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BacTech Will Focus On the Clean Technology Sector Once It Splits Off Its Gold Mining Operations

By Charles Wyatt

When last Minews took a look at BacTech Mining in July there were two projects in progress from which news was expected in the next few months. The first was the assessment as to how Continental’s shales would react with BacTech’s bioleaching process to release the contained metals such as uranium, molybdenum, nickel and vanadium and the second was progress with the cobalt tailings project in Ontario. The quick answers to both from chief executive Ross Orr are that the bacteria from BacTech’s commercially proven bacteria oxidation and bio leaching technologies certainly go after the sulphides in the shales to liberate contained metals. However this is only a partial form of liberation as these metals are still in kerogen which is a solid mixture of organic chemical compounds. A full report on releasing the metals is being carried out by a firm in Finland and is not due for another couple of months. Ross is not in a big sweat about it as the tests being carried out for Continental Precious Metals are a financial arrangement and BacTech is not involved in the outcome.

Progress with the tailings project in Ontario is, however, very much a BacTech deal and potentially very big. In July last year the BacTech team visited the town of Cobalt in northern Ontario and realised very quickly that here was the ideal place in which to develop a new application for bio leaching in the environmental remediation of polluted tailings and recovery of metals. Despite its name, silver was the target at Cobalt and between 1903 and 1922 over 300 million ounces was produced from something like 100 mines. These mines varied from a proper job to a simple hole in the ground as the grade of silver could be as high as 1,000 ounces/tonne. In fact there was also cobalt, but it was not in demand at the time so tended to be thrown out with the silver tailings. Just before the recession cobalt was trading at US$50/lb; it then fell to below US$10/lb, but is now trading around US$16/lb with all the experts prophesying further recovery.

There is therefore considerable value in these tailings and stockpiles which amount to around 18 million tonnes in lakes and onshore over a large area., but the value is associated with a big problem – arsenic. Arsenic was used in most extractive processes at the time so remains in the tailings as do sulphides which react with the atmosphere to create acid mine drainage, an acidic solution efficient at liberating certain heavy metals such as arsenic from mine tailings, resulting in pollution of the surrounding watersheds. So most of the lakes, steams and wells around Cobalt have arsenic well above acceptable levels. This has to be cleared up and BacTech reckons its bioleaching technology could prove ideal so intends to build and operate a demonstration plant capable of treating 200,000 tonnes per annum of mine tailings. The expectation is that this plant will prove capable of removing the arsenic pollution and recover metals such as silver, cobalt and nickel.

A demonstration plant of this size, however, costs money and Ross Orr wants to bring in a partner with deep pockets to take the strain. The first port of call is the Sustainable Development Technology of Canada fund which invested C$50 million in such projects last month. However it is very green and clean technology and pure mining operations do not make a good mix as far as other investors are concerned. The plan now is, therefore, to spin out BacTech’s gold mining assets which include a couple of projects in Papua New Guinea acquired from Yamana Gold and Gold Aura last year. These are both refractory in nature so fit in with the company’s strategy of acquiring metallurgically challenging deposits.

The latest addition to this proposed spin-off is the 40 per cent interest BacTech is earning in the Lichkaz-Tey gold deposit in Armenia from Caldera Resources. Caldera, until recently was a Canadian listed company with assets in Australia, mostly concerned with diamonds. Now some entrepreneurs from Montreal appear to have taken control after merging it with a private company called CanBiomine which is developing bioleach projects in south eastern Europe and CanBiomine is a strategic partner of BacTech. The relationship may sound complicated, but it is not really. The important point is that Ross Orr watched Caldera being shifted from Australia to southwestern Europe and saw that it had little impact on the Caldera share price. Investors in North America have hardly heard of Armenia, let alone know anything about its history, politics or geology so he has decided to list BacTech’s new gold company in London. Ross will be at the Minesite Forum next week so attendees will be able to get more information from him at the time.

When Armenia was part of the former Soviet union a lot of exploration took place at Lichkaz-Tey resulting in 18 kms of drives and tunnels on 8 different levels with a number of raises. It has a Russian type mineral resource in the C1 and C2 categories (equivalent to indicated and inferred under NI 43-101) totalling 3.4 million tonnes at 5.1 g/t gold, 33.2 g/t silver, and 0.41% copper to give 575,000 ozs gold, 3.7 million ozs silver and 33.4 million lbs copper and is near labour, power, water and a main highway. Caldera has now received permission to evaluate the deposit and is taking samples which BacTech will test at the University of Toronto to see how efficiently bioleaching liberates the metals. Armenia sits on the Tethyan Belt which hosts some of the world’s biggest gold porphyry deposits so it scores a lot of points for nearology.

Back to the rump of BacTech which will be aimed very much at the clean technology sector of the market after the spin-off. If the demonstration plant is a success the next stage will be a commercial plant capable of treating 1 million tonnes/year of polluted material over at least 15 years. For the clean tech aficionados there will be numerous clean air, soil, and water benefits to the environment with the operation of a commercial plant as at full capacity it will save 2,547 kg of sulphur dioxide emissions/year plus arsenic and mercury which would be present in flue gases if normal smelting processes were used. It looks like a win:win situation for BacTech when the gold company lists in London shortly as it will retain a significant shareholding.