Shares Outstanding: 338,284,556
TORONTO, March 1, 2019 /CNW/ - Aquila Resources Inc. (TSX:
AQA, OTCQB: AQARF) "Aquila" or the "Company") announced the filing
of its financial results for the fourth quarter and year ended
December 31, 2018. All amounts,
unless indicated, are reported in US dollars.
"2018 was a year of considerable progress and achievement for
Aquila as we continued to advance the Back Forty Project towards
construction," said Barry Hildred,
President and Chief Executive Officer of Aquila. "In June,
following a comprehensive environmental permitting process in
Michigan, the Company received its
Wetlands Permit, the final permit required for the construction and
commencement of operations at the Back Forty Project. In August, we
published the Back Forty Feasibility Study which demonstrated
robust economics based solely on an open pit operation. In 2019, we
are moving ahead on a number of key initiatives including
progressing pre-construction activities at Back Forty,
enhancing our leadership team, continuing to develop an exploration
strategy for our earlier stage assets in Wisconsin, and considering the strategic and
financial options available to the Company."
Annual 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 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 permits which include a Michigan
Nonferrous Metallic Mineral Mining Permit, a National Pollutant
Discharge Elimination System Permit, and a Michigan Air Use Permit
to Install.
- 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.
Fourth Quarter Highlights
- On October 5, 2018, the Company
received a payment of US$7.4 million
from an affiliate of Osisko Gold Royalties Ltd ("Osisko")
under the gold streaming agreement entered into on November 8, 2017 (the "Streaming
Agreement"). 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 Back Forty
Project Feasibility Study.
- On November 2, 2018, the Company
submitted amendments to its Mining Permit to the MDEQ to align the
permit with the current project design outlined in the Feasibility
Study as well as in the Wetlands Permit.
- On November 12, 2018, Aquila
announced the appointment of Mr. Jacques
Perron to its Board of Directors. Mr. Perron, a proven mine
builder and operator, has worked in the mining industry for more
than 30 years and has extensive technical and operations
experience.
- On December 19, 2018, the U.S.
District Court for the Eastern District of Wisconsin dismissed the federal lawsuit
brought by the Menominee Indian Tribe of Wisconsin (the "Tribe") challenging the
Environmental Protection Agency and the U.S. Army Corps of
Engineers' failure to exercise jurisdiction over Aquila's Wetlands
Permit for its Back Forty Project. The Court held that the Tribe
could not challenge the federal government's refusal to exercise
jurisdiction over the Wetlands Permit under the Administrative
Procedures Act or the Clean Water Act.
- As at December 31, 2018, Aquila
had cash of $14.4 million and working
capital of $12.1 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 January 8, 2019, Aquila
announced the cross-trading of the Company's shares on the OTCQB
Venture Market in the United
States under the symbol OTCQB: AQARF. Cross-trading Aquila
on the OTCQB provides a trading platform for U.S. shareholders
while enhancing distribution for Canadian and international
shareholders.
- The Company progressed certain pre-construction activities
including field work and site data collection, metallurgical
testwork, and hydrogeological modelling.
Outlook
- During the balance of 2019, 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.
- Pre-construction activities including project set-up will
continue to advance at Back Forty.
- The Company will continue to evaluate a mine expansion design
and business case for underground operations. 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 at Back Forty.
- 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.
- With its current cash resources and an additional $40M in staged payments that remain available to
the Company under its gold Streaming Agreement with Osisko, Aquila
is well-financed to advance its planned pre-construction
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 year ended December 31,
2018:
|
Year
ended
|
|
December
31,
|
|
2018
|
2017
|
Administrative
expenses
|
$5,273,620
|
$3,376,667
|
Mineral property
exploration expenses
|
6,817,577
|
6,186,343
|
Transaction
costs
|
-
|
1,104,496
|
Write down of mineral
property interests
|
11,700
|
86,600
|
Net finance
charges
|
1,415,867
|
(4,357)
|
Loss from
operations
|
13,518,764
|
10,749,749
|
|
|
|
(Gain) loss on
foreign exchange
|
(399,315)
|
501,590
|
(Gain) loss on change
in value of contingent consideration
|
386,022
|
(90,823)
|
(Gain) loss on change
in fair value of warrant liability
|
(1,689,518)
|
(70,860)
|
Net and comprehensive
loss for the period
|
11,815,953
|
11,089,656
|
Net loss per share -
basic and diluted
|
0.04
|
0.04
|
ABOUT AQUILA RESOURCES
Aquila Resources Inc.
(TSX: AQA, OTCQB: AQARF) 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 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 two other exploration projects: Reef Gold
Project located in Marathon County,
Wisconsin and the Bend Project located in Taylor County, Wisconsin. 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 may contain 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.
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.