Phosphoric Acid, Phosphates & Fertilizers Experts

Arianne Enters Memorandum of Understanding with China Machinery Industry Construction Group (SINOCONST)

SAGUENAY, QUEBEC – (June 4, 2019) – Arianne Phosphate (the “Company” or “Arianne”) (TSX VENTURE: DAN; OTC: DRRSF; FRANKFURT: JE9N), a development-stage phosphate mining company, advancing the Lac à Paul project in Quebec’s Saguenay-Lac-Saint-Jean region is pleased to announce that it has entered into a non-binding Memorandum of Understanding (“MoU”) with SINOCONST, a large Chinese state owned enterprise (“SOE”). Under the terms of the MoU, Arianne and SINOCONST have agreed to work towards a final binding agreement relating to the development of Arianne’s Lac à Paul project which, would include full project financing. On a parallel track, efforts to secure offtake are expected to be undertaken by SINOCONST in support of the financing package discussed under the MoU. Participation in the development of Lac à Paul on the part of SINOCONST is tied to finalized project financing commitments.

“This is a very exciting development for Arianne and the advancement of its Lac à Paul project,” said Brian Ostroff, CEO of Arianne Phosphate. “Where China used to be self-sufficient in phosphate, many industry analysts now see the country heading for a deficit in phosphate rock concentrate, joining the likes of India, another country of over 1 billion people. Arianne believes that concluding definitive financing agreements would be mutually beneficial; it would allow Arianne the financing necessary to develop its mine and allow China, through SINOCONST, an opportunity to access high-quality phosphate concentrate. The intent is now for both parties to reach a fully binding agreement and, as per the MoU, would directly tie SINOCONST’s participation in the project’s development to their ability to provide necessary project financing which, we believe, will be supported by offtake discussions; a structure often seen in Chinese involvement in large mining projects. For Arianne, this is a welcomed addition to discussions we have ongoing with other potential suppliers, offtakers and financial partners and our feeling is that this should accelerate all discussions.”
Although no assurances can be made as to a final agreement being reached, conversations surrounding the MoU have been ongoing for some time and both sides have indicated a strong willingness to progress to a final binding agreement in as quick a timeframe as possible.

China Machinery Industry Construction Group Inc. (SINOCONST) was founded in 1953 and, is one of the earliest large state-owned enterprises in China. SINOCONST has 15 wholly owned subsidiaries and employs over 10,000 people. During the past 60 years since its establishment, SINOCONST has been involved in hundreds of projects in 40 separate countries in different sectors including both mining and agriculture. Aside from its involvement in many global development projects, SINOCONST has established in-depth strategic cooperation relationships with many large financial institutions that can assist in the financing of these large developments. As well, given its industrial, geographic and financial advantages, SINOCONST and its subsidiary China Machinery Industry Hainan Co. Ltd., are striving to expand their import and export trading businesses that currently cover machinery, agricultural and food products and minerals.