BioteQ Environmental Technologies Inc.
TSX : BQE

BioteQ Environmental Technologies Inc.

November 08, 2013 18:10 ET

BioteQ Environmental Technologies Inc.: Bisbee Plant Furlough

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 8, 2013) - BioteQ Environmental Technologies, Inc. (TSX:BQE), a leader in industrial wastewater treatment, announces that the copper recovery facility in Bisbee, Arizona has been placed on furlough. BioteQ and its joint venture partner, Freeport-McMoRan Copper & Gold, have further agreed that the plant shall not restart under the existing operating arrangement.

The Bisbee plant applies BioteQ's patented BioSulphide® process technology to remove copper from wastewater at a closed mine site. The Bisbee water treatment facility is a 50/50 joint venture between BioteQ and Freeport-McMoRan Copper & Gold ("FMI").

In September 2013 BioteQ announced that operations at the Bisbee plant had been suspended. Unusually high levels of rainfall in the area during July and August had necessitated the plant being placed in idle mode. In mid-August while the plant was in idle mode, it encountered operational and process issues that led to a gas release event.

BioteQ subsequently conducted an investigation into the root causes of this release. The investigation revealed that a partial blockage in a pipe at the plant and the concurrent failure for a short duration, of a seal mechanism led to gas being released.

BioteQ has evaluated the merits of making required changes to the plant and restarting operations. Relevant matters to making a decision include:

  • The volume of solution being treated by the plant and the amount of copper being recovered has been declining since 2008. This decline in solution being processed plus a concurrent decline in copper grade has resulted in poor financial returns from the facility.
  • In the five fiscal years between 2009 and 2013, the Bisbee facility has generated positive cash flow on an annual basis only once:
(BioteQ 50% share) 2009 2010 2011 2012 2013 YTD
Net Operating Cashflow $ (45,000 ) $ (36,000 ) $ (152,000 ) $ 96,000 $ (76,712 )
  • If the plant were to continue to operate, it is highly likely that over the next 12 to 24 months the volume of solution being fed to the plant would continue to decline. Even if the volume of solution were to remain constant, the plant would continue to struggle to achieve a cash positive position.

Given that the plant would not generate positive cash flow if the plant were in operation over the next 24 months, BioteQ has decided to furlough the Bisbee plant for an indefinite period.

The parties plan to monitor ongoing developments at the site. The plant will remain in furlough until a decision is made regarding the future of the plant.

With the plant not generating positive cash flow, the decision to furlough the plant will not impact BioteQ's adjusted EBITDA results in 2014 and beyond but will impact the revenues generated by the company. The shutdown and furlough of the Bisbee facility will however, have a material impact on 2013 results. BioteQ estimates this impact to be:

  • A reduction in forecasted proportional revenue figure of approximately $400,000 for the year, and;
  • An increase in adjusted EBITDA loss forecast for the year of approximately $300,000 as a result of costs associated with labour at site during the plant shutdown and during the root cause investigation.

In addition, BioteQ will need to recognize an impairment charge for the carrying value of BioteQ's investment in the Bisbee joint venture for the full value of $1.4 million. This figure will be reflected in our Q3 net income and in adjusted EBITDA results.

Jonathan Wilkinson, BioteQ's Chief Executive Officer stated, "The decision to furlough the Bisbee plant was a difficult one given that it has operated successfully from a technical perspective for almost 10 years. However, because financial results generated by the plant in the past five years have been poor and because we know these results will not improve in the near future, the decision to furlough the operation at this time is in the best interests of both joint venture partners."

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 www.bioteq.ca 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 www.sedar.com (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.

Contact Information

  • BioteQ Environmental Technologies
    Suite 1000 - 1050 West Pender Street
    Vancouver BC Canada V6E 3S7

    BioteQ Environmental Technologies
    Jonathan Wilkinson
    CEO
    604.685.1243 or 1.800.537.3073
    jwilkinson@bioteq.ca

    BioteQ Environmental Technologies
    Paul Kim
    CFO
    604.685.1243 or 1.800.537.3073
    pkim@bioteq.ca
    www.bioteq.ca