October 31, 2005

BioteQ, Inco to study minewater treatment facility for North Mine

BioteQ Environmental Technologies, in Vancouver, has signed a preliminary agreement with Inco for the development of a water treatment facility at Inco's North Mine operation near Sudbury, Ontario. Under the agreement, the partners will complete a basic engineering study, whose results will form the basis for a decision whether or not to proceed further with the project. If they decide to do so, BioteQ and Inco will then negotiate a definitive agreement for the joint development.

BioteQ has been conducting preliminary evaluations and engineering studies at Inco's Sudbury operations for the past two years and has completed engineering estimates for treating underground minewater from the North Mine, part of Inco's Copper Cliff mining complex.

The treatment objective is to selectively recover the nickel content from the underground mine drainage using the nickel recovery process developed by BioteQ for Falconbridge's Raglan Mine in northern Quebec. The treated water would then be either recycled or discharged into Inco's tailings system. Inco anticipates that this technology will yield both environmental and commercial benefits through improved nickel recoveries from minewater.

BioteQ's preliminary base case estimate indicates that the process has the potential to recover approximately 850,000 pounds per year of nickel from a water flow of five million litres per day. The company estimates the initial operating cost at $2.2 million (Cdn) per year and the associated capital cost at approximately $3.5 million (Cdn). BioteQ is currently evaluating four flowsheet options for comparison with this preliminary base case.

Inco would receive and process the nickel product at its Sudbury operations on terms to be included in the definitive agreement. Inco would most likely charge a fee for refining the product; this has not been included in the quoted operating cost estimate.

The engineering study is scheduled for completion by the end of this year and will include basic engineering for construction. The $100,000 (Cdn) cost of the study is being shared equally by BioteQ and Inco. If the companies decide to proceed with the project, plant construction would begin in 2006. If a definitive agreement is not reached within 12 months, Inco will reimburse BioteQ for its share of the study cost.

The proposed plant at the North Mine offers a low-risk opportunity to evaluate the technology for other potential applications at Inco's Sudbury operations. The final commercial terms have not been defined, but include a variety of options for structuring the project.

More information is available from BioteQ president and CEO Brad Marchant, 604/685-1243, FAX 604/685-7778, Web site www.bioteq.ca.

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