BioteQ Receives Payment for SART Plant Equipment
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 06/27/12 -- BioteQ Environmental Technologies, Inc. (TSX: BQE), a leader in the treatment of industrial wastewater, has received payment of US$650,000 plus applicable taxes from NWM Mining, for the recently announced sale of SART plant equipment located in Lluvia, Mexico. A cash payment has been received by BioteQ, and ownership of the equipment has been transferred to NWM Mining on an 'as is' basis.
Jonathan Wilkinson, BioteQ's CEO stated, 'BioteQ evaluated all available options associated with the equipment located at the Lluvia, Mexico site, to determine the best value for our shareholders. By avoiding demobilization costs that were quoted to be approximately $450,000, and receiving a $650,000 cash payment for the equipment, the sale to NWM generates a net positive cash impact of $1.1 million. This figure is in addition to the $1.3 million legal settlement achieved in April. The overall net positive cash impact to the company from these combined transactions is $2.4 million, approximately equivalent to the original cost of the equipment, excluding labour.'
Prior to entering into negotiations with NWM regarding sale of the equipment, BioteQ evaluated all other relevant options. These options included repurposing the equipment for use in another plant, and demobilisation of the plant and the subsequent sale of all components that are in useable condition.
In evaluating the potential to repurpose the equipment, BioteQ concluded that the condition of the equipment, which has not been maintained by BioteQ for more than 3 years since the company leased the plant to the site owner, was not well suited for a sale to a new customer. Furthermore, the company presently has no near term projects that could utilize equipment with the capacity and grade of steel that comprise the Mexican plant.
BioteQ's review of demobilisation and resale of the equipment as components included a rigorous request-for-proposal process to develop a clear sense of potential value. Based on the quotations received, demobilization and the subsequent sale of the equipment components that remain useable to third parties was estimated to generate revenues approximately equal to demobilization costs.
In addition to the issues noted above, both alternative options would have required that BioteQ invest significant time and key resources into the demobilization and resale related activities. BioteQ will not need to make such investments with the sale arrangement.
The plant in Mexico was built in 2008. It has been idle since NWM ceased making payments to BioteQ under the lease to own arrangement. The equipment sale follows the settlement of legal claims by BioteQ against NWM in April for unpaid lease payments. Under the terms of the settlement, BioteQ was obligated to remove the SART plant by September 30, 2012. The $650,000 payment received by BioteQ for the equipment sale is in addition to the $1.3 million NWM has agreed to pay BioteQ over the next two years.
BioteQ Corporate Profile
BioteQ is an innovative clean technology leader in global industrial water treatment, serving the mining and energy markets. The company's proven technologies have been applied at sites around the world to recover dissolved metals and remove sulphate, producing clean water and 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.
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