Aeroquest International Limited

Aeroquest International Limited

March 23, 2005 16:01 ET

Aeroquest International Limited Announces Financial Results for the Nine Months Ended January 31, 2005


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: AEROQUEST INTERNATIONAL LIMITED

TSX VENTURE SYMBOL: AQL

MARCH 23, 2005 - 16:01 ET

Aeroquest International Limited Announces Financial
Results for the Nine Months Ended January 31, 2005

MILTON, ONTARIO--(CCNMatthews - March 23, 2005) - Aeroquest
International Limited (TSX VENTURE:AQL) ("AQL") has released its
financial results for the nine months ended January 31, 2005, including
its 100% owned subsidiary Aeroquest Limited ("Aeroquest") which has been
filed on SEDAR (www.sedar.com).

During the nine month period ended January 31, 2005, Aeroquest continued
to fly its proprietary AeroTEM II airborne electromagnetic systems while
utilizing a historically slow period to hire new staff and build more
AeroTEM systems to keep pace with expanding sales. Revenue for the first
nine months was, $5.4 million, while net income after tax and cash flow
(EBITDA) was $253,864 and $719,057 respectively.

The third quarter was a transitional one for Aeroquest with sales of
$972,909, net income after tax of $(337,483) and cash flow (EBITDA) of
$(289,563). The primary reason for the results was the seasonality of
the Canadian survey industry due to cold weather conditions. Aeroquest's
financial results were also impacted as a large survey which was not
completed by the end of the quarter and will be included in the fourth
quarter results. Currently, Aeroquest has contracts signed with a total
value of about $3 million, most of which are expected to be completed in
the fourth quarter.

"As part of our growth strategy, we recognize the need to reduce the
seasonality of our operations. We have made significant efforts to
expand our international operations which will have the effect of
smoothing out Aeroquest's quarter by quarter revenue," stated Steven
Balch, AQL's President. "We are pleased with the acceptance of the
AeroTEM system within the industry which has convinced us to increase
the number of systems in operation to keep pace with increasing survey
demand by existing and new clients".

During the quarter Aeroquest entered into contracts with representatives
in India, China and middle Asia and plans to have a large portion of its
business international next year. The slower survey period also allowed
Aeroquest to incorporate improvements in the design of the AeroTEM
systems based on the company's ongoing research and development efforts.
As part of its R&D efforts, Aeroquest is building larger diameter
AeroTEM systems, to allow the company to expand airborne electromagnetic
surveys to a larger, more varied geographic base.

During the quarter two additional AeroTEM II systems were built,
resulting in four systems available for operations by the end of the
quarter. Two more systems are expected to be ready for survey by April
1, 2005. One of these systems has been sold to a major multinational
mining firm and will be delivered to South America in April. This system
will be used by the client for internal purposes and will also be
available to Aeroquest for surveys for other clients as well.

Aeroquest's consolidated balance sheet is strong with working capital of
$4.7 million at the end of the quarter, including $3.7 million in cash
and marketable securities. The company is essentially free of debt
except for trade payables. During the quarter, the company also
established a $1.25 million operating line of credit with the Royal Bank
of Canada to be used for normal operating purposes.

Aeroquest International Limited (TSX-V:AQL) is the parent company of
Aeroquest Limited, a world leader in the development and operation of
innovative and proprietary airborne geophysical surveying platforms
servicing the mineral exploration, oil and gas, and environmental
industries. AQL has 15,829,162 shares outstanding and 17,448,606 shares
on a fully diluted basis.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Aeroquest International Limited
    Roland Horst
    Chief Executive Officer
    (905) 693-9129, Ext. 241
    Email: rhorst@aeroquestsurveys.com
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of the release.