Welcome!

News Feed Item

RB Energy Reports Q1 2014 Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/13/14 -- RB Energy Inc. (the "Company" or "RBI" or RB Energy") (TSX:RBI)(OTCQX:RBEIF) is pleased to report financial and operating results for the three months ended March 31, 2014. The consolidated financial statements together with Management's Discussion and Analysis will be available on the Company's web site (www.rb-e.com) and on SEDAR (www.sedar.com).

FIRST QUARTER HIGHLIGHTS

Corporate

The Company's acquisition of Sirocco Mining Inc. ("Sirocco"), first announced on December 4, 2013, closed on January 31, 2014 at which time the Company acquired all of the issued and outstanding common shares of Sirocco in exchange for approximately 294 million common shares of the Company. At the same time, the Company completed a post-acquisition share consolidation on the basis of one new share for three existing shares.

In March 2014, RB Energy negotiated amendments to the $75.0 million debt facility put in place for the construction of the Quebec Lithium operation, to better align the repayment terms with the revised commissioning schedule. As a result, the four 2014 principal repayments have been reduced from $24.3 million to $11.4 million. The deferred payments have been rescheduled to the periods from March 2015 to March 2017.

Subsequent to the end of the quarter, the Company announced a $22 million bought-deal equity financing to increase its current treasury. The financing is expected to close on or about May 21, 2014.

Quebec Lithium

Unusually cold temperatures in northern Quebec during the first three months of 2014 made the operation of the crushing and grinding circuit problematic, with fine ore freezing in the storage silos. Consequently, the Company elected not to operate the concentrator and focused on the commissioning of the hydro-metallurgical circuit of the plant using the spodumene concentrate stockpiled during the 2013 commissioning of the concentrator circuit. The hydro-metallurgical circuit was operated in commissioning mode for over six weeks and produced high quality battery grade lithium carbonate (99.9% lithium carbonate).

Subsequent to quarter end, with the onset of warmer temperatures, RBI re-started the concentrator with the objective of achieving continuous battery grade lithium production and first sales by the end of May.

Aguas Blancas

For the full three months ended March 31, 2014, Aguas Blancas produced 318 tonnes of iodine at a cash cost of US $25 per kg and sold 256 tonnes at an average price of US $38 per kg. Sales and shipments of iodine in the quarter were negatively impacted by both a port strike and an earthquake in Chile. Over the last 12 months the iodine price has softened due to an imbalance of supply over demand. Most recently however, prices have shown signs of firming up and demand is improving.

RESULTS FROM OPERATIONS

Quebec Lithium is in the commissioning stage and has yet to generate sales and revenues. The financial results from Aguas Blancas are included in the consolidated financial statements of RB Energy from January 31, 2014, the closing date of the acquisition of Sirocco by the Company. Further, IFRS requires RBI to value Sirocco's iodine inventory acquired on January 31, 2014 at its fair value on the date of acquisition. As a result, the operating margin in the statement of operations will not reflect normal course of business until such time as the effect of the fair value of the acquired inventory is absorbed under the Company's weighted average cost methodology applied under its accounting principles.

During the three months ended March 31, 2014, the Company incurred a net loss of $7.5 million ($0.04 per share) compared with a net loss of $2.6 million ($0.02 per share) in the same period in 2013. One-time transaction costs associated with the acquisition of Sirocco account for $3.3 million of the net loss. In addition, general and administrative expenses of $1.8 million (2013: $2.3 million) include costs to maintain offices and staff in Vancouver, Toronto and Montreal. A decision to close the Toronto and Montreal offices was made on January 31, 2014with all corporate functions consolidated in Vancouver effective April 30, 2014.

The foreign exchange loss of $1.8 million (2013: $142,000) is due principally to the negative impact of the weaker Canadian dollar against the US dollar on the carrying value of the US dollar denominated convertible debentures and cash advances from a customer. Interest expense of $0.8 million (2013: nil) relates mainly to the debt supporting iodine operations and interest accrued on cash advances from a customer. Interest on the debt for Quebec Lithium is capitalized during commissioning.


                                                                     
---------------------------------------------------------------------
Three Months Ended                                 Mar-14      Mar-13
---------------------------------------------------------------------
---------------------------------------------------------------------
Total revenues ($000's) (Note 1)                    5,044           -
---------------------------------------------------------------------
Net loss ($000's)                                   7,474       2,555
---------------------------------------------------------------------
Loss per share, basic and diluted ($)                0.04        0.02
---------------------------------------------------------------------
Total assets ($000's) (Note 2)                    477,484     344,076
---------------------------------------------------------------------
Total liabilities ($000's) (Note 2)               218,895     163,337
---------------------------------------------------------------------
Iodine produced (t) (Note 1)                          211           -
---------------------------------------------------------------------
Iodine sold (t) (Note 1)                              126           -
---------------------------------------------------------------------
Iodine avg. price ($/kg) (Note 1)                      40           -
---------------------------------------------------------------------
Iodine cash operating cost ($/kg) (Note 1, 3)          27           -
---------------------------------------------------------------------
                                                                            
Note 1: revenues and iodine data are from February 1 to March 31, 2014, the 
period post acquisition of Sirocco.                                         
Note 2: comparative data provided as at December 31, 2013.                  
Note 3: this is a non-GAAP measure. It was calculated by dividing cost of   
sales ($4.7 million), adjusted for the change in inventory ($1.4 million)   
and the related depreciation ($0.4 million), by quantities of iodine        
produced in the period.                                                     
Note 4: for complete details, refer to the March 31, 2014 interim           
consolidated financial statements and MD&A.                                 

The increase in total assets and liabilities from December 31, 2013 is due to the acquisition of Sirocco and the consolidation of its net assets as well as the ongoing construction and commissioning of the lithium processing plant in Quebec. Capitalized items include borrowing and operating costs for Quebec Lithium during the period.

OUTLOOK

Quebec Lithium

RB Energy's focus is on completing the commissioning of the processing plant and ramp up to name plate production before the end of 2014. The 2014 timetable includes four operating objectives:


1.  commissioning of the hydro-metallurgical circuits - completed in Q1
    2014; 
2.  achieve continuous production of battery-grade lithium carbonate on a
    continuous basis by the end of Q2 2104 - on target; 
3.  install a primary optical ore sorter (to reduce ore dilution) during Q2,
    with commissioning completed in early Q3, thereby increasing concentrate
    grade in Q3 2014 - installation commenced; and 
4.  reach name plate production capacity before the end of 2014 - on
    schedule.

The extent of 2014 revenue will depend on the timing of achieving commercial production and the ramp up of production volumes. Based on the information currently available to the Company, 2014 lithium production is estimated to be in the 9,000 - 11,000 tonne range. As 2014 will be the first year of operations of the plant, substantially involving commissioning, the estimate of production may have a degree of variability. Operating costs for 2014 will be capitalized until commercial production has been achieved, currently estimated in late Q3 or Q4.

As part of the commissioning process, various plant improvements have been identified and are in progress, including the installation of an optical sorter ($5.6 million), completion of mill construction ($3.3 million), rerouting the local access road from the open pit area ($1.5 million), and construction of a natural gas pipeline ($4.2 million). In addition, RB Energy estimates that several individually smaller capital upgrades will also be warranted.

Aguas Blancas

Production at Aguas Blancas was reduced in late 2013 by placing the Agitated Leach Plant ("ALP") on care and maintenance in response to softening prices in the market. As a result, operations in 2014 will be limited to heap leaching. In 2014, production of iodine is estimated at 1,000 tonnes at a cash cost of approximately US $29/kg. Aguas Blancas expects to supplement the sales of its 2014 production by reducing the level of its approximate 800 tonnes of finished product inventory.

Also late in 2013, the completion of the expansion of the ALP was deferred to 2015. The majority of the equipment for the completion of the expansion is on site. Capital costs in 2014 will be limited to settling the balance of payment of equipment orders ($1.2 million) for the expansion, completion of the chemical plant upgrade ($0.9 million) and sustaining capital of $1.4 million.

About RB Energy Inc.

RBI is a Canadian company formed pursuant to the arrangement involving Sirocco Mining Inc. and Canada Lithium Corp. It currently owns Aguas Blancas, an iodine producing mine in northern Chile, and Quebec Lithium near Val d'Or, the geographical heart of the Quebec mining industry. The Aguas Blancas mine is currently in production. The Quebec Lithium has completed construction and is in the commissioning phase. For more information regarding RBI, please refer to its public filings available at www.sedar.com.

The technical contents of this release have been reviewed by Mr. Kevin Ross, Eur. Ing., a Qualified Person pursuant to NI-43-101. Mr. Ross is Chief Operating Officer of the Company and a Member of The Institute of Materials, Minerals and Mining.

Forward-Looking Statements

Certain information contained in this news release, including any information relating to the state of the lithium and iodine industries; statements regarding our ability and the timing to achieve and sustain commercial production and name-plate production levels of iodine; our ability to secure commercial orders from our customers; and our ability to become a material player in the lithium market are "forward-looking statements". These forward-looking statements relate to future events or future performance and reflect the Company's expectations regarding the future growth, results of operations, business prospects and opportunities of RBI. These forward-looking statements also reflect the Company's current internal projections, expectations or beliefs and are based on information currently available to the Company. In some cases forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "budget" or the negative of those terms or other comparable terminology. The estimates and assumptions of RBI underlying the forward-looking statements in this news release may prove to be incorrect. Assumptions upon which such forward looking information include, among other things, successful and timely commissioning, ramp-up and production at the Quebec Lithium Project; the lack of any further significant capital expenditures during the commissioning stage or to bring the hydrometallurgical process plant into production; the continuing support and cooperation of RBI's off-take partners; as well as financial predictions premised on such assumptions. Although the Company believes that the forward-looking information contained in this news release is based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Accordingly, readers are cautioned against placing undue reliance on forward-looking information. RBI expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.

On behalf of the Board,

Richard P. Clark, President and CEO

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., discussed how these tools can be leveraged to develop a lasting competitive advantage ...
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, presented an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He then expounded on the industry issues he frequently came up against as an analyst, and ...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, will provide a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to ...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
Given the popularity of the containers, further investment in the telco/cable industry is needed to transition existing VM-based solutions to containerized cloud native deployments. The networking architecture of the solution isolates the network traffic into different network planes (e.g., management, control, and media). This naturally makes support for multiple interfaces in container orchestration engines an indispensable requirement.
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Because IoT devices are deployed in mission-critical environments more than ever before, it’s increasingly imperative they be truly smart. IoT sensors simply stockpiling data isn’t useful. IoT must be artificially and naturally intelligent in order to provide more value In his session at @ThingsExpo, John Crupi, Vice President and Engineering System Architect at Greenwave Systems, will discuss how IoT artificial intelligence (AI) can be carried out via edge analytics and machine learning techn...
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
FinTechs use the cloud to operate at the speed and scale of digital financial activity, but are often hindered by the complexity of managing security and compliance in the cloud. In his session at 20th Cloud Expo, Sesh Murthy, co-founder and CTO of Cloud Raxak, showed how proactive and automated cloud security enables FinTechs to leverage the cloud to achieve their business goals. Through business-driven cloud security, FinTechs can speed time-to-market, diminish risk and costs, maintain continu...
Consumers increasingly expect their electronic "things" to be connected to smart phones, tablets and the Internet. When that thing happens to be a medical device, the risks and benefits of connectivity must be carefully weighed. Once the decision is made that connecting the device is beneficial, medical device manufacturers must design their products to maintain patient safety and prevent compromised personal health information in the face of cybersecurity threats. In his session at @ThingsExpo...
Existing Big Data solutions are mainly focused on the discovery and analysis of data. The solutions are scalable and highly available but tedious when swapping in and swapping out occurs in disarray and thrashing takes place. The resolution for thrashing through machine learning algorithms and support nomenclature is through simple techniques. Organizations that have been collecting large customer data are increasingly seeing the need to use the data for swapping in and out and thrashing occurs ...