Overview

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. Highlights of the PEA are outlined here. 

The Company has received the four key permits required to commence construction and operations at Back Forty. The Company is awaiting a decision by an administrative law judge regarding the contested case challenge to its Wetlands Permit, which is expected later in 2020. The Company is also working to secure additional permits prior to construction, including a Dam Safety Permit.

Production Highlights

MINING

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.

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.

MINERAL PROCESSING AND METALLURGY

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.
7. Carbon-in-Column gold adsorption.
8. Carbon acid-washing, desorption and recovery.
9. Smelting to produce doré.
10. Cyanide destruction of the final wash filtrate from the vacuum filtration step.
11. 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.

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.