Shares Outstanding: 332,949,056
TORONTO, May 10, 2018 /CNW/ - Aquila Resources
Inc. (TSX: AQA) ("Aquila" or the "Company") announced today
the filing of its financial results for the first quarter ended
March 31, 2018. All amounts,
unless indicated, are reported in U.S. dollars.
FIRST QUARTER HIGHLIGHTS
- In February 2018, the Company
announced an updated Mineral Resource Estimate for the Back Forty
Project (the "2018 Mineral Resource Estimate"), which was
subsequently documented in a technical report, titled "Updated
Mineral Resource Estimate and Technical Report on the Back Forty
Project, Michigan, USA" prepared
by P&E Mining Consultants Inc. dated March 26, 2018 and filed on SEDAR on March 26, 2018. The 2018 Mineral Resource
Estimate replaces the mineral resource estimate that was first
disclosed in an Aquila news release dated February 4, 2013 (the "2013 Mineral Resource
Estimate"). Highlights of the 2018 Mineral Resource Estimate
include a 10% increase in tonnage in the Measured and Indicated
Mineral Resource categories versus the 2013 Mineral Resource
Estimate, a 12% increase in contained zinc and a 4% increase in
contained gold. Contained silver, copper and lead also increased
versus the 2013 Mineral Resource Estimate.
- Appointed Michael Welch as Chief
Operating Officer ("COO") effective March 1, 2018. As COO, Mr. Welch has now assumed
responsibility for the Company's activities at its Back Forty
Project in Michigan where he will
lead operational readiness and help drive the seamless integration
from project to operations. He also oversees stakeholder
engagement, compliance, sustainability, and the Company's regional
strategy.
- On December 8, 2017, the Company
announced that the Michigan Department of Environmental Quality
(the "MDEQ") deemed Aquila's wetland/stream/floodplain
permit application (the "Wetlands Permit") for the Back
Forty Project administratively complete allowing the regulatory
technical review process to move to the next stage. The Wetlands
Permit is the fourth and final permit required to build and operate
the Back Forty Project. On January 23,
2018, the MDEQ held a public hearing for the Wetlands
Permit. The public comment period, which continued after the public
hearing, concluded on February 2,
2018. The Company continues to work with the MDEQ to provide
further clarifications as part of its ongoing technical review of
the Wetlands Permit application.
- On March 8, 2018, the United
States Environmental Protection Agency (the "EPA") provided
comments to the MDEQ regarding the Wetlands Permit. The EPA had 90
days from December 8, 2017, when the
MDEQ deemed the Company's Wetlands Permit application
administratively complete, to provide comments. The EPA's
opportunity to comment on the application is subject to strict
statutory processes, regardless of the significance of the
comments. The MDEQ has 90 days from March 8,
2018, to work with Aquila to resolve the comments made by
the EPA and to provide the information requested by it. The EPA
provided supplementary comments to the MDEQ in a letter dated
May 3, 2018 (see Post Quarter
Highlights).
- In January 2018, the Menominee
Indian Tribe of Wisconsin filed a
federal lawsuit in the Eastern District of Wisconsin against the Environmental Protection
Agency and the US Army Corps of Engineers, claiming that the
federal government should exercise jurisdiction over the wetlands
permitting process currently being administered by the State of Michigan and require Aquila to obtain
a federal wetlands permit. Both federal agencies rejected
this argument when it was presented to them last year, and Aquila
anticipates that their position that the State of Michigan is properly exercising its
delegated authority to issue a Wetlands Permit will be vindicated
by the federal court. To that end, the U.S. Department of Justice
has filed a motion for dismissal of the lawsuit, which Aquila has
joined.
- On March 16, 2018, Hudbay
Minerals Inc. exercised 865,385 warrants with an exercise price of
$ 19 cents for proceeds to the
Company of $164,423.
- As at March 31, 2018, Aquila had
cash of $14.9 million and working
capital of $13.5 million. This
compared to cash of $17.2 million and
working capital of $15.5 million at
December 31, 2017. The decrease in
working capital is primarily due to the funding of the Company's
permitting activities and development of the Feasibility Study.
POST QUARTER HIGHLIGHTS
- In April 2018, an administrative
contested case hearing began. The case was adjudicated by an
Administrative Law Judge regarding the validity of the Part 632
Permit to Mine issued to Aquila for the Back Forty Project by the
MDEQ in December 2016. An individual
alleging to own property near the Back Forty Project and the
Menominee Indian Tribe of Wisconsin have challenged the permit. These
challenges will ultimately be resolved by the Director of the MDEQ
after the contested case hearing is complete. Aquila does not
anticipate the MDEQ Director will come to a different conclusion on
issuing the permit than MDEQ staff.
- On May 3, 2018, the EPA provided
supplementary comments to the MDEQ regarding the Company's Wetlands
Permit application. The EPA confirmed that a number of objections
identified in the March 8, 2018
letter have been resolved. Further, the EPA believes there is a
ready pathway for the resolution of the EPA's remaining objections
through the MDEQ's inclusion of specific conditions in a final
Wetlands Permit. Aquila has reviewed the proposed permit conditions
and is confident that the conditions can be readily met. The
MDEQ and Aquila have until June 6,
2018 to ensure that the proposed permit conditions fully
address the EPA's objections. The Company will continue to work
with the MDEQ in order to satisfy completely all requirements of
both the State and Federal wetland and stream protection statutes
and believes all other related issues have largely been reviewed.
The Company is confident that it can work with the MDEQ within the
prescribed timeframe.
"Aquila continues to make significant progress towards receiving
the final Wetlands Permit in June," said Barry Hildred, President and Chief Executive
Officer of Aquila. "With the concerns of the EPA now substantially
resolved, subject to inclusion of specific permit conditions, we
are able to focus on working closely with the MDEQ to address any
final questions concerning the application. In parallel, we are
moving ahead on a number of key initiatives including finalizing
the Back Forty Feasibility Study, developing an exploration
strategy for Back Forty and our earlier stage assets in
Wisconsin, continuing to enhance
our leadership team, and considering the strategic and financial
options available to the Company."
SELECTED FINANCIAL INFORMATION
The following table provides selected financial information that
should be read in conjunction with the financial statements of the
Company for the three months ended March 31,
2018:
|
Three months
ended
|
|
March
31,
|
In US
dollars
|
2018
|
2017
|
Administrative
expenses
|
$
|
1,152,188
|
$
|
960,665
|
Mineral property
exploration expenses
|
1,334,773
|
1,320,701
|
Net finance
charges
|
392,648
|
1,060
|
Loss from
operations
|
2,879,609
|
2,282,426
|
|
|
|
Gain (loss) on
foreign exchange
|
(197,303)
|
81,833
|
Gain on change in
value of contingent consideration
|
(24,470)
|
(32,260)
|
(Gain) loss on change
in fair value of warrant liability
|
(225,465)
|
423,563
|
Net and comprehensive
loss for the period
|
2,432,371
|
2,755,562
|
Net loss per share -
basic and diluted
|
0.01
|
0.01
|
ABOUT AQUILA RESOURCES
Aquila Resources Inc. (TSX:
AQA) is a development‐stage company with strategic assets in the
Great Lakes Region. The Company's experienced management team is
currently focused on advancing permitting and engineering
activities for its 100%‐owned zinc‐ and gold‐rich Back Forty
Project in Michigan.
Aquila's flagship Back Forty Project is an open pit volcanogenic
massive sulfide deposit with underground potential located along
the mineral‐rich Penokean Volcanic Belt in Michigan's Upper Peninsula. The Project
contains approximately 1.1 billion pounds of zinc and 1 million
ounces of gold in the Measured & Indicated categories, with
additional upside potential. Currently Aquila is working to secure
the final State permit required to build and operate Back Forty
while completing a Feasibility Study.
The Company has three other exploration projects: Reef Gold
Project located in Marathon County,
Wisconsin, the Bend Project located in Taylor County, Wisconsin and Aquila Nickel
located in the Upper Peninsula,
Michigan. Reef is a gold-copper property and Bend is a
volcanogenic massive sulfide occurrence containing copper and
gold.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION
This press release contains certain
forward‐looking statements within the meaning of applicable
Canadian securities legislation. In certain cases, forward‐looking
statements can be identified by the use of words such as "plans",
"expects" or "does not anticipate", or "believes", or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved" and similar expressions suggesting future
outcomes or statements regarding an outlook.
Forward‐looking statements relate to any matters that are not
historical facts and statements of our beliefs, intentions and
expectations about developments, results and events which will or
may occur in the future, without limitation, statements with
respect to additional upside potential of the Back Forty Project,
the status of a feasibility study in respect of Back Forty, the
permitting status of the Back Forty Project and Aquila's future
exploration and development plans.
These and other forward‐looking statements and information
are subject to various known and unknown risks and uncertainties,
many of which are beyond the ability of Aquila to control or
predict, that may cause their actual results, performance or
achievements to be materially different from those expressed or
implied thereby, and are developed based on assumptions about such
risks, uncertainties and other factors set out herein. These risks
include those described under the heading "Risk Factors" in
Aquila's most recent annual information form and its other public
filings, copies of which can be under Aquila's profile at
www.sedar.com. Aquila expressly disclaims any obligation to update
forward‐looking information except as required by applicable
law. Such forward‐looking information represents Aquila's
best judgment based on information currently available. No
forward‐looking statement can be guaranteed and actual future
results may vary materially. Accordingly, readers are advised not
to place undue reliance on forward‐looking statements or
information. Furthermore, Mineral Resources that are not Mineral
Reserves do not have demonstrated economic viability.
SOURCE Aquila Resources Inc.