Pursuits and Viability
Our technology of choice is, of course, bioleaching. However we’re always interested in learning about projects that use conventional, “off-the -shelf” technology. Over the past year the Company has been approached by third parties for potential projects in Chile, Peru, Ecuador and Colombia in addition to Company searches in the US and Canada.
Of these, Ecuador has become a country of major interest given the high levels of arsenic in the concentrates and tailings produced by small miners. Our interest in South America largely stems from BacTech’s ability to treat materials that are currently being subjected to mercury treatment - a process which is known to have serious repercussions to the environment, and to the health of living beings.
A lot of time and cost goes into determining the viability of an opportunity.The presence of a decent gold grade does not necessarily ensure the viability of project development, as we saw in our Manitoba pursuit. Outside factors, such as a lack of iron in the concentrate, can prevent our ability to make a stable ferric arsenate, or how the lack of local limestone required for neutralization made the Snow Lake project unfeasible.
The projects in Bolivia and Ecuador offer true promise and we’re hopeful that our investigations and test work will lead to the development of both.
Telamayu is custom mill plant that has treated material from several different mines in the area for 80+ years. What strikes you at first sight is the amount of infrastructure that exists from previous processing. Included in the infrastructure is a power substation, water, a railway that leads to the Pacific Ocean and a local, trained workforce. Oh, and considerable grades of silver, copper and tin.
+ Project Evaluation
There are 2 stockpiles at Telamayu but our focus initially will be on the smaller, but high grade, Antiguo (“old”) tailings. Considerable evaluation has taken place to date including the drilling of 57 holes on a 20m grid. The information gleaned from the drilling provided the underpinning of a National Instrument 43-101 report that resides on our website as well as on Sedar. In short, the study provided the following values;
Tonnage: ~475,000 tonnes
Tin grade: 1.3% or >6,000 tonnes
Silver grade: 8.2 opt or ~4M ounces
Copper grade: 1.7% or >8,000 tonnes
+ Financing and Forecast
In May of 2016, BacTech and Comibol, the Bolivian state mining company, entered into an Association contract for the development of the Telamayu Tailings. The agreement calls for BacTech to conduct 3 phases at its own expense. Phase 1 will be completed by the end of August and could be classified as the technical phase. Phase 2 will be construction followed by the 3rd phase of commercialization. BacTech will be entitled to 100% of the cash flow from the project for a) 18 months or b) repayment of the project debt is completed. After the 18 months or debt repayment occurs, the agreement becomes a 55/45% split in Comibol’s favour.
After completion of the NI 43-101 report we moved on to investigating the metallurgy. In other words, how much of the contained metal are we going to able to recover. Obviously, this is important given our payments and subsequent debt repayment will be based on the metal recovered for sale. After an initial test program at the University of Oruro in Bolivia we have moved the program to Met-Solve in Vancouver who have expertise in tin recovery. From the NI 43-101 we learned that the tin values in the tailings make up roughly 50% of the value of the in-situ metal. Our initial results from Oruro showed decent silver and copper recoveries but poor tin recoveries and the decision was made to try to improve on the tin recoveries. Final results will be release by the end of August. No doubt the results will have a serious impact on the continuation of the project.
On June 27, 2018 BacTech signed a Memorandum of Understanding (“MOU”) with CACS International Investment Co., Ltd., a subsidiary of the giant Chinese conglomerate SinoMach. CACS will exclusively design, manufacture and install a mineral processing plant for the reprocessing of the Antiguo tailings. In addition, CACS will assist BacTech to arrange the project financing from a Chinese institution for 85% of the capital expenditure.
In addition to the Antiguo tails BacTech was also given the right of first refusal on the Nuevo (“new”) tailings that sit across the river. At this stage we do not know a lot about the composition of the tailings outside the fact they contain some 4M tonnes of material and they are acid generating. Should Antiguo make it to production we would begin an evaluation of the larger tailings in Year 2 of production.
+ The Case for Tin
Tin has become an important input metal in the “new technologies” such as renewable energy, electric vehicles and computation and IT. Most people think of tin as the metal of choice for vegetable canning and older industrial uses. In fact, tin was recently declared in study conducted by MIT in Boston, the metal to be most impacted by the “new technologies” ahead of lithium and cobalt. At the time of writing tin trades at or near $20,000 per tonne or over 3 times that of copper. Attached is a summary of the MIT study that was commissioned by mining giant Rio Tinto Zinc (“RTZ”).
In 2017 BacTech learned of the issues facing the environment in Ecuador caused by mining. In the past, mercury has been used extensively by small or artisanal miners, not only in Ecuador but globally. This practice has led to severe environmental degradation as well as fatal health issues for those that use the element for gold and silver extraction. The Minamata Convention of 2013 was signed by 140 countries and outlines the elimination of mercury use by miners, globally. Progress has been made, but there are still areas of the world where mercury is used for mineral processing. Ecuador is a perfect instance of the latter.
+ Bioleaching as a Solution
There are areas of the country that produce arsenopyrite mineralization which infers the presence of arsenic in the ore. Bioleaching is an effective technology for the processing of arsenopyrite minerals: not only does bioleaching release the gold for conventional recovery but it also produces a stable ferric arsenate or benign form of arsenic.
+ Project Background
In December 2017, Ross Orr and Lou Nagy met with the Minister of Mining for Ecuador to discuss BacTech’s potential participation in metal processing, either from concentrates produced from mining or from tailings, in the Ponce Enriquez (“PE”) area of SW Ecuador. It seems the problem is twofold in PE. First the tailings associated with the small mining industry have reached capacity and the government is hesitant to provide additional capacity given the tailings sit 1,000m above the coastal plain. A 100-year storm or an earthquake could cause severe damage should the tailings breach. Secondly, the small miners in PE are forced to sell their arsenopyrite concentrates they produce for 50 cents on the dollar to Asian buyers given the arsenic levels regularly exceed 10% As.
Enough encouragement was received that BacTech arranged for the delivery of 150 kg of arsenic ore, concentrate and tailings from the PE area to be delivered to Laurentian University in Sudbury, Canada. A 6 month bioleach test program was completed this past June and the impressive results were delivered to the new Minister, Carlos Perez in July. The government was very pleased that someone was addressing the arsenic issues and they have committed to supporting the idea of bringing bioleaching to Ecuador for environmental purposes. BacTech’s concept, at this stage, is to a) identify a local partner, b) secure base feed of concentrates for the proposed plant and c) identify suitable tailings for reprocessing using bioleaching. The hybrid-type plant will not only allow for capturing processing of arsenic concentrates in-country but for reprocessing arsenic tailings that are a major concern to the government.
+ Test Work
Phase 2 of the Ecuador test work began recently at Laurentian. It will be used to ensure the processing meets the government’s arsenic deposition standards as well as focusing on maximizing gold recovery. The test work should be completed by year end 2018. Given we have built a plant in China that processed material from over 12 different mines (ie input) we think the design for a PE plant would be very similar. Depending on our ability to source concentrates and tailings it is conceivable that construction of a bioleach plant in PE could happen as early as 2019.