Dear Shareholder:

It has been a horrible year for resources and no doubt many investors have tuned out and looked to alternate industries to invest their hard earned money. Hopefully with what I have written below, regarding BacTech’s Bolivian and Peruvian projects, we will restore some confidence in you.

I have just returned from a business trip to Bolivia and Peru. My Bolivian leg of the trip was hi-lighted by the meeting on the very first day of the visit with the President of Comibol, Marcelino Quispe. If you recall, we have been pursuing the signing of the Association Contract with Comibol for the better part of a year. At this meeting, it was Comibol who suggested we get the contract signed before year-end. Sr. Quispe instructed his team of lawyers and engineers to proceed on finalizing the contract. It is no secret that Bolivia, like all resource-based economies, is hurting economically with the collapse in oil and gas prices as well as the drop off in mining. At the time of writing this letter, I am waiting on our lawyer’s advice on when to go back to La Paz to sign the final contract. I would expect this to happen before Christmas. Marcelino has suggested a press conference would be appropriate for the signing of this document in order to show the world that Bolivia is open for business.

We are also very happy to announce that we have engaged the services of Jose Cordova, a former President of Comibol, as well as a former manager at the Telamayu mill complex. Jose has been actively involved in the negotiations with Comibol. It would be an understatement to say that he knows the project very well.

The Bolivian project does not include bioleaching in its plans. We will build a simple gravity/flotation circuit for the silver and copper and we believe the majority of the tin will also be recovered by gravity. This is to get to a cash flow position as quickly as we can. In reality, the test work we have planned for Q1/16 will provide the final answers on what route we take. There is the possibility to use bioleaching in Bolivia in the future, provided that the projects are economically viable.

In Peru, we have signed a Memorandum of Understanding (“MOU”) with Duran Ventures Inc. to investigate the economic possibility of processing arsenopyrite ores with bioleaching. Unlike many of the Canadian companies that have built or bought oxide-processing plants in Peru, our agreement calls for the construction of a flotation plant for sulphide ores including ores with high levels of gold/silver and arsenic.

I was fortunate to travel to Duran’s flotation plant site near Trujillo. What strikes someone right away is its ideal location. It is 11 km east of an ocean port making movement of equipment and concentrates very easy and the area seldom, if ever, sees any rain. At 200 meters above sea level, it provides a good backdrop for bioleaching. Fresh water and power are within close proximity as well. Duran expects to commission their 100 tonne per day flotation plant in Q2/16.

We have just received some results from an internal study for material we submitted a few weeks back. I can’t provide the actual numbers as we collected the samples and to be reportable they would need to be collected by an independent party. The results are really a confirmation for us that we are pursuing the right material for bioleaching. These samples will now be floated to provide us with a flotation concentrate for bioleach amenability work. These mineralized materials we are assessing are ideally what we want to find for a “contracted” source of material for bioleaching. In the event we identify a suitable project to provide ore feed, we would undertake the customary NI 43-101 study, as well as provide independent assays for the mineralized material.

Personally, I think the prudent road for us to take is to build a bioleach plant that is two times the capacity of what we contract for. This allows the artisanal miner to find us and fill up the excess capacity. In my opinion, to build a plant strictly on the back of artisanal miner feed would not be financeable.

So what do we have in store for 2016? First and foremost, we would like to bring a small rig to Telamayu to get a better understanding of where the metal sits in the tailings or, in layman’s English, find out where the hot spots are. The material that is generated from the drill program will be subjected to enhanced flotation test work, which in turn will allow us to determine what the appropriate flow sheet should look like. There have been several different groups expressing an interest in financing the plant, which is a positive in this environment. High-grade opportunities always attract savvy investors.

In Peru, we will continue to identify deposits that contain high-grade gold and arsenic. Since there currently is no home to process these deposits, we believe we have identified an attractive niche for gold production and corresponding mercury reduction. Again, if everything goes to plan, we could be talking about a new bioleach circuit in next year’s “Year in Review.”

2016 should be a very busy year with production and cash flow on the near horizon. Cash Flow. That is quite a concept for a junior company. Please feel free to email or call me at the contacts below, with any questions or comments you may have.

Yours Sincerely,

Ross Orr, President & CEO
BacTech Environmental Corporation
416-813-0303 ext 222
416-346-5529 Cell

Bill Mitoulas, Investor Relations