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Announces Spin-Out of Mining Assets
Jan 13, 2010 01:58PM
January 12, 2010BacTech Announces Spin-Out of Mining AssetsTORONTO, CANADA--(Marketwire - Jan. 12, 2010) -
Editors Note: There is a chart available with this Press Release.
BacTech Mining Corporation ("BacTech" or the "Company") (TSX VENTURE:BM), today announced that its board of directors has approved, in principle, a reorganization of the Company to create separate companies for each of the Company's two operating segments, namely, the use of bioleaching to liberate gold and base metals from primary mining, and, secondly, the use of bioleaching for the remediation of mine tailings left by previous mines.
Over the past several months, BacTech has been investigating the most effective way of effecting the reorganization, and has determined that the reorganization will be effected by way of a Plan of Arrangement (the "Arrangement"). The Arrangement allows for U.S. investors, who hold in excess of 12 million common shares of BacTech, to be treated on the same basis as the other shareholders.
In anticipation of the Arrangement, BacTech will establish a new company, Goldco, and will transfer to Goldco all of the Company's existing mining properties (including the back in rights for 40% ownership of the Lichkvaz-Tey gold project in Armenia, and the Company's interest in the R&D project being conducted on behalf of Continental Precious Metals Inc.), together with all the Company's intellectual property for gold and base metal bioleaching. The Company will retain a perpetual, exclusive license to use the bioleaching technology in the reclamation space.
Under the proposed Arrangement, shareholders of the new Goldco would receive 1 common share in Goldco for each 3 common shares of BacTech that they hold as of the effective date of the Arrangement (see Figure 1).
The proposed new management and board of directors for Goldco will be announced shortly. BacTech, the surviving company, will continue to pursue projects in secondary mining such as the Cobalt tailings reprocessing project. BacTech's current board will continue in its capacity. Dr. Paul Miller, the Company's Vice President of Technology & Engineering, will consult to both companies going forward with respect to bioleaching.
"We never anticipated the reaction we received from certain investors to participating both in mining as well as the reclamation space. With this reorganization, people now have the option to choose where their investment dollars should be focused," said Ross Orr, President and CEO of BacTech.
It is anticipated that the Arrangement process will take 3 to 4 months and Goldco will apply for a listing on the TSX Venture Exchange. 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.
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 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.