Green Tech Co. Eyes Ecuador Election With Interest

Green technology company BacTech Environmental Corp. (BAC:CSE;BCCEF:OTCQB;OBT1:FRA), whose permitting process for its Ecuador bioleaching plant is on hold, is watching the results of Sunday's presidential election there closely.

Luisa González, of the Movimiento Revolución Ciudadana party, led the vote with about 33%, while Daniel Noboa, of National Democratic Action, came in second with nearly 24%. The two will now face off in a runoff on October 15.

González ran for the party of former leftist President Rafael Correa, who supported her run from exile in Belgium after being convicted of corruption.

"It's worth noting that seven out of the eight candidates recognize that the country's progress hinges on the development of natural resource projects, which would lead to job creation and increased tax revenue for the government," BacTech Chief Executive Officer Ross Orr wrote in his weekly "Sunday Morning Coffee" email to shareholders and supporters before the vote. 

"Our business model calls for the purchase of high arsenic/gold concentrates from miners in Ponce Enriquez," Orr said. "Through bioleaching, we will liberate gold and silver for recovery while producing a stable form of arsenic as a by-product."

The Constitutional Court of Ecuador has suspended a presidential decree involving the environmental consultation process for many projects in the country, including BacTech's plant in Tenguel.

The company had received its construction permit and approval from the government for its environmental impact study on the site but has been working through the community consultation phase for the final environmental permit.

The court's temporary decision came after a complaint filed by the indigenous group CONAIE, or the Confederation of Indigenous Nationalities of Ecuador, which participated in protests against a mining project involved in the same consultation process.

But as Orr points out, the company does not mine but cleans up after mines.

"Our business model calls for the purchase of high arsenic/gold concentrates from miners in Ponce Enriquez," Orr said. "Through bioleaching, we will liberate gold and silver for recovery while producing a stable form of arsenic as a by-product."

Difficult to Make a Call

The decree covering the consultation process was provisionally suspended until there is a final decision by the Constitutional Court. Current President Guillermo Lasso and other public bodies had until Monday to file their responses.

Chris Temple, editor of The National Investor newsletter and a BAC shareholder, called the company "a poster child for what is legitimately a green cause. I believe that it should be a simple matter for the Constitutional Court to toss out CONIAE's latest nuisance suit," he wrote on August 15.

Mark Turner, the author of the IKN Weekly junior mining newsletter, wrote on Sunday that much of the outcome of the runoff election will depend on "deals cut and alliances" formed between now and October 15.

"Put the pieces together tonight, and it's difficult to make a call on who will be the next president of Ecuador," he wrote.

Crime has topped the election's agenda since the assassination earlier this month of presidential candidate Fernando Villavicencio, an anti-corruption journalist.

The Catalyst: 'Very Positive' Public Feedback

BacTech recently completed the information stage of the environmental consultation process for the plant and received "very positive feedback" from the public, the company said in a release.

"The project is being well received by the locals, and they look forward to getting to work," Orr wrote recently in his weekly "Sunday Morning Coffee" email to shareholders and supporters.

Chris Temple, editor of The National Investor newsletter and a BAC shareholder, called the company "a poster child for what is legitimately a green cause."

"I believe that it should be a simple matter for the Constitutional Court to toss out CONIAE's latest nuisance suit," he wrote on August 15.

Rock-Eating Bugs

BacTech's bioleaching process uses naturally occurring bacteria, harmless to humans and the environment, to extract precious and base metals from ores, concentrates, and tailings.

Its motto is "Our bugs eat rocks." The rocks are like bricks in a wall, with sulfur as the mortar. The bacteria eat the sulfur, causing the wall to come crashing down.

For the feed going into the plant, there are 90 small mines in the area that produce significant amounts of arsenic with gold in the area. The plant would process about 30,900 ounces gold (Au) per year. There is potential for expansion; the total availability of materials in the area is an estimated 250 tonnes per day.

Orr said BacTech is seen in the country as "a crucial factor in making certain mining developments more acceptable" and plans to actively seek funding for the project one the situation stabilizes.

BacTech recently launched a new sustainable framework for issuing US$20 million in Green Bonds to pay for the plant.

"We've discovered a gem in Ecuador, and despite the current challenges, we're confident in overcoming them," Orr said. "While governments may change, environmental issues persist until addressed. I firmly believe that Ecuador is just the first in a series of successes that will follow once we demonstrate the capabilities of our technology."

Ownership and Share Structure

Nearly half of the company, 49%, is held by insiders, management, and strategic shareholders, the biggest of which is Option Three Advisory Services Ltd., which owns 8.48%, or 15.57 million shares, according to Reuters. That also includes CEO Orr, who owns 3.57% or 6.54 million shares, and Board Director Timothy Lewin, who owns 0.54% or 0.98 million shares.

The rest is retail.

The company has 185.36 million shares outstanding, including 159.12 million free floating. Its market cap is CA$13.07 million, and it trades in a 52-week range of CA$0.10 and CA$0.055.

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Important Disclosures:

1. BacTech Environmental Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of BacTech Environmental Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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