VANCOUVER, BC – BioteQ Environmental Technologies Inc. (TSX:BQE) reports that it has initiated site activities for the retro-fit of an existing metallurgical plant to incorporate BioteQ’s ChemSulphide™ Process for the recovery of copper and cobalt from acidic mine drainage at the Mt Gordon site, which is owned and operated by Birla Mt Gordon Pty Ltd (“Birla”), a wholly owned subsidiary of Aditya Birla Minerals Limited. BioteQ has agreed to increase its responsibilities for water management at Birla’s mine site, resulting in an increase in its capital and operating costs for the project. As a result, the commercial terms have been modified to increase BioteQ’s share of recovered metals to 90% and Birla has agreed to contribute certain capital items, in cash and existing equipment, to minimize the capital risk to BioteQ. A formal variation to the existing agreement has been completed.
Project Description – Mt Gordon Mine
The Mt Gordon mine, located near Mt. Isa in Queensland, Australia, currently produces copper concentrate from underground mining and conventional flotation milling operations. Mine drainage from waste dumps and low grade stockpiles is acidic, containing copper, nickel, cobalt and other metals that require treatment prior to discharge of the water. BioteQ is constructing a ChemSulphide™ plant for the recovery of a copper product and a nickel-cobalt product. Based on preliminary engineering completed by BioteQ, the plant will have the capacity to treat approximately 2.2 billion litres of acid water per year containing approximately 1.44 million pounds of copper, 140,000 pounds of cobalt and 23,000 pounds of nickel.
Following the metal recovery stages, the water will be further treated by standard evaporation methods to maintain the water balance and eliminate any discharge from the site to meet new sulphate regulations at Mt Gordon. The new water management plan also minimizes the use of fresh water. BioteQ will construct and operate the evaporation circuit as well as manage all activities for acid water collection and treatment. The additional scope of overall water balance and sulphate management is a change in the commercial scope for BioteQ compared to the previous release regarding Mt Gordon.
The capital cost for BioteQ’s treatment plant as well as the evaporation circuit has been estimated by BioteQ at C$ 3.0 million, and is subject to final vendor quotations and construction bids. BioteQ has estimated the total operating cost, including the evaporation plant for sulphate control, to be C$ 3.1 million per year. The current project schedule is to complete plant construction during 2007, which is dependent on equipment deliveries and applicability of certain existing site infrastructure.
Change in Commercial Terms
The key agreement terms previously released outlined a build, own, operate commercial arrangement where BioteQ would provide for all project financing, design, construction and operation of the plant. BioteQ would receive 100% of the revenues from metal sales until the capital is repaid, plus an agreed return on investment, then the net revenues from metal sales (gross revenues less certain costs and royalties) would be shared equally with Birla. BioteQ would be the operator of the plant.
Based on the increased scope of service, and related increase in capital and operating costs for BioteQ, the parties have agreed that following capital recovery by BioteQ, plus 30% return, BioteQ will then retain 90% of the net revenues from metal sales, rather than sharing equally with Birla. In addition, Birla will pay AUD$ 100,000 in capital towards the water transport system as well as make available existing piping and certain metallurgical plant equipment for use in the BioteQ metal recovery plant during the term of the agreement, to minimize capital costs.
The agreement is subject to the parties obtaining any necessary approvals, authorizations and permits. Detailed engineering is in progress and equipment procurement has been initiated.
BioteQ Corporate Profile
BioteQ is establishing itself as a leader in the treatment of acid contaminated water through the use of its patented BioSulphide® Process and the ChemSulphide™ Process. Focused on the mining industry, BioteQ has partnered with leading metal producers including Phelps Dodge (Freeport), Breakwater, CVRD-INCO, Jiangxi Copper, Aditya Birla and Xstrata as well as utilities operator EPCOR Water Services, to finance, design, build and operate mine site water treatment plants which recover saleable metals in addition to meeting ever stricter environmental regulations.
On behalf of the Board of Directors