BacTech Mining Corporation
TSX VENTURE : BM
May 12, 2009 09:00 ET
BacTech to Consider Spin-Out of Gold Subsidiary
TORONTO, CANADA--(Marketwire - May 12, 2009) - BacTech Mining Corporation ("BacTech" or the "Company")(TSX VENTURE:BM) today announced that it will investigate the possibility of a spin-out transaction to create a stand alone gold company that would have its own management and a separate board of directors. The only relationship between the spin-out company and BacTech would be the payment of a production royalty to BacTech for the exclusive use of its gold technology.
The rationale behind such a move is to separate two distinctly different businesses. With BacTech's entry into the cleantech arena through the Cobalt, Ontario, reclamation opportunity, BacTech may have created a conflicted shareholder base. Formerly, the Company has restricted the application of its technology to the mining of refractory gold pursuant to which three plants have been built to process arsenic gold ores. With the application of bioleaching to the reclamation of old mining tails, BacTech believes that it will also pursue a much different type of investor than it has in the past.
"Most of the cleantech funds we have spoken to are not able to invest in a company that is involved in mining. The possible split allows investors to invest in their company of choice and unlocks the value of the technology to pursue multiple applications," said Ross Orr, President and CEO of BacTech.
The first asset to be held by the spin-out company will be the Company's 33% interest in 2 gold deposits in Papua New Guinea ("PNG") that BacTech has agreed to purchase from Yamana Gold Inc. ("Yamana"). BacTech has reapplied to the PNG government in the name of its wholly-owned subsidiary, BacTech Gold Corporation, for approval of the asset purchase from Yamana.
Some of the remaining issues to be addressed are the tax effects of a distribution to shareholders and the ability to source a capable management team with mine building expertise, and an effective board of directors to oversee the future of the gold company. Once these issues have been addressed, BacTech intends to call a shareholders' meeting to seek approval of the transaction. The completion of the spin-out transaction is anticipated to take at least a few months to complete, subject to receipt of all requisite shareholder and regulatory approvals.
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 focus is the acquisition of equity positions in projects amenable to bioleaching. In June 2008, the Company signed an agreement to acquire Yamana Gold Inc.'s 33% interest in two refractory gold deposits in Papua New Guinea. In September 2008, BacTech signed an MOU to investigate the use of bioleaching to reprocess arsenic-laden tailings in Cobalt, Ontario. This is the Company's first foray into the cleantech industry. BacTech is continuing to evaluate additional remediation projects.
Shares outstanding 82,857,206
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