and production of the apatite concentrate
at the Lac à Paul project. Often, but not always, forward-looking
information can be identified by the use of words such as "plans",
"expects, "is expected", "budget", "scheduled", "estimates",
forecasts", "intends", "anticipates", or "believes", or the
negatives thereof or variations of such words and phrases or
statements that certain actions, events or results "may", "could",
"would", "might", or "will" be taken, occur or be achieved.
Forward-looking information is subject to be known and unknown
risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of the
Company to be materially different from those expressed or implied
by such forward-looking information, including but not limited to:
volatile stock price; risks related to changes in commodity prices;
sources and cost of power facilities; the estimation of initial and
sustaining capital requirements; the estimation of labour and
operating costs; the general global markets and economic
conditions; the risk associated with exploration, development and
operations of mineral deposits; the estimation of mineral reserves
and resources; the risks associated with uninsurable risks arising
during the course of exploration, development and production; risks
associated with currency fluctuations; environmental risks;
competition faced in securing experienced personnel; access to
adequate infrastructure to support mining, processing, development
and exploration activities; the risks associated with changes in
the mining regulatory regime governing the Company; completion of
the environmental assessment process; risks related to regulatory
and permitting delays; risks related to potential conflicts of
interest; the reliance on key personnel; financing, capitalization
and liquidity risks including the risk that the financing necessary
to fund continued exploration and development activities at Lac à
Paul project may not be available on satisfactory terms, or at all;
the risk of potential dilution through the issue of common shares;
the risk of litigation. Forward-looking information is based on
assumptions management believes to be reasonable at the time such
statements are made, including but not limited to, continued
exploration activities, no material adverse change in commodity
prices, exploration and development plans proceeding in accordance
with plans and such plans achieving their stated expected outcomes,
receipt of required regulatory approval, and such other assumptions
and factors as set out herein. Although the Company has attempted
to identify important factors that could cause actual results to
differ materially from those contained in the forward-looking
information, there may be other factors that cause results not to
be as anticipated, estimated or intended. There can be no assurance
that such forward-looking information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such forward-looking information. Accordingly,
readers should not place undue reliance on forward-looking
information. Forward-looking information is made as of the date of
this press release, and the Company does not undertake to update
such forward-looking information except in accordance with
applicable securities laws.
SOURCE Arianne Phosphate Inc.