Green Tech Co. Finalizes Royalty Agreement, Receives First Tranche

1. BacTech Environmental Corp. and Silver Crown Royalties Inc. have consulting relationships with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay 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. and Silver Crown Royalties Inc. 
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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BacTech Environmental Corp. (BAC:CSE; BCCEF:OTC; OBT1:FSE) announced it has finalized its agreement with Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX; QS0:FSE) and has received the first tranche of shares from the company.

BacTech has agreed to pay the equivalent of a minimum of 35,000 ounces of silver annually to Silver Crown for 10 years from its proposed bioleaching plant in Ecuador, which is expected to produce 45,000 to 50,000 ounces each year.

Silver Crown is paying CA$4 million in common shares in three tranches to BacTech in exchange, including an equal number (100,000) of common share purchase warrants exercisable at CA$16 for three years from closing as part of the first tranche.

The remaining tranches will be issued at milestones in the development of the plant in Tenguel, including a final installment of 200,000 shares once commercial production begins.

"Monetizing our silver production allows us to strengthen our balance sheet while maintaining focus on our core gold recovery operations," BacTech Chief Executive Officer Ross Orr said. "The recent surge in gold prices has significantly improved the Tenguel project's profitability."

At current silver prices (about US$34 per ounce on Wednesday), expected annual revenue would be as much as nearly US$1.4 million.

"We are excited to partner with Ross and his Team in Ecuador," Silver Crown Chief Executive Officer Peter Bures said. "The ability to unearth value for a small silver contribution from future production fits perfectly with our business model and approach. We are thankful for the opportunity to help out BacTech Environmental in their endeavor to conduct mining activities in a safe and environmentally responsible way."

'Our Bugs Eat Rocks'

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."

"While governments may change, environmental issues persist until addressed," Orr has said. "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. The second phase, expected to increase throughput fourfold, will significantly boost the production of gold and silver.

BacTech has said all of the necessary permits have been issued for the plant in Tenguel, including the Environmental Impact Study and the consultation permit. Construction time is estimated to be 12-14 months.

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.

In its release this week, BacTech also said it was "expanding its search for historic mine tailings in northern Peru to potentially supply feed for the Ecuador project or establish a base for a new plant near Trujillo, in northern Peru."

The Catalyst: Silver Market Booming

Silver is not just a precious metal, it's also the most conductive element in nature and is important to the green economy transition for its use to coat electrical contacts in computers and in phones, cars, and appliances. It's also an important element in solar technology.

The silver market is seeing its highest prices in more than a decade, but still features "a lot of volatility," Christopher Lewis wrote Wednesday for FX Empire.

"This is nothing new for the silver market because, quite frankly, it is one of the more volatile you can trade," Lewis wrote. "It's probably worth noting that recently we broke above a major resistance barrier in the form of US$32.50. So, I think at this point, that will be your floor in the market."

The developments could be a bullish flag, he noted. "We'll have to wait and see. But this could end up being a sign that we could break towards the $36 level."

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$4.83 million, and it trades in a 52-week range of CA$0.09 and CA$0.03.