Aquila Resources Announces Fourth Quarter and Year End 2020 Financial Results


Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) announces the filing of its financial results for the fourth quarter and year ended December 31, 2020. All amounts, unless indicated, are reported in US dollars.

“In 2020, Aquila significantly advanced our Back Forty Project in Michigan, highlighted by the Preliminary Economic Assessment the Company announced in August that showcased Back Forty’s potential as a near-term producer in the United States,” said Guy Le Bel, President & CEO of Aquila. “Despite the ongoing COVID-19 pandemic, Aquila was able to expand its team in Michigan and resolved all federal challenges to the Back Forty Project. Our current focus is securing additional capital and evaluating various strategic alternatives to maximize shareholder value, advancing the optimized Feasibility Study, and securing the remaining State permits required to build and operate Back Forty.”


  • In August 2020, the Company announced the results of a positive Preliminary Economic Assessment (“PEA”) for the Company’s 100% owned Back Forty Project. Key highlights include:
    • After-tax NPV at a 6% discount rate of $176.3 million (approximately C$235 million) with 26.1% IRR at long term consensus metal prices including $1,485 per ounce gold.
    • After-tax NPV of $316.3 million at a 6% discount rate (approximately C$422 million) with 37.8% IRR at spot prices as of August 4, 2020 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.
    • 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.
  • In January 2020, in a unanimous decision, the United States Court of Appeals for the Seventh Circuit (the “Appeals Court”) upheld the dismissal of a lawsuit related to Aquila’s Wetlands Permit brought by the Menominee Indian Tribe of Wisconsin (the “Tribe”) in the State of Wisconsin. In May 2020, in a unanimous decision, the Appeals Court denied an earlier request by the Tribe for a rehearing of its appeal. This marks the end of the Tribe’s federal challenge to the Back Forty Project.
  • In August 2020, the Company added two key hires to its team:
    • The Company hired Mike Foley as Director of Environment & Infrastructure. Mr. Foley has 32 years of experience as a Civil Engineer in the Upper Peninsula of Michigan and northern Wisconsin.
    • The Company hired Bob Mahin as Director of Exploration. Mr. Mahin is a senior level geologist with thirty years of progressive experience guiding mineral exploration programs. Since 1990, Mr. Mahin has been based in Michigan’s Upper Peninsula and has gained progressive experience from fieldwork to managing multi-million-dollar exploration programs in the pursuit of gold and base metals.
  • In September 2020, the Company held its 2020 annual meeting of shareholders at which the six nominees listed in the management information circular were elected as directors of Aquila. The Company welcomed a new director, Mr. Paul Johnson, to the Board. Mr. Johnson is a mining engineer with 40 years of experience in the mining industry. Prior experience includes serving as Open Pit Project Evaluation Manager for Osisko Gold Royalties and being part of the initial development team for Osisko Mining Corporation’s Canadian Malartic project.
  • In June 2020, the Company announced that it entered into definitive agreements to amend certain terms of its gold and silver purchase agreements with a subsidiary of Osisko Gold Royalties Ltd (“Osisko”) in order to accelerate Aquila’s access to a portion of the outstanding funding under the gold purchase agreement and to provide additional flexibility.
  • In August 2020, the Company achieved DTC eligibility for its common shares from The Depository Trust Company (“DTC”). The DTC is a subsidiary of the Depository Trust & Clearing Corp. and manages the electronic clearing and settlement for the vast majority of publicly traded equities and other securities in the United States. This electronic method of clearing securities accelerates the settlement process for investors and brokers, enabling the stock to be traded over a much wider selection of brokerage firms by coming into compliance with their requirements. The Company’s common shares continue to be listed for trading in the United States on the OTCQB market under the symbol AQARF.


  • As at December 31, 2020, Aquila had cash of $1.8 million and negative working capital of $0.8 million. This compared to cash of $4.0 million and working capital of $1.6 million at December 31, 2019. The decrease in working capital is primarily due to permitting and legal activities at its Back Forty Project. The Company is focused on securing financing in the near-term.
  • In December 2020, the Ingham County Circuit Court in the State of Michigan upheld the final decision of the Michigan Department of Environment, Great Lakes, and Energy (“EGLE”) to issue the Back Forty Mining Permit after a lengthy contested case hearing initiated by two petitioners. Subsequent to its issuance by EGLE, the Mining Permit was upheld by the Judge and an environmental review panel made up of technical experts from various fields.


  • In February 2021, a resolution supporting the mining industry in Michigan was introduced into the Michigan Senate. The resolution has been reported out of committee without changes and is expected to be adopted by the Senate in the current legislative session.
  • On February 1, 2021, the Company appointed Guy Le Bel as President & CEO of Aquila. Barry Hildred transitioned to the role of Executive Chair of the Board of Directors and Ted Munden, outgoing Chair of the Board of Directors, was appointed to the position of Lead Director. Mr. Le Bel brings more than 35 years of experience in business and project development, strategic and financial planning, and permitting in the Americas to Aquila. Most recently, he was CEO and CFO of Golden Queen Mining Ltd. until its acquisition in 2020 by Falco Resources Ltd. Mr. Le Bel holds an MBA Finance from Ecole des Hautes Études Commerciales (Montreal), a Master Applied Sciences, Mining Engineering from the University of British Columbia and a B.Sc. Mining Engineering from Université Laval. He is a Professional Engineer (O.I.Q.).
  • In March 2021, Aquila announced that it entered into definitive agreements (the “2021 Stream Agreement Amendments”) with Osisko to amend certain terms of the Gold Stream and Silver Stream in order to provide additional flexibility. Under the terms of the 2021 Stream Agreement Amendments, Osisko agreed to adjust certain milestone dates under the Gold Stream and the Silver Stream to align the streams with the current project development timeline.
  • In March 2021, Aquila engaged Osisko Technical Services (“OTS”) to lead an optimized feasibility study (the “Feasibility Study”) for the Back Forty Project. OTS’ technical team has a proven track record of project execution. Aquila will leverage the team’s combined engineering, permitting, construction and operating expertise to unlock value and advance the Back Forty Project through its next phase of development.
  • In January 2021, an administrative law judge for the Michigan Office of Administrative Hearings and Rules (the “Judge”) issued a decision denying the prior issuance of the Back Forty Wetlands Permit. In his decision, the Judge determined that Aquila’s groundwater model does not provide a reliable identification of wetland impacts and therefore found the permit application to be administratively incomplete. The Judge also determined that Aquila did not provide a complete assessment of potential alternatives to its proposed plan. Aquila has appealed the Judge’s decision to the EGLE environmental review panel (the “Panel”). The Panel is expected to render a decision in the second half of 2021. The Panel has the authority to adopt, remand, modify, or reverse, in whole or in part, the Judge’s decision. The decision of the Panel will become the final decision of EGLE.
  • In January 2021, a Michigan Public Service Commission Administrative Law Judge rejected Alger Delta Power Cooperative’s motion which objected to Upper Michigan Energy Resources Corporation’s (UMERC) filing of its Notice of Intent to Serve the Back Forty Mine. The Company believes this decision paves the way for Aquila to choose whichever electrical service provider it deems best for the Back Forty Project.
  • On March 24, 2021, the Company announced that it filed a preliminary short form prospectus in connection with a marketed equity offering (the “Offering”). On March 25, 2021, the Company announced that, in light of current market conditions, it determined not to proceed with the Offering. Aquila is working with its advisors to consider and evaluate various strategic alternatives to maximize shareholder value, including looking to realize value from its Wisconsin properties.


  • The Company will continue to advance its Back Forty Project in Michigan where the main objectives are completing the optimized Feasibility Study and securing the remaining permits required for construction and operations. The Feasibility Study will incorporate both the open pit and underground mine plans. Following the completion of the Feasibility Study, the Company will submit revised permit applications to EGLE to align the permits with the Feasibility Study design. EGLE previously issued the Company the four key permits required to build and operate the Back Forty Project, being a Mining Permit, Air Permit, NPDES Permit, and a Wetlands Permit (which was subsequently denied by the Judge in January 2021), based on the development plan contemplated in the Company’s open pit only feasibility study filed on SEDAR on September 7, 2018. The Company believes that permit applications that reflect the Feasibility Study design will demonstrate reduced environmental impact and a longer mine life for the benefit of all stakeholders.
  • Aquila will continue to advance its appeal of the Judge’s decision to deny the issuance of the Back Forty Wetlands Permit. Through its appeal, at a minimum, Aquila is seeking to clarify certain aspects of the decision to facilitate further permitting efforts for the Back Forty Project. In parallel with its appeal, Aquila will work closely with EGLE to reach consensus on the groundwater model.
  • As the Company works through the Wetlands Permit appeal and continues its collaboration with EGLE in support of a revised Wetlands Permit application, if required, the Company will conduct technical studies to support the optimized Feasibility Study that will seek to evaluate areas of opportunity. These include opportunities to:
    • Simplify the process flowsheet and increase gold recoveries in light of improved metal prices; and
    • Optimize the mine plan to enhance economics, reduce environmental impact, and improve the Project configuration and strip ratio.
  • The Company will continue its efforts to secure additional financing and, in parallel, will evaluate various strategic alternatives to maximize shareholder value.


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, 2020:



Year Ended



December 31





Mineral property exploration expenses





Administrative expenses





Net finance charges (recoveries)





Loss from operations







(Gain) loss on foreign exchange





Loss (gain) on change in value of contingent consideration





(Gain) loss on change in fair value of warrant liability





Net and comprehensive loss for the period





Net loss per share - basic and diluted






Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) is a development‐stage company focused on high grade polymetallic projects in the Upper Midwest, USA. Aquila’s experienced management team is currently advancing pre-construction activities for its flagship 100%‐owned gold and zinc‐rich Back Forty Project in Michigan.

The Back Forty Project is a volcanogenic massive sulfide deposit with open pit and underground potential located along the mineral‐rich Penokean Volcanic Belt in Michigan’s Upper Peninsula. Back Forty contains approximately 1.1 million ounces of gold and 1.2 billion pounds of zinc in the Measured & Indicated Mineral Resource classifications, with additional exploration upside. An optimized Feasibility Study for the Project is underway.

Aquila 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. Additional disclosure of Aquila’s financial statements, technical reports, material change reports, news releases and other information can be obtained at or on SEDAR at

Cautionary statement regarding forward-looking information

This press release may contain certain forward-looking statements. 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”. In particular, this news release contains forward-looking information pertaining to the following: the ability of the Company to realize the economic results of the PEA, the outcome of the Wetlands Permit appeal, the ability of the Company to successfully permit the Back Forty Project, the ability of the Company to realize value from its Wisconsin properties, the completion of the optimized Feasibility Study, and other development plans and objectives. 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, including but not limited to: the ability of the Company to close the Offering; risks and uncertainties related to the availability of further advances of the remaining deposit under the Gold Stream; the availability of senior construction financing for the Back Forty Project; risks with respect to the COVID-19 pandemic; and other related risks and uncertainties, including, but not limited to, risks and uncertainties disclosed in Aquila’s filings on its website at and on SEDAR at Aquila undertakes no 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.

Guy Le Bel, President & CEO
Tel: 450.582.6789
[email protected]

Barry Hildred, Executive Chair
Tel: 647.943.5672
[email protected]

David Carew, VP Corporate Development & IR
Tel: 647.943.5677
[email protected]

Source: Aquila Resources Inc. Aquila Resources Inc.