BQE Water Reports Q1 2023 Results

by ahnationtalk on May 31, 202378 Views

May 30, 2023

VANCOUVER, BC – BQE Water Inc. (TSX-V: BQE), a leader in the treatment and management of mine impacted waters, is pleased to release its interim consolidated financial results for the three months ended March 31, 2023.

“With the addition of the two US-based treatment plants we commissioned in 2022 to our plant operations services, we were able to grow our Q1 2023 GAAP revenues to $2.7 million, a record high for any first quarter in our company history. Looking forward to the remainder of 2023, we plan to continue to build on the growth trajectory we started last year, executing on our expanding project pipeline, and growing our recurring revenues as we bring online the fourth Selen-IX™ treatment plant to remove selenium at a US mine.” stated David Kratochvil, President & CEO of BQE Water.


  • Grew total revenues by 9% primarily driven by a fourfold, or $646,000, increase in recurring plant operation revenues compared to Q1 2022.
  • Recorded net loss of $342,000 and Adjusted EBITDA loss of $80,000, compared to net income of $190,000 and Adjusted EBITDA of $446,000 in Q1 2022.
  • Working capital of $6.7 million at March 31, 2023, compared to $7.2 million at December 31, 2022, a decrease of $481,000 or 7% over the three months.
  • Net cash of $5.8 million at March 31, 2023, compared to $6.2 million at December 31, 2022, a 7% decrease.

Selected financial results are as follows:

(in ’000s) 3 months ended Mar. 31
2023 2022
$ $
Revenues under GAAP 2,691 2,467
Proportional Revenues 3,560 3,529
Net income (loss) (342) 190
Adjusted EBITDA (80) 446


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 Jiangxi province, China Sales of recovered metals
MWT-BQE Joint Venture Shandong province, China Sales of recovered metals
Raglan Mine for Glencore Northern Québec, Canada Water treatment fees
Minto Mine for Minto Metals Yukon, Canada Water treatment fees
Zhongkuang Metallurgical Facilities for MWT Shandong province, China Operations support fees
Zhaojin Metallurgical Facilities for MWT Shandong province, China Operations support fees
Power utility ash pond for WesTech Eastern USA Water treatment fees
Base metal project for a metal producer Southwestern USA Water treatment fees

JCC-BQE Joint Venture Operations
Our 50/50 joint venture with partner Jiangxi Copper Company (“JCC”) operates three water treatment plants at Dexing Mine and at Yinshan Mine in Jiangxi province of China. The volume of water treated and pounds of copper recovered by the plants fluctuate seasonally depending on precipitation levels in the region. The operating results for Q1 2023 are as follows:

(in ’000s) 3 months ended Mar. 31
2023 2022
Water treated (cubic metres) 2,899 2,864
Copper recovered (pounds) 291 402

In the first quarter of 2023, all three plants met mechanical availability and process performance targets set by the Company. The volume of water treated is comparable to the year prior while the mass of copper recovered decreased by 28%. 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.

MWT-BQE Joint Venture Operations
Our 20% share in MWT-BQE is with our 80% partner Beijing MWT Water Treatment Project Limited Company (“MWT”) and together we operate a water treatment plant at a smelter in Shandong province of China. MWT-BQE generates revenues from the sale of zinc and copper recovered from smelter wastewater. Operating results for Q1 2023 are as follows:

(in ’000s) 3 months ended Mar. 31
2023 2022
Zinc recovered (pounds) 78 61
Copper recovered (pounds) 41 54

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.

BQE Water Operations
The Company, with Inuit partner Nuvumiut Development, operates four treatment plants at Raglan Mine in Nunavik for Glencore Canada Corporation (“Glencore”). In the first quarter, the plants at Raglan Mine are shut down as water stored in the outdoor reservoirs are frozen. Consequently, no water was treated and no revenue was generated in Q1 2023 from the Raglan Mine plants.

In 2022, we entered into a new operational services agreement with Minto Metals to operate a water treatment plant at Minto Mine in the Yukon. The mine is expected to treat approximately 750,000 to 1.4 million cubic metres of water per year. During Q1 2023, we treated and discharged 214,000 cubic metres of clean water without interruption.

In 2021, we began operations of the Zhongkuang SART plant and the Zhaojin SART plant at metallurgical facilities in China. Both plants have been under our technical supervision since the start of full production. Both SART plants operated fully throughout Q1 2023 without disruption.

In 2021, we completed the commissioning of our first project in the power generation industry, a treatment plant utilizing our Selen-IX™ process to remove selenium from ash pond water for WesTech Engineering (“WesTech”). In Q1 2023, our team continued at site providing water treatment services with the Selen-IX™ circuit to manage the presence of selenium in the feed.

In April 2022, we completed the commissioning of a treatment plant utilizing a combination of nanofiltration and our proprietary selenium electro-reduction process for the simultaneous removal of selenium and sulphate from mine water for a base metal project in the American Southwest. Our team completed the performance test milestone for the treatment plant in February 2023, initiating a variable treatment fee based on the volume of water treated. In Q1 2023, the plant operated and treated 3,000 cubic metres of water.

The number of operating days contributing to water treatment or support fees for the three months ended March 31, 2023 are as follows:

(in days) 3 months ended Mar. 31
2023 2022
Raglan Mine water treatment plants
Minto Mine water treatment plant 90
Zhongkuang SART plant 90 90
Zhaojin SART plant 90
Water treatment plant for ash pond in Eastern USA 90 90
Water treatment plant in Southwest USA 90

The volume of water treated for the three months ended March 31, 2023 are as follows:

(in ’000s cubic metres) 3 months ended Mar. 31
2023 2022
Raglan Mine water treatment plants
Minto Mine water treatment plant 214
Eastern China SART plants 131 32
Water treatment plants in USA 3 7


BQE Water’s technical expertise and IP are applicable globally across broad areas of water management. The highlights of technical services provided to clients and technical innovation projects during Q1 2023 are summarized below.

Selenium Removal Projects

  • Successfully completed the performance test including bioassays for acute and chronic toxicity at a treatment plant removing selenium and sulphate simultaneously at a US mine.
  • Continued to provide engineering services for the construction of a third Selen-IX™ plant at a US mine.

Water Consulting Projects (Water Management, Treatability, Permitting Assistance, Toxicity Mitigation)

  • Continued to provide engineering design services for three water treatment plants to support permitting of the KSM project in BC.
  • Completed the installation and initiated commissioning of a water treatment pilot plant for a rare earth elements project under permitting in Chile.
  • Initiated a treatability assessment for copper concentrate filtrate that will need to comply with stringent limits for molybdenum and sulphate in Argentina.
  • Performed a toxicity investigation evaluation to demonstrate treatment for toxicity mitigation at an existing mine prior to the spring freshet in Qué
  • Partially completed – due to the project being put on hold – the design of an ammonia removal system for a mine in Ontario.
  • Assisted with the water treatment expansion requirements at Minto Mine in the Yukon.
  • Initiated laboratory scale testing aimed at increasing water recovery and reducing brine waste for a reverse osmosis system in BC.

Cyanide Management Projects (Cyanide Destruction, Recycle)

  • Completed lab scale testing and preliminary engineering for a cyanide destruction system to comply with a weak acid dissociable (WAD) cyanide limit below 50 ppb at a US mine.
  • Completed a second round of on-site cyanide destruction testing to identify options to reduce operating costs and establish the engineering design basis for the design of a new system at the Pogo Mine in Alaska.
  • Completed a trade-off study to upgrade an existing cyanide destruction plant using a sulphur burner and an oxygen generator for a mine in Mexico.
  • Continued optimization for a cyanide destruction and effluent discharge system using reverse osmosis at a large gold heap leach operation in Peru.
  • Continued with the engineering design for a third SART plant for Shandong Gold in China.


Historically, the first quarter has been our weakest financially, primarily due to the impact of seasonality on recurring revenues from existing operations. Specifically, our operations in Northern Québec are shut down over the winter months while our joint venture operations in China treat lower water volumes during their dry season. The two new water treatment plants in the US that began operations in 2022 continued to experience a lack of water, and although the two plants have a monthly base treatment fee, this did not fully mitigate seasonality from other plants. Overall, we recorded Proportional Revenues of $3.5 million in Q1 2023.

In comparison to Q1 2022, the financial results for Q1 2023 reflect higher labour costs associated with the onboarding of new staff; a reorganization aimed at establishing operations support infrastructure required for long-term growth; and lower technical services revenues due to some project delays and suspensions.

Looking ahead to the remainder of 2023, we plan to continue to execute on our existing project backlog and expect recurring revenues from operations to improve in Q2 and Q3. With travel restrictions easing globally, travel related to business development activities is increasing and is expected to contribute to growth in our opportunity pipeline going into 2024 and beyond. At the same time, the management team plans to focus on opportunities to reduce expenditures moving forward in anticipation of a slowing economy.

The trends of increased environmental protection, stricter regulations, and the outsourcing of water know-how continue to be supportive of the Company’s long-term growth. However, we continue to caution investors with respect to uncertainties that could affect the shorter-term outlook; specifically, the risk of a global recession, which could affect the development of new mining projects, and geopolitical risks. That said, we have meaningfully strengthened our balance sheet over the past three years and have grown our recurring revenue base. Additionally, we secured a second interest free loan through a new government program to support the development of our professional team. All this positions us well to sustain any temporary exogenous shocks and also supports our growth plans as we capitalize on long-term opportunities in mining and ESG.

Read More:


Send To Friend Email Print Story

Comments are closed.

NationTalk Partners & Sponsors Learn More