Our current pursuits have taken us to Ecuador where there is significant opportunity for gold recovery while addressing the environmental degradation and health issues caused by mining.
Ecuador has emerged as a country of major interest given the high levels of arsenic in concentrates and tailings produced by small, artisanal miners. Our interest in South America largely stems from BacTech’s ability to support improved metallurgical processing while treating high arsenic materials, as opposed to current practices of shipping material to Asia at severe pricing discounts — where dangerous and environmentally unfriendly liberation treatments involving mercury are used.
BacTech Environmental is planning to build a new owner-operated bioleaching facility near Tenguel – Ponce Enriquez, Ecuador, in a region where arsenic is associated with gold ore (Arsenopyrite). The Company’s plan is to build a 50 tpd bioleach plant capable of treating high gold/arsenic material. A 50 tpd plant, processing 1.75 ounces of gold per tonne of feed, similar to feeds available to the Company from local miners, would produce approximately 30,900 ounces per year. Plant designs are modular and can be expanded without affecting ongoing production. The total concentrate market in the Ponce Enriquez area is estimated to be 250 tonnes per day, allowing for increased throughput potential with a larger plant.
In total, there are over 90 small mines operating in the area. BacTech intends to return local miner compensation back to previous payment levels, prior to a sweeping price reduction imposed by Chinese buyers due to recent import levies on arsenic/gold concentrates entering China.
Key Economic Highlights:
Key economic highlights, assuming a base gold price @ $1,600 per ounce:
- Pre-tax NPV (Net Present Value with 5% discount rate) of $60.7M
- Pre-tax IRR (Internal Rate of Return) of 57.9%
- Annual Gold Production of 30,900 ounces
- Capital Cost of $17M
- Bioleach Operating Cost of $212 per tonne
- Assumed Purchase Prices of Concentrate – 65% of the contained gold value
- Pre-tax Earnings Prior to Employee Bonus – $10.9M annually
- Estimated local employee bonus pool – $1.64M
On March 22, 2012 the Company received official notification documenting that the Ministerio de Energia y Recursos Naturales No Renovables (“Ministry of Energy and Non-Renewable Resources”) has issued a permit to BacTech for the plant construction.
On May 2, 2022 the Company announced a historic Investment Protection Agreement (“IPA”) for its Tenguel gold recovery/arsenic stabilization project was signed with the Government of Ecuador. This groundbreaking agreement was executed by Julio José Prado, Ecuador’s Minister of Production, Foreign Trade, Investment & Fisheries on April 28, 2022, in Quito. Countersigning on the Company’s behalf was Bernardo Brito, BacTech’s Country Manager. The IPA terms explicitly cover both BacTech’s prior and forthcoming investment commitments in Ecuador of up to US$95.5 million in plant construction and gold production activity through 2024.
Recently, BacTech has introduced a unique shared land management program with local farmers across its 100-acre proposed gold and silver processing plant site. The agreement will see on-site cocoa farming continue across 80% of the thousands of untouched trees with proceeds from all cocoa sales being retained by the former employees of the purchased land.
Currently, the Company is working to socialize the results of the ESIA (Environmental and Social Impact Assessment) with the communities in the area and subsequently carry out the final community socialization phase in order to secure its Environmental License and associated permit approvals for the construction of the processing facilities and future bioleaching operations.
Plant Financing will be finalized following the review of all funding options available to consider and to maximize shareholder value. Plant Construction, followed by the start of production in early 2023 is anticipated.