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AquilaResources announces 3Q18 financial results

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Global Mining Review,

AquilaResources Inc. has released its 3Q18 financial results.

"Despite recent market weakness, we continue to execute on our strategy of advancing the Back Forty Project and unlocking its fundamental value," said Barry Hildred, President and CEO of Aquila. "Aquila is well funded to advance our planned pre-construction activities at Back Forty, which is one of a select group of permitted development-stage projects in the US."

3Q18 highlights

  • On 1 August 2018, the company announced the results of an independent open pit only Feasibility Study for its Back Forty Project. The Feasibility Study demonstrated robust economics including a pre-tax NPV at a 6% discount rate of US$259 million and an IRR of 32.0% at base case metal prices of US$1300/oz gold, US$1.20/lb zinc, US$20/oz silver, US$3.00/lb copper and US$1.00/lb lead. On an after-tax basis, the Project generates an after-tax NPV at a 6% discount rate of US$208 million and an IRR of 28.2% with a 2.2 year payback. The company has also identified a number of opportunities to further enhance the overall economics of the Project including the future addition of an underground expansion.
  • The company finalised its Project Execution Plan, which will further define the design and construction strategy including contracting philosophy, plans for basic and detailed engineering and any required permit amendments, as well as plans for building the owner's team in preparation for the construction and operational readiness phases of the Back Forty Project.
  • As at 30 September 2018, Aquila had cash of US$10.5 million and working capital of US$8.0 million. This compared to cash of US$17.2 million and working capital of US$15.5 million at 31 December 2017. The decrease in working capital is primarily due to the funding of the company's permitting activities and finalisation of the Feasibility Study.

Post Quarter Highlights

  • On 5 October 2018, the company received a payment of US$7.4 million from an affiliate of Osisko Gold Royalties Ltd under the gold streaming agreement entered into on 8 November 2017. This payment represents the second deposit of the total advance payment of US$55 million to be made by Osisko under the Streaming Agreement. The payment, which was made net of a US$100 000 capital commitment fee, followed the receipt by Aquila of all material permits required for the development and operation of its Back Forty Project in Michigan and the completion of the Feasibility Study.
  • On 2 November 2018, the company submitted final amendments to its Mining Permit to the Michigan Department of Environmental Quality to align the permit with the project design outlined in the Feasibility Study as well as in the Wetlands Permit.


  • During the balance of 2018 and into 2019, the company will continue discussions with prospective financial partners to secure the required capital to build the Back Forty Project. Aquila, with the assistance from its advisors, will consider all strategic and financial options available to the company and the Project.
  • Pre-construction activities including project set-up and basic engineering will continue to advance at the Back Forty Project.
  • The company will continue to evaluate an underground mine expansion design and business case. A Preliminary Economic Assessment is expected to be published in a future period.
  • In addition to recently filled positions, the company will continue to add to its leadership team to prepare for the construction and operational readiness phases of the Back Forty Project.
  • The company is also evaluating its strategy with respect to its early stage exploration projects in Wisconsin in light of the recent repeal of the decades-old moratorium on non-ferrous mining in the state.
  • With its current cash resources and an additional US$40 million in staged payments that remain available to the company under its gold Streaming Agreement with Osisko, Aquila is well-financed to complete its planned pre-construction activities.

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