BacTech Mining Corporation
TSX VENTURE : BM

BacTech Mining Corporation

May 04, 2010 09:15 ET

BacTech Gold Signs LOI to Option Gold/Antimony Mine in Guatemala

Highlights

- BacTech Gold Corporation ("BGC") has signed a Letter of Intent to option a gold/antimony mining operation.

- Previous studies indicated an approximate 1M oz historical gold equivalent resource(i) with significant exploration upside.

- Upon completing its due diligence and signing a definitive option agreement, BGC will have an 18 month period in which to exercise its option to purchase the asset.

- If BGC elects to exercise the option, it will pay the owners CAD$20M, in installments, plus a 1.5% NSR.

- This is one of a number of projects where BGC is actively investigating the opportunity to become a gold producer in the near term.

TORONTO, CANADA--(Marketwire - May 4, 2010) - BacTech Mining Corporation ("BacTech" or the "Company") (TSX VENTURE:BM) today announced that its wholly-owned subsidiary, BacTech Gold Corporation ("BGC"), has signed a Letter of Intent ("LOI") to acquire a past producing gold/antimony mine in northwest Guatemala. The mine, namely the San Ildelfonso Ixtahuacan Mine, includes approximately 500 hectares of land, a mill and associated equipment.

The San Ildelfonso Ixtahuacan mine has operated since 1969, primarily producing a high-grade antimony concentrate averaging 70% Sb. The mine also produced, as a byproduct, an arsenopyrite concentrate that graded greater than 60 g/t gold plus some tungsten. The property hosts two past producing deposits, the Anabella and the Los Lirios deposits. The deposits are located within a NW-SE trending mineralized zone, with a possible strike length greater than 5 km. The Anabella deposit has been exploited along a strike length of 350-400 m and vertically up to 100 m. The Los Lirios deposit has been exploited over a length of 700 m and vertically over 50-100 m. Both deposits appear open at depth. The mineralization is in the form of multiple veins, with widths averaging 10 meters, grading between 5 g/t and 7 g/t gold and 4% to 6% antimony.

Previous studies developed a resource containing approximately 1M ounces of gold equivalent. (i)BGC has not verified the classification of the historic resource reference and is not treating it as a National Instrument 43-101 ("43-101") defined resource verified by a Qualified Person and should not be relied on. BGC has engaged an independent consultant to provide a 43-101 report on the project that should be completed within 30 days. The previous studies also indicated that Anabella had the potential to host a Carlin style, sediment hosted disseminated gold/antimony mineralization, as well as the existing high grade vein systems. The previous studies are presented for historical reporting and to provide a basis for assessing BGC's choices for its business activities and not to be understood as indicating the existence of reserves or resources.

The mine temporarily suspended operations in January 2009, and the current owner of the mine is in the process of re-starting the operations to produce an arsenopyrite concentrate for delivery to a third-party roaster. With a working mill on site and the potential for extracting gold from the old tailings, this asset could present an opportunity for the Company to become a gold producer relatively quickly.

Minas de Guatemala, S.A, is the current operator of the mine and BGC will conduct a 3-month due diligence process, leading to the signing of a definitive agreement for the option to purchase, should BGC be satisfied with its due diligence. Upon signing the definitive agreement, the terms of the LOI call for BGC to have an 18-month option period on the property. At any time during the 18-month period, BGC can exercise its right to acquire the mine. BGC will pay CAD$80,000 per month during the option period, with the funds used to ensure that the mine properties, licenses, and permits remain in good standing, and to provide for local community initiatives.

If BGC elects to exercise its option to purchase the project, BGC will pay CAD$10M to the parent company and owner, Caribbean Resources Group Corporation, and assume control of operations. On the first and second anniversaries of the purchase, BGC will pay CAD$5M, bringing the total purchase price to CAD$20M. In addition, a 1.5% NSR will be paid on production.

During the option period, the company will undertake the necessary exploration, metallurgical testing and techno-economic studies to confirm the potential for developing a profitable and responsible operation. As part of its studies, BGC will evaluate whether to build a bioleaching facility to process the ore or whether to ship the concentrate to a third-party facility.

This is the first project to be optioned by BGC. BGC is in the process of being spun out from BacTech Mining Corporation to form a new gold mining company that plans to use its proprietary and proven bioleaching technology to support the cost effective acquisition and development of gold projects. In addition to this project, BGC is actively engaged in discussions and investigations on a number of other suitable gold assets, with a view to selecting a manageable portfolio of projects with good potential to become operating mines. BGC will seek both partnership and control opportunities.

BACTECH PROFILE

In January the Company announced its intention to effect a divisive reorganization whereby BacTech will transfer all of its interests in mining projects and the rights to its bioleaching technology to a wholly-owned subsidiary. The common shares of the subsidiary will be distributed to the shareholders of BacTech upon completion of the reorganization. BacTech will hold an exclusive and perpetual right to use the bioleaching technology for projects related to environmental remediation of mine tailings. Completion of the proposed reorganization is subject to receipt of all required consents and approvals, including without limitation, court approval, shareholder approval, and TSX Venture Exchange approval. The special meeting of shareholders required to approve the reorganization is scheduled for June 2010.

BacTech owns patented bacterial oxidation technology for the treatment of refractory ores and concentrates to enhance the recovery of gold, silver and base metals. The Company's initial focus is the acquisition of equity positions in projects amenable to bioleaching.

Shares outstanding 89,264,706

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • BacTech Mining Corporation
    Ross Orr
    President & CEO
    416-813-0303 ext 222
    or
    BacTech Gold Corporation
    Mark Burridge
    Chairman
    +44 7771 937 710
    info@bactech.com
    www.bactech.com