Shares Outstanding: 337,974,556
TORONTO,
Nov. 8,
2018 /PRNewswire/ - AquilaResourcesInc.
(TSX: AQA) ("Aquila" or the
"Company") announced the filing of its financial results for
the third quarter ended September 30,
2018. All amounts, unless indicated, are reported in US
dollars.
"Despite recent market weakness, we continue to execute on our
strategy of advancing the Back Forty Project and unlocking its
fundamental value," said Barry
Hildred, President and Chief Executive Officer of Aquila.
"Aquila is well funded to advance our planned pre-construction
activities at Back Forty, which is one of a select group of
permitted development-stage projects in the US."
Third 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 finalized its Project Execution Plan which will
further define the design and construction 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.
- As at September 30, 2018, Aquila
had cash of $10.5 million and working
capital of $8.0 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 October 5, 2018, the Company
received a payment of $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 $55 million
to be made by Osisko under the Streaming Agreement. The payment,
which was made net of a $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 Feasibility Study.
- On November 2, 2018, the Company
submitted final amendments to its Mining Permit to the Michigan
Department of Environmental Quality to align the permit with the
project design outlined in the Feasibility Study as well as in the
Wetlands Permit.
Outlook
- During the balance of 2018 and into 2019, 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 project set-up and basic
engineering will continue to advance at the Back Forty
Project.
- 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 $40M in staged payments that remain available to
the Company under its gold Streaming Agreement with Osisko, Aquila
is well-financed to complete 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 three and nine months ended September 30, 2018:
|
Three months ended
|
Nine Months Ended
|
|
September 30,
|
September 30,
|
|
2018
|
2017
|
2018
|
2017
|
Administrative
expenses
|
$
|
1,289,473
|
$
|
699,781
|
$
|
3,699,132
|
$
|
2,319,425
|
Mineral property
exploration expenses
|
1,935,172
|
1,209,587
|
5,377,127
|
4,304,143
|
|
|
|
|
|
Net finance
charges
|
516,045
|
871
|
1,551,572
|
2,995
|
Loss from
operations
|
3,740,690
|
1,910,239
|
10,627,831
|
6,626,563
|
|
|
|
|
|
(Gain) loss on
foreign exchange
|
52,813
|
254,136
|
(275,623)
|
454,895
|
(Gain) loss on change
in value of contingent
consideration
|
(50,102)
|
(556)
|
412,403
|
(10,934)
|
(Gain) loss on change
in fair value of
warrant liability
|
(1,298,287)
|
(997,322)
|
(1,405,491)
|
(768,117)
|
Net and comprehensive
loss for the period
|
2,445,114
|
1,166,497
|
9,359,120
|
6,302,407
|
Net loss per share -
basic and diluted
|
0.01
|
0.01
|
0.03
|
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 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 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.
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 there
with, 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, those related to the receipt by the Company of the
remaining payments from the Streaming Agreement, 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 here in.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.