Agreement Could Put Silver Money in Green Tech Co.'s Pockets

BacTech Environmental Corp. (BAC:CSE;BCCEF:OTCQB;OBT1:FRA) announced it has signed a Letter of Intent (LOI) with Silver Crown Royalties Inc. (SCRI) for the sale of a portion of its anticipated annual silver production at its proposed bioleaching plant in Ecuador.

Under the terms of the LOI, the company will deliver 90%, but no less than 35,000 ounces of silver per year for 10 years.

In exchange, BacTech will receive CA$1 million in Silver Crown for each of four mileposts: on the execution of the definitive agreement, on successfully completing the financing to build the plant, when construction starts, and at the commencement of production.

"Given the relatively low contribution of silver to BacTech's revenue, we deemed it prudent to monetize it and add (CA)$4 million in assets to the company's balance sheet," said BacTech President and Chief Executive Officer Ross Orr. "At current silver prices (~US$30), the expected annual revenue for the first phase is approximately (US)$1,050,000, accounting for 1.3% of total revenues. Essentially, as long as we hold the shares in SCRI, we will remain exposed to any increases in the price of silver."

The transaction is subject to the signing of a definitive agreement, with the closing expected within the next three months, the company said.

BacTech is building the plant in Tenguel. Its 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."

"We've discovered a gem in Ecuador," Orr has 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."

The company said it anticipates gold production ranging between 31,000 and 35,000 ounces per year, along with silver production ranging between 45,000 and 50,000 ounces from the project's first phase. The second phase, expected to increase throughput fourfold, will significantly boost the production of both metals.

The Catalyst: Record Highs for White Metal

BacTech said it continues to work with interested parties to finance the construction of the plant. All of the necessary permits have been issued, including the Environmental Impact Study and the Consultation permit. Construction time is estimated to be 12-14 months from receipt of the funding.

Ecuador's small mines, including 90 in the area of the plant that produce significant amounts of arsenic with gold, will be the feed for the plant. There is potential for expansion; the total availability of materials in the area is an estimated 250 tonnes per day.

Silver spot prices rose to a new all-time high of US$32.43 per ounce on May 20, and were still at US$31.56 on Thursday.

According to the Silver Institute's World Silver Survey, global demand for silver "massively exceeded" supply last year, a deficit that is expected to extend into a fourth consecutive year in 2024.

In addition to being a precious metal, silver is the most conductive element in nature. It's important to the green economy transition because it's used to coat electrical contacts in computers, phones, cars, and appliances. It's also an important element in solar technology.

Ron Struthers of Struthers Resource Stock Report, who typically follows gold, recently wrote that a breakout was "imminent" for the white metal.

"As they say, timing is everything, and I believe the time is soon arriving" for silver, he said.

Converting All Mine Waste Into Profitable Assets

After the company recently filed an expanded patent application for what it says is the first zero-waste bioleaching process for recovering metals, fertilizer, and iron from millions of tons of mine tailings worldwide, Technical Analyst Clive Maund said he was staying long on the stock and rated it a Buy for all timeframes.

From 1 tonne of waste, five different products can be sold, leaving behind zero waste, the company said. Those products are iron for steel or battery manufacturing, premium organic fertilizer, and the base metals nickel, cobalt, and copper. What's left are silicates that can be used as industrial filler or paste for backfilling in mines.

"It is hard to overstate the significance of the technology BacTech has developed for the mining industry and the environment worldwide," wrote Maund. "There are hundreds of millions or even thousands of millions of tons of these tailings lying around all over the world."

"BacTech's technology has the capacity to convert all of this waste into profitable assets and clean up the mess at the same time," Maund noted. "This is why, given that BacTech has patented its processes and technology, its stock has such huge potential upside." 

With the technology, Temple said BacTech, which was "an already compelling 'green mining' story ... just got a whole lot better and potentially more explosive."

"Taking the bioleaching process to its conclusion can also lead to both iron recovery be used in steel making and even an organic fertilizer product," he wrote.

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 193.04 million shares outstanding. Its market cap is CA$10.19 million, and it trades in a 52-week range of CA$0.10 and CA$0.05.

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. In addition, BacTech Environmental Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
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.
4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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Contributing Author Disclosures

1. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing this article. Maund received his UK Technical Analysts’ Diploma in 1989.  The recommendations and opinions expressed in this content accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed.

Clivemaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be  only be construed as a recommendation or solicitation to buy and sell securities.