Arianne Phosphate Reports on Fourth Quarter FY2012
Arianne Phosphate Reports on Fourth Quarter FY2012
SAGUENAY, QUEBEC -- (Marketwired) -- 04/23/13 -- Arianne Phosphate (the "Company" or "Arianne") (TSX VENTURE:DAN)(FRANKFURT:JE9N)(OTCBB:DRRSF) filed today its financial statements for the year ended 2012.
During the fourth quarter and early part of Q1 2013, Arianne made significant progress on the Feasibility Study ("FS") of the Lac a Paul phosphate project, including:
-- Arianne announced that it will seek shareholders' approval to change its name from "Arianne Resources Inc." to "Arianne Phosphate Inc." at its next annual general meeting of shareholders in May 2013 to recognize the focus of its activities on developing the world class Lac a Paul phosphate deposit. -- The Company announced its intention to divest all its non-phosphate exploration properties in order to focus exclusively on becoming a leading Canadian phosphate producer. The decision to sell these non-core assets is a logical step in Arianne's evolution and reflects the transition of the Company from exploration to mine development. -- Arianne announced that the updated mineral estimate for the Paul Zone amounts to 590 million metric tons (Mt) of measured and indicated resources. This National Instrument ("NI") 43-101 compliant resource calculation conducted by GoldMinds Geoservices Inc. provides an updated estimate of the resources present in the Paul Zone, which is the main zone of the Lac a Paul project, Saguenay, Quebec. The updated mineral resource estimate incorporates the results of drilling programs undertaken during the last quarter of 2011 on the lateral and depth extensions of the Paul Zone. In total, 153 holes, totaling 39,371 metres, have now been drilled on the Paul Zone. The highlights are: 1. For this disclosure of resources, a cut-off grade of 4.0% P2O5, instead of 2.43% P2O5 in 2011, was used. 2. Although the cut-off grade is higher, the measured and indicated resources of the Paul Zone have increased by 221% compared to the last estimate released in 2011. 3. The measured and indicated mineral resources of the Paul Zone amount to 590.24 Mt at 7.13% P2O5. -- Arianne announced that the Interim Bench-Scale S tatus Report has been delivered by Jacobs Engineering. The following is an excerpt from the report: "During the five locked cycle tests, the cleaner 3 concentrate reached an average of 40% P2O5 for an 86.84% recovery. The MER (minor element ratio) and CaO/P2O5 values are acceptable at less than 0.1 and 1.3, respectively." This metallurgical testwork and its conclusions will be used in development of the Company's FS. -- Arianne announced the implementation of measures to strengthen its ties with local communities. The Company intends to take an active part in various committees created by the Innu communities and the various MRCs across the Saguenay-Lac-Saint-Jean region with the objective of promoting local economic benefits. It has also committed to become a participant in the regional committee on economic benefits in order to facilitate the realization of regional benefits that should accrue from the development of the Lac a Paul phosphate mining project. -- Arianne announced the commencement of public consultations on the transportation component of its project to operate a phosphate mine in Lac a Paul, located at kilometre 168 on Chemin des Passes, in the Lac- Saint-Jean region. Public meetings will be held in municipalities most likely to be affected. Following these consultations, Arianne intends to create a working group on transportation, with community representatives and experts in an effort to optimize this major component of the project. The scenario currently under study involves transporting ore by road using heavy haulage trucks from the mine to a sorting centre located north of Saint-Ludger-de-Milot. The ore will then be transported by standard truck to a transfer yard located near the former Rio Tinto Alcan plant in Alma. From this location, the apatite concentrate will be shipped by train to North American markets or to the deep-water port in Grande-Anse, Saguenay, to supply mainly international markets. In collaboration with municipal authorities in Alma, Arianne intends to pursue discussions with representatives from the Quebec Ministere des Transports (MTQ) to make sure the project to build a bypass road in the Isle Maligne area continues to progress. -- Arianne, the Commission scolaire du Pays-des-Bleuets and the Pekuakamiulnuatsh Takuhikan Education and Labour Department are pleased to announce the signing of a letter of intent to create training services for mine workers as part of the Lac a Paul mine project. The training programs will affect various types of jobs, from pre-production to operations, including technical services.
Mr. Bernard Lapointe, Chief Executive Officer of the Company commented: "Arianne made significant progress on its Feasibility Study in the fourth quarter of 2012 and is on track to release a comprehensive and robust analysis of the Paul deposit in September 2013 that validates the attractive metallurgical results seen to date and proves up the substantial phosphate reserves that exist on the Paul property."
Key milestones upcoming in 2013 include the following:
-- Issuing a new NI 43-101 compliant resource estimate in Q3 2013 that will be included in the FS. -- New pilot scale metallurgical testing to be issued in Q2 2013 that will also be included in the FS. -- Submitting the Environmental and Impact Assessment (EIA) with the preliminary version of the EIA to be submitted at the end of Q2 2013. -- Continuing the various steps required to obtain permits required for the operation of the proposed Lac a Paul mine. -- Adding new members to the team currently in place to further develop the Lac a Paul phosphate project. -- Organizing additional public consultations to discuss all aspects of the Lac a Paul mining project. Public meetings will be held in the municipalities mainly affected by road transport.
The net loss for the three-month period ended December 31, 2012 was $2,729,669 compared to a net loss of $2,823,930 for the same period in 2011. The lower loss is primarily due to lower expenses for stock based compensation in 2012 partially offset by the write-off of the 100% owned non-phosphate properties and increased costs related to the Lac a Paul FS.
During Q4 FY2012, the Company announced it would seek to sell off its non-core phosphate properties that had not already been joint ventured. These assets include Heva, La Dauversiere R-14, Moly-Hill, Black Dog, Chico, Dulain and Terres Rares. As part the year end audit, the Company reviewed the fair value of these assets and determined that these properties should be fully written off. This write-off totaled $2,059,680.
In addition, the Company spent in the last quarter $1,574,000 on the Lac a Paul FS in a variety of areas including metallurgical tests, technical reports, mine planning and drilling. The net loss for the quarter includes share based compensation expense of $4,250 (compared to $503,050 in 2011), and represents the value of share purchase options vested during the period.
The net loss for the twelve month period ended December 31, 2 012 was $5,402,587 compared to a net loss of $3,438,693 for the same period in 2011 and is due to higher spending on the FS and the write-off of the non-phosphate assets partially offset by lower expense for share based compensation. For the twelve months ended December 31, 2012, the Company spent $4,143,206 on the FS. As noted, the write-off in 2012 was $2,059,680.
The net loss for the 2012 year includes share based compensation expense of $1,565,883 (compared to $3,417,971 in 2011) which represents the value of share purchase options vested during the period. In 2012, 1,777,500 options were vested versus 3,795,000 options vested in 2011.
The Company ended 2012 with cash of $5,225,976 access to undrawn credit lines of $4,600,000 and mining tax credit receivable of $2,502,426. Based on current spending estimates for the FS and future project development, Arianne anticipates it will need additional financing before the end of 2013. The Company expects it will be able to raise the required amount of funds at competitive rates.
The Company's financial statements and accompanying management's discussion and analysis for the year ended December 31, 2012 are available on the Company's website and on SEDAR at www.sedar.com. Arianne's annual information form for FY2012 will be filed before the end of May. Unless otherwise noted, all figures in the news release are reported in Canadian dollars.
About Arianne Phosphate
Arianne Phosphate (www.arianne-inc.com) is developing the Lac a Paul phosphate-titanium deposits located approximately 200 km north of the Saguenay/Lac St. Jean area of Quebec, Canada. These deposits should produce a high quality igneous apatite concentrate grading 39% P2O5 with little or no contaminant. The Company has 76 million shares outstanding.
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