VANCOUVER, BRITISH COLUMBIA — (Marketwired) — 11/13/13 — BioteQ Environmental Technologies Inc. (TSX: BQE), a leader in industrial wastewater treatment, releases its financial and operating results for the third quarter ended September 30, 2013. Further information on the third quarter results can be obtained from the Company–s Q3 2013 Unaudited Condensed Consolidated Interim Financial Statements and Management–s Discussion and Analysis (“MD&A”).
BioteQ will hold a conference call on November 14, 2013 at 11:00 AM EDT to discuss results for Q3 2013. Participants can dial in as follows:
North America: 1-416-644-3415; 1-877-974-0445 (toll free)
United Kingdom: 44-20-7190-1596; 0800-358-5256 (toll free)
Switzerland: 41-22-592-7311; 0800-560-749 (toll free)
Participant pass code: 4647657
As noted at the beginning of 2013, due to recent changes in Generally Accepted Accounting Standards (“GAAP”) effective Q1 2013, the results of the Company–s joint ventures will be accounted for as equity investments in BioteQ–s current and future financial statements. In prior years, the results of the Company–s joint ventures were accounted for through proportionate consolidation.
To ensure clarity and comparability with historic results, certain statements in this news release and in the MD&A are characterized as BioteQ–s “proportional” share, which means the effective portion of results that BioteQ would have reported if each of its joint ventures had been reported in accordance with past accounting standards. For further details, please see “Non-GAAP Financial Measures” in the Company–s Q3 2013 MD&A.
Q3 2013 Financial Results
Operational Results
New Plants – Update
The Company is currently completing construction of three new, previously announced water treatment plants with joint venture partner Jiangxi Copper Company (“JCC”) in China. At JCC–s Dexing Mine site, the nickel/cobalt recovery ion exchange plant is expected to be fully commissioned during the fourth quarter of 2013. Also at the Dexing site, a second copper recovery plant is expected to be completed by Q2 2014. At JCC–s Yinshan mine site, a new copper recovery plant is expected to be completed by Q2 2014.
Collectively the three new Chinese plants represent significant financial and personnel investments by BioteQ in 2013. However, while these plants create only costs for BioteQ in 2013, they will add significant revenues to the company–s recurring revenue base in 2014 and beyond. Collectively these three plants are expected to add approximately $2.5 million to BioteQ–s Proportional Revenues in 2014 and approximately $3.0 million in 2015 and beyond.
Selen-IX Technology Developments and Teck Project Update
Over the past 18 months, BioteQ has been developing an ion exchange process to remove selenium from mine impacted water streams. BioteQ views the selenium removal market as a significant near term opportunity in Canada and the United States.
In recent years regulators in both Canada and the US have become increasingly concerned with selenium discharge. Both Canada and the US are examining the implementation of significantly more stringent water quality guidelines relating to selenium. There has also been a trend in both countries towards mine permits tightening selenium limits or adding selenium to the list of regulated elements.
Key developments for the Company with regard to Selen-IX over the past 9 months have included:
The BioteQ Selen-IX technology is presently still in the pre-commercial phase. BioteQ is however devoting very significant resources to the development and furtherance of this platform. BioteQ believes that the emerging selenium removal market is significant and will eventually be very large. BioteQ believes that the drivers for solution implementation are strong and that the Company–s technology, once technically proven, will offer an extremely compelling value proposition to prospective customers.
Outlook
The business environment in the mining industry over the past 6-8 months has been a challenging one. As was noted in the discussion of our Q2 results, this has had its impact on BioteQ in at least a couple of ways:
These factors coupled with recent the shutdown of the Bisbee operation have had an impact on BioteQ–s expectations for 2013. In August 2013, BioteQ had indicated that proportional revenue for the year would be in the range of $8.5 million to $9.5 million and adjusted EBITDA for the year to be in the range of ($1.5 million) to ($2 million).
The shut down and furlough at Bisbee has reduced revenue expectations by approximately ($400,000) and adjusted EBITDA expectations by ($300,000) for the year. This, coupled with continuing slow sales volumes have caused the Company to revise guidance ranges to:
While the general downturn in the mining industry and the recent issues at the Bisbee facility have tempered BioteQ–s expectations regarding its 2013 financial results, the company remains very positive regarding prospects for 2014 and beyond. Specifically:
The various developments noted above make us confident that the company will in fact achieve a position of being cash flow from operations positive commencing in the second half of 2014. This would represent an enormous step forward for the company towards a future in which the company will begin to generate positive cash flows on a consistent and sustainable basis. However, it should also be noted that given the seasonality of cash flows through the fourth quarter of 2013 and the first quarter of 2014 – when some seasonal facilities do not operate and when the new Chinese facilities are not yet on stream – the company will need to carefully manage its working capital balances, review and mitigate costs where necessary, and explore options to provide financial flexibility for the company until cash flows increase in the second half of 2014.
BioteQ Corporate Profile
BioteQ is an innovative clean technology leader in global industrial water treatment, serving the mining and energy markets. The company has technology expertise and proven operational capabilities in sulphide precipitation, ion exchange, alkali/lime precipitation, leaching, sulphate removal and SART technology. Over the past decade, BioteQ has designed and commissioned waste water treatment plants at mine sites for leading organizations including Xstrata, Freeport McMoran, Jiangxi Copper and the US EPA. These plants recover dissolved metals and/or remove substances such as sulphate and selenium, producing clean water and minimizing or eliminating residual waste. BioteQ is headquartered in Vancouver, Canada and trades on the TSX under the symbol BQE. Please visit our website at for additional information.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
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 Annual Report for the year ended December 31, 2012 and the section entitled “Risk Factors” in the Company–s Annual Information Form for the year ended December 31, 2012). 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.
Contacts:
BioteQ Environmental Technologies Inc.
Jonathan Wilkinson
CEO
604.685.1243 or 1.800.537.3073
BioteQ Environmental Technologies Inc.
Paul Kim
CFO
604.685.1243 or 1.800.537.3073