Shares Outstanding: 183,201,174
- Final Technical Report includes updated economics -
- $282.2M pre-tax NPV and 38.8% pre-tax IRR -
TORONTO , Sept. 8, 2014 /CNW/ - Aquila Resources Inc. (TSX: AQA) (FKT: JM4A) ("Aquila"), a development-stage company with assets in the Great Lakes Region
including its 100%-owned gold- and zinc-rich Back Forty Project in
Michigan's Upper Peninsula ("Back Forty"), today announced that it has
filed a technical report (the "Technical Report") in respect of the
Company's preliminary economic assessment on the Back Forty Project.
PEA Highlights
In preparation of the final NI 43-101 compliant Technical Report, the
Company has provided updated economics for Back Forty.
Table 1. Key Economic Highlights
|
Pre-Tax
|
After-Tax
|
NPV @ 6%
|
$282.2M
|
$210.8M
|
IRR
|
38.8%
|
32.0%
|
Payback Period
|
1.4 years
|
1.8 years
|
The PEA includes inferred resources that are considered too speculative
geologically to have the economic considerations applied to them that
would enable them to be categorized as mineral reserves. There is no
certainty that the PEA results will be realized.
There are no updates to the capital or operating expenditures from the
figures stated in the July 23, 2014 press release.
Sensitivity Analysis
Taking into consideration the updated economics, a new sensitivity
analysis was performed to test the economic viability of Back Forty
against possible fluctuations in commodity prices. A table illustrating
project sensitivity is presented below:
Table 2. Sensitivity Analysis
|
Base Case -15%
|
Base Case
|
Base Case + 15%
|
Gold
|
$1,099/oz
|
$1,293/oz
|
$1,487/oz
|
Silver
|
$17.39/oz
|
$20.46/oz
|
$23.53/oz
|
Zinc
|
$0.82/lb
|
$0.96/lb
|
$1.10/lb
|
Copper
|
$2.70/lb
|
$3.18/lb
|
$3.66/lb
|
Lead
|
$0.82/lb
|
$0.96/lb
|
$1.10/lb
|
Pre-Tax
|
NPV @ 6%
|
$122.3M
|
$282.2M
|
$440.6M
|
IRR
|
23.7%
|
38.8%
|
52.0%
|
Payback Period
|
2.8 years
|
1.4 years
|
0.9 years
|
After-Tax
|
NPV @6%
|
$95.2M
|
$210.8M
|
$324.8M
|
IRR
|
20.2%
|
32.0%
|
42.0%
|
Payback Period
|
3.1 years
|
1.8 years
|
1.2 years
|
Project Potential
An alternate mine plan, which considers a low-CAPEX, high-grade initial
phase operation, was evaluated in the PEA and provides some flexibility
in the development of the project. This option would focus on mining
near-surface, high-grade zones by way of three small open pits in order
to maximize capital return in the early years of production. This
approach has the potential to provide attractive economic returns,
mitigate certain start-up risks, and allow for significant optionality
in the long-term development of the project. Following the five-year
initial phase operation, Aquila could commence a second phase operation
which would consider an expanded pit and / or inclusion of the
underground resource.
This opportunity would be fully evaluated during the feasibility stage
of project development and could be pursued depending on future
macro-economic conditions.
Table 3. Key Economic Highlights of Initial Phase Operation
|
Pre-Tax
|
After-Tax
|
NPV @ 6%
|
$129.4M
|
$103.3M
|
IRR
|
38.6%
|
35.2%
|
Payback Period
|
2.1 years
|
2.2 years
|
Qualified Persons
The Technical Report was prepared under the supervision of Tetra Tech
Inc., specifically Rex Bryan , SME; Wenchang Ni , P.Eng.; Daniel Sweeney ,
P.Eng.; Arun Vathavooran, Ph.D., C.Eng., MIMMM, SME; Dharshan
Kesavanathan , P.Eng.; Mike McLaughlin , P.Eng.; Sabry Abdel Hafez ,
P.Eng.; and, Andrew Carter , Eur. Ing., C.Eng., MIMMM, MSAIMM, SME. All
of the aforementioned individuals are Qualified Persons as defined in
National Instrument (NI) 43-101.
The environmental components of the Technical Report were prepared under
the supervision of Andrea K. Martin, P.E., from Foth Infrastructure &
Environment, LLC. Ms. Martin is considered a Qualified Person as
defined under NI 43-101.
The scientific and technical information in this news release was
reviewed and approved by Thomas O. Quigley , Vice President of
Exploration and Senior Technical Advisor for the Back Forty Project. By
virtue of his education, experience and professional association, Mr.
Quigley is considered a Qualified Person as defined under NI 43-101.
Information regarding data verification is provided in Aquila's annual
information form dated March 31, 2014 .
About Aquila Resources
Aquila Resources Inc. (AQA.TO) (JM4A.F) is a
development-stage company with assets in the Great Lakes Region
including its 100%-owned gold- and zinc-rich Back Forty Project in
Michigan's Upper Peninsula.
The Toronto Stock Exchange neither approves nor disapproves the
information contained in this News Release. Neither the Toronto Stock
Exchange nor its Regulation Services Provider (as that term is defined
in the policies of the Toronto Stock Exchange) accepts responsibility
for the adequacy or accuracy of this release.
This press release contains 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, statement with respect to: (i) the economic
analysis contained in the PEA; (ii) the development plan of the PEA and
results thereof; (iii) capital expenditure programs; (iv) the quality
or quantity of the mineral resources subject to estimates by Aquila;
and (v) work plans to be conducted by Aquila.
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 herein. 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.
SOURCE Aquila Resources Inc.