Green Tech Co. Gets CBOE Approval for Silver Royalty Sale
BacTech Environmental Corp. (BAC:CSE; BCCEF:OTC; OBT1:FSE) says it has received CBOE approval for its royalty sale to Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX; QS0:FSE). With the silver market poised to move higher along with gold, the deal also gives silver exposure to BacTech as it focuses on its gold recovery operations.
BacTech Environmental Corp. (BAC:CSE; BCCEF:OTC; OBT1:FSE) announced it had received CBOE approval for its royalty sale announced last month to Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX; QS0:FSE).
Under the agreement, Silver Crown acquires a 10-year annual silver royalty on BacTech's planned bioleaching facility in Tenguel, Ecuador, equating to the cash equivalent of the greater of 90% of the silver processed at the facility or a minimum annual payment of 35,000 ounces silver.
"This partnership allows Bactech to unlock value from its silver byproduct while maintaining its focus on environmental technology and gold recovery, potentially improving its overall financial position and project development capabilities," BacTech said in a release.
The plant is expected to produce 45,000 to 50,000 ounces of silver every year, with a second-phase expansion to take annual production to more than 200,000 ounces per 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, which has already been paid to the company. 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.
The expected annual revenue paid to Silver Crown would be a minimum of US$1.07 million annually based on the price of silver at writing, which was US$30.45 per ounce.
Strengthening the Balance Sheet
According to BacTech, the royalty sale impacts the company's financial outlook in several ways. It strengthens its balance sheet with the potential to add CA$4 million in Silver Crown shares, provides BacTech with upfront capital through share issuances, and has minimal revenue impact since the royalty only represents about 1.2% to 1.3% of the projected total revenues from Tenguel.
"The 10-year agreement provides a stable, long-term relationship that could lead to future collaborations on other silver-producing projects," BacTech Chief Executive Officer Ross Orr said. "The phased issuance of shares aligns with Bactech's project development milestones, providing additional financial support at crucial stages."
In its release, BacTech also noted that as a shareholder in Silver Crown, it gains exposure to upside in silver prices and Silver Crown's performance.
Also, it allows the company to "concentrate on its core bioleaching technology and gold recovery operations while still benefiting from silver production," the release said.
First in a Series of Successes
BacTech's 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.
BacTech also has 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.
"It is hard to overstate the significance of the technology BacTech has developed for the mining industry and the environment worldwide," wrote Technical Analyst Maund. "There are hundreds of millions or even thousands of millions of tons of these tailings lying around all over the world."
Silver Is Also an Industrial Metal
Silver prices continued to see "a lot of choppy behavior" Monday as the "market is still trying to see whether or not it can bounce from the US$30 level permanently," Christopher Lewis wrote for FX Empire.
"The silver market initially tried to rally a bit during the early hours on Monday, but then gave back the gains, showing signs of hesitation," Lewis wrote. "The market pulling back at this juncture is not a huge surprise as we continue to see a lot of back-and-forth action, and I think the US$30 level underneath will be major support. After all, it's a large round, psychologically significant figure and an area that I think a lot of people will pay attention to via the options market. On the other hand, if we do break out to the upside, breaking above the 50-day EMA on a daily close opens up the possibility of a move to the US$33 level."
Lewis pointed out that in addition to being a precious metal, silver is also an industrial metal. It's the most conductive element in nature and is used to coat electrical contacts in computers, phones, cars, and appliances. It's also an important element in solar technology.
"I think the market is likely to play upon a lot of fiscal concerns for governments around the world, as well as a lot of concerns when it comes to geopolitics," Lewis wrote. "Those aren't as strong in the silver market, but they are part of the overall picture. As things stand right now, this still looks like a buy on the dips market."
Mordor Intelligence noted that the white metal is expected to register a compound annual growth rate (CAGR) of more than 5% between 2024 and 2029.
Newsletter editor Brien Lundin encouraged investors not to get discouraged, as any price drop-off is temporary, he said.
Streetwise Ownership Overview*
BacTech Environmental Corp. (BAC:CSE;BCCEF:OTC;OBT1:FSE)
*Share Structureas of 11/26/2024Source: BacTech Environmental Corp.Based on silver's charts, Ron Struthers of Struthers Resource Stock Report also predicted a major run-up in the silver price.
"Back in April or early May, I highlighted the breakout from a cup and handle formation and [that] that would lead to a major upside move. This is now confirmed," he wrote on Oct. 23.
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$5.8 million, and it trades in a 52-week range of CA$0.09 and CA$0.02.
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Important Disclosures:
BacTech Environmental Corp. and Silver Crown Royalties Inc. have a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.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. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.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.For additional disclosures, please click here.