TORONTO, January 6, 2004 (PRIMEZONE) -- BacTech Mining Corporation (TSX Venture Exchange:BM) ("BacTech") announced today that it has entered into an agreement to obtain the initial debt financing for the Tonkin Springs gold project in Nevada. The Company is pleased to report that it has agreed to issue a $3 million debenture to The Prudent Global Income Fund ("PGIF"), a member of the Prudent Bear Fund group.
The debenture matures in 5 years and bears interest at a rate of 10% per year. The debenture is redeemable by the Company after 18 months and may be repaid in cash, gold or BacTech common shares based on the 20 day weighted average trading price prior to redemption. BacTech has also agreed to issue PGIF up to 2,000,000 common share purchase warrants, each warrant entitling the holder to purchase common shares of BacTech at a price of $1.00 for a 2 year period.
The proceeds will be used to partially fund the development of the Tonkin Springs project and, if required, to redeem a $1 million convertible note that is held by Rothschild's Golden Arrow Fund (GAF). The GAF note has been called by the Company for redemption on February 3, 2004. GAF holds the right to convert the note to common shares at $0.60 per share. The closing of the financing is subject to execution of definitive documentation and receipt of all requisite regulatory and other approvals and consents, including the approval of the TSX Venture Exchange.
BacTech has committed to spending the first US$12 million to reopen the Tonkin Springs mine. The Company's feasibility study for Tonkin Springs is expected to be completed during the first quarter of 2004 at which time production permits will be amended and filed with the Nevada Bureau of Land Management for review. Subject to receiving a positive feasibility study, amended permits and remaining project financing, initial production from Tonkin Springs is expected in the 4th quarter of this year.
Finally, at a recent meeting of the Board of Directors, a total of 533,750 incentive options were issued to certain insiders and consultants of the Company. The options expire on December 28, 2008 and are exercisable into common shares at $1.10 per share.
The Prudent Global Income Fund is a high quality international fixed income fund with a precious metals component. The fund is currently structured to benefit from a declining US dollar and rising gold prices. The fund is managed by David W.Tice and Associates LLC.
Corporate Profile
On August 5, 2003, BacTech announced the closing of its acquisition of a 55% interest in the Tonkin Springs Gold Mine located in north-central Nevada on the prolific Cortez Trend. On November 12, 2003 BacTech announced its second acquisition, the optioning of 100% of the MacKinnon Creek gold project in southeast British Columbia. On December 17, 2003 BacTech entered into a series of agreements that will see the Company participating in the Chinese gold industry through equity and project participation.
BacTech has developed and patented bioleach technology for the treatment of refractory ores and concentrates to enhance the recovery of gold, silver and base metals. BacTech has commissioned three commercial bioleach plants for the recovery of gold and more recently has successfully demonstrated its technology in the selective recovery of precious and base metals from complex sulphide concentrates. Bioleaching is a commercially accepted and environmentally friendly alternative to conventional smelting operations and provides BacTech with a distinct market advantage in the acquisition and operation of mineral properties. BacTech's business is to own and operate mining projects independently or in joint venture.
The TSX Venture Exchange has not reviewed and does not accept any responsibility for the adequacy or accuracy of this release.