Back Forty shows strength for Aquila, HudBay (June 15, 2010)

Vancouver – The Back Forty deposit in Michigan is flexing its volcanogenic massive sulphide (VMS) muscles for joint-venture partners Aquila Resources (AQA-T) and HudBay Resources (HBM-T), returning lengthy intercepts of gold and zinc mineralization from an infill and expansion drill program.

Aquila has identified some eight mineralized zones at Back Forty to date. Some of the zones comprise true massive sulphide mineralization, others are stringer zones better endowed in zinc than in copper, gold, or silver, and a few only host gold mineralization. Together, though, the zones already host a significant amount of metal and new drill results indicate those amounts will increase in an updated resource estimate due out before the end of the year.

The latest results come primarily from the eastern half of the project, which covers the East zone, Hinge zone, PM zones, and 90 Gold zone.

Hole 424 hit mineralization outside of the resource model at the East zone, cutting 5.5 metres of 10.2 grams gold per tonne, 79.1 grams silver per tonne, and 8.6% zinc. Hole 429 also hit outside of the defined East zone resource, returning 19.8 metres of 1.2 grams gold, 12.4 grams silver, and 9.6% zinc.

Hole 430 tested between the East and Hinge zones and returned 122.4 metres of massive sulphide and stringer mineralization grading 2 grams gold, 9.1 grams silver, and 5.5% zinc, including 13.5 metres of 6.5 grams gold and 10.6% zinc. Fifty metres to the north hole 434 cut 22.1 metres of 1.1 grams gold, 9.9 grams silver, and 11.1% zinc, followed immediately by 6.1 metres of 3.3 grams gold, 9.4 grams silver, and 4% zinc. And 100 metres to the west hole 438 intersected 5.8 metres grading 1.7 grams gold, 17.2 grams silver, and 8.6% zinc from above the modeled Hinge zone, followed by 8.4 metres of 1.1 grams gold, 23.2 grams silver, and 14.6% zinc from east of the defined resource.

Just to the southeast, hole 433 extended the shallow 90 Gold zone almost 100 metres to the east with a 43.7-metre intercept grading 1.1 grams gold and 4.5 grams silver from 17 metres depth. Almost 100 metres later the hole encountered the depth extension of the PM zone, returning 13.3 metres of 3.4 grams gold and 38.4 grams silver.

And over on the western side of the project, several holes tested for expansions to the Pinwheel and NS zones. Hole 436 returned 20.5 metres of Pinwheel gossan and massive sulphide grading 2.8 grams gold, 263.5 grams silver, and 2.2% copper from outside of the resource model. And hole 438, an infill holes within the NS zone, cut 14.7 metres grading 3.3 grams gold and 48.1 grams silver from 38 metres downhole, followed 15 metres later by 6 metres of 34 grams gold and 487.7 grams silver.

In at least two zones – Pinwheel and East – drilling since the resource calculation has encountered precious metal grades higher than previously estimated. Earlier this year in the East zone, for example, Aquila hit 3.9 metres grading 117.8 grams gold. The next hole returned 11 metres of 6.37 grams gold and 7.19% zinc. The Pinwheel zone is also showing its copper grade strength, with intercepts like 8.8 metres of 10.67% copper. And the NS zone is a new discovery since the last resource estimate.

Aquila and HudBay are working through a US$18.5-million program at Back Forty this year targeting completion of a feasibility study and submission of a permit application by early 2011. Aside from drilling and resource modeling, the program includes environmental and engineering studies, geotechnical studies, land acquisition, and continuing economic studies.

HudBay will earn a 51% stake in the project once it has spent US$10 million. If the major funds the proposed work program to completion, it will increase its interest to 65%. Aquila is presently the project operator.

The last estimate, completed in early 2009, pegged measured and indicated resources at 8.5 million tonnes grading 2.13 grams gold, 30.6 grams silver, 5.61% zinc, 0.51% copper, and 0.28% lead. Inferred resources add 1.2 million tonnes averaging 2.9 grams gold, 41.7 grams silver, 4.42% zinc, 0.21% copper, and 0.55% lead.

Roughly two-thirds of those resources sit within an open pit shell. The other third would be extracted using underground mining.

On its latest drill results from Back Forty Aquila gained a penny to close at 27¢. The company has a 52-week trading range of 14¢ to 45¢ and has 82 million shares outstanding.