Back Forty

Working towards optimized Feasibility Study


Back Forty is Aquila’s 100%-owned development-stage project delineating a gold-rich volcanogenic massive sulfide (VMS) deposit located along the mineral-rich Penokean Volcanic Belt in Michigan’s Upper Peninsula. Aquila and various past joint venture partners, including Hudbay Minerals, have invested more than $95 million exploring and advancing Back Forty.

On August 5, 2020, Aquila published the results of a Preliminary Economic Assessment (PEA) on Back Forty. The PEA expands on the Company’s 2018 open pit Feasibility Study and includes the known underground Mineral Resource classification. The full Technical Report can be downloaded here

Aquila is currently advancing an optimized Feasibility Study that incorporates the open pit and underground mine plans. Aquila is also working to secure the remaining permits required to commence construction and operations at Back Forty.

Strong PEA Results

In August 2020, Aquila released results of an expansion case PEA on Back Forty. The PEA was prepared in accordance with National Instrument 43-101 (“NI 43-101”) by P&E Mining Consultants Inc. in collaboration with Golder Associates Ltd. and Lycopodium Minerals Canada Ltd.


  • Robust economics: After-tax NPV at a 6% discount rate of $176.3 million (approximately CA$235 million) with 26.1% IRR at long term consensus metal prices including $1,485 per ounce gold
  • Significant leverage to gold: After-tax NPV of $316.3 million at a 6% discount rate (approximately CA$422 million) with 37.8% IRR at recent spot prices including $1,998 per ounce gold with gold generating 52% of revenue
  • Includes the known underground Mineral Resources at Back Forty, increasing the life of mine to 12 full years
  • Life of mine production of over 1.5 million gold equivalent ounces with production in Year 1 of 206,000 gold equivalent ounces
  • The PEA mine plan consists of open pit mining from Year 1 to Year 5. Underground development will be initiated in Year 5 and underground mining will continue to Year 11. Remaining stockpiles will be processed in Year 12 and a partial Year 13
  • Pre-production capital costs of $250.4 million benefitting from significant nearby infrastructure
  • Potential value enhancement through additional exploration as the deposit remains open at depth

Economic Highlights

A summary of key Back Forty Project metrics are outlined in the table below.

Summary metrics
AreaItemUnitsBase Case

Price Deck1


Price Deck2

Process Production
Gradeg/t gold equivalent (AuEq)44.2 g/t3.7 g/t
Total Recovery and Payability% of contained AuEq74.3%73.4%
Payable Goldkoz gold692
Payable Gold Equivalentkoz gold equivalent1,5431,323
Annual Gold Equivalentkoz gold equivalent128110
Life of MineYears12 years
ThroughputTonnes per day (t/d)Nominal 2,800 t/d sulphides + 350 t/d oxides
Metal Price DeckGold$/oz$1,485$1,998
Revenue and OPEXGross Revenue$/t process feed$132$149
NSR$/t process feed$113$130
Total Site Opex$/t process feed$52
Royalties% of NSR2.0%2.1%
EBITDA3$/t process feed$59$75
EBITDA margin% of EBITDA / NSR52%58%
C1 Cash Costs (co-product)3$/oz gold equivalent$733$854
C1 Cash Costs (by-product)3$/oz gold$(82)$(29)
CAPEXInitial Capital$ M$250.4
Sustaining Capital$ M$214.1
AISC (co-product)3$/oz gold equivalent$926$1,078
AISC (by-product)3$/oz gold$397$462
Unlevered ReturnsPre-Tax NPV 6% discount rate$ M$248.3$430.3
Pre-Tax IRR%31.6%45.4%
Post-Tax NPV 6% discount rate$ M$176.3$316.3
Post-Tax IRR%26.1%37.8%
After-tax Paybackyears2.41.6
  1. The Base Case macro-economic forecast assumes flat pricing that has been drawn from the consensus long term estimates of select banks as of July 2020.
  2. As at August 4, 2020.
  3. None of EBITDA, C1 cash costs or all-in sustaining costs (“AISC”) have a standardized meaning under IFRS. See “Non-IFRS Measures”.
  4. Gold equivalent ounces were determined by calculating the total value of metals contained or produced and dividing that number by the gold price ($1,485/oz gold Base Case or $1,998/oz gold Spot Case). As the denominator is higher in the Spot Case, the gold equivalent is lower than at Base Case prices. Gold equivalent grade is calculated by dividing the number of gold equivalent ounces by the Mineral Resource size (tonnes).
  5. Project economics reflect the Company’s gold and silver streaming agreements with Osisko Gold Royalties (see Aquila press release dated June 18, 2020). The PEA financial model includes $30 million of initial payments under the gold stream to be received during the design and construction period. The 2018 Feasibility Study did not include the impact of the gold streaming agreement.

1.5M gold equivalent ounces

Life of Mine Payable production

Production Highlights


The Back Forty mine plan presented in the PEA is based on mining the highest value material as soon as possible and treating this material through the process plants to maximize cash flow. This strategy is achieved by mining the mineralized material and either feeding the material directly to the process plant or stockpiling the material on-site for processing later per a feed schedule based on optimal economics for the operation. This plan consists of a combined open pit and underground mining operation.  Open pit mining will take place from Year 1 to Year 5. Underground development will be initiated in Year 5 and underground production mining will continue to Year 11.

A series of grade blending stockpiles, by material type, will serve to prioritize the processing of higher-grade material and also manage fluctuations in process plant feed delivery from the two mining operations.

The Back Forty Project area consists of very subdued terrain and topography. The area, topography and climate are amenable to the conventional open pit mining operations proposed for the Project. The open pit mining operation will encompass a single open pit that will be mined with conventional mining equipment in three pushback phases. The underground mine will be developed beneath the open pit with a single decline access point located partway down the open pit main access ramp.

Open Pit Mining

The open pit design is based on the 2018 Feasibility Study design. Minor modifications were made to standardize on 5-metre-high benches with a quadruple bench configuration, resulting in a 20-metre vertical distance between catch berms.

Open pit mining operations will be carried out by Company personnel except for blasting operations. A blasting contractor will be used to supply the explosives, prepare the blasts, charge the holes, fire the blast, and inspect the area post-blast. The equipment fleet will consist of hydraulic excavators and wheel loaders, both with 8 m3 buckets, and 90 t capacity haul trucks, plus track dozers, graders, and support equipment.

A summary of the open pit mining schedule is shown in Table 4.

Table 4

Open Pit Mining Schedule

Waste Rockkt47,9701,5689,26312,13013,43710,5121,058
Total Wastekt51,7472,80110,91113,02713,43710,5121,058
Process Plant Feed Mining
Total Sulphidekt8,815732,2361,6471,4062,678776
Total Oxidekt1,31712635332715730945
Total Feedkt10,1321992,5891,9741,5632,987821
Total Materialkt61,8803,00013,50015,00015,00013,5001,879
Strip ratiow:o5.
Feed to Stockpileskt6,9611991,9951,6095751,953629


Underground Mining

Extraction of the underground Mineral Resource will be achieved by a combination of mechanized Cut and Fill (“CF”) or Longhole (“LH”) methods. CF mining is the dominant method, producing approximately 63% of mined tonnes, with LH producing the remaining 37% of tonnes. CF mining uses one of four stope sizes, and targets flatter-dipping material (dip less than 55°). LH mining uses one of two stope size subsets and orientations (transverse or longitudinal). The weighted average direct mining cost is $33/tonne.

The underground mine begins construction and development in Year 5 with commercial production achieved in Year 6. The production rate of the underground varies depending on development requirements, with a commercial production rate of 2,300 t/d, increasing to a maximum of 3,200 t/d in Year 7.

Table 5 shows the production tonnes from the Back Forty underground deposit by year and mining method.

Table 5

Production by Mining Type by Year (kt)















CF Type 1985035202681,389
CF Type 21195515585362321,996
CF Type 3118434713122
CF Type 41162224872



Oxide mineralized material and sulphide mineralized material (Main, Pinwheel and Tuff material) will be treated through separate process plants.

The oxide mineralized material will be processed via a cyanidation leach circuit to produce doré. Depending on the grades of copper, zinc and lead, the sulphide mineralized material will be processed via two stages of flotation to produce concentrates, i.e. either a copper and zinc concentrate, or a lead and zinc concentrate.

Sulphide mineralized material will be processed on a campaign basis based on the main material types that have a similar metallurgical response. As such the design of the sulphide process plant is based on a flexible metallurgical flowsheet to process the main material types.

The oxide process plant has been designed for a throughput of 350 t/d. The overall flowsheet includes the following steps:

  1. Three stage crushing using an open circuit jaw crusher, open-circuit secondary cone crusher and closed-circuit tertiary cone crusher.
  2. Grinding and classification.
  3. Pre-leach thickening.
  4. Cyanide leach.
  5. Vacuum filtration of leaching tailings.
  6. Carbon-in-Column gold adsorption.
  7. Carbon acid-washing, desorption and recovery.
  8. Smelting to produce doré.
  9. Cyanide destruction of the final wash filtrate from the vacuum filtration step.
  10. Tailings repulping and disposal to the Tailings Management Facility (“TMF”).

The sulphide process plant has been designed for a nominal throughput of 2,800 t/d. The overall flowsheet includes the following steps:

  1. Primary crushing.
  2. Coarse mineralized material stockpile and reclaim.
  3. Grinding and classification.
  4. Gravity concentration.
  5. Bulk rougher flotation to produce copper concentrate or lead concentrate depending on mineralized material campaign.
  6. Zinc rougher flotation.
  7. Bulk concentrate regrind (copper or lead concentrate).
  8. Zinc concentrate regrind.
  9. Bulk cleaner flotation, using three stages of cleaning (copper or lead concentrate).
  10. Zinc cleaner flotation, using two stages of cleaning.
  11. Bulk concentrate thickening and filtration (copper or lead concentrate).
  12. Zinc concentrate thickening and filtration.
  13. Tailings thickening and disposal in the common TMF. 

Metal Production

Metal production figures are summarized Table 6.

Table 6

payable METAL production

MetalLife of ProjectAverage Annual
Gold (K oz)69258
Zinc (M LBS)80167
Copper (M lbs)867
Silver (K oz)6,260522
Lead (M lbs)262

Capital and operating costs

Captial Costs

The capital estimate is summarized in Table 8 by area and by discipline. All costs are based on Q3 2019 pricing. The estimate is deemed to have an accuracy of ±25%.

Table 8

Capital Estimate Summary by Area

ItemCapital Costs ($M)
Construction Indirects11.4
Oxide Process Plant24.1
Sulphide Process Plant57.5
TMF/Waste Rock Facility42.6
Owner costs11.4
Contingency (14%)29.9


Operating Costs

A summary of the life of project operating costs is outlined in Table 9.

Table 9

Operating Costs Summary

Life of Project Cost


Unit Cost


Gross Revenue2,095132
Realization Charges31019
NSR (Base Case)1,785113
Open pit mining17811
Underground mining28818
Process plant31020
Total Site Opex82152

Project Opportunities

The PEA outlined a number of initiatives that may enhance the Project including:


  • Increased gold recovery: There is value in further investigating leaching sulphide flotation tailings to economically recover additional gold. Previous scoping metallurgical test work and cost analysis investigated various options, at a high level, to extract gold from flotation tailings and was favourable at gold prices above $1,600/oz.
  • Contract mining: The current mine operations plan is based on an owner-operated mine fleet. Contract mining may be an option to offset initial mine capital costs and mitigate any risks associated with training, operational readiness and the availability of experienced mine personnel.
  • Contract process plant operations and maintenance: The current process plant operations plan is based on owner operating and maintaining the process plant. An operations and maintenance contract may be an option to mitigate any risks associated with training, operational readiness and the availability of experienced process plant operators and maintenance personnel.
  • Resource confirmation and expansion: Complete additional infill drilling with the objective of step-out drilling to potentially expand Mineral Resources.

Resource Estimate

Back Forty Mineral Resource Estimate as of October 14, 2019(1-7)

The Mineral Resource Estimate is set out in Table 3 and was prepared by P&E Mining Consultants Inc. The Deposit is well-defined with 94% of the Mineral Resource contained in the Measured and Indicated (“M&I”) classifications. On a gold equivalent basis, the Deposit contains 2.5 million gold equivalent ounces in the M&I classifications at a grade of 4.3 g/t gold equivalent.


























Open Pit

1.      Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

2.      The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

3.      The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.

4.      The Mineral Resources in this Technical Report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council.

5.      The Mineral Resource Estimate was based on metal prices of $1,375/oz gold, $22.27/oz silver, $1.10/lb zinc, $3.19/lb copper and $1.15/lb lead.

6.      Open pit Mineral Resources were defined within the constraining pit design as per the 2018 Feasibility Study.

7.      NSR cut-off values were established for each metallurgical type. Refer to the Technical Report for full details.

Low-CAPEX environment

$250M in estimated initial capital costs


Mineralization at Back Forty consists of massive, semi-massive, and stringer sulfide mineralization as well as precious metal zones with sparse sulfides

Developed within a highly altered sequence of rhyolite breccias and pyroclastic rocks cut by dikes, sills and irregular intrusions of porphyritic dacite and rhyodacite. Late mafic dikes and at least one dioritic to gabbroic intrusive intrude the felsic sequence.

Structurally, this rhyolite sequence and associated massive sulfide mineralization has been deformed into an asymmetric, moderately southwest plunging anticlinal fold characterized by a gently dipping north limb, and a steeply dipping and sheared south limb. Folding has produced an axial planar schistosity and faulting has offset lithologies and created zones of weakness for younger intrusive rocks.

Altered host rocks form assemblages of quartz – sericite – pyrite throughout an extensive area surrounding the known mineralization. The degree and extent of this alteration is evidence for a large and long-lived hydrothermal system and suggests the potential for additional mineralization in the area.


To date, Aquila has completed over 700 diamond drill holes

Early in 2001, zinc-rich massive sulfide mineralization was intersected in a water well. Follow-up drill testing of a geophysical anomaly resulted in the discovery of the massive sulfide deposit. To date, Aquila has completed over 700 diamond drill holes and has drilled over 135,000 meters in which polymetallic ore mineralization has been intersected from the surface to depths exceeding 700 meters.