BioteQ Updates Operations and Projects

VANCOUVER, BC – BioteQ Environmental Technologies Inc. (TSX VENTURE:BQE) today reports on its current operations and development projects in progress during 2006:

  • Raglan plant exceeds design flow capacity – treatment fee increased
  • Bisbee plant operating at planned copper production after June slow-down
  • Caribou operations at steady state with new operating contract
  • Wellington Oro project equipment procurement continuing
  • Inco North Mine project design report complete
  • Pueblo Viejo project pending Barrick decision
  • Dexing project design report complete
  • Laboratory testing in progress for La Jojoba project in Mexico
  • Piloting completed for Britannia enhancement project
  • Second quarter results filed on SEDAR

Raglan Plant – Exceeds Design Flow Capacity and Achieves Record Production
BioteQ’s Raglan plant, located in Northern Quebec at the Raglan Mine which is owned by Falconbridge, started discharging treated water in early May, approximately one month earlier than last year. As a result of plant modifications made last year the treatment capacity now exceeds 200 m3 per hour and production since startup has been at record levels per month. The plant is now consistently treating over 140,000 m3 of water on a monthly basis. The original annual treatment target of 530,000 cubic meters has been increased to 700,000 cubic meters.

BioteQ and Falconbridge have agreed to an increase in the treatment fee from $1.06 per cubic meter of water treated to $1.12 per cubic meter of water treated. The monthly capital fee is currently under review.

Bisbee Plant – Bioreactor Slowdown in June
Following a return to normal operating levels after the first quarter, the Bisbee plant operated at target production levels during April and May. An operations error in late May caused a slowdown in bioreactor activity. It was agreed to test a new rapid ramp-up procedure, which was unsuccessful and caused a prolonged drop in bioreactor activity during June. The plant has now returned to normal operating levels after a normal ramp-up period and is producing more than 5,000 pounds of copper per day. Copper production during the second quarter was 303,000 pounds while treating 102 million gallons of water. Copper recovery from solution remains at over 99% and the copper level in the feed solution remained at approximately 360 parts per million. BioteQ’s share of revenue for the first quarter of 2006 from Bisbee, after refining charges, was $618,000.

Caribou Site – New Operating Contract Signed
The assets of CanZinco Ltd, a subsidiary of Breakwater Resources Ltd., which included the Caribou mine and the Restigouche mine, were sold to Blue Note Metals Inc. effective August 1, 2006. Blue Note plans to return both sites to operation. As a result of the transaction BioteQ’s contract with CanZinco was terminated and a new operating contract was signed with Blue Note. On termination of the CanZinco agreement BioteQ receives a payment to recover capital costs for fixed capital equipment provided by BioteQ at the sites, totaling $419,000.

The new contract with Blue Note provides for a similar scope of services at the two sites and is for an initial term of one year. The payment terms in the new contract are based on a cost plus 10% arrangement where BioteQ charges a monthly fee based on actual costs to treat water plus a 10% fee, which eliminates the operating cost risk to BioteQ. In the previous contract with CanZinco, BioteQ was reimbursed for operating consumables at a fixed rate per month. In the new contract Blue Note will pay for most operating consumables directly, which will reduce BioteQ’s gross revenue from the project but improve net revenues to BioteQ. Blue Note plans to increase the water treatment capacity to accelerate mine dewatering in order to begin mine operations in 2007. Currently the mine water treatment plants are operating in steady state to maintain water levels in compliance.

Blackwell Plant Construction
The Blackwell plant, located in Oklahoma, was constructed in modules which were designed and fabricated in Vancouver and completed last year. Final installation of the modules and plant commissioning is pending completion of certain site permits and infrastructure by Phelps Dodge. The plant has been designed to recover zinc and cadmium from a groundwater source, utilizing BioteQ’s ChemSulphide™ process.

Wellington Oro Project – Equipment Procurement Continuing
As previously announced, the Company has signed the final construction agreement with the Town of Breckenridge and the Board of County Commissioners of Summit County, Colorado for the construction and commissioning of the Wellington Oro water treatment plant. The Wellington Oro project will use BioteQ’s ChemSulphide™ process, similar to that incorporated in the Blackwell project.

The agreement is subject to definition of a maximum guaranteed price. After a review of the final capital cost estimate by Summit County representatives it was decided to re-bid the civil construction portion of the plant, to reduce costs. BioteQ is continuing with engineering and procurement of the process plant equipment that BioteQ is providing. The plan is to warehouse the plant equipment in Breckenridge over the winter and install the plant in the second quarter of 2007 following completion of the civil work, building construction and site infrastructure. This is a delay of approximately 6 months when compared to the initial project schedule included in the construction agreement.

INCO Project – Design Report Completed
A final design report was completed in June and delivered to Inco in early July, which provides the basis for plant construction. The most recent production estimate is consistent with previous information released with approximately 750,000 pounds of nickel recovered per year. The estimated operating cost has been reduced to CAD$ 1.22 million per year, which does not include refining charges for the nickel product, which are negotiable. The final capital cost estimate is pending firm quotations from local contractors for civil construction and mechanical installation of the process plant equipment.

To maintain the project schedule for 2007 operation some critical plant equipment and civil work must be initiated during the third quarter this year and the building erected during the fourth quarter. The project schedule is subject to receiving necessary plant permits, the negotiation of the necessary agreements with Inco and internal Inco approvals.

Pueblo Viejo Project – Additional Pilot Work Pending Project Decision
Since the acquisition of Placer Dome by Barrick Gold Corporation, BioteQ has been working with Barrick and their consultants as part of the overall gold project feasibility that is in progress by Barrick. Additional pilot studies have been scheduled with Barrick to validate inclusion of BioteQ’s BioSulphide® Process as part of the water treatment facilities at Pueblo Viejo.

Dexing Project – Design Report Completed
The project design report has been completed by BioteQ and was delivered to Jiangxi Copper in July. The design report provides the basis for construction and capital cost estimation. Capital cost estimation is in progress by China ENFI Engineering Corporation, who maintain a project office in Dexing, to provide an independent assessment of project capital costs. At the same time BioteQ is proceeding with necessary legal documentation to establish its legal entity in China to facilitate investment in the project. The joint venture anticipates beginning construction later this year for a planned 2007 startup, pending approval of the independent capital cost estimate by the joint venture committee. BioteQ is providing the Operating & Technical Manager for the project, to manage the construction and day-to-day operation of the plant. Mr. Songlin Ye, a Canadian engineer previously employed with an international engineering consulting company in Vancouver, will be BioteQ’s representative in China for the project.

La Jojoba Project – Laboratory Testwork in Progress
Laboratory testwork is now in progress at a US laboratory to provide the design criteria for La Jojoba project previously announced. It is expected that a design report will be completed by the end of this year for a planned construction project in 2007. BioteQ is also working with Columbia Metals, the owner of La Jojoba, on the Lluvia de Oro project, which is located nearby La Jojoba, for a possible second copper recovery circuit. This project is a new application of BioteQ’s sulphide technology where cyanide can be regenerated for the recovery of gold in a conventional heap leach operation with concurrent recovery of copper from the cyanide solutions, based on the SART process developed by SGS Lakefield Research.

Britannia Process Enhancement – Pilot Study Completed
The Company has completed pilot testing of a novel process to make construction materials from lime plant waste sludge products. The Britannia site currently has a High Density Sludge (HDS) lime plant, built by EPCOR in 2005 and also operated by EPCOR. The objective of the proposed enhancement project at Britannia is to utilize BioteQ’s existing metal recovery technology to recover heavy metals contained in the acidic drainage, prior to the lime plant, then modify the lime plant to make a sludge product that can be used to form various saleable construction materials. Based on the pilot results, BioteQ is currently conducting a study to evaluate the commercial feasibility of the new sludge process.

Second Quarter Results
The second quarter results have been filed on SEDAR. The Company has reported its best financial quarter to date, showing a small loss for the period of $315,773, or less than $0.01 per share. The Company had expected to be breakeven on a cash basis (EBITDA) in the second quarter, however the production slowdown at Bisbee during June, combined with a high level of project development activity resulted in a small loss.

A summary of operating revenues and expenses is shown below (CAD$ 000’s):

                                            Operating      Operating
                                   Revenues     costs    profit(loss)
                                   -------- ---------    -----------
Bisbee                                  618       263            355
Raglan                                  300       154            146
Caribou                                 298       358            (60)
Other projects                           70        79             (9)
                                   -------- ---------    -----------
 Subtotal                             1,286       854            432
All other costs                                                  748
Total for the quarter April to June 2006                        (316)

The Company anticipates that it will be cash positive for the balance of 2006 (EBITDA), if normal operations continue as successfully as they are currently. Total revenue anticipated in 2006 is approximately $5 million, approximately double the total for 2005, but lower than previous estimates for 2006 due primarily to the change in the Caribou contract and the delay in the Wellington Oro site construction noted above.

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 related sulphide technologies. Focused on the mining industry, BioteQ has partnered with leading metal producers including Phelps Dodge, Breakwater, INCO, Jiangxi Copper and Falconbridge 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

Brad Marchant