Aquila tables feasibility study for Back Forty in Michigan

Nearly two months after receiving its final environmental permit, Aquila Resources (TSX: AQA; US-OTC: AQARF) has tabled a positive feasibility study for its Back Forty polymetallic project, located 19 km west of Stephenson, Michigan.

“We can now focus the company’s resources on the pre-construction phase at Back Forty while considering funding alternatives to complete the development of the project,” Aquila president and CEO Barry Hildred states in a press release.

At the end of March, the company had US$14.9 million in cash, with another US$47.5 million on the way in staged payments from Osisko Gold Royalties (TSX: OR; NYSE: OR), which bought a gold stream on the project last year.

The project has a US$208 million after-tax net present value at a 6% discount rate and a 28.2% after-tax internal rate of return with a 2.2 year payback period.

The project would produce 468,000 oz. gold and 512 million lb. zinc over seven years. It would cost an initial US$294 million to fund a two-year construction phase with US$110.6 million in sustaining costs.

The project contains 11.65 million proven and probable tonnes grading 1.85 grams gold, 21.7 grams silver, 2.64% zinc, 0.21% lead and 0.28% copper. Roughly 70% of the reserves are in the proven category.

Inclusive of reserves are 16.6 million measured and indicated tonnes grading 1.92 grams gold, 24.7 grams silver, 3.13% zinc, 0.32% copper and 0.26% lead for 1.02 million oz. gold, 13.2 million oz. silver, 1.14 million lb. zinc, 116.9 million lb. copper and 94.9 million lb. lead.

Mineralization at Back Forty occurs across four distinct zones: zinc and copper-rich massive sulphides that contain gold and silver; gold, zinc and copper-bearing stockwork stringer and peripheral sulphides; precious metal only low-sulphide mineralization; and oxide-rich precious metal gossan.

Aquila said it could extend the project’s life through underground mining. Though the company is only permitted for an open pit mine, it says it will soon begin an exploration program to further define an underground resource.

Shares of Aquila are currently valued at 27¢ with a 52-week range of 22¢ to 39¢. The company has a $92 million market capitalization.