BQE Water Reports Q1 2026 Results
Press Release
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, 2026.
“Our Q1 2026 results were unable to match our exceptionally strong Q1 2025, which was unpinned by BQE’s response to an emergency environmental disaster in the Yukon. The first quarter for the Company is historically slow due to seasonal revenue patterns and limited metal recovery activity in China. Our Q1 2026 bottom line was also affected by one-time budgeted expenses associated with taking over the Britannia Mine treatment facility operation under a 20-year contract, and higher expenses to support the Company’s growth plan, mainly from increasing of head office staff and completing our new aquatic toxicology laboratory,” said David Kratochvil, President & CEO of BQE Water. “Our outlook for 2026 as a whole is positive, as we anticipate continuing our long-term operations at the nine sites across Canada, US, and China, new short-term operations in Western Canada, and steady increase in our technical advisory and engineering design services through 2026.”
FINANCIAL HIGHLIGHTS
- Revenues under GAAP of $4.8 million and Proportional Revenues of $5.3 million in Q1 2026, compared to $7.4 million and $7.9 million in Q1 2025
- Gross margin of $1.2 million in Q1 2026 compared to $3.2 million in Q1 2025, a $2.0 million decrease.
- Net loss of $1.3 million in Q1 2026 compared to net income of $1.7 million in Q1 2025.
- Loss per share of $0.98 in Q1 2026 compared to earnings per share of $1.34 in Q1 2025.
- Adjusted EBITDA loss of $1.1 million in Q1 2026 compared to income of $1.9 million in Q1 2025.
- Working capital of $20.0 million at March 31, 2026, compared to $21.4 million at December 31, 2025, a 7% decrease.
Selected financial results are as follows:
| (in ’000s) | 3 months ended Mar. 31 | ||||
| 2026 | 2025 | ||||
| Revenue from operational services | 1,981 | 1,962 | |||
| Revenue from technical services – short-term operations | 920 | 3,442 | |||
| Revenue from technical services – advisory and design | 1,899 | 2,042 | |||
| Total revenues under GAAP | 4,800 | 7,446 | |||
| Share of revenue from joint ventures in China | 504 | 502 | |||
| Proportional Revenues | 5,304 | 7,948 | |||
COMMENTARY AND OUTLOOK
Our Q1 2026 financial results were unable to match our exceptionally strong Q1 2025 as explained below. Q1 has historically been our seasonally weakest quarter as several of the Company’s long-term operations generate little or no revenue during the northern hemisphere winter months and our metal recovery operations in China are modest at best due to the dry season. Over the last seven years, the Company recorded positive net income only twice – in Q1 2022 and Q1 2025.
Looking specifically at Q1 2026 when compared to Q1 2025, there were three primary factors at play:
- Our record financial results in Q1 2025 were achieved primarily through the Eagle Mine emergency response project in the Yukon, where we provided engineering, commissioning, and short-term operations services throughout the period by mobilizing a large portion of the Company’s resources. Our successful efforts allowed Eagle Mine to cease treating water in Q4 2025 with no need to re-start the water treatment system until March 2026. As a result, there was only one month of short-term operations services at Eagle Mine in Q1 2026. The decrease in this project’s revenue between Q1 2026 and Q1 2025 explains most of the total decrease in revenue between the two periods.
- Two factors contributed to a lower gross margin in Q1 2026 when compared to the same period last year: i) lower productivity of new team members, and ii) a one-time increase in operating costs associated with the transition of the Britannia Mine water treatment plant from the previous operator. Although the Britannia operation started to generate new long-term recurring revenue in mid-January, transition-related costs resulted in a net loss of $100,000 for the project in Q1 2026. These one-time expenses primarily included temporary and additional operations personnel, travel costs, and rental equipment charges. The plant is now fully transitioned and staffed with permanent personnel, and we anticipate gross margins to improve going forward.
- Finally, Q1 2026 also marked the first full quarter following the Company’s re-organization, which was implemented to support our strategic growth plan developed last year to double in size within three years. As part of this plan, we increased labour resources, primarily at our headquarters. Sales and development costs also rose in Q1 2026 due to one-time expenses integral to our growth strategy, including training and development of new staff and completing the set-up of our new aquatic toxicology laboratory facility.
Our outlook for 2026 as a whole is positive, particularly in the following areas:
- Operational Services. Field operations are ramping up with two new contracts – ERDC in the Yukon and Canadian Royalties Inc. in Quebec – and operations at Britannia Mine are expected to stabilize and contribute positively to our financial results over the remainder of the year.
- Short-term Operations. We expect our short-term operations revenue to increase further as we are in advanced stages of contracting for operations with three other sites in Western Canada in 2026.
- Advisory and Design. Based on active engineering design projects, the value of our technical services is expected to increase steadily as we move through 2026.
In summary, while ongoing staff training and development will weigh on our margins over the next few quarters, these investments are considered essential to the Company’s growth goals. Notably, we continue to observe a marked increase in business activity in the mining industry, with permitting, pre-feasibility, and feasibility studies for major projects being initiated across all key jurisdictions. We believe this activity is indicative of the early stages of an upswing in capital spending in the industry, which we expect will provide a strong tailwind to our business over the next few years. At the same time, we are always mindful of current geopolitical and market uncertainties and are prepared to pivot as required to prioritize profitability while continuing to pursue disciplined growth.
OPERATIONAL SERVICES HIGHLIGHTS
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 | Water treatment fees |
| Raglan Mine for Glencore | Northern Québec, Canada | Water treatment fees |
| Britannia Mine water treatment plant | British Columbia, Canada | Water treatment fees |
| Water treatment plant for lead smelter | Quebec, Canada | Operations support fees |
| Zhongkuang Metallurgical Facilities for MWT | Shandong province, China | Operations support fees |
| Zhaojin Metallurgical Facilities for MWT | Shandong province, China | Operations support fees |
| Shandong Gold SART plant for MWT | Southwestern USA | Operations support fees |
| Power utility ash pond for WesTech | Eastern USA | Water treatment fees |
| Wharf Mine water treatment plant | South Dakota, USA | Operations support fees |
| Base metal project for a metal producer | Southwestern USA | Operations support 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 metals recovered by the plants fluctuate seasonally depending on precipitation levels in the region. The operating results for Q1 2026 are as follows:
| (in ’000s) (3 months ended Mar. 31) | 2026 | 2025 |
| Water treated (cubic metres) | 1,473 | 1,914 |
| Copper recovered (pounds) | 124 | 148 |
| Zinc recovered (pounds) | 75 | 177 |
In Q1 2026, all three plants met mechanical availability and process performance set by the Company. When compared to Q1 2025, the volume of water treated decreased by 23%, the mass of copper recovered decreased by 16%, and the mass of zinc recovered decreased by 58%. Such changes in water volume and metal grade in feed water 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 of 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 2026 are as follows:
| (in ’000s) (3 months ended Mar. 31) | 2026 | 2025 |
| Water treated (cubic metres) | 56 | 69 |
BQE Water Operations
The number of operating days contributing to water treatment or support fees for three months ended March 31, 2026, are as follows:
| (in days) (3 months ended Mar. 31) | 2026 | 2025 |
| Raglan Mine water treatment plants | 12 | – |
| Britannia Mine water treatment plant | 79 | – |
| Water treatment plant for lead smelter in Eastern Canada | 87 | – |
| Zhongkuang SART plant | 55 | 90 |
| Zhaojin SART plant | 90 | 85 |
| Shandong Gold SART plant | 36 | – |
| Water treatment plant in Eastern USA | 61 | 64 |
| Wharf Mine water treatment plant | 30 | – |
| Water treatment plants in Southwest USA | 90 | 90 |
The volume of water treated by geographic location for the three months ended March 31, 2026, are as follows:
| (in ’000s cubic metres) (3 months ended Mar. 31) | 2026 | 2025 |
| Raglan Mine water treatment plants | 49 | – |
| Britannia Mine water treatment plant | 1,177 | – |
| Water treatment plant for lead smelter in Eastern Canada | 59 | – |
| SART plants in China | 110 | 110 |
| Water treatment plants in USA | 468 | 749 |
The Company, with our Inuit partner Nuvumiut Development, operates four water treatment plants at Raglan Mine for Glencore Canada Corporation (“Glencore”). The plants at Raglan Mine usually are shut down in the first quarter as water stored in the outdoor reservoirs was frozen. During Q1 2026, as the temperature was warm enough, our team extended the 2025 operating season till mid-January of 2026. We expect to restart water treatment for the 2026 season in late May.
In 2021, we began operations of the Zhongkuang SART (sulphidication-acidification-recycling-thickening) 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. In September 2025, we commissioned the third SART plant at Shandong Gold, and starting October 2025, our team has been providing ongoing technical supervision.
In 2022, we began operations of a treatment plant utilizing our Selen-IX™ process to remove selenium from ash pond water for WesTech Engineering (“WesTech”). In Q1 2026, our team continued at site providing water treatment services with the Selen-IX™ circuit to manage the presence of selenium in the feed.
In 2022, we completed the commissioning of a treatment plant utilizing a combination of nanofiltration and our proprietary selenium electroreduction process for the simultaneous removal of selenium and sulphate from mine water for a base metal project in the American Southwest. In August 2023, our team completed the performance test milestone for a second newly constructed selenium removal water treatment plant which entered the operation phase. In Q1 2026, our team continued onsite to provide operations support and technical supervision at the treatment plants.
In October 2025, we completed the commissioning of a Selen-IX™ treatment plant located at the Coeur Wharf Mine in South Dakota and began providing routine operation support. In Q1 2026, our team continued at site to provide onsite and offsite support to the selenium removal circuit to manage the presence of selenium in the feed.
In January 2026, we assumed operational responsibility to provide operations and maintenance services for the Britannia Mine water treatment plant for the BC government over a 20-year arrangement. This High-Density Sludge lime treatment plant neutralizes acidity and removes heavy metals, primarily copper and zinc, from the mine water collected in the legacy underground workings prior to its discharge into Howe Sound. In Q1 2026, our team completed a smooth transition and began treating water daily without interruptions.
In February 2026, we initiated an annual operation support arrangement with an integrated lead smelter-recycling facility in Eastern Canada. Prior to such arrangement, we completed an upgrade to the existing treatment system, implemented a new sulphate removal stage to a discharge limit of less than 1,500 mg/L and provided short-term operations support for the newly upgraded facility. In Q1 2026, our team has been providing ongoing site support and technical supervision.
TECHNICAL SERVICES HIGHLIGHTS
BQE Water’s technical expertise and IP are applicable globally across broad areas of water management. Highlights of some of our technical services and technical innovation projects during Q1 2026 are summarized below.
Short-term Operations Services
- Resumed providing water treatment operations services for the temporary emergency treatment system at the Eagle Gold Mine in the Yukon.
Trusted Advisory Services (Water Management and Water Studies)
- Continued to provide plant engineering design services requiring the end-of-pipe cyanide level below 8 ppb to a project in the US.
- Initiated detailed engineering for SART integrated into the New Britannia mill in Manitoba, Canada.
- Completed the engineering design for construction of a SART plant at a new mine under development in Mexico.
- Initiated field assessment and bench scale testing to support SART integration into an existing mine in Turkey.
- Performed field troubleshooting of a cyanide destruction circuit at a mine in the US.
Cyanide Management (Destruction and Recycle)
- Continued to provide plant engineering design services requiring the end-of-pipe cyanide level below 8 ppb to a project in the US.
- Performed METSIM modelling, laboratory testing, and basic engineering for SART integration into the New Britannia mill in Manitoba, Canada.
- Continued with the engineering design for construction of a SART plant at a new mine under development in Mexico.
Aquatic Toxicology Services
- Continued the testing involving investigation of water quality on early life stages of trout for a client in BC.
- Continued the development of nitrate guidelines for a client in Alberta.
SELECTED FINANCIAL INFORMATION
For a complete set of Financial Statements and MD&A, please go to www.bqewater.com.
| (in $’000 except for per share amounts) (3 months ended Mar. 31) | 2026 | 2025 | |
| $ | $ | ||
| Revenues | 4,800 | 7,446 | |
| Operating expenses (excluding depreciation) | (3,622) | (4,240) | |
| Gross margin | 1,178 | 3,206 | |
| Share of income from joint ventures | 44 | 61 | |
| General and administration | (1,059) | (766) | |
| Sales and development | (1,310) | (676) | |
| Share-based payments | (260) | (83) | |
| Depreciation and amortization | (146) | (127) | |
| (Loss) income from operations and joint ventures | (1,553) | 1,615 | |
| Other income, net | 275 | 108 | |
| Income tax recovery | – | 3 | |
| Net (loss) income for the year | (1,278) | 1,726 | |
| (Loss) earnings per share (basic) | (0.98) | 1.34 | |
| (Loss) earnings per share (diluted) | (0.97) | 1.33 | |
| Proportional Revenues (Non-GAAP measures) | 5,304 | 7,948 | |
| Adjusted EBITDA (Non-GAAP measures) | (1,074) | 1,877 | |
| at Mar 31 | at Mar 31 | ||
| 2025 | 2024 | ||
$ |
$ |
||
| Cash and cash equivalents | 17,684 | 18,982 | |
| Working capital | 19,931 | 21,410 | |
| Total assets | 34,681 | 35,710 | |
| Total non-current liabilities | 3,220 | 2,549 | |
| Shareholders’ equity | 27,773 | 28,795 |
NON-GAAP MEASURES
The Company uses non-GAAP financial measures to supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (IFRS), or GAAP, to enhance overall understanding of the Company’s current financial performance with investors and observers. Proportional Revenues and Adjusted EBITDA are reconciled as follows:
Proportional Results
To provide additional insight into our financial results, certain statements in this MD&A disclose the effective portion of results we would have reported if our Chinese joint venture operations had been proportionately integrated and are referred to as BQE Water’s proportional share (“Proportional”). All Proportional financial measures disclosed in this MD&A are non-GAAP measures.
Proportional Revenues
This non-GAAP financial measure of Proportional Revenue adds BQE Water’s share of revenues from its China joint ventures to the Company’s revenues reported under GAAP. Proportional Revenues for the three-month periods ended March 31, 2026 and 2025, are as follows:
| (in $’000s) (3 months ended Mar. 31) | 2026 | 2025 |
| $ | $ | |
| Reported revenues under GAAP | 4,800 | 7,446 |
| Share of revenues from joint ventures in China | 504 | 502 |
| Proportional Revenue for the period | 5,304 | 7,948 |
Adjusted EBITDA
Adjusted EBITDA (“earnings before interest, taxes, depreciation and amortization”) is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Consequently, the presentation of Adjusted EBITDA enables shareholders to better understand the underlying financial performance of our business through the eyes of management. Adjusted EBITDA includes adjustments of the Company’s Proportional share of joint venture results. The following table reconciles this non-GAAP measure to the most directly comparable IFRS measure of net income:
(in $’000s) (3 months ended Mar. 31)20262025
$$GAAP: Net (loss) income(1,278)1,726 deduct: interest income(28)(29) deduct: income tax recovery(47)(70) add: depreciation and amortization267248EBITDA(1,086)1,875 add: share-based payments26083 deduct: non-operating income(153)(91) add/deduct: net foreign exchange (loss)(95)10Adjusted EBITDA(1,074)1,877
IBF4
