Letter to Shareholders - Wednesday, January 04, 2012
I would like to wish everyone a happy and healthy 2012.
2011 was BacTech's first full year as a stand-alone environmental reclamation company. In the short span of 13 months (spin off was Dec 2/10) we have managed to identify, negotiate, and finally sign our first project that will use bioleaching as a means to reclaim a historic mine legacy.
A few weeks ago, BacTech signed the definitive agreement with the government of Manitoba Department of Innovation Energy and Mines with respect to cleaning up the Snow Lake arsenopyrite stockpile. For those of you who are not entirely sure what we are attempting to do I will provide some background on the project.
The Nor-Acme Mine, as it was known at the time, produced for approximately 9 years (1949-1958) in Snow Lake, Manitoba. The mine produced predominantly 'free' gold; gold that does need any liberation technology. It also produced about 15% of its' gold in the form of arsenopyrite, which included very high levels of arsenic and made recoveries very inefficient. A decision was made at the time to produce a float concentrate and stockpile it on site to be processed at a later date when a suitable technology could deal with the high levels of arsenic. Fast forward 50-60 years and we still find the stockpile sitting as is only now it is slowly oxidizing and discharging acidic water contaminated with soluble arsenic into the local environment. Given the fact that the pile contains up to 20% arsenic, one can understand why this pile has never been pursued in a serious fashion, even with the allure of over 85,000 ounces of gold.
Enter BacTech and our bioleaching technology. Since we have the ability to not only oxidize the sulphides (and eliminate future acid mine drainage) and stabilize the arsenic as a ferric arsenate, this project is an ideal place for us to build the first plant of its kind in North America. In most of the tailings we have looked at to date the sulphides need to be separated from the waste rock to produce a concentrate for bioleaching. In fact, usually the sulphides only make up about 5-7% of the contained material in the tailings. At Snow Lake we are dealing with a pile that is already in concentrate form, meaning less capital has to be employed in the build out (no need for a flotation plant, crushing, grinding etc.). This is a great place to start.
Another exciting event, a Christmas gift as it were, was the signing of an agreement with Newalta Corporation of Calgary, Alberta. Newalta provides cost-effective solutions to industrial customers to improve their environmental performance with a focus on recycling and recovery of products from industrial residues. These services are provided both through a network of 85 facilities across Canada and at their customers' facilities. Newalta trades on the TMX as NAL. If you want to learn more about Newalta, visit www.newalta.com.
Newalta has agreed to contribute $300,000 to be applied to the engineering studies needed to develop Snow Lake. In return BacTech will allow for 2 engineers from Newalta to be part of the process. In the event of a positive study result BacTech has agreed to negotiate exclusively with Newalta for 90 days with respect to Newalta's possible participation in the project. If no agreement can be consummated BacTech is free to keep the study and is under no obligation to repay the funds. The study, which is being conducted by Micon Engineering, will kick off in early January. We are very pleased to have attracted a quality company like Newalta to be our potential partner at Snow Lake.
Keeping in mind that Snow Lake is priority #1, we also need to keep our eyes and ears open to other opportunities that could become projects #2 and #3 etc. Since the initial announcement of our involvement at Snow Lake we have had numerous opportunities presented to us for review. I won't get specific at this stage but I am comfortable naming locations where we have looked or will look at projects in the new year (California, Timmins, Pickle Lake, Peru, Bolivia, & Slovakia to name 6). The potential size of the market we are addressing is truly very large. Our mandate is to identify projects that can add production and value in the short to medium term, keeping in mind that not all tailings projects are bioleach candidates. We must search for the wheat amongst the chaff.
2011 was a very difficult time for junior companies and I believe 2012 will also be challenging. It is our intent to turn BacTech into a cash flowing entity by the end of the year which will allow us to wean ourselves off the equity markets and reduce further dilution. I want to thank everyone who has had a hand in getting us to the where we are today as well as thank the shareholders for their patience as we move towards transforming BacTech into a viable option for tailings reclamation.
Sincerely;
Ross Orr
President
416-813-0303