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

Contacts:
RB Energy Inc.
Sophia Shane
(604) 689-7842
(604) 689-4250 (FAX)
[email protected]

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
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
The need for greater agility and scalability necessitated the digital transformation in the form of following equation: monolithic to microservices to serverless architecture (FaaS). To keep up with the cut-throat competition, the organisations need to update their technology stack to make software development their differentiating factor. Thus microservices architecture emerged as a potential method to provide development teams with greater flexibility and other advantages, such as the abili...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, provided some practical insights on what, how and why when implementing "software-defined" in the datacent...
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory? In her Day 2 Keynote at @DevOpsSummit at 21st Cloud Expo, Aruna Ravichandran, VP, DevOps Solutions Marketing, CA Technologies, was jo...
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.
Leading companies, from the Global Fortune 500 to the smallest companies, are adopting hybrid cloud as the path to business advantage. Hybrid cloud depends on cloud services and on-premises infrastructure working in unison. Successful implementations require new levels of data mobility, enabled by an automated and seamless flow across on-premises and cloud resources. In his general session at 21st Cloud Expo, Greg Tevis, an IBM Storage Software Technical Strategist and Customer Solution Architec...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, discussed the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, application p...