Shares Outstanding: 337,568,556
TORONTO, Aug. 10, 2018 /PRNewswire/ - Aquila Resources
Inc. (TSX: AQA) ("Aquila" or the "Company") announced the
filing of its financial results for the second quarter ended
June 30, 2018. All amounts, unless
indicated, are reported in U.S. dollars.
"Aquila has successfully accomplished two major milestones in
2018," said Barry Hildred, President
and Chief Executive Officer of Aquila. "First, the Company received
the Wetlands Permit, which is the final State and Federal permit
required for the commencement of operations at Back Forty. Second,
Aquila completed the Back Forty open pit Feasibility Study with
robust economics. We have now turned our focus to the
pre-construction phase at Back Forty where we will continue to
advance engineering activities, build our team, and conduct an
exploration program to expand the resource."
SECOND QUARTER HIGHLIGHTS
- On June 4, 2018, the Company
announced that it received its wetland/stream/floodplain permit
(the "Wetlands Permit") from the Michigan Department of
Environmental Quality (the "MDEQ") for its Back Forty
Project in Michigan (the
"Project"). The Wetlands Permit was issued inclusive of
specific conditions, including those requested by the United States
Environmental Protection Agency (the "EPA") on May 3, 2018. Aquila has now received all State
and Federal permissions required for the construction and
commencement of operations at the Back Forty Project. The Company
had already received the three other required State permits which
include the Nonferrous Metallic Mineral Mining Permit, the National
Pollutant Discharge Elimination System Permit, and the Air Use
Permit to Install.
- On May 3, 2018, the EPA provided
supplementary comments to the MDEQ regarding the Company's Wetlands
Permit application for the Project.
- As at June 30, 2018, Aquila had
cash of $12.6 million and working
capital of $10.9 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 finalization of the Feasibility
Study.
POST QUARTER HIGHLIGHTS
- On August 1, 2018, the Company
announced the results of an independent open pit only Feasibility
Study (the "Feasibility Study") for its Back Forty Project.
The Feasibility Study demonstrated robust economics including a
pre-tax NPV at a 6% discount rate of $259M and an IRR of 32.0% at base case metal
prices of $1,300/oz gold,
$1.20/lb zinc, $20/oz silver, $3.00/lb copper and $1.00/lb lead. On an after-tax basis, the Project
generates an after-tax NPV at a 6% discount rate of $208M 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 is finalizing its Project Execution Plan which will
further define the Project development 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.
- In July 2018, the Company
initiated an exploration drilling program at Back Forty that will
seek to expand the known resource, test additional targets, and
further define the underground potential of the deposit, where
mineralization remains open at depth.
OUTLOOK
- In 2018, 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 basic and detailed
engineering will continue at the Back Forty Project.
- The Company will advance its exploration program at Back
Forty.
- 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 $47.5M in staged payments that remain available
to the Company under its gold stream purchase agreement with Osisko
Gold Royalties Ltd, Aquila is well-financed to complete its planned
pre-construction and exploration activities.
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 and six months ended June 30, 2018:
|
Three months
ended
|
Six Months
Ended
|
|
June
30,
|
June
30,
|
|
2018
|
2017
|
2018
|
2017
|
Administrative
expenses
|
$1,257,305
|
$658,979
|
$2,409,659
|
$1,619,644
|
Mineral property
exploration expenses
|
2,067,182
|
1,773,855
|
3,401,955
|
3,094,556
|
Net finance
charges
|
643,046
|
1,064
|
1,035,527
|
2,124
|
Loss from
operations
|
3,967,533
|
2,433,898
|
6,847,141
|
4,716,324
|
|
|
|
|
|
Gain (loss) on
foreign exchange
|
(131,136)
|
118,926
|
(328,435)
|
200,759
|
Gain on change in
value of contingent consideration
|
486,975
|
21,882
|
462,505
|
(10,378)
|
(Gain) loss on change
in fair value of warrant liability
|
118,261
|
(194,358)
|
(107,204)
|
229,205
|
Net and comprehensive
loss for the period
|
4,441,633
|
2,380,348
|
6,874,007
|
5,135,910
|
Net loss per share -
basic and diluted
|
0.01
|
0.01
|
0.02
|
0.02
|
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
focused on advancing pre-construction and exploration 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 1.1B pounds of
zinc and 1M ounces of gold in the
Measured & Indicated Mineral Resource categories, with
additional upside potential. Aquila has received all State and
Federal permissions required for the construction and commencement
of operations at the Back Forty Project.
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 Project and the
potential for underground mining activities at the Project and
benefits associated therewith, statements with respect to the
expected project economics for the Project, such as estimates of
life of mine, total production and average production, metal
production and recoveries, C1 cash costs, AISC, capital and
operating costs, pre- and post-tax IRR, pre- and post-tax NPV and
cash flows, the potential conversion of Inferred Mineral Resources
into Indicated Mineral Resources, any projections outlined in the
Feasibility Study in respect of the Project, the permitting status
of the 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.
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SOURCE Aquila Resources Inc.