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BacTech Environmental Corporation

BacTech Environmental Year End Review

Commentary by Ross Orr, President & CEO BacTech Environmental Corporation.

Well, its that time of year again where I get to sit down and reminisce about the past year and speculate about the new year with BacTech (“BacTech” or the “Company”), (CSE: BAC, OTC Pink: BCCEF). At the time of writing we are drilling the Telamayu tailings in Bolivia. Actually, to be more precise the drilling was halted for the holidays, but they are back at it and we hope to have the program completed by the end of this January. It seems the drillers encountered a layer of waste rock and clay near the surface of the tailings, which has hardened into a cap of sorts that was hindering our progress. In any event the Vibracore was unable to penetrate the cap so we are now digging down 1-2 meters with a backhoe followed by the Vibracore, which has no problem taking us to the bottom of the tailings. One can assume that we will have some preliminary assay results out shortly and should they confirm the Comibol results from a few years ago, we will start the metallurgical work right away. All of this activity will lead us to building a gravity/flotation circuit this year and that will generate cash flow. That’s quite a concept...cash flow. Remember this is not a bioleach plant. Its an inexpensive way to get to (a), cash flow, and (b) a soft entry into the Bolivian market where there are many more opportunities with Comibol and private concerns.

I am particularly excited about Ecuador. In fact I couldn’t write a better script for bioleaching. As you all know bioleaching is a very good way to stabilize arsenic as it ends up as ferric arsenate, a US EPA approved material, for final disposal. The arsenopyrite ores that are produced in the province of Ponce Enrique in southern Ecuador are particularly high grade in gold and arsenic. Over the past decade, with the jump in the price of gold, artisanal miners by the thousands have been swarming over mining areas in Peru, Ecuador, and Colombia etc. in search of ore to mine. In their wake lies environmental degradation on a large scale caused by the release of arsenic and mercury from artisanal mining.

So, along comes Dr. Marcelo Veiga from the Norman Keevil Institute of Mining at UBC in Vancouver with a program designed to eliminate the use of mercury in artisanal gold mining. His idea was to use flotation on the sulphide ores as the amount of gold or silver they were able to recover using mercury was very low, less than 10% for refractory ores. Dr. Veiga, with some assists from a couple of Canadian government groups, built some flotation circuits to buy ore from the artisanal miners. What they found was they produced a very high-grade gold concentrate but unfortunately a very high-grade arsenic value as well. Effectively a product, if sold on the open market, that would only fetch 50 cents on the dollar due to arsenic penalties applied by the smelters. Enter BacTech.

Our vision for Ecuador is to build a bioleach circuit in Ponce Enrique. With a local partner we hope to buy concentrates from existing flotation plants and use their output as our source of feed for bioleaching. Today these high gold/arsenic concentrates are being sold to foreign buyers who load, ship, unload and process in China. Given the savings in transportation alone we feel we can be very competitive and secure a piece of the roughly 100 tonnes per day of high-arsenopyrite concentrate that is being produced for export.

From the government’s standpoint a project such as this is viewed very positively. Local employment gains, an increase in the amount of money being injected into the area, a reduction in the amount of arsenic being released into the environment, a reduction in the use mercury, physical benefits to the people working in these conditions and of course, taxes are all results of a bioleach plant installation.

I hope you saw our press release on the agreement we signed with Laurentian University. In short they will undertake our bioleach test work under the guidance of our own Dr. Paul Miller. The costs savings are very real to a small company such as ours. We anticipate rounding up 200 kgs of high-arsenopyrite gold concentrate from the flotation plants in Ponce Enrique in January that will find its way to Laurentian for 4-6 months of bioleach test work. No doubt arsenic levels of 15% will provide a challenge but it is not something new to us. If the results are positive we would move on arranging financing for a plant estimated to be US$10M that would treat 40 tonnes per day as a start. Remember that adding additional tanks increases your capacity so as the arsenopyrite processing market grows (and it is) so would our production.

There is no question that Bolivia and the Telamayu project are of great importance to us. The ability to develop new projects with internally generated cash flow instead of raising dribs and drabs of cash in the market to push them along is hopefully within reach. I always say to people that cash is our biggest problem. If we had a flowing tap of cash we could build these plants up and down the Andes and right into Central America. I really believe that we have found the sweet spot for bioleaching, at least from our perspective. That being smaller, less expensive plants that can treat material that others can’t or won’t AND do it in such a way that “sustainability” really means something to the local inhabitants.

To all you long-suffering shareholders thank you for supporting us over the years. To everyone who has joined us over the past year, welcome and be prepared for what I believe will be the penultimate year for BacTech Environmental.

About BacTech Environmental Corp.

BacTech Environmental is a pioneering, Canadian environmental technology company created in 2010 following completion of a Plan of Arrangement originated by BacTech Mining Corporation (now called REBgold). REBgold was originally responsible for the development and commercialization of the patented BACOX bioleaching technology. BacTech Environmental has been granted a perpetual, exclusive license by REBgold to use the BACOX technology for the remediation and reclamation of highly toxic tailings and waste rock resulting from abandoned mining operations.

For more information on BacTech Environmental Corporation contact Ross Orr, President & CEO at (416) 813-0303 ext 222 or Bill Mitoulas, Investor Relations, (416) 479-9547, Email: billm@bactechgreen.com or visit the website at www.bactechgreen.com.


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