BQE Water Reports Q2 2017 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 quarter ending June 30, 2017.

Q2 2017 Highlights

  • Revenues as reported under GAAP were $953,000 compared to $644,000 in Q2 2016;
  • Proportional revenues were $3.2 million compared to $2.1 million in Q2 2016;
  • Net income as reported under GAAP was $265,000 compared to net loss of $1.6 million in Q2 2016;
  • Adjusted EBITDA was $744,000 compared to $71,000 in Q2 2016;
  • Cash and cash equivalents reported under GAAP as of June 30, 2017 was $685,000 compared to $2.2 million at December 31, 2016; and
  • Proportional cash and cash equivalents, which includes BQE Water’s share held in joint ventures, as of June 30, 2017 was $2 million compared to $3 million at the end of 2016.

Operating Highlights
The Raglan Project, Quebec
During the quarter, BQE Water commenced operations for its 14th operating season at the Raglan Mine site. The plant began treating water in early June, slightly earlier than the prior year. Based on the availability of water at the site, BQE Water expects to conclude operations by September, a few months earlier than prior years.

Joint venture with Jiangxi Copper Company, China
BQE Water’s joint venture in China with partner Jiangxi Copper Company (“JCC”) operated three plants during the quarter. Operating results for all three plants are as follows:

(in ’000s) 3 months ended Jun. 30 6 months ended Jun. 30
2017 2016 2017 2016
Water treated (cubic metres) 6,124 6,660 8,058 11,639
Copper produced (pounds) 1,501 1,274 1,804 2,192

During Q2 2017, all three plants met or exceeded mechanical availability and process performance. Changes in water volume and feed grade are largely the result of environmental conditions beyond the control of the joint venture and will fluctuate from period to period. During Q2 2017, BQE Water had a decrease of 8% in water treated and an increase in copper recovery of 18% over the same period in 2016. On a year to date basis, all three plants have met budgeted copper recovery after a slow start to the year.

Sales and Project Highlights
Sulf-IX™ Piloting Activity
In early 2017, BQE Water started a pilot testing contract with a Peruvian resource company to demonstrate the capabilities of its Sulf-IX™ technology. BQE Water successfully completed the construction of a Sulf-IX™ pilot plant and finished two months of on-site piloting in Peru during Q2 2017. The pilot campaign was able to meet stringent discharge limits and results are currently being reviewed with the customer to determine the advancement of the project.

Engineering Services
In Q2 2017, BQE Water continued to provide engineering services for a mine located in the Northern Interior of BC. Following BQE Water’s successful pilot demonstration with this client in 2016, BQE Water was contracted to assist them with their permit application and to conduct detailed engineering for a water treatment system to remove selenium and metals using BQE Water’s Selen‐IX™ and ChemSulphide® technologies. BQE Water is continuing discussions with the mine site owner to advance the project but the water treatment operations will be a part of the overall development of the site.

Consulting Services
Also during the quarter, BQE Water continued to provide consulting services for several water treatment projects in Canada, United States, Asia, Europe and Latin America. These services covered a broad spectrum of activities including operations support, development of site specific water management strategies and various stages of water treatment assessment for the removal of metals, sulphate and selenium. BQE Water expects that these activities will continue over the next several quarters and may lead to new activities and contracts as water management measures proceed to implementation.

Lab Testing Services
During Q2 2017, BQE Water continued to perform lab scale testing of its technologies at various mine sites with customers in Canada, United States and Latin America. These tests will allow mine sites to assess BQE Water’s technologies and provide high level cost estimates for possible full-scale plants. If results prove favourable, they could lead to additional services including pilot scale testing, design, construction and operation of full-scale plants in the future.

Zinc and Copper Recovery – Joint Venture
In late 2015, BQE Water announced a new joint venture to build, own and operate a zinc and copper recovery plant at a smelter in China. BQE Water has commenced engineering and construction and had expected to begin operations in late 2017. However, due to construction delays beyond the control of the joint venture partners, BQE Water now expects the plant to begin operations in late Q1 2018. Under the terms of the joint venture and operating contracts, BQE Water will receive a fixed-fee for technical support and an ongoing share of the profits from the operation.

Our results for Q2 2017 builds upon the progress achieved over the last year. The first half of the year typically has lower revenues due to the seasonal nature of our operations at the Raglan Mine site and China joint venture. However, as previously noted we finished 2016 with a strong backlog of projects and increased our year-to-date project revenue by 75% over the prior year.

In Q1 2017, seasonal conditions around our plants in China were drier than normal and as a result, we had a slow start to 2017. During Q2 2017, copper recovery increased significantly and we finished the quarter near budgeted levels of copper volume on a year to date basis. The plants in 2017 recovered 388,000 pounds less copper when compared to 2016 but with the increase in average copper price during 2017, our year to date copper revenues were consistent with 2016.

Overall, we increased our positive adjusted EBITDA significantly when compared to the same quarter in 2016. This improvement is a result of maintaining a focused and disciplined cost structure while targeting activities in key markets for future growth.

The current projects completed year to date are the result of efforts over the past several years. We have worked on positioning the Company for success by getting involved in early stages of new projects, strengthening our technical team, and advancing the development and commercialization of new products including our Sulf-IX™ and Selen-IX™ processes. We have also restructured our expenditures over this time to preserve working capital while continuing to expand our project pipeline and deliver our services in a strategic and disciplined manner. We expect to build on this throughout the current year.

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 and cash flows 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, sales bookings, and execution of projects to generate cash flow are the primary areas of focus for the Company’s management.

We are scheduled to repay the principle amount of the convertible loan on January 6, 2018. Currently, we believe that we should generate sufficient cash from operations and new projects through the rest of 2017 to meet this obligation. However, the lack of control in timing of revenues from forecasted projects introduces the risk of temporary shortage in working capital and could impact our ability to repay the loan.

Q2 2017 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)

3 months ended Jun. 30

6 months ended Jun. 30






$ $ $ $
Revenues 953 644 1,621 1,035
less: Plant and other operating costs (excluding depreciation)  








297 279 547 451
General and administration 376 465 871 891
Sales and development 303 268 592 617
Stock-based compensation 15 16 9 46
Depreciation and amortization 33 59 66 116
Share of results of equity accounted joint ventures (764) (291) (798) (191)
Income (loss) from operations and joint ventures 334 (238) (193) (1,028)
Other expenses – net (69) (1,408) (116) (1,434)
Net income (loss) for the period 265 (1,646) (309) (2,462)
Translation (loss) gain on foreign operations (51) 1,290 (43) 1,027

Comprehensive income (loss) for the period









Net loss per share (basic and diluted) 0.00 (0.02) (0.00) (0.03)
Proportional Revenues1 3,182 2,137 4,290 3,656
Adjusted EBITDA1 744 71 245 (513)

1See “Non-GAAP Measures” in Q2 2017 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.