Name and Location
Back Forty gold/zinc project, Michigan, US.

Client
Aquila Resources.

Project Description
The new preliminary economic assessment (PEA) completed on the Back Forty project, in Michigan’s upper peninsula, incorporates a revised mine plan based on results from Aquila’s 2013 resource update. The project contains measured and indicated resources of 15.13-million tonnes grading 2.03 g/t gold, 24.48 g/t silver, 0.33% copper, 0.22% lead and 3.06% zinc. Inferred resources total 2.34-million tonnes grading 2.07 g/t silver, 26.53 g/t silver, 0.36% copper, 0.33% lead and 2.2% zinc.

The PEA contemplates mining 16.1-million tonnes of mineralised material over the 16-year life-of-mine, of which 12.5-million tonnes is openpit and 3.6-million tonnes is underground. The PEA demonstrates the potential for a diverse earning stream, with a payable metal value mix of 41.2% gold, 40.5% zinc, 12% copper, 5.7% silver and 0.6% lead. Operating at an initial throughput rate of 5 350 t/d, the total payable production of the mine is expected to be about 532 000 oz of gold, 704-million pounds of zinc, 63-million pounds of copper, 4.66-million ounces of silver and 11-million pounds of lead.

Net Present Value/Internal Rate of Return
The project has a pretax net present value at 6% of $247.2-million and an internal rate of return of 34.9%, with a payback period of 1.6 years.

Value
$261-million.

Duration
Not stated.

Latest Developments
After completing comprehensive and integrated metallurgical testwork Aquila Resources has reported that it has improved recoveries and the potential for increased production of its flagship Back Forty project's two main metals, gold and zinc.

Gold recoveries have improved from 61% to 63%, and zinc recoveries have improved from 91% to 93%, when benchmarked against the company's June 2014 PEA.

“We will be further quantifying and evaluating the impact of these results on Back Forty's project economics during the course of our work on the feasibility study, which is being developed in parallel with our permitting activities, both of which are expected to be completed before the end of 2016,” Aquila VP for project development Andrew Boushy has advised.

The metallurgical testwork, which has been conducted by SGS Canada, in Lakefield, has analysed new representative samples indicating that the mineral resource is an aggregate of three sulphide zones (Main, Pinwheel and Tuff) and one oxide zone. 

Further testwork performed on composite samples for each of these ore types has revealed a gradient, with higher-grade samples generally exhibiting improved recovery compared with lower-grade samples. When new recovery equations were applied to the PEA mine plan, the impact on recovery ranged from a 2% improvement for zinc to a 15% improvement for silver.

Testwork has also demonstrated that more gold and silver could be recovered from the zinc concentrate. Additional work will be performed to determine whether the concentration of precious metals in zinc concentrate will meet the required payable threshold.

Aquila has stated that the positive results of the metallurgical test programme have provided the company with the basis to finalise its process design, a key step in the development of the Back Forty feasibility study. Aquila expects to complete the feasibility study, including an updated resource and mine plan, by December.

Lycopodium Minerals Canada is currently designing the processing plant and has provided input for the comminution testwork.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Aquila Resources, tel +1 906 352 4024, fax +1 906 352 4027 or email info@aquilaresources.com.