BQE Water Reports 2016 Year End Results

VANCOUVER, BC – BQE Water Inc. (TSX-V: BQE), a leader in the treatment and management of mine impacted waters, releases its consolidated financial results for the year ending December 31, 2016.

“BQE Water has made notable progress in 2016,” stated David Kratochvil, President & Chief Executive Officer. “We had an 11% increase in revenue over 2015, three consecutive quarters of positive Adjusted EBITDA between Q2 and Q4, and achieved positive Adjusted EBITDA on an annual basis for the first time in the company’s history. Beyond our financial results, we also continued to advance our Selen-IX™ and Sulf-IX™ technologies and signed several new sales contracts to build a strong backlog of revenue coming into 2017.”

2016 highlights include:

  • Revenues for the year as reported under GAAP were $4 million compared to $3.6 million in 2015, an 11% increase over the prior year;
  • Proportional revenues for the year were $8.4 million compared to $7.9 million in 2015, a 6% increase over the prior year;
  • Net loss as reported under GAAP was $2.3 million compared to $1.4 million in 2015;
  • Adjusted income before interest, tax, depreciation and amortization (“adjusted EBITDA”) for the year was $8,000 compared to a loss of $894,000 in 2015;
  • Cash and cash equivalents reported under GAAP were $2.2 million compared to $1.4 million at the end of 2015; and
  • Proportional cash and cash equivalents and short-term investments, which includes BQE’s share held in joint ventures, as of December 31, 2016 were $3 million compared to $2.1 million at the end of 2015.

In July 2016, BQE Water issued convertible loans (“Loan”) with an aggregate principle of $1.5 million. The Loan is with multiple lenders which include certain directors, management, and employees of BQE, individual investors, and non-management insiders of the company. The Loan bears interest at a rate of 8% per annum with interest being payable semi-annually from the issuance date. Under the agreement, the Loan is due for repayment in 18 months from the issuance date. The Company may elect to prepay all or any portion of the outstanding balance plus unpaid interest accrued at any time during the term of the Loan without penalty. During the term of the Loan, the lenders will hold a first charge security interest over the assets of the company.

Upon prepayment or maturity of the Loan, each lender may elect to convert all or any portion of the unpaid principal into common shares of BQE Water at a conversion price of $0.06 cents per share. Any accrued but unpaid interest thereon will be converted into common shares at a conversion price equal to the greater of $0.06 cents per share or the then-prevailing market price of the common shares.

The proceeds of the Loan will be used to fund general operating expenses and ensure BQE Water has the financial resources to continue executing on its longer term growth strategy.

Operating Highlights
Raglan Mine, Quebec
During the year, BQE Water completed its 13th operating season at the Raglan Mine site. Operating results for the 12 months ended December 31, 2016 are as follows:

(in ’000s) 2016 2015
Water treated (cubic metres) 982 1,118

BQE Water has renewed its operating contract with the mine site owner for an additional four years until the end of the 2020 season.

Joint venture with Jiangxi Copper Company, China
Our joint venture in China with partner Jiangxi Copper Company (“JCC”) operated three plants during 2016. Operating results for all three plants during the 12 months ended December 31, 2016 are as follows:

(in ’000s) 2016 2015
Water treated (cubic metres) 18,180 19,892
Copper produced (pounds) 3,609 3,126

Sales and Project Highlights
Selen-IX™ Activity
In March 2016, BQE Water completed the pilot testing contract with a Canadian mining company which originally commenced in mid-2015. The pilot testing results are being used to demonstrate the capacity of the Selen-IX™ process to meet stringent discharge limits for selenium and provide engineering design data required for evaluating capital and operating costs of a full-scale plant. Currently, preliminary design and engineering work is in progress with the customer.

In August 2016, BQE Water secured a contract with a new customer, a Canadian resource company, for a pilot scale demonstration and evaluation of its Selen-IX™ technology to remove selenium from mine impacted water. The pilot campaign was completed in December 2016 and the final report was issued in February 2017. The results are being reviewed with the customer to determine the advancement of the project. The total value of the contract is comparable to past pilot campaigns.

BQE Water has now completed four Selen-IX™ pilot campaigns since 2013. This demonstrates the increasing need for mining companies to manage selenium concentrations in their wastewater and the capabilities of our solution.

Zinc and Copper Recovery – Joint Venture
During the year, BQE Water completed a detailed technical and economic assessment of a new treatment plant to be installed at an active smelter in China. BQE Water has commenced engineering and construction and expects to begin operations in late 2017. Under terms of the joint venture and operating contracts, BQE Water will receive a fixed-fee, technical support contract and an ongoing share of the profits from the operation.

Design, Construction, and Commissioning Services
During the year, BQE Water provided design, construction and commissioning services for a water treatment plant at the Silvertip project in Northern BC. The plant has been commissioned and is available for water treatment operations. BQE Water continues to provide additional technical services and operational support as required.

BQE Water’s results for the year reflect continuing improvements despite the challenging environment for the resource industry globally. During the first half of the year, BQE Water required working capital to fund general operating expenses and to ensure it had the financial resources to continue executing on its longer term growth strategy. As a result, in July 2016, BQE Water issued $1.5 million in convertible loans. That financing allowed BQE Water to achieve significant improvements over the last half of the year and build a solid pipeline of projects into 2017. Specifically, BQE’s achievements were:

  • Increased Proportional Revenue over 2015;
  • Positive Adjusted EBITDA on an annual basis;
  • Successful demonstration of its Selen-IX™ capabilities with a new resource sector customer while continuing to raise its profile within the industry;
  • Successful completion of the design and construction of a new water treatment plant at the Silvertip Mine in BC, Canada;
  • Securing a contract for pilot demonstration of its Sulf-IX™ process for sulphate control in Peru; and
  • Finalizing a new joint venture agreement for a water treatment plant in China that will contribute long-term, recurring revenue beginning in Q4 2017.

For 2017, BQE Water expects to continue building on the improvements made over the past several years. BQE Water begins 2017 with a backlog of project sales of approximately $1.6 million. Included in this backlog are contracts with customers in Latin America which BQE Water sees as an important market long-term. BQE Water has also renewed its operating contract at the Raglan Mine site for an additional four years and expects its new joint venture in China to begin operations later this year.

The current backlog of projects are the results of efforts over the past several years. BQE Water has worked on positioning the Company for success by getting the Company involved in early stages of new projects, strengthening its technical team, and advancing the development and commercialization of new products including their Sulf-IX™ and Selen-IX™ processes. BQE Water has also restructured its expenditures over this time to preserve working capital while continuing to expand its project pipeline and deliver its services in a strategic and disciplined manner.

Although these projects provide significant opportunities for future one-time and recurring revenues, all these projects happen in stages, typically over a period of two to three years and the timing of revenue is uncertain. Consequently, the consistency of the Company’s profitability through 2017 and 2018 cannot be guaranteed with the existing projects pipeline and the continued growth of the projects pipeline is one of the primary areas of focus for the Company’s management. In particular, the lack of control of timing of revenues from existing projects introduces a risk of temporary shortage in working capital. Management and our Board of Directors are actively exploring potential options to ensure continuing operations of our business and avoid shortages in working capital.

2016 Financial Highlights Summary
For a complete set of Financial Statements and Management Discussion and Analysis, please go to

(in $’000 except for per share amounts)



$ $
Revenues 3,961 3,647
less: Plant and other operating costs (excluding depreciation) 1,758 2,333
2,203 1,314
General and administration 1,705 2,031
Sales and development 1,154 1,177
Stock-based compensation 76 (19)
Depreciation and amortization 234 221
Share of results of equity accounted joint ventures (156) (189)
Loss from operations and joint ventures (810) (1,907)
Finance income, net (98) 13
Foreign exchange (loss) gain (1,427) 259
Bad debt recovery 11 336
Other income 9
Loss before income taxes (2,324) (1,290)
Income tax (1) (143)
Net loss for the year (2,325) (1,433)
Translation gain on foreign operations 954 517
Comprehensive loss for the year (1,371) (916)
Net loss per share (basic and diluted) (0.02) (0.02)
Proportional Revenues1 8,362 7,949
Adjusted EBITDA1 8 (894)
1See “Non-GAAP Measures” in 2015 MD&A


About BQE Water
BQE Water is a service provider specializing in water treatment and management for the mining and metallurgical industry. We are focused on reducing Life Cycle Costs through customized solutions that reduce risks and long-term environmental liabilities while introducing sustainability into the overall water management plan. We have extensive expertise in the removal, recovery, and/or recycle of a broad range of metals, sulphate, selenium, cyanide, ammonia and other nitrogen species. BQE Water has commercialized several water treatment technologies and built plants at mine sites around the world for organizations including Glencore, Jiangxi Copper, Freeport-McMoRan and the US EPA. A key part of our business is our involvement in the ongoing operation and maintenance of treatment plants. We currently operate several plants under long-term contract and provide operations support to other plants globally. Our capabilities in implementing technical innovation and plant operations provides us with first-hand experience to deliver practical and actionable consultancy services. The company operates water testing laboratories and mobile pilot treatment facilities in North and South America, and China. BQE Water is headquartered in Vancouver, Canada and trades on the TSX Venture Exchange under the symbol BQE. Please visit for more information.


 The Toronto Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.

Certain information contained herein may not be based on historical fact and therefore constitutes “forward-looking information” under applicable Canadian securities legislation. This includes without limitation statements containing the words “plan”, “expect”, “project”, “estimate”, “intend”, “believe”, “anticipate”, “may”, “will” and other similar words or expressions. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks, uncertainties and other factors that may cause actual events or results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the Company’s dependence on key personnel and contracts, uncertainty with respect to the profitability of the Company’s technologies, competition, technology risk, the Company’s ability to protect its intellectual property and proprietary information, fluctuations in commodity prices, currency risk, environmental regulation and the Company’s ability to manage growth and other factors described in the Company’s filings with the Canadian securities regulators at (including without limitation the factors described in the section entitled “Risks and Uncertainties” in the Company’s MD&A for the year ended December 31, 2016). Given these risks and uncertainties, the reader is cautioned not to place undue reliance on forward-looking statements. All forward-looking information contained herein is based on management’s current expectations and the Company undertakes no obligation to revise or update such forward-looking information to reflect subsequent events or circumstances, except as required by law.