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BacTech Environmental Corp.
Mid-Summer Update 

Ross Orr, President & CEO, BacTech Environmental Corporation (OTC: BCCEF) provides an update on progress in both Bolivia and Ecuador.

The end of August is going to be a date to mark on your calendar. It is expected that the metallurgical test work we are doing on material from the Telamayu tailings will be completed by then. If you recall we provided some results about 4 months ago that showed good silver and copper recoveries but lower than expected tin results. The tin is important as its gross value in the tailings is about 50% of the contained +$200M worth of metal. Can the project proceed based on silver and copper? Most likely, but the upside from producing a good tin concentrate should have a very good effect on overall project performance. It was a fortunate meeting at PDAC in March where I met the people from Met-Solve in Vancouver that led to the test work being undertaken presently. Let’s cross our collective fingers on good tin recoveries.

Should the recoveries be positive the next step is a quick economic study to be completed by a third party in China. The results will be shared by CACS (our Chinese engineering group who are to provide 85% financing for the plant at Telamayu) and BacTech. CACS will be responsible for applying to a Chinese bank for 85% of the Capex. It is still a bit of a guesstimate but we don’t see the required capital being over US$10M at this stage. Of course, the flow sheet that will grow from the metallurgical test work will allow us to narrow down the Capex estimate.

I recently returned from Quito, Ecuador where I had the good fortune to engage a Canadian ex-pat named Derek Lamb. Derek has lived and worked in Ecuador for over 10 years but has recently returned to live there after a 10 year absence. Derek’s group is called The Scot Group and he was instrumental in arranging some very high-level meetings with senior Ministers in government. Part of my reason to visit was to present the findings from the bioleach test work we completed at Laurentian University under the guidance of our Dr. Paul Miller and their Dr. Nadia Mykytczuk. In short, we are able to liberate very high levels of arsenic in material that we sourced in Ponce Enriquez and more importantly, produced a ferric arsenate that easily beat the minimum TPCL levels demanded by the US EPA.

I had the pleasure to meet with the new Minister of what I would call a Super Ministry. The new Ministry is a combined Oil and Gas, Mining and Electricity unit with 3 sub-Ministers or 1 for each division. The head of the Ministry is Carlos Perez with whom I had the pleasure to meet on 2 occasions. Sr. Perez spent many years with US-based Haliburton Industries and was golfing quietly in retirement before getting the call from now President Moreno. The task before him is a daunting one but the buzz suggests that Ecuador is a country on the rebound after 10 years of “interesting” leadership (or lack thereof) and a great place to do business.

We also had a stop at the Ministry of Environment where we laid out our plans for bioleaching in Ponce Enriquez that also included discussion of other “hot spots” in the country in need of reclamation. We are preparing a technical submission on bioleaching which will be tendered shortly and it will include a report form BacTech/Laurentian on the arsenic results. Perhaps I have put the cart in front of the horse, so I will recap why we are in Ecuador in addition to Bolivia. Bolivia is not a bioleach candidate but future projects there could be. In an effort to establish a bioleach beachhead in South America we followed the arsenic and it took us to southern Ecuador, more specifically Ponce Enriquez (SW Ecuador). Here we found concentrates being produced by small scale miners using flotation for arsenopyrite. The problem, for the miner, is he produces a product that has very high arsenic levels, some as high as 15% As. Sales of these types of concentrates are very difficult to achieve as smelters and roasters have very strict limitations on the amount of arsenic they can burn. Enter the Asian buyer who pays 50% of the value and takes the product away to do who knows what. A second issue in the area has to do with tailings that have reached their maximum capacity and the tailings sit 1000-1500m above the town of Ponce Enriquez. Applications by the small miners to expand their tails have been denied by the government and in fact, they have been told to remove what they have or face a mining shutdown. Ponce is a very pro-mining area, so one can see the issues that could possibly arise. Should there be a 100-year storm or earthquake (both very real possibilities) these tailings could breach their banks and crash down the mountain causing havoc with the locals and the environment.

A facility built on the coastal plain between the Andes and the ocean would provide an ideal, flat location for a bioleach plant including reinternment of the oxidized arsenopyrite tailings. Trucking the tailings material from 1000m above sea level is okay especially when its downhill with empty trucks climbing back for more. A combination of concentrate processing from the small miners as well as refloating lower grade material from the tailings is a unique opportunity for BacTech.

The next steps for the PE project will be a 2nd round of bioleach test work at Laurentian where we will work on optimizing the gold recovery as the first round focused on delivering good arsenic stabilization results. We will also incorporate any local, meaning Ecuadorian, protocols into the test work so as to be compliant with their environmental standards.

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