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TSX: AQAOTCQB: AQARF
Focused on Gold-Rich Projects in the United States
Corporate PresentationJuly 2020
Disclaimer
This presentation contains certain forward-looking statements within the meaning of applicable Canadian securities legislation. In certain cases, forward-lookingstatements 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 orstatements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" and similar expressions suggesting futureoutcomes 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, resultsand events which will or may occur in the future, without limitation, statements with respect to additional upside potential of the Project and the potential forunderground mining activities at the Project and benefits associated therewith, statements with respect to the expected project economics for the Project, such asestimates of life of mine, total production and average production, metal production and recoveries, C1 cash costs, AISC, capital and operating costs, pre- and post-taxIRR, pre- and post-tax NPV and cash flows, the potential conversion of Inferred Mineral Resources into Indicated Mineral Resources, any projections outlined in theFeasibility Study in respect of the Project, the permitting status of the Project and Aquila’s future exploration and development plans and associated timelines.
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 ofAquila to control or predict, that may cause their actual results, performance or achievements to be materially different from those expressed or implied thereby, andare developed based on assumptions about such risks, uncertainties and other factors set out herein. These risks include those described under the heading “RiskFactors” 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 expresslydisclaims any obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents Aquila’s bestjudgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readersare advised not to place undue reliance on forward-looking statements or information. Furthermore, Mineral Resources that are not Mineral Reserves do not havedemonstrated economic viability.
None of EBITDA, all-in sustaining costs (“AISC”), or free cash flow (“FCF”) have a standardized meaning under IFRS. See “Non-IFRS Measures” in the Company’snews release dated August 1, 2018. Financial evaluation includes financial impacts of the Company’s silver stream with Osisko Gold Royalties (OGR) but does notinclude the financial impact of its gold stream with OGR for which the majority of the upfront payments have yet to be received and for which there is uncertaintyregarding the exact timing of these payments. See the Company’s most recent Financial Statements and MD&A available on SEDAR for additional details regardingthe gold stream.
Andrew Boushy, Senior Vice President, Projects for Aquila Resources, is the Qualified Person for the Company as described in National Instrument 43-101 and isresponsible for the technical contents of this presentation.
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INVESTMENT HIGHLIGHTS
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Advancing development of 100%-owned Back Forty Project in Michigan
Favorable metal exposure to Gold and Zinc
Well-established and safemining jurisdiction
Granted key Permits including Mining Permit and Wetlands Permit
Strong shareholder base
Exploration upside:
• Near deposit• Prospective projects
on the Penokean Belt
Aquila CAPITAL STRUCTURE
4
Current Capital Structure
Share Price (As of July 6, 2020) C$0.16
Avg. daily vol. (3-mth) (TSX + OTCQB) 153,000
52-week range C$0.07 – $0.22
Shares O/S 339M
Market Cap. C$54M
Year End December 31
Cash position @ March 31, 2020 US$2.5M
Major Institutional Shareholders
Orion 28.7%
Ruffer 12.8%
Hudbay 10.5%
TSX: AQAOTCQB: AQARF
52-Week Stock Chart (C$) – Closing Price
Analyst Coverage
Cormark Securities Stefan Ioannou
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
$-
$0.05
$0.10
$0.15
$0.20
$0.25
Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
FOCUSED ON GOLD-RICH PROJECTS IN THE US
Back Forty • Gold and Zinc• Pre-construction
phase
Prospective projects located in Wisconsin
• Bend• Copper-Gold
Exploration• Reef
• Gold Exploration
Located along the Penokean Volcanic Belt
Region is experiencing a mining resurgence
5
Attractive Pipeline of Projects in HIGHLY PROSPECTIVE DISTRICT
TSX: AQAOTCQB: AQARF
BACK FORTY Flagship Project
100%-owned Gold- and Zinc-rich deposit
Re-acquired from Hudbay in Q1 2014
Open Pit Feasibility Study completed August 2018
Granted key permits including Mining Permit and Wetlands Permit
Attractive exploration upside Near deposit
Underground expansion (open at depth)
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$294M $208M 28.2% $677/oz AuEq CAPEX NPV IRR AISC
OPEN PIT FEASIBILITY STUDY (at $1,300/oz gold)
$95M > INVESTED TO DATE• Exploration• Technical reports
• Land acquisitions• Permitting activities
• Engineering
Back Forty PRODUCTION HIGHLIGHTS
7
45%
31%
16%
8%
Revenue by Product
Zinc Concentrate
Copper Concentrate
Doré
Lead Concentrate
41%
41%
10%
6%
2%
Revenue by Metal
Gold Zinc
Copper Silver
Lead
BENEFITS OF POLYMETALLIC DEPOSITS
DIVERSE REVENUE STREAMS Provide Natural Hedge
135,000 oz. of gold produced in Year 1
Gold represents 56% of LOM revenue at spot prices
Base Case Metal Prices: Gold: $1,300/oz; Zinc: $1.20/lb; Silver: $20.00/oz; Copper: $3.00/lb; Lead: $1.00/lb
Spot Metal Prices: Gold: $1,728/oz; Zinc: $0.91/lb; Silver: $17.21/oz; Copper: $2.44/lb; Lead: $0.75/lb
Payable Production
Metal Life of Project Average Annual
Gold (K oz) 468 67
Zinc (K lbs) 512,198 73,171
Copper (K lbs) 51,109 7,301
Silver (K oz) 4,458 637
Lead (K lbs) 24,183 3,455
Production Parameters
Project Life 7 years
Throughput 4,800 tpd
Strip Ratio (life of project) 4.3:1
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Back Forty Open PitPRODUCTION PROFILE
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135
86 68 67 54
33 25
137
86 88
136
121
41 27
$541
$744 $701
$595
$474
$661 $682
273 172 156 203 175 75 52
2022 2023 2024 2025 2026 2027 2028 2029 2030
Gold Production (koz Au) Non-Gold Production (koz Au Eq.)AISC (US$ / oz Au Eq.) Total Production (koz Au Eq.)
Source: Back Forty Open Pit Feasibility Study – August 2018
Back Forty Open PitMINERAL RESERVE ESTIMATE
9
70% OF RESERVES are in Proven Category
1. CIM definitions were followed for the Mineral Reserve Estimate.2. The Mineral Reserve Estimate used average long term metal prices
of $1,250/oz gold; $20.00/oz silver; $1.15/lb zinc; $1.00/lb lead; and $3.00/lb copper.
3. A Mineral Reserve is defined within a mine plan, with pit phase designs guided by Lerchs–Grossmann (LG) pit shells, after dilution and mining loss adjustments.
4. The Mineral Reserve Estimate is derived from Measured and Indicated Mineral Resources only.
BACK FORTY MINERAL RESERVE ESTIMATE AS OF FEBRUARY 6, 2018
Gold equivalent grade 4.3 g/t
Zinc equivalent grade 6.7%
Category Ore Mt
NSR $/t
Gold g/t
Silver g/t
Zinc %
Lead %
Copper %
Proven 8.12 $120 1.95 18.4 3.02 0.13 0.35
Probable 3.53 $85 1.63 29.3 1.76 0.41 0.10
Proven + Probable 11.65 $109 1.85 21.7 2.64 0.21 0.28
5. Metallurgical recovery used was a variable function of the rock type and metal grade.
6. The Mineral Reserve Estimate for the Project will be comprised of eight different ore types that will be processed either though a flotation concentrator or cyanide leach plant. NSR cut-off values applied are: Ore 1 - $16.50/t, Ore 2,3,4,7,8 - $16.00/t, Ore 5 - $17.50/t, and Ore 6 - $28.50/t.
7. The life-of-mine strip ratio is 4.3:1 including the pre-construction period.
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Back Forty CAPITAL AND OPERATING COSTS
Sustaining capital of $111M
Mine closure costs of $75M (starting in Year 8)
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PREPARED WITH SUPPORT FROM GLOBALLY RECOGNIZED EXPERTSINCORPORATES BEST PRACTICES IN ALL ENVIRONMENTALLY SENSITIVE AREAS
Capital Costs SummaryArea $MIndirect Construction 19Common Plant 20Oxide Plant 33Sulphide Plant 59TMF/WRFs 39Infrastructure 33Mining 25Management Costs 22Owner costs 13Subtotal 263Contingency (12%) 31Total 294
Operating Costs SummaryLife of Project
($M)$/t Ore
Gross Revenue 1,437 123Realization Charges 180 15NSR (Base Case) 1,256 108
Mining 160 14Processing 184 16G&A 27 2Total Site Opex 371 32
C1 cash costs of $499/oz Au (co-product) AISC of $677/oz Au (co-product)
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PROCESS FLOWSHEET
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SULPHIDE ORE PROCESSING (4,000 tpd)
OXIDE ORE PROCESSING (800 tpd)
Ore from Mine or Stockpile
Primary Crushing
SAG/Ball Mill
Flotation Plant
Ore from Mine or Stockpile
3 Stage Crushing
Ball Mill Leach Plant
Tailings
Tailings
Conc – 80.6% Recovery
Conc – 91.7% Recovery
Conc – 81.5% Recovery
Au – 91.6% RecoveryAg – 68.6% Recovery
CuZnPb
Au/Ag Doré
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Back Forty FUTURE DRILL PROGRAM TARGETS
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Deposit Open at Depth
400 m
700 m
Expansion
Expansion
Connection
Connection
MAJOR INTERCEPTS IN THIS AREA
LK-4798.7m @ 6.0 g/t Au, 245 g/t Ag 5.9% Zn
LK-5047.4m @ 7.3 g/t Au, 190 g/t Ag 1.5% Zn
2016 ZONE
PINWHEEL NW
LOWER DEEP ZONE
UPPER DEEP ZONE
TUFF ZONE EXTENSION
MAJOR INTERCEPTS IN THIS AREA
LK-47969.7m @ 1.12 g/t Au, 27 g/t Ag 0.4% Cu, 1.3% Zn
Including6.2m @ 6.4 g/t Au, 94 g/t Ag
LK-484 31m @ 6.32 g/t Au, 34 g/t Ag, 0.47% Pb, 1.8% ZnIncluding17m @ 13.8 g/t Au, 69 g/t Ag
LK-50254m @ 0.86 g/t Au, 51 g/t Ag, 0.78% Pb, 1.86% ZnIncluding22.5m @ 1.49 g/t Au, 49 g/t Ag, 0.77% Pb, 2.0% Zn
NS Zone Conversion
Lone Pine South
TSX: AQAOTCQB: AQARFLOOKING NORTH
Funds a Significant Portion of Pre-Construction Activities and Project Capital
US$60M FINANCING with Osisko Gold Royalties
INVESTMENT BY OSISKO US$10M equity private placement US$50M gold stream with staged payments:
• US$7.5 million on closing (received Nov. 10, 2017)
• US$7.5 million on receipt of all material permits and receipt of a positive feasibility study (received Oct. 5, 2018)
• US$10 million in tranches on achievement of certain corporate and project milestones (US$2.5M received June 16, 2020)
• US$25 million on drawdown of a project debt facility
KEY GOLD STREAM TERMS Osisko will purchase 18.5% of the refined gold from Back Forty until 105,000 ounces of gold have been delivered
• Thereafter the percentage will be reduced to 9.25% of the refined gold
Ongoing payment: Osisko will pay the Company 30% of the spot price of gold on the day of delivery, subject to a maximum payment of US$600per ounce.
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VALUE CREATION MILESTONES
Evaluate underground mine expansion
Back Forty drilling – Geotech, underground infill and step out
Resource update
Updated Feasibility Study (including underground resources)
Advance Pre-Construction Activities
Wetlands Permit Contested Case
Mine Permit Amendment Contested case
Dam Safety Permit
Power / Roads14 TSX: AQA
OTCQB: AQARF
Wisconsin Exploration
Prospect Permit for Bend Project
Reef Project
Evaluate additional opportunities on the Penokean Belt
Project ExecutionProject financing
Expand owner’s team
Basic and Detailed Engineering
Site establishment
Commercial production
Attractive Pipeline of Projects in HIGHLY PROSPECTIVE DISTRICT
NEXT GENERATION ASSETS in Wisconsin
BEND COPPER-GOLD PROJECT100%-owned VMS occurrence located in the Penokean Volcanic Belt
>14,000 meters of historical drilling delineating a non-43-101 compliant resource* • 2.7M tonnes grading, 2.4% copper,
1.4 g/t gold and 13.7 g/t silver in copper zone
• 1.12M tonnes grading, 4.7 g/t gold and 0.31% copper in gold zone
Aquila drilling in 2012 indicates major expansion
REEF GOLD PROJECT 100%-owned, high-grade gold mineralization potentially amenable to low-cost, open-pit mining
Historic drilling delineated a non-43-101 compliant resource* of 140,564 contained gold ounces (412,410 tonnes @ 10.6 g/t)
• Phase III drill program to expand and define resource
Aquila drilling shows broad zones of gently-dipping mineralization open in all directions
15 * The Company is not treating the historical estimates as current mineral resources or mineral reserves and the historical estimates should not be relied upon or understood to indicate the existence of reserves or resources.
NEW MINING LAW APPROVED December 2017TSX: AQA
OTCQB: AQARF
MANAGEMENT TEAM Experienced & Committed
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BARRY HILDRED, CEOCurrently a director and Past-Chair of The Children's Aid Foundation of Canada. Founder and Former President of TMX Equicom. 25+ years of capital markets experience.
STEPHANIE MALEC, CFO15+ years of experience combining accounting, financial reporting, public markets and mining sector work. Previously with Malbex Resources, Starfield Resources, Dundee Precious Metals, Falconbridge and PriceWaterhouseCoopers.
DAVE CAREW, Director of Corporate Development and Investor Relations Former VP Corporate Development and Investor Relations at a TSX-V listed developer and previously a mining industry-focused investment banker. 10+ years of capital markets experience.
Committed to UNLOCKING AQUILA’S POTENTIAL
ANDREW BOUSHY, P.Eng., SVP ProjectsMore than 25 years of experience in major capital project delivery, engineering design, strategic business planning, construction and operational optimization. Worked domestically and internationally in various project, construction and consulting roles. Mr. Boushy has held senior roles with Ausenco Canada and Xstrata Nickel (now Glencore).
DAVID ANDERSON, General Manager 25 years of experience in environmental monitoring, impact assessment, regulatory affairs and permitting, and most recently served as the Director of Environment for Highland Copper’s Copperwood project.
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LEADERSHIP TEAM Strong Board
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EDWARD MUNDEN, ChairmanCurrently a Director and Co-Founder of private investment company and a Director of Mustang Minerals. Co-founded a NASDAQ-traded energy company and held senior positions until it was sold in 2001. 35+ years of experience in energy, mining and technology industry.
BARRY HILDRED, CEOCurrently Chairman of Children's Aid Foundation of Canada. Founder and Former President of TMX Equicom. 20+ years of capital markets experience.
KEVIN DROVER Currently President & CEO of Aurcana Corporation since 2014. 40+ years of experience in management, operations and project development with mining companies with assets around the world, including Kinross Gold, Benz Mining, Oracle Mining and Glencairn Gold.
ANDREW W. DUNNCurrently Managing Partner of Canadian Shield Capital. Previously spent 27 years at Deloitte and served as Vice Chair of Deloitte Canada and Chair of its Client Cabinet.
DIRECTORS INCLUDE EXPERIENCED MINING VETERANS WITH DEVELOPMENT AND OPERATIONS EXPERIENCE
JACQUES PERRONCurrently President & CEO of Pretium Resources. Director of CenterraGold, Victoria Gold and TMAC. Over 30 years of technical and operations experience in the mining industry. Previously CEO of Thompson Creek and St Andrew Goldfields.
JOSEPH DE LA PLANTE Currently CIO of Nomad Royalty Company. Former Vice President Corporate Development of Osisko Gold Royalties, where he played a key role in the company’s IR, corporate development and financing activities.
IAN PRITCHARDCurrently Chief Operating Officer of Belo Sun Mining and SVP Technical Services at Troilus Gold. Brings more than 30 years of industry experience with a particular focus on project and operations management.
PAMELA SAXTONBusiness executive with over 35 years of experience in public company finance roles, primarily in mining, software and oil and gas and most recently as EVP and CFO of Thompson Creek. Currently serves as a Trustee and Vice President of the Viola Vestal Coulter Foundation, which provides scholarships to colleges and universities with a focus on mining. Past Chair for the Colorado Association of Commerce and Industry.
TSX: AQAOTCQB: AQARF
CONTACT INFORMATION
BARRY HILDRED
Chief ExecutiveOfficer Aquila Resources
647.943.5673
BHildred@aquilaresources.com
DAVE CAREW
Director of Corporate Development & IRAquila Resources
647.943.5677
DCarew@aquilaresources.com
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APPENDIX
Back Forty PERMITTING STATUS
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Part 632 Mine Permit
Permit Issued December 2016
Contested Case Decision May 2019
Contested Case Appeal Final Decision November 2019
Amended Permit Issued December 2019
Amended Permit Contested Case Decision PENDING – Expected H1 2021
National Pollutant Discharge Elimination System (NPDES) Permit
Permit Issued April 2017
Wetlands Permit
Permit Issued June 2018
Contested Case Decision PENDING – Expected 2020
Air Permit
Permit Issued December 2016
Amended Permit Issued December 2019
Dam Safety Permit
Permit Application PENDING – Expected 2020
Permit Issued PENDING – Expected 2021
Back Forty MINERAL RESOURCE ESTIMATE
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Category Tonnes (1,000)
Au (g/t)
Au (K oz)
Ag (g/t)
Ag (K oz)
Zn (%)
Zn (M lb)
Cu (%)
Cu (M lb)
Pb (%)
Pb (M lb)
Measured 7,943 2.04 522 20.4 5,214 3.34 584.3 0.35 61.2 0.17 30.0
Indicated 8,680 1.80 504 28.7 8,013 2.95 563.8 0.29 55.8 0.34 64.9
M&I 16,623 1.92 1,026 24.8 13,227 3.13 1,148.1 0.32 116.9 0.26 94.9
Inferred 1,129 3.42 124 43.2 1,568 1.03 25.7 0.35 8.7 0.44 11.0
~94% OF RESOURCES are in M&I Category
(1) Mineral Resources are estimated as of February 6, 2018. See Aquila news release dated February 7, 2018 for a complete summary of the 2018 Minerals Resource Estimate.
(2) Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. (3) The Inferred Mineral Resource in this estimate has a lower level of confidence that that applied to an Indicated Mineral Resource and must not be converted
to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
(4) The Mineral Resource was estimated using CIM guidelines and include the Mineral Reserve.(5) Metallurgical type Oxide (all gold domains and leachable Gossans) is leachable, while all other metallurgical types are flotable.(6) The Mineral Resource Estimate was based on metal prices of US$1,375/oz gold, US$22.27/oz silver, US$1.10/lb zinc, US$3.19/lb copper and US$1.15/lb
lead. An NSR cut-off of $21/tonne was used for the floatable portion of the in-pit resource and an NSR cut-off of $22/tonne was used for the leachable portion of the in-pit resource. An NSR cut-off of $70/tonne was used for the out of pit portion of the resource. See Aquila news release dated February 7, 2018.
BACK FORTY MINERAL RESOURCE ESTIMATE AS OF FEBRUARY 6, 2018 (1-6)
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R0?
R3
TuffR1
TuffR0
R2.1TuffR2
Rhyolite
Main Zone
Tuffaceous sediments
Main QFP
Tuff Zone Massive Sulfide Sp+Gn Pinwheel Zone
GossanTuff Zone massive
sulfidePINWHEEL
NORTH
TUFF ZONE EXTENSION
Deep Zone
2016 ZONE EXTENSION
Future Drill Target Areas
Idealized Pit Outline
100-200m
100-200m
200-700m
50-150m 50-150m Pinwheel massive sulfide and gossan
DEEP ZONE TARGETS
Back Forty GEOLOGIC CROSS SECTION
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Back Forty SENSITIVITY ANALYSIS
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Base Case-15%
Base Case Base Case+ 15%
Gold ($/oz) 1,105 1,300 1,495
Zinc ($/lb) 1.02 1.20 1.38
Silver ($/oz) 17.00 20.00 23.00
Copper ($/lb) 2.55 3.00 3.45
Lead ($/lb) 0.85 1.00 1.15
Pre-Tax NPV @ 6% 102 259 416
IRR 17.9% 32.0% 44.1%
After-Tax NPV @ 6% 79 208 332
IRR 15.5% 28.2% 38.9%
Payback Period (years) 3.3 2.2 1.5
ECONOMICALLY VIABLE Against Commodity Price Fluctuations
TSX: AQAOTCQB: AQARF
Back Forty SITE PLAN
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Based on Purchase of Hudbay’s 51% INTEREST IN BACK FORTY
MILESTONE PAYMENTS to Hudbay Minerals
AMOUNT
C$3 Million
C$2 Million
C$2 Million
C$2 Million
TIMELINE
Payable upon completion of financing tied to start of construction at Back FortyUp to 50% payable in Aquila shares
Payable 90 days after start of commercial production
Payable 270 days after start of commercial production
Payable 450 days after start of commercial production
First milestone payment due by January 20241% NSR was repurchased from Hudbay in April 2015 concurrent with Orion transaction
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