BQE Water Reports Q2 2018 Results

VANCOUVER, BC – BQE Water Inc. (TSX-V: BQE), a leader in the treatment and management of mine impacted waters, is pleased to release its interim consolidated financial results for the three and six months ended June 30, 2018.

Q2 2018 Financial Highlights

  • Revenues as reported under GAAP were $540,000 compared to $953,000 in Q2 2017;
  • Proportional revenues were $2.8 million compared to $3.2 million in Q2 2017;
  • Net income as reported under GAAP was $61,000 compared to $265,000 in Q2 2017;
  • Adjusted EBITDA was $427,000 compared to $744,000 in Q2 2017;
  • Cash reported under GAAP as of June 30, 2018 was $300,000 compared to $984,000 at December 31, 2017; and
  • Proportional Cash, which includes our share held in joint ventures, as of June 30, 2018 was $2.5 million compared to $2.5 million at the end of 2017.

Q2 2018 Operating Highlights

Joint venture with Jiangxi Copper Company, China
Our joint venture in China with partner Jiangxi Copper Company (“JCC”) operated three plants during Q2 2018. Although most of the treated water is discharged into the environment, some treated water is occasionally recycled. Revenue is derived from the sale of copper recovered from the wastewater, which is a combination of acid rock drainage and seepage from low-grade stockpiles. The following is summary of operating results for all three plants during Q2 2018.

(in ‘000s) 3 months ended Jun. 30 6 months ended Jun. 30
Dexing 1 2018 2017 2018 2017
Water treated (cubic metres) 2,698 2,311 3,567 2,601
Copper produced (pounds) 591 745 651 745
Dexing 2
Water treated (cubic metres) 3,240 2,770 5,115 3,901
Copper produced (pounds) 365 397 501 536
Water treated (cubic metres) 1,744 1,043 2,544 1,556
Copper produced (pounds) 385 359 629 523
Total Joint Venture
Water treated (cubic metres) 7,682 6,124 11,226 8,058
Copper produced (pounds) 1,341 1,501 1,781 1,804

The volume of water treated and pounds of copper recovered at all three plants will fluctuate depending on precipitation levels and climate conditions at each site. The two plants Dexing 1 and Dexing 2 treat water from the same sources and water may be diverted from one plant to the other to optimize operations.

During 2018, all three plants met or exceeded mechanical availability and process performance. However, excessive rain caused the overall volume of water reporting for treatment to increase by 25% and the mass of copper to decrease by 11% in Q2 2018 compared to the same period in 2017. This higher ratio of water treated to the mass of copper recovered reduced the profit margin in Q2 as the consumption of power and some of the treatment reagents such as lime is directly proportional to the volume of treated water.

Raglan Mine, Quebec
BQE Water operates three Water Treatment Plants (“WTP”) at the Raglan Mine, an active nickel mine in Northern Quebec owned by Glencore Canada Corporation (“Glencore”). The three plants include: BQE Water’s ChemSulphide® process plant, BQE Water’s Met-IX™ process plant, and a conventional lime neutralization plant. All plants discharge treated water into the environment. The ChemSulphide® and Met-IX™ plants also recover nickel from wastewater which is blended into the nickel concentrate produced by the mine. BQE Water is responsible for all aspects of the plant operation and charges a treatment fee per cubic metre of water discharged.

During the quarter, we mobilized our operations team to site to commence our 15th operating season at Raglan. However, due to unusually cold weather in May and June, the spring thaw has been delayed by approximately one month compared to previous seasons. As a result, none of the WTP were able to treat and discharge water into the environment in Q2. Based on the availability of water at the site, we expect that over 1.1 million cubic metre of water will be available for treatment for the 2018 season and preparations are being made to extend the treatment season by one month.

Q2 2018 Commentary and Outlook for 2018
Our results for Q2 2018 continue to reflect the improvements that we had achieved over the last four years, showing relative strength with positive Adjusted EBITDA figures for both Q2 and year to date. That said, our performance in the first six months of 2018 was slightly lower compared to 2017. Since our costs remained more or less unchanged, the reduction in revenue yielded a corresponding drop in the Adjusted EBITDA figures by approximately $200,000 year to date. The reasons for the slightly lower revenue in the first half of 2018 included:

  • Delayed water treatment season at our Raglan operations;
  • Lower copper production from our joint venture plants in China; and
  • Reduced project activity in South America.

The first two are climate-related and outside of the Company’s control. While the revenue from Raglan and China in the second half of the year is uncertain, it is possible that part of the revenue shortfall in the first half of 2018 could be offset by increases in Q3 and Q4. The third reason for lower revenue in the first half of 2018 is the relative weakness of our project pipeline in South America which has not been re-built to the same extent as our pipeline in North America and Asia since the start of the industry downturn in 2013. We have been proactive in our business development efforts and are seeing more leads and future business opportunities for BQE Water in South America now compared to previous years. However, it will take time before we reach the point where our project revenue from South America is stabilized.

A positive note for our 2018 financial results is the growth and diversification of our technical services revenues outside of pilot demonstrations. Over the last several years, pilot demonstrations would account for approximately 30% to 40% of our technical services revenues on an annual basis. Despite not having a pilot project in the first six months of 2018, our earnings of approximately $1 M in technical services revenue for the period is a reflection of the broadening of technical services for which we have been contracted. These technical services include water management, permitting assistance, technical audits and the design of new treatment plants, some of which may proceed into implementation in 2019 or beyond.

More importantly, we are now providing services to an increasing number of clients. The change from the reliance on one major project per year with one client to multiple smaller projects with multiple clients is beneficial and strategically important for the Company. In the short-term, it helps us stabilize our non-recurring technical services revenue. In the long-term, it is key to the continued growth of our client base and the strengthening of BQE Water’s brand across the industry through the demonstrated value of our technologies and expertise.

One of the business highlights in 2018 that is evidence of the strengthening of our brand is our involvement in five new SART projects for five different clients globally. These projects were initiated in the first half of this year and while the scope of work varies based on their respective project phases, BQE Water is the lead technical expert for each.

Although we believe that our existing project pipeline will allow us to continue the trend of year-over-year financial performance improvements in 2018, it is difficult to determine the exact timing of when we will recognize the non-recurring revenue from these projects, as they typically proceed in stages and/or require reviews and approvals by regulatory agencies and our client’s executive management.

The combination of seasonality on our recurring revenue and the uncertain timing of non-recurring revenue creates fluctuations in our working capital. Consequently, management and the Board of Directors have explored different options for securing additional short-term financing. During Q2 of 2018, management and the Board of Directors have successfully signed short-term loan contracts with employees of the Company and the Company’s joint venture partner in China to mitigate the fluctuations in our working capital. Management and the Board of Directors will continue to explore other financing options such as a line of credit from a financial institution. While the improvements in our financial performance over the past several years may allow us to obtain a line of credit from a financial institution, this process will take time and other sources of financing may be required. Although the company has been successful in securing financing in the past, there is uncertainty whether financing will be available in the future on terms acceptable to the Company.

Q2 2018 Financial Results
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 540 953 1,067 1,621
less: Plant and other operating costs (excluding depreciation)  








101 297 168 547
General and administration 344 376 713 871
Sales and development 328 303 652 592
Stock-based compensation 10 15 64 9
Depreciation and amortization 4 33 8 66
Share of results of equity accounted joint ventures (697) (764) (794) (798)
Income (loss) from operations and joint ventures 112 334 (475) (193)
Other expenses – net (51) (69) (64) (116)
Net income (loss) for the period 61 265 (539) (309)
Translation (loss) gain on foreign operations (157) (51) 163 (43)

Comprehensive income (loss) for the period









Net loss per share (basic and diluted) (0.00) 0.00 (0.01) (0.00)
Proportional Revenues1 2,832 3,182 4,113 4,290
Adjusted EBITDA1 427 744 9 245
  at Jun. 30, at Dec. 31,




Working capital   (2,099) 735
Total assets   7,287 6,866
Total long term liabilities   1,498
Shareholders’ equity   4,082 4,395

1See “Non-GAAP Measures” in the MD&A 

About BQE Water
BQE Water is a service provider specializing in water treatment and management for the mining and metallurgical industry. We focus on reducing Life Cycle Costs through 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. We also provide plant operation and maintenance services and currently operate several plants under long-term contract. BQE Water is headquartered in Vancouver, Canada and trades on the TSX Venture Exchange under the symbol BQE. 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, 2017). 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.