BQE Water Reports Year End 2018 Results

VANCOUVER, BC – BQE Water Inc. (TSX-V: BQE), a leader in the management of mine wastewater and metallurgical bleed streams, is pleased to release its audited consolidated financial results for the year ended December 31, 2018.

2018 Financial Highlights

  • First annual net earnings reported in the Company’s financial history, net income of $150,000 compared to loss of $362,000 in 2017;
  • Adjusted EBITDA for the year was $1.2 million compared to $776,000 in 2017, a 51% increase over the prior year;
  • Cash reported under GAAP as of December 31, 2018 was $1.4 million compared to $1 million at the end of 2017;
  • Proportional Cash which includes our share held in joint ventures as of December 31, 2018 was $3.2 million compared to $2.5 million at the end of 2017; and
  • Debt-free after the full conversion of $1.6 million convertible loan principal and unpaid accrued interest into an approximate aggregate of 27 million common shares of the Company on December 14, 2018.

2018 Operational Services Highlights
Operations generating revenue from water treatment fees
During the year, we completed our 15th operating season at Raglan Mine where BQE Water is responsible for the ongoing operation of three water treatment plants. Our revenue is linked directly to the volume of water treated and discharged to the environment as per the client’s specification. In addition to tolling fees at Raglan Mine, the Company generates an operation support fee from the MWT-BQE joint venture. The fee is not linked to the volume of water treated but rather to the achievement of operational targets which rely on the Company’s expertise delivered through ongoing operations supervision and support services. The operating results for the 12 months ended December 31, 2018 are as follows:

(in ’000s) 2018 2017
Water treated at Raglan Mine (cubic metres) 1,221 1,168
Water treated at MWT-BQE joint venture (cubic metres) 283

Operations generating revenue from sales of recovered metals
Our joint venture in the Jiangxi province of China operated three water treatment plants during 2018. Revenue is derived from the continuous sale of copper recovered from mining wastewater. The operating results for the 12 months ended December 31, 2018 for our joint venture (“JCC-BQE”) with partner Jiangxi Copper Company (“JCC”) are as follows:

(in ’000s) 2018 2017
Water treated (cubic metres) 19,814 17,160
Copper recovered (pounds) 3,367 3,449

During 2018, our joint venture in the Shandong province of China commissioned its first water treatment plant and operated the plant continuously for four months at the Guoda smelter. The joint venture generates revenue from the sale of copper and zinc recovered from wastewater. As of December 31, 2018, there was unsold inventory of approximately 431 thousand pounds of zinc and five thousand pounds of copper. This unsold inventory of is expected to be sold in 2019. The operating results for the 12 months ended December 31, 2018 for our joint venture (“MWT-BQE”) with partner Beijing MWT Water Treatment Project Limited Company (“MWT”) are as follows:

(in ’000s) 2018 2017
Zinc recovered (pounds) 525
Copper recovered (pounds) 34

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

Issued for Construction Engineering for Selen-IX™ Plant
The Kemess underground project received permits to proceed based on the use of Selen-IX™ as the treatment system to control selenium in treated water discharged from the site into the environment. During Q1 2018, we signed an agreement with Centerra Gold for the engineering, procurement, installation support and commissioning of a water treatment plant at the Kemess site. The plant will combine our unique know-how of heavy metal removal and selenium control using our Selen-IX™ process.

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.

Modular Selen-IX™ Plant for Contaminated Groundwater Site in the US
This urban site in the US experiences ingress of groundwater contaminated with selenium into the underground building structure. Following successful laboratory testing that demonstrated the ability of Selen-IX™ to remove selenium from water down to less than one part per billion, the client requested that detailed engineering of a modular skidded Selen-IX™ system be completed. The design of the plant was completed in Q4 of 2018.

SART Plant Start-up at Minera Media Luna
The Minera Media Luna (“MML”) gold property contains elevated levels of cyanide soluble copper which impacts gold extraction. In Q2 2018, we were contracted by MML to commission the SART plant at their site and help stabilize the operation. This involved overcoming and rectifying plant design inadequacies delivered by a third party. Throughout the commissioning phase, we led all aspects of the SART plant operation including safety, environmental, automation, operator and supervisor training, and reporting. The commissioning was completed safely without any incidents and the plant entered stable continuous operation in approximately three months. Our involvement continued in Q4 with ongoing technical support of the SART operation.

SART Engineering Projects in Early Stages of Planning and Development
In 2018, we provided engineering and/or laboratory testing services to five new SART projects in early stages of development. All projects are located in the Americas and are yet to be built. We anticipate that some of these projects may advance into detailed engineering design and construction in 2019.

Membrane Water Treatment Pilot at BC Mine
This active mine in BC has a positive water balance and wishes to reduce the inventory of mine impacted water stored on site. Following our initial assessment of water treatment options, we identified membrane treatment as the most suitable method to achieve the site objectives mostly driven by sulphate levels in the receiving environment. Although we considered the use of our Sulf-IX™ process, the volume of water requiring treatment is finite and the time horizon for active treatment quite short which favoured the deployment of a membrane-based system instead of Sulf-IX™.

The mine owner then contracted us in Q2 to carry out a pilot demonstration of the proposed system. The on-site pilot was completed over a period of seven weeks and involved the treatment of 1,200 m3 of mine water. An important component of the pilot was the demonstration of brine management, which is critical for the success of any membrane application in the mining industry. The pilot was successfully completed and a report issued in Q4 2018.

Water Management and Permitting Assistance
Over the course of 2018, BQE Water engineers acted as the Qualified Persons (“QPs”) for water issues on several projects navigating the permitting process. We have also participated in formulating water management plans and identifying possible treatment systems for new mining projects in early stages of development.

2018 Commentary and Outlook for 2019
Overall, 2018 was very successful and the key achievements of the Company can be summarized as follows:

  • Achieved the best financial performance in Company history with net income of $150,000 and Adjusted EBITDA of $1.2 million compared to a net loss of $362,000 and Adjusted EBITDA of $776,000 in 2017;
  • Produced earnings per share of $0.16, calculated based on an adjusted weighted average number of shares outstanding after the 100:1 share consolidation completed on March 5, 2019;
  • Maintained a strong safety and environmental record at operations with no accidents and environmental incidents;
  • Executed an industrial scale demonstration of the Selen-IX™ electro-reduction circuit and advanced Selen-IX™ to a commercial ready status;
  • Signed an engineering services agreement and an operating services agreement with Centerra Gold for the first commercial scale Selen-IX™ water treatment plant;
  • Commissioned and started the operation of a new water treatment plant at the Guoda gold smelter;
  • Completed a successful pilot demonstration of membrane treatment with brine desaturation at an existing mine in Canada, demonstrating the Company’s capabilities and impartiality to select treatment based on project specific requirements; and
  • Contracted to provide technical services for six new SART projects globally, reflecting the recognition of BQE Water as the leader in the cyanide recovery and recycle technology.

The first half of 2018 was slower than expected with several projects either delayed or suspended. This changed in the second half of the year when a number of new projects started, resulting in the best Q3 performance in the Company’s history. Followed by strong Q4, the Company yielded a positive net income for the first year in history. Part of the catch-up in the second half of the year can be attributed to the growth of the Company’s project pipeline in the last three years where a short term loss in revenue from cancelled or delayed projects can be replaced by revenue from new and different projects.

The financial results in 2018 extended the steady positive trend in the Company’s financial performance improvements of the past few years. Since our 2015 annual results, the net increase of our Adjusted EBITDA has been over $2 million. While this long-term trend is very positive, it is important for shareholders to realize the significant fluctuations of our quarterly results and annual financial performance. Recurring revenue from water treatment fees and sales of recovered metals, which accounts for approximately 55% of our total Proportional Revenue, fluctuates intrinsically as it is dependent on temperature and climatic conditions that affect total water volume and recoverable metals available for treatment.

Although the Company has been cash-flow positive since 2017, shareholders should realize that a significant portion of the Company’s working capital are on the balance sheet of our joint ventures in China. Cash earned from operation is accumulated in our joint ventures throughout the year and it cannot be accessed by the Company until the annual declaration of dividends. The Company recognize that short-term fluctuations in our revenue combined with the timing of the dividend payout represents a risk of a temporary shortfall in working capital. Management and our Board of Directors are actively exploring options to mitigate this risk.

Looking ahead towards 2019, the Company has several catalysts to grow recurring revenue over the long-term that is built into the current project pipeline. First and foremost, we expect the first commercial Selen-IX™ plant to be successfully commissioned at the Kemess Mine before the end of 2019. The success of this project will not only initiate our five-year operating agreement for this water treatment plant but will likely trigger new projects due to the growing demand for selenium removal solutions in the North American mining market. The key features of the Selen-IX™ process are its ability to reduce selenium in effluent to less than one part per billion and to produce a small amount of very stable residue that can be reused in steel making. Current competitors of Selen-IX™ do not achieve either. The second catalyst is our global leadership in the deployment of SART technology on a large industrial scale. Our current pipeline includes several SART projects at gold mines in Latin America and China that may proceed to construction in 2019 and begin operation in 2020.

Aside from Selen-IX™ and SART related projects, there are several projects in our pipeline that may lead to larger projects and we expect it to give the Company an opportunity to generate new IP in the mine water market that we believe may become strategic in the next five years.

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) 2018 2017
$ $
Revenues 4,270 4,057
less: Operating expenses (excluding depreciation) 2,029 2,315
2,241 1,742
General and administration 1,509 1,665
Sales and development 1,120 1,219
Stock-based compensation 111 68
Depreciation of plant and equipment 19 214
Share of results of equity accounted joint ventures (898) (1,149)
Income (loss) from operations and joint ventures 380 (275)
Finance costs, net (124) (215)
Foreign exchange gain (loss) 19 (35)
Other income 63

Income (loss) before income taxes





Income tax (expense) recovery (125) 100
Net income (loss) for the year 150 (362)
Translation gain (loss) on foreign operations 102 (12)

Comprehensive income (loss) for the year





Net income (loss) per share (basic and diluted) 0.16 (0.38)
Proportional Revenues1 9,799 9,276
Adjusted EBITDA1 1,181 776
at December 31 at December 31
2018 2017
$ $
Working capital 1,286 735
Total assets 7,913 6,866
Total non-current liabilities 1,498
Shareholders’ equity 6,382 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, 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.