BQE Water Reports Year End 2017 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 consolidated financial results for the year ended December 31, 2017.

2017 Financial Highlights:

  • Revenues for the year as reported under GAAP were $4.1 million compared to $4.0 million in 2016;
  • Proportional revenues for the year were $9.3 million compared to $8.4 million in 2016, an 11% increase over the prior year;
  • Net loss as reported under GAAP was $362,000 compared to $2.3 million in 2016;
  • Adjusted EBITDA for the year was $776,000 compared to $8,000 in 2016;
  • Cash reported under GAAP, as of December 31, 2017 was $1 million compared to $2.2 million at the end of 2016; and
  • Proportional Cash, which includes our share held in joint ventures, as of December 31, 2017 was $2.5 million compared to $3.0 million at the end of 2016.

2017 Operating Highlights:
Raglan Mine operation for Glencore Canada Corporation, Quebec
During the year, we completed our 14th operating season at the Raglan Mine owned by Glencore Canada Corporation, where BQE Water is responsible for the ongoing operation of three WTP. Our contract is performance based and our revenue is linked directly to the volume of water treated to the client’s specification for discharge into the environment. The operating results for the 12 months ended December 31, 2017 are as follows:

(in ’000s) 2017 2016
Water discharged (cubic metres) 1,168 1,382

Joint venture operation with Jiangxi Copper Company, China
Our joint venture in China with partner Jiangxi Copper Company (“JCC”) operated three WTP during 2017. 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 wastewater. The operating results for the 12 months ended December 31, 2017 are as follows:

(in ’000s) 2017 2016
Water treated (cubic metres) 17,160 18,180
Copper produced (pounds) 3,449 3,609

2017 Commentary and Outlook for 2018

Overall, 2017 was very successful and the key achievements of the Company can be summarized as follows:

  • Maintained a strong safety and environmental record at its operations with no accidents and environmental incidents;
  • Achieved the best financial performance in its history with annual adjusted EBIDTA of $776,000, an increase of $768,000 over 2016;
  • Increased Proportional Revenue over 2016, as non-recurring component of the Proportional Revenue stagnated for several years;
  • For the first time since 2009, the Company has solid prospects for new plants to be built that includes operation services in North America;
  • Successful industrial scale demonstration of BQE Water’s Selen-IX™ electro-reduction technology has supported its advancement to a commercially ready status;
  • Completion of mobile pilot plants in Latin America and in China, to aid business development in these key strategic markets; and
  • Successful expansion and re-start of a SART plant designed by BQE Water at the LLuvia de Oro Mine in Mexico demonstrates to the industry that BQE Water can deliver SART safely, cost-effectively and on a tight schedule.

Despite significant short-term/quarterly fluctuations in our financial performance, the year ended 2017 marked the third consecutive year we achieved year-over-year improvement in our adjusted EBIDTA. We are proud of this achievement especially due to the challenges faced by the mining sector from 2015 to 2017.

The improved financial performance in 2017 is a reflection of several factors. First, the 27% increase in the average copper price compared to 2016 increased our share of revenues from our Dexing joint venture. The remainder of the increase was due to increased revenue generated by technical service engagements. In this context, the results in 2017 reflect the long sales cycle in our industry where efforts over the past three years are finally having a positive impact on revenues. Furthermore, the reduction in Company expenses and ongoing fiscal discipline applied in recent years resulted in a dramatic improvement in the Adjusted EBIDTA from $8,000 in 2016 to $776,000 in 2017. Our overall gross margin decreased in 2017 compared to 2016 primarily due to the lowering of our project margin on a specific project to build a new mobile pilot plant. While this reduced our gross margin in 2017, this is unlikely to occur again in the near future. More importantly, we believe that the new pilot plant assets will help us grow our business in these strategic markets in the future.

Despite the positive trend in the Company’s financial performance over the last three years, it is important to understand that fluctuations in profitability are unlikely to disappear in the near future. This is primarily due to the following:

  • Recurring revenue from plant operations and sales of recovered metals which accounts for approximately 55% of our total Proportional revenue, fluctuates intrinsically as it is dependent on climatic conditions that affect total water volume and mass of recoverable metals reporting for treatment;
  • Amortization, interest charges, and income taxes in our China joint ventures are all significant relative to our Proportional results and this is unlikely to change in the near future; and
  • General and administration expenses relating to public company expenses represent a significant component of our total expense and the timing of these expenses contributes to quarterly fluctuations in financial performance.

As we look forward to 2018, we expect the trend of year-over-year improvement to continue. We have better visibility about certain projects that have been in our pipeline for several years. We also have a number of projects in much earlier stages of development and while these projects provide significant opportunities for future revenues, they are conducted in stages, hence, timing of these stages and associated revenues and cash-flows to BQE Water are uncertain. As a result, the primary areas of focus for the Company in 2018 are to continue to grow the project pipeline and identify avenues that would contribute to shortening the sales cycle and assist in generating revenues in the short-term.

Overall, we expect to generate sufficient cash-flow throughout 2018 to enable us to repay the principle amount of the convertible loan due on January 6, 2019 and have sufficient cash reserves to ensure ongoing Company operations. However, we recognize that short-term fluctuations in our revenue combined with the timing of the dividend payout from our China joint venture represents a risk of a temporary shortfall in working capital. Management and our Board of Directors are actively exploring options to mitigate this risk. Although the Company has been successful in securing financing in the past, there is uncertainty whether any financing will be available in the future on terms acceptable to the Company.

2017 Financial Results
For a complete set of Financial Statements and Management Discussion and Analysis, please go to

(in $’000 except for per share amounts)



$ $
Revenues 4,057 3,961
less: Plant and other operating costs (excluding depreciation) 2,315 1,758
1,742 2,203
General and administration 1,665 1,705
Sales and development 1,219 1,154
Stock-based compensation 68 76
Depreciation and amortization 214 234
Share of results of equity accounted joint ventures (1,149) (156)
Loss from operations and joint ventures (275) (810)
Finance costs, net (215) (98)
Foreign exchange loss (35) (1,427)
Bad debt recovery 61 11
Other income 2
Loss before income taxes (462) (2,324)
Income tax recovery (expense) 100 (1)
Net loss for the year (362) (2,325)
Translation (loss) gain on foreign operations (12) 954
Comprehensive loss for the year (374) (1,371)
Net loss per share (basic and diluted) (0.0) (0.02)
Proportional Revenues1 9,276 8,362
Adjusted EBITDA1 776 8
at Dec. 31 at Dec. 31
2017 2016



Working capital 735 1,660
Total assets 6,866 7,459
Total long term liabilities 1,498 1,378
Shareholders’ equity 4,395 4,756

1See “Non-GAAP Measures” in 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 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.