September 07, 2016
Dear Shareholder:

Now that summer has passed, I thought it would be prudent to provide an update on BacTech’s activities for the year to date.

Bolivia 

We are almost ready to begin field work on this project. I say this as the contract, which was signed in May with COMIBOL, has been approved by the Bolivian Parliament and now sits at the Senate awaiting a final stamp. This should happen imminently. Once it is approved, we will be establishing an office in La Paz, as well as banking facilities, etc.

We will be engaging Leduc Drilling of La Paz to undertake a 400 metre drilling program that will consist of 40 holes, each of 10 metre depth. We are very comfortable with the assay results received previously, but the Bolivian Government (i.e., COMIBOL) insist that there is a significant amount of tin in the tailings, as much as 1.5%. If this is true, and it will be verified in the upcoming assay and metallurgical test work, we are looking at gross tin values of up to US$140M alone. This, obviously, will have a huge impact on the value of contained metal in the Antiguas tailings. So, after 2 years of negotiating and waiting, our time is at hand. Finally!!

Future Opportunities

Ecuador

Very quietly, we have been putting together a game plan for Ecuador. We were contacted by a local representative of a European metal trading group who couldn’t help but notice the amount of high-grade arsenic/gold concentrate that was being shipped to China on a daily basis. Using his access to local input costs, we built a very attractive cash flow model that would be the underpinning of a 40 ton per day bioleach facility in southern Ecuador. If you recall, artisanal miners produce arsenopyrite ore for processing, which is now being done at a series of flotation plants in Ponce Enrique. The concentrates are then purchased by the Chinese and shipped to China for processing. We understand that the purchase price per tonne is in the 50 to 60% range of the total value of the metal, leaving considerable margin to be captured. By virtue of buying local concentrates, we can capture this margin without the added expense of transportation and arsenic penalties. I hope to visit the country soon to meet with potential local partners that have expressed an interest in this type of project.

Additional Opportunities

Ecuador for one. Peru, albeit it has been very quiet of late. An enquiry from Europe regarding processing of gold tails there, and a unique opportunity in the Mother Lode of California. Even though our focus remains Bolivia, it is important that we have projects in the pipeline so we do not have all of our eggs in one basket. Don’t be surprised to see announcements on some of these in the near future.

Financing

In June we announced a CAD$500,000 financing. To date, we have raised in excess of $369,000, and we are confident we will exceed the amount we set out to raise. The principle use of funds will be for Bolivia and we are hopeful that this money will allow us to be shovel-ready. Of course, we will need to raise debt to finance the construction of the plant, but there is so much infrastructure in place, we think our ability to raise the Capex should be good. Remember that Telamayu is NOT a bioleach plant but a simple gravity/flotation circuit. In essence, we went after a project that had high-grade metal and low Capex. Therefore payback should be quick.

Marketing

Recently, we engaged the services of Frontier Capital to assist with the financing, as well as an awareness program. It is no secret that we have done very little in marketing over the past 12 months. We now feel the time is right to tell our story, given that we are on the cusp of getting going in Bolivia.

In August, I spent two full days meeting with interested parties in Toronto and another two days in Montreal. If you haven’t noticed, the stock is now trading on a regular basis with volumes of over 300,000 shares on occasion. It is my intent to continue the road shows to western Canada and the west coast of the U.S. with Frontier’s assistance. The general consensus of the meetings has been we have a unique story with early cash flow potential. With some 2 million shares bought over the past few weeks, I think we are now positioned to obtain the value that we feel we have created.

Conclusion

I believe our long wait is over. I am confident we are heading in the right direction.

Sincerely,

Ross Orr
President & CEO
BacTech Environmental Corporation
1820 – 20 Eglinton Avenue West
P.O. Box 2029
Toronto, Ontario M4R 1X8
Telephone: 416-813-0303 ext 222
Cell: 416-346-5529
Email: borr@bactechgreen.com