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Aquila Resources publishes 2Q19 financial results

Published by , Assistant Editor
Global Mining Review,

Aquila Resources Inc. (Aquila) announced the filing of its financial results for the second quarter ended 30 June 2019. All amounts, unless indicated, are reported in US dollars.

Barry Hildred, President & CEO of Aquila, commented "In 2019, we have continued to advance pre-construction activities in compliance with all permits as issued for Back Forty. In May, we received a favourable administrative court ruling upholding our Mine Permit and Michigan regulators issued a proposed decision in favour of our permit amendments. In parallel, we continue to evaluate a potential future underground mine at Back Forty while considering all strategic and financial options for the company and the project. We believe that a stronger gold market and improving investor sentiment will set up a favourable backdrop for advancing Back Forty as we transition into the Project Execution phase."

Second quarter highlights

The company is progressing certain Back Forty Project pre-construction activities including environmental fieldwork and site data collection, metallurgical testwork, hydrogeological modelling, and a geotechnical drill programme.

The company is continuing with its evaluation of underground mining following an open pit operation at Back Forty as outlined in the August 2018 Feasibility Study. The company is also assessing various alternatives for the processing plant that better aligns open pit plant and potential future underground throughputs. This analysis will form the basis of an updated Preliminary Economic Assessment, the results of which Aquila expects to announce later this year. 

On 3 May 2019, the Michigan Office of Administrative Hearings and Rules issued a Final Decision and Order upholding the Michigan Nonferrous Metallic Mineral Mining Permit for its Back Forty Project in Michigan. Following 30 days of cumulative testimony, the administrative law judge issued a final decision finding "that the proposed mining operation will not pollute, impair, or destroy the air, water and other natural resources, or the public trust in those resources," in compliance with Michigan's Nonferrous Metallic Mining Statute.

On 22 May 2019, a draft permit (proposed decision) on the Back Forty Mining Permit amendment was issued. A consolidated public hearing for the Mine Permit and Air Permit amendments was held on 25 June 2019. Aquila expects the amendments to receive final approval in 2019.

On 29 May 2019, Aquila strengthened its land position at its Bend Project in Wisconsin by entering into a long-term mineral lease agreement with a party that owns the mineral rights on a portion of the deposit.

On 3 June 2019, a contested case hearing related to the company's Wetlands Permit began.

On 19 June 2019, the company announced the election of Pamela Saxton to its Board of Directors. Saxton is a business executive with over 35 years of experience in domestic and international public company finance roles, primarily in mining, software and oil and gas. Saxton has also joined the company's Audit Committee.

On 28 June 2019, the company announced that its two largest shareholders, Orion Mine Finance (and its affiliated funds) (Orion) and Osisko Gold Royalties Ltd. (Osisko) completed a transaction whereby Orion purchased from Osisko all 49 651 857 common shares of the company owned by Osisko (the Transaction). The Transaction was a small component of the share repurchase and secondary offering transaction first announced by Osisko on 25 June 2019. Orion now owns 97 030 609 common shares of Aquila representing approximately 28.7% of the outstanding common shares. Osisko remains a significant financial partner to Aquila as the holder of gold and silver streams on the company's Back Forty Project. Under its gold streaming agreement with the company, Osisko remains committed to funding an additional US$40 million in staged payments to continue the development of the Back Forty Project.

As of 30 June 2019, Aquila had cash of US$9.6 million and working capital of US$7.0 million. This compared to cash of US$14.4 million and working capital of US$12.1 million at 31 December 2018. The decrease in working capital is primarily due to the funding of the company's pre-construction activities.


  • Pre-construction activities including engineering and construction readiness will continue to advance at Back Forty.
  • Operational readiness activities including advancing plans with respect to roads, power, and concentrate logistics are underway.
  • In addition to recently filled positions, the company will continue to add resources to its owners' team to prepare for the construction and operational readiness phases at Back Forty.
  • The company will continue discussions with prospective financial partners to secure the required capital to construct 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.
  • The company is also evaluating its strategy and funding alternatives with respect to its exploration projects in Wisconsin in light of the recent repeal of the decades-old moratorium on non-ferrous mining in the state.

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