BacTech Environmental Corp. (BAC:CSE;BCCEF:OTCQB;OBT1:FRA) is looking to complete an important engineering report on its bioleaching plant in Tenguel, Ecuador, by the end of the year.
The detailed engineering progress report was about 90% done as of Oct. 31, the company said.
BacTech is building the plant to take advantage of the growing green mining space. Research company Markets and Markets said the sector is expected to grow from an estimated US$9 billion in 2019 to US$12.9 billion by 2024.
Pressures from government and environmental groups are forcing companies to raise their capital and operating expenditures.
“As the countries tighten the environmental regulations and the public concern about the mining industry grows, this increases the pressure on these mining companies to minimize their environmental impacts and pay a higher amount to the occurring local issues,” Markets and Markets wrote.
Chris Temple, editor of The National Investor, has said he believes that process with the community will go smoothly. “This is a great project for the area,” he said.
But BacTech thinks it has a solution. Using naturally occurring bacteria, bioleaching makes it possible for those companies to work with lower-grade ore and recover metals from tailings sites as well as mines.
“Our bugs eat rocks,” the company says. Bacteria chew and oxidize the sulfides in the rock like mortar in a brick wall. Once that mortar is gone, the wall crashes down, President and Chief Executive Officer Ross Orr said.
“We really have no competition as we are pursuing this, which everyone else is running away from,” Orr told Streetwise Reports.
Bioleaching was attempted commercially in South Africa in 1986. There have been more than 20 plants built globally since then.
The Catalyst
BacTech received approval from the Ecuador government for its environmental impact study on the site for the plant last month. All that’s left from a regulatory standpoint is the final community consultation phase before the final environmental permit is issued.
The company will give presentations, hold town halls, and reply to questions from residents.
Chris Temple, editor of The National Investor, has said he believes that process with the community will go smoothly. “This is a great project for the area,” he said.
Procurement Underway
The site’s construction permit was approved in March, and BacTech signed an Investment Protection Agreement (IPA) with the government in May, giving it a 12-year income tax holiday and international arbitration for disputes.
As of the end of October, about 62% of the equipment for the plant had been procured, the company said.
“Procurement will now begin to command greater attention in an effort to lock down key supplier relationships and equipment pricing,” said BacTech Chief Operating Officer David Tingey.
The company said discussions were ongoing with several groups with respect to financing for the project, which will depend on permitting and completion of the detailed engineering report.
The plant will also have a small footprint, as much of the 100 acres of land bought for it will continue to be used by local farmers. BacTech has agreed to let them keep harvesting 80% of the farm’s thousands of cocoa trees.
For the feed going into the plant, there are 90 small mines in the area that produce significant amounts of arsenic with gold in the area. The plant would process about 30,900 ounces gold (Au) per year. There is potential for expansion; the total availability of materials in the area is an estimated 250 tonnes per day.
The plant would have pre-tax earnings of about US$10.9 million and a two-year payback period, according to data from EPCM Consultores.
The company is also opening a pilot facility to treat low-grade nickel in pyrrhotite and recover associated elements like iron and sulfur.
Ownership, Coverage, and Share Structure
BacTech recently started trading on the OTCQB Venture Market in the United States under the ticker symbol BCCEF. It continues to be traded on the Canadian Stock Exchange under BAC.
Nearly half of the company, 49%, is held by insiders, management, and strategic shareholders, the biggest of which is Option Three Advisory Services Ltd., which owns 8.98%, or 15.57 million shares, according to Reuters. That also includes CEO Orr, who owns 3.78% or 6.54 million shares, and Board Director Timothy Lewin, who owns 0.57% or 0.98 million shares.
Currently, BacTech is covered by newsletter writers of clivemaund.com, of 321gold.com, and of The National Investor. Click "See More Live Data" in the data box below to see what they are saying.
The company has 173.4 million shares outstanding, including 149 million free floating. Its market cap is CA$10.32 million, and it trades in a 52-week range of CA$0.165 and CA$0.06.
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Disclosures:
1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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