BQE Water Reports Q3 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 nine months ended September 30, 2018.

Q3 2018 Financial Highlights

  • Strongest quarter in the Company’s history with adjusted EBITDA of $1.3 million and net income of $944,000 in the quarter;
  • Proportional revenues increased by 11% to $3.5 million for the quarter;
  • Technical services accounted for 28% of Proportional revenues in comparison to 18% for the same period for the year prior, indicating a corporate shift away from revenues earned from metals recovery; and
  • Proportional Cash, which includes our share held in joint ventures, as of September 30, 2018 was $3.2 million compared to $2.5 million at the end of 2017.

Q3 2018 Operating Highlights
Raglan Water Treatment, Quebec
The Company operates three water treatment plants at Raglan Mine, an active nickel mine in Northern Quebec owned by Glencore Canada Corporation (“Glencore”). The three plants utilize BQE Water’s ChemSulphide® and Met-IX™ processes, and conventional lime neutralization. The two plants using ChemSulphide® and Met-IX™ not only treat water for environmental discharge but also recover nickel that is blended into the nickel concentrate produced by the mine.

During Q2, 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 and we started treating water approximately one month later compared to previous seasons. Based on the availability of water at the site, we expect that over 1.1 million cubic metres of water will be available for treatment for the 2018 season and preparations are being made to extend the treatment season by one month. Operating results for three plants for the current quarter and the current year are as follows:

(in ’000s) 3 months ended Sept. 30 9 months ended Sept. 30
2018 2017 2018 2017
Water treated (cubic metres) 862 1,002 862 1,142

Joint venture with Jiangxi Copper Company, China
Our joint venture in China with partner Jiangxi Copper Company (“JCC”) continued to operate three plants during Q3 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 Q3 2018.

(in ’000s) 3 months ended Sept. 30 9 months ended Sept. 30
Dexing 1 2018 2017 2018 2017
Water treated (cubic metres) 2,416 2,505 5,983 5,106
Copper produced (pounds) 536 492 1,187 1,237
Dexing 2
Water treated (cubic metres) 2,766 2,993 7,881 6,894
Copper produced (pounds) 373 368 1,002 904
Water treated (cubic metres) 1,091 946 3,635 2,502
Copper produced (pounds) 131 196 632 719
Total Joint Venture
Water treated (cubic metres) 6,273 6,444 17,499 14,502
Copper produced (pounds) 1,040 1,056 2,821 2,860

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.

Q3 2018 Project Highlights
BQE Water’s technical expertise and intellectual property are applicable across broad areas of water management. The highlights of the technical services provided to clients for projects globally during Q3 2018 are summarized below.

Water Treatment Plant at Kemess Mine – First Commercial Selen-IX™ Plant
BQE Water signed an agreement with AuRico Metals in March 2018 for the engineering, procurement, installation assistance and commissioning of a new water treatment plant at the Kemess Mine in Northern BC. The plant combines BQE Water’s ChemSulphide® process adapted for the Kemess water and Selen-IX™ technology for selenium control. Issued for construction engineering has been completed and the project is currently in the initial stages of procurement, equipment fabrication and site preparation. Equipment fabricated and procured over the winter will be installed in Q2 2019 with commissioning of the water treatment plant scheduled for the second half of 2019. We have also signed a five year operating services agreement to operate the new water treatment plant, which is expected to treat up to 6,400 m3/day of mine impacted water. The operation of the water treatment plant is expected to start on January 1, 2020.

SART Implementation at Media Luna in Mexico
In May 2018, BQE Water was brought in as the lead technical expert in SART to help with the implementation of this process at Torex’s Media Luna project in Mexico. BQE Water was contracted to take charge of all aspects of the SART process commissioning including safety, environmental, automation, operator and supervisor training, and reporting. Commissioning of the plant was completed safely without any incidents and the plant entered stable continuous operation less than 60 days from the beginning of the process start-up. The plant is currently operating around the clock and we continue to provide ongoing technical support to the operation including ongoing plant optimization.

Commissioning of Copper and Zinc Recovery Plant at Shandong Smelter in China
In 2016, BQE Water entered into a joint venture agreement with a Chinese partner, Beijing MWT Water Treatment Project Limited Company (“MWT”), for the design, construction and operation of a treatment plant that would recover copper and zinc from wastewater generated by Zhaoyuan Gold Smelting Co., Ltd (“Zhaoye”). BQE Water provides its technology and plant operating experience in exchange for an ongoing 20% participation of the profit from metals recovered and technical support fees which are built into the operating cost during the first three years of operation. Plant construction began in Q4 2017 and was completed and commissioned in Q3 2018. The plant is now operating around the clock recovering approximately 180,000 pounds of zinc and 8,000 pounds of copper per month. Copper concentrate produced by the plant is sold back to Zhaoye and the zinc concentrate is sold to local metal traders.

Membrane Water Treatment Pilot at BC mine
During Q2 2018, BQE Water was contracted to assess water treatment options at a producing mine in Central BC. The mine owner is concerned about the inventory of impacted water stored at site and wants to reduce this inventory to create room for future operations while at the same time reducing environmental risks. Following our initial assessment of water treatment options, we identified membrane treatment as the most suitable method to achieve the site objectives. Starting in Q3 2018, we carried out a pilot demonstration of the proposed membrane treatment. The on-site pilot was completed over a period of seven weeks and involved the treatment of 1,200 cubic metres of mine water. The final report summarizing the pilot operating results and recommendations for possible implementation of the full-scale treatment system will be submitted in Q4 2018.

Mine Water Management & Treatment Studies
Over the course of Q3, BQE Water’s engineering team completed preliminary engineering designs, laboratory test campaigns and water management reports for various mine sites and smelters around the world. The projects are not only spread geographically but also across commodity sectors including gold, base metals and coal.

Q3 2018 Commentary and Outlook
The positive Adjusted EBITDA figure of over $1.2M for both Q3 and year to date, reflect the improvements in the Company’s performance achieved over the last four years. Q3 has historically been our strongest financial quarter each year due to the seasonal operations at Raglan Mine and our typically strong operating results from our China joint venture plants. However, the results achieved in Q3 2018 exceeded all previous Q3 results recorded by the Company historically despite lower recurring revenue from water treatment plant operations. This is due to the strong contributions from engineering, pilot testing, and consulting services to the overall revenue in the quarter.

In context of the year-to-date results, this exceptional performance in Q3 2018 largely offsets the relative short fall in revenue recorded during the first half of 2018 compared to 2017, bringing the Company to a strong starting position going into Q4 of 2018. Based on the status of projects we worked on in Q3, we expect the strength in non-recurring revenue from technical services to continue through Q4 2018 and into the first half of 2019. This should help stabilize our revenues during the winter months when recurring revenue from operations is at its minimum. With the strong performance in Q3 2018, we expect to repay both the short-term loan agreements with employees of the Company and with our MWT-BQE joint venture during Q4, while at the same time improving our working capital position prior to the start of 2019. We also expect the Company will have sufficient funds to repay all lenders of the convertible loan due in January 2019 who opted not to convert all or any portion of the loan into common shares of the Company.

Q3 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 Sept. 30

9 months ended Sept. 30





$ $ $ $
Revenues 1,893 1,578 2,960 3,199
less: Plant and other operating costs (excluding depreciation) 573 642 1,472 1,716
1,320 936 1,488 1,483
General and administration 369 383 1,082 1,254
Sales and development 211 263 864 855
Stock-based compensation 37 34 101 43
Depreciation and amortization 4 31 12 98
Share of results of equity accounted joint ventures (302) (470) (1,096) (1,268)
Income from operations and joint ventures 1,001 695 525 501
Other expenses – net (57) (17) (120) (134)
Income taxes recovery 153 153
Net income for the period 944 831 405 520
Translation loss on foreign operations (318) (97) (155) (140)
Comprehensive income for the period 626 734 250 380
Net income per share (basic and diluted) 0.01 0.01 0.00 0.01
Proportional Revenues1 3,488 3,147 7,602 7,437
Adjusted EBITDA1 1,272 1,088 1,280 1,333
at Sept. 30, at Dec. 31,



Working capital (1,421) 735
Total assets 8,501 6,866
Total long term liabilities 1,498
Shareholders’ equity 4,739 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.