BQE Water Reports Q3 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 nine months ended September 30, 2019.


  • Revenues reported under GAAP of $2.3 million compared to $1.9 million in Q3 2018 and Proportional Revenues of $4 million compared to $3.5 million in Q3 2018, both representing historic highs for the third quarter;
  • Adjusted EBITDA of $1.3 million is unchanged compared to Q3 2018 despite a bad debt write-off of $287,000 recognized during Q3 2019;
  • Net income as reported under GAAP was $849,000 compared to $944,000 in Q3 2018; and
  • Proportional Cash, which includes our share held in joint ventures, as of September 30, 2019 was $4 million compared to $3.2 million at the end of 2018.


Our operational services consist of the operation of water treatment plants, which generate recurring revenues for the Company from two main sources: sales of recovered metals and 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 nine months ended September 30, 2019 are as follows:

(in ’000s) 3 months ended Sept. 30 9 months ended Sept. 30
2019 2018 2019 2018
Water treated (cubic metres) 7,267 6,273 20,353 17,499
Copper produced (pounds) 1,095 1,040 3,066 2,821

During Q3 2019, all three plants met or exceeded mechanical availability and process performance. The volume of water treated increased by 16% and the mass of copper recovered increased by 5% 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 of its first water treatment plant in Q4 2018. The water treatment plant in the Shandong province of China generates the majority of its revenues from the sale of zinc recovered from smelter wastewater, along with small traces of copper found in the stream. The operating results for MWT-BQE for the three and nine months ended September 30, 2019 are as follows:

(in ’000s of pounds) 3 months ended Sept. 30 9 months ended Sept. 30
2019 2018 2019 2018
Zinc recovered 152 1,229
Copper recovered 30 134

During Q3 2019, the MWT-BQE water treatment plant recovered 59% less zinc than Q2 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 remainder 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 for the quarter is consistent with production during Q2 2019.

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

Compared to 2018, the number of water treatment plants generating recurring revenues from water treatment fees has increased by two to a total of five water treatment plants. They include four plants operated by BQE Water for Glencore at Raglan Mine and one plant operated by the MWT-BQE joint venture but supervised by BQE Water in China. The operating fees from the Glencore operations are primarily based on the volume of water treated and discharged in accordance with strict regulatory requirements. The MWT-BQE plant generates operations support fees for the achievement of operational targets that rely on the Company’s technical expertise. The volume of water treated for the three and nine months ended September 30, 2019 are as follows:

(in ’000s of cubic metres) 3 months ended Sept. 30 9 months ended Sept. 30
2019 2018 2019 2018
3 Glencore plants operated historically 1,049 862 1,216 862
1 new Glencore plant in 2019 363 537
1 MWT-BQE plant 164 99 446 99


BQE Water’s technical expertise and IP are applicable globally across broad areas of water management. The highlights of technical services provided to clients and technical innovation projects during Q3 2019 are summarized below.

Commercial Deployment of Selen-IX™ Technology

  • Assist with the procurement and installation of Selen-IX™ plant equipment at the Kemess Mine in Northern BC.
  • Preparation of the operating manual, pre-commissioning and commissioning plan.

Engineering Design & Supply of Modular Treatment Systems

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

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

  • Treatability study for waste brine at a base metal refinery in Eastern Canada.
  • Pilot demonstration for the simultaneous removal of sulphate and selenium to support the permitting of a mine expansion in Canada.
  • Peer review of a proposed mine water treatment solution for the permitting of a new gold mine in Eastern Canada.
  • Engineering design of a temporary water treatment system to manage toxicity from cyanide destruction residue at a gold mine in Québec.
  • Assessment of water quality control and general water management improvements, waste residue minimization, scaling mitigation, flotation improvements and copper recovery from waste, at a large copper mine in Chile.
  • 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.
  • Assessment of water treatment performance improvements for a silver-zinc-lead mine in BC.

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

  • Engineering design and procurement assistance for a new SART plant at the Parral operation in Mexico.
  • Engineering design and cost estimate for a SART plant to be integrated into either a heap leach or CIP operation at an existing gold mine in South America.
  • Engineering design for the construction of two new SART plants that will be integrated into the gold metallurgical processing facility for Shandong Zhongkuang Group and Zhaojin Group in China.

The third quarter tends to be the Company’s strongest financially as all water treatment plant operations contribute the maximum recurring revenues during this period. Moreover, as discussed in our previous quarter’s outlook, we anticipated the non-recurring revenues from technical services to remain stable and strong in the third quarter due to new contracts we had entered into during the first half of 2019. Looking at the financial results for Q3, it confirms that we have delivered according to expectations. The Proportional Revenues and revenues reported under GAAP for the third quarter both reached historic highs of $2.3 million and $4 million, respectively. Moreover, the Company had a bad debt write-off of $287,000 during the third quarter, as one of the Company’s customers declared bankruptcy and had no further assets to settle the debt owed to its unsecured creditors. Despite the one time bad debt write-off, the Adjusted EBITDA for the first nine months of 2019 is approximately 50% higher and the net income has doubled in comparison to the same time period a year ago. We are very pleased with our Q3 financial performance and believe it is yet another reflection of our ongoing trend of reported steady improvements since 2014.

The fourth quarter is anticipated to be a busy one with two new SART China plants entering the construction phase, the first commercial scale Selen-IX™ plant in Northern BC advancing to commissioning, and the new SART plant designed for a precious metals producer in Mexico earlier in the year expecting to start pre-commissioning. We will also be completing a pilot demonstration for the simultaneous removal of sulphate and selenium to support the permitting for the expansion of an existing mine in Canada. That said, the recurring revenues earned from plant operations will decrease in Q4 when compared to Q3, due to seasonality and maintenance schedules. Nevertheless, we expect to end the year 2019 with positive net earnings and a healthy balance sheet. In this regard, we are pleased to report that we have received the annual JCC-BQE dividend from China earlier this month.

Regarding the longer term outlook into 2020, we are excited to report that during this quarter, we managed to advance several new long-term opportunities in our project pipeline to the point of possibly reaching commercial agreements in Q4 2019 or Q1 2020. Provided we secure these new opportunities, 2020 and beyond looks very positive. This also takes into account the fact that several new water treatment plants currently under construction are scheduled to be fully commissioned and will enter the operations phase in the second half of 2020. At that point, these operations will start to contribute new recurring revenues.

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 Sept. 30

9 months ended Sept. 30





$ $ $ $
Revenues 2,326 1,893 4,258 2,960
less: Operating expenses (excluding depreciation) 857 573 1,907 1,472
1,469 1,320 2,351 1,488
General and administration 405 369 1,151 1,082
Sales and development 241 211 833 864
Share-based payment expenses 55 37 140 101
Depreciation and amortization 54 4 154 12
Share of results of equity accounted joint ventures (402) (302) (1,111) (1,096)
Income from operations and joint ventures 1,116 1,001 1,184 525
Other income (expenses) – net 37 (57) (7) (120)
Bad debt expense (287) (288)
Income tax expense (17) (20)

Net income for the period









Other comprehensive income    
Translation loss on foreign operations (140) (318) (354) (155)

Comprehensive income for the period









Net earnings per share (basic and diluted) 0.70 1.00 0.72 0.43
Proportional Revenues1 3,991 3,488 9,185 7,602
Adjusted EBITDA1 1,274 1,272 1,951 1,280
  at Sept. 30, at Dec. 31,




Working capital   1,100 1,286
Total assets   9,153 7,913
Total long term liabilities   325
Shareholders’ equity   6,942 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.