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Green Tech Co. Awaits Court's Decision on Consultation Process

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It's now up to an Ecuadorian court to decide the fate of environmental consultation processes for halted projects there, including BacTech Environmental Corp.'s bioleaching plant in Tenguel.

It's now up to the Constitutional Court of Ecuador to decide the fate of a presidential decree unlocking the environmental consultation process for halted projects there, including BacTech Environmental Corp.'s (BAC:CSE;BCCEF:OTCQB;OBT1:FRA) bioleaching plant in Tenguel.

Three new lawsuits have been filed against the decree. Its temporary suspension to halt the process came after an initial complaint filed by the indigenous group CONAIE, or the Confederation of Indigenous Nationalities of Ecuador.

On Sept. 18, the court heard arguments for and against the decree and must now decide the fate of the process. According to a release from another company with an affected project in the country, Adventus Mining Corp. (ADVZF:OTCMKTS), "the court can be expected to issue a resolution within two to three months following the public hearing commencement."

"My understanding is that the government presented a very good case for removing the temporary ban on the consultation process," BacTech President and Chief Executive Officer Ross Orr wrote in his weekly update to shareholders, "Sunday Morning Coffee." "The bigger question is how long will they take to make a ruling."

Chris Temple, editor of The National Investor and a BacTech supporter and shareholder, wrote on September 12 that the Tenguel project "enjoys overwhelming support in the local communities."

A mining law expert told Bnamericas that the lawsuits show abuse of the legal system to obstruct economic activities and the mining industry.

"We must call on the constitutional court so that it is not used," Andrés Ycaza told the publication. "There is an appropriation [of mining activity], using constitutional justice. It is evident that these groups, regardless of the court's ruling, will continue to file legal action to keep the sector paralyzed."

Prensa Latina reported that an Ecuadorian business group told the Constitutional Court during last week's hearing that as many as 176 processes are being paralyzed nationwide by the suspension, with a negative impact of US$2 billion on the economy.

But as Orr likes to point out, the company does not mine. It cleans up after mines.

"Through bioleaching, we will liberate gold and silver for recovery while producing a stable form of arsenic as a by-product," Orr has said.

The Catalyst: Protesters Overplayed Their Hand?

BacTech received its construction permit and approval from the government for its environmental impact study on the site but has been working through the community consultation phase for the final environmental permit.

Chris Temple, editor of The National Investor and a BacTech supporter and shareholder, wrote on September 12 that the Tenguel project "enjoys overwhelming support in the local communities."

"Keeping in mind the fact that Ecuador's highest court is even more political than the typical U.S. courts, their game plan encourages us," Temple wrote. "With the Constitutional Court of a mind to give this controversy . . .  thorough attention, I tend to think what will be revealed is that CONIAE and the rest dramatically overplayed their hand."

Technical Analyst Clive Maund of also rated BacTech an Immediate Buy in March.

Temple said the companies affected by the suspension "remain hopeful that the proper processes will be followed and that — as early as Q4 or now, perhaps, Q1 next year, depending on the Court — the construction process can begin."

Orr said BacTech is seen in the country as "a crucial factor in making certain mining developments more acceptable" and plans to actively seek funding for the project once the situation in the country stabilizes.

The company recently launched a new sustainable framework for issuing US$20 million in Green Bonds to pay for the Tenguel plant.

"We've discovered a gem in Ecuador, and despite the current challenges, we're confident in overcoming them," Orr said. "While governments may change, environmental issues persist until addressed. I firmly believe that Ecuador is just the first in a series of successes that will follow once we demonstrate the capabilities of our technology."

BacTech's bioleaching process uses naturally occurring bacteria, harmless to humans and the environment, to extract precious and base metals from ores, concentrates, and tailings. "Our bugs eat rocks," the company says.

Technical Analyst Clive Maund of also rated BacTech an Immediate Buy in March.

Election Complicates Issue

Complicating the issue has been the country's presidential election process. Crime has topped the agenda of the race, which saw the assassination of candidate Fernando Villavicencio, an anti-corruption journalist.

Luisa González, of the Movimiento Revolución Ciudadana party, led the vote with about 33%, while Daniel Noboa, of National Democratic Action, came in second with nearly 24%. The two will now face off in a runoff on October 15.

González ran for the party of former leftist President Rafael Correa, who supported her run from exile in Belgium after being convicted of corruption.

Streetwise Ownership Overview*

BacTech Environmental Corp. (BAC:CSE;BCCEF:OTCQB;OBT1:FRA)

*Share Structure as of 4/13/2023

"It's worth noting that seven out of the eight candidates recognize that the country's progress hinges on the development of natural resource projects, which would lead to job creation and increased tax revenue for the government," Orr wrote in another installment of "Sunday Morning Coffee."

Ownership and Share Structure

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 8.48%, or 15.57 million shares, according to Reuters. That also includes CEO Orr, who owns 3.57% or 6.54 million shares, and Board Director Timothy Lewin, who owns 0.54% or 0.98 million shares.

The rest is retail.

The company has 185.36 million shares outstanding, including 159.12 million free floating. Its market cap is CA$17.61 million, and it trades in a 52-week range of CA$0.10 and CA$0.055.

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Important Disclosures:

  1. BacTech Environmental Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of BacTech Environmental Corp.
  3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
  4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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