BQE Water Reports Q1 2024 Results
"In Q1 2024, we doubled our recurring operation revenues over the same period last year as our new streams of recurring revenue in the US mitigated the seasonality of our existing operations," said
- Recorded Proportional and GAAP revenues of
$3.4 million and$2.5 million in Q1 2024 respectively, compared$3.6 million and$2.7 million in Q1 2023. - Doubled recurring plant operation revenues to
$1.8 million in Q1 2024 when compared to Q1 2023. - Gross margin of
$1.1 million in Q1 2024 compared to$1.0 million in Q1 2023, an 11% increase. - Net loss of
$486,000 in Q1 2024 compared to a loss of$342,000 in Q1 2023. - Adjusted EBITDA loss of
$121,000 in Q1 2024 compared to a loss of$80,000 in Q1 2023. - Net cash and cash equivalents of
$8.2 million atMarch 31, 2024 , compared to$7.9 million atDecember 31, 2023 , a 4% increase. - Working capital of
$9.9 million atMarch 31, 2024 , compared to$10.5 million atDecember 31, 2023 , a 6% decrease.
Selected financial results are as follows:
(in '000s) |
3 months ended |
|
|
2024 |
2023 |
Revenue from Operation Services |
1,789 |
835 |
Revenue from Technical Services |
719 |
1,856 |
Revenue from joint ventures in |
902 |
869 |
Proportional Revenues |
3,410 |
3,560 |
Our operational services consist of the operation or technical supervision of water treatment plants, which generate recurring revenues from three main sources: sales of recovered metals, water treatment fees and operations support fees. The Company's operations by source of revenue are as follows:
Operations |
Location |
Revenue Source |
JCC-BQE Joint Venture |
|
Sales of recovered metals |
MWT-BQE Joint Venture |
|
Sales of recovered metals |
|
|
Water treatment fees |
|
|
Water treatment fees |
Zhongkuang Metallurgical Facilities for MWT |
|
Operations support fees |
Zhaojin Metallurgical Facilities for MWT |
|
Operations support fees |
Power utility ash pond for WesTech |
|
Water treatment fees |
Base metal project for a metal producer |
|
Water treatment fees |
Our 50/50 joint venture with partner Jiangxi Copper Company ("JCC") operates three water treatment plants at
(in '000s) |
3 months ended |
|
|
2024 |
2023 |
Water treated (cubic metres) |
4,217 |
2,899 |
Copper recovered (pounds) |
380 |
291 |
In Q1 2024, all three plants met mechanical availability and process performance targets set by the Company. The volume of water treated increased by 45% and the mass of copper recovered increased by 31% compared to Q1 2023. Such changes in water volume and feed grade from period to period are largely the result of environmental conditions beyond the control of the joint venture.
Our 20% share in MWT-BQE is with our 80% partner
(in '000s) |
3 months ended |
|
|
2024 |
2023 |
Zinc recovered (pounds) |
31 |
78 |
Copper recovered (pounds) |
5 |
41 |
The smelter periodically operated its production lines with ores from different sources which led to varying concentrations of zinc and copper in the feed and a fluctuation in the volume of wastewater treated by the plant. The joint venture has no control over the composition and volume of feed that flows into the plant.
The number of operating days contributing to water treatment or support fees for the three months ended
(in days) |
3 months ended |
|
|
2024 |
2023 |
|
- |
- |
|
- |
90 |
Zhongkuang SART plant |
91 |
90 |
Zhaojin SART plant |
91 |
90 |
Water treatment plant in |
67 |
64 |
Water treatment plant in |
91 |
88 |
The volume of water treated by geographic location for the three months ended
(in '000s cubic metres) |
3 months ended |
|
|
2024 |
2023 |
|
- |
- |
|
- |
214 |
SART plants in |
136 |
131 |
Water treatment plants in USA |
200 |
5 |
The Company, with our Inuit partner
In 2022, we began to provide water treatment services at
In Q1 2024, the treatment plant at
In 2021, we began operations of the Zhongkuang SART plant and the Zhaojin SART plant at metallurgical facilities in
In 2022, we began operations of a treatment plant utilizing our Selen-IX™ process to remove selenium from ash pond water for
In
- Initiated engineering services for the design and construction of a fourth selenium removal plant in the US using Selen-IX™ at a gold mine to meet end-of-pipe limit of less than 2 parts per billion.
- Performed a site visit and technical assessment of treatment options for removing sulphate to a discharge limit less than 1,500 mg/L at an integrated lead smelter-recycling facility in
Eastern Canada . - Performed field engineering assessment of the root causes of poor performance of an existing water treatment plant removing metals and ammonia from mine wastewater in
Western Canada . - Completed a laboratory treatability test program on mine water for selenium removal from an existing mine in the US.
- Initiated METSIM modelling of a build-up on impurities in metallurgical process water for a new project in the US.
- Initiated the review of a water management plan for a proposed new gold mine in the
Yukon with comments to support the regulatory reviews by the territorial government. - Initiated a technical assessment on options for the disposal of large quantities of elemental sulphur at a mine in BC.
- Continued to provide water treatment expertise to the executive team of a top tier metal producer in due diligence for an acquisition of an existing mining operation.
- Continued to provide engineering design services for three water treatment plants to support permitting of the KSM gold-copper project in
British Columbia . - Continued to provide engineering and design services for the construction of a new water treatment plant for water recycle at a gold mine in
Mexico .
- Initiated a review of requirements for cyanide recycle at a new project currently in development in
Mexico . - Completed a treatability assessment for the removal of cobalt and associated cyanide from an existing gold mine in
Ontario . - Continued with the engineering design for a third SART plant for Shandong Gold in
China .
The change in the Company's financial performance between Q1 2024 and Q1 2023, was predominantly affected by the following:
- a 114% increase in recurring revenue from new water treatment operations in Q1 2024 compared to Q1 2023;
- a 61% decrease in non-recurring revenue from technical services in Q1 2024 compared to Q1 2023, which in turn contributed to a 51% increase in sales and development expenses as resources not utilized to fulfill revenue contracts were allocated to sales and marketing instead of direct operating expenses;
- a 35% increase in revenue from our JCC-BQE joint venture in Q1 2024 compared to Q1 2023, primarily due to a higher volume of recovered copper;
- the decline in revenue from the MWT-BQE joint venture due to a one-time sale of a large quantity of metal concentrate in Q1 2023 that did not recur in Q1 2024; and
- a 44% increase in share-based payments in Q1 2024 compared to Q1 2023 due to the vesting of Restricted Share Units ("RSUs") issued to staff in previous years and the RSUs being valued at the Company's higher share price.
The winter shut-down of our operations in
The timing of non-recurring technical advisory contracts and the associated revenue varies from quarter to quarter based on several factors:
- our clients' schedules, which are not in our control;
- the short average contract duration of approximately 4 to 6 months; and
- the stage of the project, since very early stages typically contribute less revenue than later stages.
Except for one project, most of the technical services delivered by the Company in Q1 2024 were associated with new projects at early stages. These early stages often contribute less than
Copper recovery from the JCC-BQE JV in
The other significant expenses that increased the net loss in the quarter are non-cash share-based payments as well as depreciation expense. A significant portion of the share-based payments is due to the amortization of RSUs, which are compensation linked to the Company's share price. RSUs, a key component of
The outlook for 2024, and our assessment of long-term drivers for growth as well as risks and downsides remain unchanged from our last commentary in the Q4 2023 MD&A.
For a complete set of Financial Statements and MD&A, please go to www.bqewater.com.
(in $'000 except for per share amounts) |
3 months ended |
|
|
2024 |
2023 |
|
$ |
$ |
Revenues |
2,508 |
2,691 |
Operating expenses (excluding depreciation) |
(1,403) |
(1,694) |
Gross margin |
1,105 |
997 |
|
|
|
Share of income from joint ventures |
332 |
81 |
General and administration |
(700) |
(672) |
Sales and development |
(924) |
(613) |
Share-based payments |
(273) |
(190) |
Depreciation and amortization |
(101) |
(82) |
Loss from operations and joint ventures |
(561) |
(479) |
|
|
|
Other income, net |
87 |
143 |
Income tax expenses |
(12) |
(6) |
|
|
|
Net loss for the period |
(486) |
(342) |
|
|
|
Loss per share (basic) |
(0.39) |
(0.27) |
Loss per share (diluted) |
(0.38) |
(0.27) |
|
|
|
Proportional Revenues (Non-GAAP measures) |
3,410 |
3,560 |
Adjusted EBITDA (Non-GAAP measures) |
(121) |
(80) |
Comprehensive loss |
(443) |
(332) |
|
|
|
|
|
|
|
at |
at |
|
2024 |
2023 |
|
$ |
$ |
Cash |
8,232 |
7,928 |
Proportional cash (Non-GAAP measures) |
9,544 |
9,790 |
Working capital |
9,902 |
10,529 |
Total assets |
18,301 |
18,856 |
Total non-current liabilities |
1,913 |
1,900 |
Shareholders' equity |
14,443 |
14,776 |
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 MD&A for the year ended
SOURCE