BQE Water Reports Q2 2019 Results

VANCOUVER, BC – BQE Water Inc. (TSX-V: BQE), a leader in the management of mine wastewaters and metallurgical bleed streams, is pleased to release its interim consolidated financial results for the three and six months ended June 30, 2019.


  • Net earnings per share of $0.29 compared to $0.06 in Q2 2018;
  • Adjusted EBITDA of $756,000 compared to $427,000 in the second quarter of 2018, a significant 77% increase;
  • Net income as reported under GAAP was $345,000 compared to $61,000 in Q2 2018;
  • Proportional Revenues of $3.1 million compared to $2.8 million in Q2 2018;
  • Proportional Cash, which includes our share held in joint ventures, as of June 30, 2019 was $2.8 million compared to $2.5 million at June 30, 2018, and to $3.2 million at the end of 2018; and
  • First ever net earnings recorded during the first six months of a calendar year, extending the period of positive net earnings from 2018.

Our operational services are the operation of water treatment plants, which generates recurring revenues for the Company from two main sources: from the sales of recovered metals and from water treatment fees.

Revenues from Sales of Recovered Metals
The Company operates four water treatment plants that generate revenues from the sale of recovered metals, three plants operating under the JCC-BQE Joint Venture and one plant operating under the MWT-BQE Joint Venture.

JCC-BQE Joint Venture (“JCC-BQE”)
Our joint venture with partner Jiangxi Copper Company (“JCC”) operates three water treatment plants at the Dexing and Yinshan Mines in Jiangxi province of China. The volume of water treated and pounds of copper recovered by the plants fluctuate seasonally depending on precipitation levels in the region. The operating results for JCC-BQE for the three and six months ended June 30, 2019 are as follows:

(in ’000s) 3 months ended Jun. 30 6 months ended Jun. 30
2019 2018 2019 2018
Water treated (cubic metres) 6,805 7,682 12,614 11,226
Copper produced (pounds) 1,189 1,341 1,971 1,781

During Q2 2019, all three plants met or exceeded mechanical availability and process performance. Both the volume of water treated and the mass of copper recovered decreased by 11% over the same period in 2018. 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.

MWT-BQE Joint Venture (“MWT-BQE”)
Our joint venture with partner Beijing MWT Water Treatment Project Limited Company (“MWT”) began operations for its first water treatment plant in Q4 2018. The water treatment plant in the Shandong province of China generates revenues from the sale of copper and zinc recovered from smelter wastewater. The operating results for MWT-BQE for the three and six months ended June 30, 2019 are as follows:

(in ’000s) 3 months ended Jun. 30 6 months ended Jun. 30
2019 2018 2019 2018
Zinc recovered (pounds) 368 1077
Copper recovered (pounds) 51 104

During Q2 2019, the MWT-BQE water treatment plant recovered 48% less zinc than Q1 2019. The decrease in zinc recovery is due to a reduction in the volume of wastewater generated by the smelter and in the grade of recoverable zinc contained in the wastewater. The Company expects both of these factors to continue for the remaining of 2019. Such factors are beyond the Company’s control as they are linked to a temporary change in the smelter’s throughput. Copper recovery is consistent with production during Q1 2019.

Revenues from Water Treatment Fees
The Company is contracted to operate water treatment plants that generate recurring revenues in the form of treatment fees.

Compared to June 2018, the number of water treatment plants generating recurring revenues has increased by two for a total of five plants. They include four plants at Raglan Mine owned by Glencore in Canada and one plant operated by MWT-BQE in Shandong province. In Q1 2019, Glencore updated the scope of our existing operations services agreement to include the addition of operations for the Katinniq plant, which was previously operated by Glencore. This addition was based on 15 years of operational excellence for three other plants at Raglan Mine.

During Q2 2019, we mobilized our operations team to site to commence our 16th operating season at Raglan. The team began operations of the newly added Katinniq plant in April 2019 and began discharging clean water for the ChemSulphide® plant at the beginning of June 2019.

The MWT-BQE plant in Shandong generates an operations support fee paid to the Company by MWT-BQE. This fee is not linked to the volume of water treated but to the achievement of operational targets which rely on the Company’s expertise delivered through ongoing operations services. The total water treated for the three and six months ended June 30, 2019 are as follows:

(in ’000s) 3 months ended Jun. 30 6 months ended Jun. 30
2019 2018 2019 2018
4 WTP at Raglan Mine (cubic metres) 319 319
1 WTP at MWT-BQE (cubic metres) 80 231

BQE Water’s technical expertise and IP are applicable globally across broad areas of water management. The highlights of our technical services and technical innovation projects during Q2 2019 are summarized below. 

Commercial Deployment of Selen-IX™ Technology

  • Assist with the procurement and fabrication of modularized equipment to be shipped and subsequently installed at the Kemess Mine in Northern BC. The new water treatment plant will use Selen-IX™ as one of the treatment stages.
  • Preparation of the operating manual, pre-commissioning and commissioning plan.

Engineering Design & Assistance with Procurement for TMAC Resources

  • Engineering design of a containerized modular water treatment plant for the Hope Bay project in Western Nunavut.
  • Assist with the procurement and oversight of fabrication of equipment to meet a Port of Québec delivery deadline for shipment to site by boat.

Cyanide Management/Recovery for Precious Metals Extraction Projects using SART and the Management of Nitrogen Residues with various Treatment Approaches

  • Engineering design and cost estimate for a SART plant treating up to 600 m3/hr of gold leach solution and the recovery of approximately 3,400 metric tons of copper and 6,700 metric tons of cyanide per year in South America.
  • Engineering design to support the construction of a SART plant to treat 140 m3/hr of leach solution at the Parral project in Mexico.
  • Engineering design for the construction of a SART plant integrated into the gold metallurgical processing facility for Shandong Zhongkuang Group in China.
  • Cyanide management at a gold processing facility owned by Shandong Zhaojin Group in China.

Water Services – Management, Treatment, Permitting Assistance, Toxicity Mitigation

  • On-site testing and engineering design of a temporary water treatment system to manage toxicity from cyanide destruction residue at a gold mine in Qué
  • Assessment of water quality control and general water management improvements at a large copper mine in Chile. This project involves waste residue minimization, scaling mitigation, flotation improvements and copper recovery from waste.
  • Technical lead for the permitting of improvements and expansion of water treatment at the Silvertip Mine in BC.
  • Technical review of water treatment for First Nations engaged in the permitting and re-start of an existing BC mine.

Optimization of Existing Water Treatment Plant

  • Assessment of options to upgrade and expand the Spoon water treatment facility at Raglan Mine in response to mine expansion.

We are very pleased with our Q2 2019 financial results and the realization of net earnings of $0.29 per share for the quarter, achieving the first ever net profit recorded during the first half of a calendar year. Having attained net earnings in fiscal 2018, extending this positive trend into the first half of 2019 is extremely encouraging. This is especially noteworthy because the first half of any calendar year for the Company is traditionally the weakest due to the seasonality of our existing ongoing operations in Canada and our joint venture operations in China. The single largest factor contributing to the improved overall financial performance of the Company in the first six months in 2019 is the increase in revenues from technical services. While this is very positive, our shareholders should understand the true meaning and importance of the recorded increase during 2019 to better appreciate the expectations for the remainder of the year and the longer term outlook.

In the Company’s business model, technical services such as effluent treatability assessments, permitting assistance and preliminary engineering designs come early on in a project and often several years before a new water treatment plant is built and can contribute new recurring revenues when it starts operating. Therefore, revenues from technical services correlates well with the strength of our business development pipeline and provides a leading indicator of the Company’s future growth of recurring revenues. Moreover, it is important to consider revenues from technical services over a longer term, preferably on an annual basis or longer to obtain a true picture of the Company’s performance and future outlook. This is because it is difficult to predict the timing of this revenue which may lead to irregular financial performance from quarter to quarter.

Finally, while we expect revenues from technical services to continue to increase, we also anticipate that its relative contribution to the overall revenues of the Company will diminish in the future as the recurring revenues portion linked to plant operations grows with each new plant. Consequently, the results recorded in Q1 and Q2 2019 and all of 2018, which are dominated by improvements in revenues from technical services, should not be construed to reflect either a long-term rebalancing of recurring revenues from operations versus non-recurring revenues from technical services and/or a one-off or difficult to maintain short-term change in the Company’s fortunes. Rather, the results should be seen as a positive indicator of future longer term performance anchored in a strong project pipeline.

The third quarter tends to be the strongest quarter for the Company when all of our treatment plants contribute the maximum recurring revenues. In addition, we signed several contracts for the construction of new plants in Q2 and expect the revenues from technical services to match our last two quarters. Therefore, the outlook for the rest of the year is very positive. Despite uncertainties around the magnitude and timing of revenues from technical services in 2020, the longer term forecast looks positive with several new plants entering operations next year and we expect the recurring revenue component of our Proportional Revenues to grow. Crucially, these plants include the first industrial scale Selen-IX™ plant showcasing our proprietary selenium removal technology and several SART plants which solidifies our leadership position in what we anticipate to be a fast growing segment of the global gold extraction market. In Management’s view, the main risks to the Company’s performance in the short-term is a possible sudden change in the foreign exchange rate between the Chinese renminbi and the Canadian dollar and/or a delay in the payment of our annual JCC-BQE dividend.

For a complete set of the interim condensed 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
2019 2018 2019 2018
$ $ $ $
Revenues 1,216 540 1,932 1,067
less: Operating expenses (excl depreciation) 607 439 1,051 899
609 101 881 168
General and administration 362 344 745 713
Sales and development 274 328 593 652
Share-based payment expenses 64 10 86 64
Depreciation and amortization 50 4 100 8
Share of results of equity accounted joint ventures (507) (697) (709) (794)
Income (loss) from operations & joint ventures 366 112 66 (475)
Other expenses, net (21) (51) (48) (64)
Net income (loss) for the period 345 61 18 (539)
Other comprehensive (loss) income    
Translation (loss) gain on foreign operations (241) (157) (214) 163
Comprehensive income (loss) for the period 104 (96) (196) (376)
Net earnings (loss) per share (basic & diluted) 0.29 0.06 0.01 (0.57)
Proportional Revenues1 3,138 2,832 5,194 4,113
Adjusted EBITDA1 756 427 677 9
  at Jun. 30, at Dec. 31,


2019 2018
Working capital   623 1,286
Total assets   8,304 7,913
Total long term liabilities   359
Shareholders’ equity   6,214 6,382

 1See “Non-GAAP Measures” in the MD&A

About BQE Water
BQE Water is a service provider specializing in water treatment and management for metals mining, smelting and refining. We are helping to transform the way the industry thinks about water in the context of natural resource projects by offering services and expertise which enables more sustainable water management practices and improved overall project performance at reduced risks. BQE Water invests in innovation and has developed unique intellectual property through the commercialization of several new technologies at mine sites around the world for organizations including Glencore, Jiangxi Copper, Freeport-McMoRan and the US EPA. 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, 2018). 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.