aquila resources inc. investor packet

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- Investor Packet June 2013 Image: Financial analysts tour of the Back Forty project- October 2011

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Page 1: Aquila Resources Inc. Investor Packet

-

Investor Packet

June 2013

Image: Financial analysts tour of the Back Forty project- October 2011

Page 2: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

LETTER FROM THE PRESIDENT

Dear Shareholders:

As you are aware our joint venture partner HudBay Minerals Inc. has

suspended development activities at the Back Forty project and

terminated the exploration alliance. While we are disappointed with

their decision to do so, the situation produces new opportunities for

Aquila as a result.

Aquila currently retains a 49% interest in the Back Forty project and

has certain rights to acquire HudBay's interest in the Project should

that be deemed in the interest of shareholders. Being that the Back

Forty has a completed Preliminary Economic Assessment (PEA) with

positive economic projections, exploration upside and growing

precious metals content, our 49% stake could become increasingly

valuable.

In spite of suspending other activities at Back Forty, the joint venture

released an updated NI 43-101 resource estimate in February that

incorporated the results of an additional 78 drill holes, many of which

encountered significant mineralization. The result was improved grades that can be used in the evaluation

of future economic studies.

HudBay was clear that work was suspended at Back Forty due to capital requirements at other projects

and current economic conditions. Accordingly, the high quality asset that the Back Forty has become over

the last few years remains as robust and economic today as it was yesterday. While the process of

strategically reviewing alternative options for development of Back Forty is just beginning, both sides

have agreed to work diligently to pursue what is best for our shareholders and many stakeholders.

As a result of the termination of the exploration alliance, Aquila now maintains a 100% interest in all three

former alliance projects. This further strengthens Aquila's position as an exploration leader in the Great

Lakes region of North America. High quality projects such as the Bend copper-gold deposit and Five Mile

Lake Zinc project are now 100% controlled, in conjunction with Aquila’s Reef gold project, to form a well-

rounded and highly prospective portfolio of assets.

Aquila still believes the unexplored and undeveloped nature of the Great Lakes area creates one of the

best areas in North America for new discoveries. Thanks to the dedication of our hard working team and

shareholders like you, Aquila plans to continue to advance these projects and build additional shareholder

value through exploration and discovery.

Sincerely,

Thomas O. Quigley

President and Chief Executive Officer

Page 3: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

CORPORATE PROFILE

Aquila Resources Inc. (TSX: AQA) (Frankfurt:

JM4A) is a mineral exploration Company

focused on the discovery and development of

high grade base and precious metal projects in

highly prospective regions of North America.

Aquila has established a leadership presence in

the Great Lakes region, a politically stable and

increasingly attractive investment opportunity,

through the acquisition and development of

multiple base and precious metal projects. This

includes a 49% interest in the gold and zinc Back

Forty Project as well as a growing portfolio of

100% controlled base and precious metal

projects. Leading the way is an experienced

management team that has identified significant

ore deposits over the last 30 years.

INVESTMENT HIGHLIGHTS

Exploring in highly prospective Great Lakes region of North America with world-class potential for

base and precious metal districts

Assembled strong portfolio of base and precious metal projects ranging from grass roots to advanced

stage

49% interest in the Back Forty project which contains NI 43-101 compliant resource estimate of

907,000 ounces gold, 11.31 million ounces silver, 963 million pounds zinc and 75.8 million pounds

copper; PEA completed in 2012

Exposing shareholders to high level of exploration upside through continued acquisition and

exploration of base and precious metal projects

Highly experienced management team with regional proprietary database and history of identifying

ore deposits

Operating in politically stable jurisdiction creating potential for long-term stability, growth and

shareholder value

2011 ACCOMPLISHMENTS

Acquisition of Bend copper-gold deposit and Reef gold project within potentially world-class

Penokean Volcanic belt

Over $16 million in exploration and project development expenditures at Back Forty project

Successful drill campaigns at Reef gold project and Peninsula gold project with multiple high grade

gold intercepts

Completion of US$2.2 million corporate financing

Page 4: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

GREAT LAKES REGION: WORLD-CLASS POTENTIAL

Aquila has established a leadership presence within the Great Lakes region of North America. The

company has assembled a strong portfolio of projects that are currently being explored and developed

within the region while aggressive acquisition continues.

Penokean Volcanic Belt Underexplored belt with district-scale potential that could potentially host

more than 150 million tonnes of mineralization

Midcontinent Rift System Underexplored geological rift that could potentially become a major

Copper-Nickel- PGE district

Surface Gossan At Back Forty

Drill Core From Bend Deposit

Drill Rig At Reef Gold Project

Page 5: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

BACK FORTY PROJECT

The Back Forty project is an advanced-staged exploration project

delineating a zinc and gold rich volcanogenic massive sulfide (VMS)

deposit located within the Penokean Volcanic Belt. Over the past 10

years, Aquila and various venture partners have spent more than $50

million exploring and advancing the Back Forty project.

As of July 3, 2012 HudBay suspended funding for the joint venture.

Both parties are now working together to assess various strategic

alternatives that will continue to advance the project and that are in

the best interests of shareholders and stakeholders. An updated

National Instrument (NI) 43-101 resource estimate that included an

additional 78 drill holes was released on February 4, 2013.

PROJECT HIGHLIGHTS

49% owned by Aquila and 51% owned by HudBay Minerals Inc.

(TSX: HBM; NYSE: HBM)

Located in Menominee County, Michigan USA 12 miles west of

the town of Stephenson

Gold and zinc-rich VMS deposit with over 120,000 meters of

drilling to date

Positive Preliminary Economic Assessment (PEA) completed in

2012 (included only 25% of ore body) and Net Present Value (8%

discount rate) calculated at $78 million

Updated resource estimate released in February 2013

Two-year environmental baseline studies completed

Excellent infrastructure in place including access to roads, rail,

water and electricity

PROJECT GEOLOGY

Mineralization at Back Forty consists of massive, semi massive, and stringer sulfide mineralization as well

as precious metal zones with sparse sulfides, developed within a highly altered sequence of rhyolite

breccias and pyroclastic rocks cut by dikes, sills and irregular intrusions of porphyritic dacite and

rhyodacite. Late mafic dikes and at least one dioritic to gabbroic intrusive intrude the felsic sequence.

Structurally, this rhyolite sequence and associated massive sulfide mineralization has been deformed into

an asymmetric, moderately southwest plunging anticlinal fold characterized by a gently dipping north limb,

and a steeply dipping and sheared south limb. Folding has produced an axial planar schistosity and

faulting has offset lithologies and created zones of weakness for younger intrusive rocks.

Altered host rocks form assemblages of quartz – sericite – pyrite throughout an extensive area

surrounding the known mineralization. The degree and extent of this alteration is evidence for a large and

long lived hydrothermal system and suggests the potential for additional mineralization in the area.

Page 6: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

RESOURCE ESTIMATE

The updated February 2013 National Instrument (NI) 43-101 technical report calculated 15.1 Mt of

Measured plus Indicated (M+I) and 2.3 Mt of Inferred resources. The updated M+I resource estimate

contains 987,236 ounces of gold, 11.91 million ounces of silver, 1.02 billion pounds of zinc, 74.3 million

pounds of lead and 110.4 million pounds of copper. An additional 155,885 ounces of gold, 1.99 million

ounces of silver, 113.3 million pounds of zinc, 17.2 million pounds of lead and 18.6 million pounds of

copper are included in inferred resources.

Category Tonnes Au (g/t) Ag (g/t) Cu (%) Pb (%) Zn (%)

Open Pit *

Measured 4,720,716 2.24 26.77 0.55 0.13 3.49

Indicated 4,926,783 1.90 18.30 0.14 0.21 1.49

Measured and Indicated 9,647,498 2.07 22.45 0.34 0.17 2.47

Inferred 152,488 2.76 34.56 0.19 0.39 2.86

Underground **

Measured 1,982,087 1.97 25.56 0.29 0.31 5.04

Indicated 3,504,462 1.96 27.78 0.33 0.32 3.57

Measured and Indicated 5,486,549 1.97 28.06 0.32 0.32 4.10

Inferred 2,184,246 2.03 25.96 0.37 0.33 2.15

Open Pit and Underground

Measured and Indicated 15,134,047 2.03 24.48 0.33 0.22 3.06

Inferred 2,336,734 2.07 26.53 0.36 0.33 2.20

EXPLORATION POTENTIAL

The limit of strong quartz-sericite-pyrite alteration in rhyolites has not been identified in either drilling or

surface exploration at Back Forty. Outcrops over half a kilometer to the southwest are altered and

mineralized.

Step out drill holes have shown that strongly altered host-rocks with anomalous zinc and gold

mineralization continue for at least 500 meters east of the known massive sulfide. Drilling in late 2010

intersected deep, high grade gold and zinc mineralization between 100 and 300 meters west-southwest

of previously modeled mineralization, indicating that mineralization continues at depth. Strong gravity

trends that coincide with the strike of massive sulfide remain to be tested. More than 10 geophysical

targets remain to be tested.

* Cut off values were determined for each of the metallurgical domains contained in the optimized open pit were based on NSR

values. Average cut-off value for the open pit resource contained within an optimized pit shell was US$27.75. See “Mineral

Resource Estimate Disclosure.”

** Cut off values were determined for each of the metallurgical domains based on NSR values. Average cut-off value for the

underground resources outside of the optimized pit shell was US$66.45. See “Mineral Resource Estimate Disclosure.”

Page 7: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

PRELIMINARY ECONOMIC ASSESSMENT

The April 2012 National Instrument (NI) 43-101 Preliminary Economic Assessment (PEA) outlines the

construction and operation of an estimated seven year open pit mining operation of approximately one

million tonnes per year.

The high grade open pit deposit provides substantial leverage to gold and zinc prices. Revenue by metal

is 48% gold and 26% zinc, 18% copper and 8% silver. Using the base case metal price assumptions

below, the project achieves payback of capital occurs in the third year of full production.

3-Year Historical Price Base Case

Gold US$ (oz) 1,332

Silver US$ (oz) 25.05

Copper US$ (oz) 3.44

Zinc US$ (oz) 0.94

Pre-tax Cashflow 211,794,000

NPV 8% 73,574,000

IRR 18.2%

The potential economic viability of the Back Forty deposit was evaluated using measured, indicated and

inferred mineral resources and a discounted pre-tax cash flow analysis. The mine plan evaluated in the

PEA assessed the mining of only the near surface portion of the resource by open pit methods.

Potential underground mining of deeper resources was not addressed in the PEA.

The PEA outlined the scope for the project and a summary of the key operating and cost parameters of

the project are as follows:

Proposed life of mine is approximately 7 years at a full production rate of 3,000 tonnes per day

Net payable gross revenue of $786.8 million is from copper and zinc concentrates and gold-silver

alloy dore

Average unit operating costs of $36.79 per tonne mined and processed over life of the project

Total life of mine capital of $272.3 million, includes $224.7 million for initial project capital required to

build the mine, site infrastructure, sulfide flotation and oxide leach plant and purchase of new mining

equipment to achieve commercial production

The project has a pre-tax cash flow of $211.8 million and a Net Present Value (8%) of $73.6 million,

18.2% Internal Rate of Return using 3 year historical metal prices

Over the Life of Mine (LOM), Back Forty is expected to produce 77,200 tonnes of copper concentrate,

323,500 tonnes of zinc concentrate and 295,300 ounces of gold and 2,561,700 ounces of silver

contained in gold-silver alloy dore product and within the copper concentrate

Page 8: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

REEF GOLD PROJECT

The Reef Gold project is located approximately 99 miles west of the Back Forty project. The project is

100% owned by Aquila and has the potential to host a gold deposit amenable to open pit operations.

Aquila has completed over 4,500 meters of core drilling since acquiring the project and is working towards

a NI 43-101 resource estimate.

Located in Marathon County Wisconsin, USA in the Penokean VMS Belt

Project was focus of exploration by Noranda Exploration in 1970’s

4,500 meters of core drilling completed by Aquila to date; Phase III drill program planned

Noranda calculated historic resource estimate (non 43-101 compliant) of 119,000 contained gold

ounces (454,600 tonnes @ 10.6 g/t)

Resource extends from surface to depth of 450 feet and is open in all directions

Project is potentially amendable to low cost, open pit mining

2011 Drilling Program At Reef

Page 9: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

BEND COPPER-GOLD DEPOSIT

The Bend copper-gold deposit is 100% controlled by Aquila Resources. Exploration in the 1990's

delineated a non 43-101 compliant resource estimate of greater than three million tonnes of copper, gold

and silver mineralization. Since acquiring the project in 2011, almost 6,000 meters of core drilling have

been completed and development of a 43-101 compliant mineral resource continues. Mineralization

remains open in all directions. Located in northern Taylor County Wisconsin, USA in the Penokean

Volcanic belt

Approximately 35 miles southeast from former producing Flambeau mine

Contiguous land block covering 5,560 acres within the Chequamegon National Forest on both private

and federal lands

Copper and gold-rich volcanogenic massive sulfide (VMS) deposit with over 14,000 meters of

historical drilling

Historical resource estimates include (non 43-101 compliant):

3 million tonnes grading 2.4% copper, 1.4 g/t gold and 13.7 g/t silver in copper zone

1.23 million tonnes grading 4.7 g/t gold and .31% copper in gold zone

Historic drill core verified for geological characteristics and mineralized content

5,800 meter drill program completed in winter 2011; additional program scheduled for 2012

DRILL INTERCEPT HIGHLIGHTS

2.66 meters of 2.85% copper in B12-01

29.30 meters of 1.05 g/t gold in B12-02

Including 3.24 meters of 3.15 g/t gold

6.29 meters of 4.26 g/t gold in B12-03

Including 6.29 meters of 4.26 g/t gold

74.5 meters of 1.04 g/t gold in B12-04

Including 9 meters of 2.27 g/t gold

71.68 meters of 1.68 g/t gold in B12-06

Including 26.55 meters of 0.54% copper in B12-06

And 18.4 meters of 5.25 g/t gold

Including 2.9 meters of 27.06 g/t gold

18.4 meters of 5.25 g/t gold in B12-06

3.53 meters of 3.56 g/t gold in B12-07A

63.06 meters of 1.32 g/t gold in B12-08

Including 5.41 meters of 6.34 g/t gold

77.36 meters of 0.67 g/t gold in B12-09

Including 6.44 meters of 0.54% copper

And 4.17 meters of 2.06 g/t gold

34 meters of 1.02 g/t gold in B12-10

Including 5.5 meters of 2.43 g/t gold

37.01 meters of 1.06 g/t gold in B12-11

Including 7.55 meters of 2.05 g/t gold

Page 10: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

OTHER PROJECTS

FIVE MILE LAKE ZINC PROJECT

The Five Mile Lake project is located in St. Louis County, Minnesota approximately 10 kilometers

southwest of Ely, Minnesota. Limited core drilling by Newmont Exploration (NYSE: NEM) and Teck

Resources Ltd. (NYSE: TCK) have produced encouraging results from large geochemical anomalies.

Located 10 kilometers southwest of Ely, Minnesota in the Vermillion District

Contiguous land block covering 4,267 acres

445-line kilometer VTEM survey completed in 2011 revealed number of EM anomalies

Widespread alteration, typical of that associated with base metal deposits in the Noranda and Snow

Lake camps, is associated with mineralization at Five mile

Four diamond holes drilled in 1994 by Teck Resources Ltd. (NYSE: TCK)

STURGEON FALLS SILL PROJECT

Located in northern Menominee County Michigan, USA

Approximately 19 miles north of Back Forty project

Host ultramafic rock with favorable chemistry to host nickel/copper sulfides

Recently completed 1,470-line kilometer VTEM survey that identified multiple drill targets

ROYAL VINDICATOR PROJECT

Located in Haralson County Georgia, USA in the Carolina Slate belt and 100% owned

Land package covers 600 contiguous acres with single private surface and mineral owner

Consistent gold values across horizon suggest potential for multiple high-grade ore shoots

Preliminary geologic mapping and geochemical sampling completed in 2010

MOOSE PASTURE PROSPECT

Located in Anson County North Carolina, USA in the Carolina Slate belt and 100% owned

Land package covers 917 acres and 5 private landowners

Historic gold-in-soil anomaly that disappears beneath the Cretaceous coastal plain

Preliminary geological mapping, geochemical sampling and stream sampling program completed in

2012

Page 11: Aquila Resources Inc. Investor Packet

TSX: AQA / FKT: JM4A

LEADERSHIP TEAM

PETER M.D. BRADSHAW, CHAIRMAN

Dr. Bradshaw, P. Eng., is President, CEO and Director of First Point Minerals Corp. and has 40 years of

international exploration experience in over 30 countries with Barringer Research, Placer Dome and

Orvana Minerals. Dr. Bradshaw has been directly involved with the discovery, evaluation and

advancement of a number of properties. He is also the co-founder and Chairman of the Mineral Deposit

Research Unit, University of British Columbia.

THOMAS O. QUIGLEY, PRESIDENT, DIRECTOR

Mr. Quigley, a Professional Geologist, obtained a Master’s of Science degree in Geology from Queen’s

University in 1990 from the Mineral Exploration Program (QMinEx). He also attended the University of

Minnesota, obtaining a Master’s of Science degree in Biology in 1978. Mr. Quigley has extensive

exploration experience as an industry and consulting geologist throughout North America. He has been

President of Minerals Processing Corporation since its inception in 1995, and President of Aquila

Resources Inc. since 2004.

BARRY HILDRED, CEO

Mr. Hildred is a seasoned executive and successful entrepreneur with varied business leadership

experience. Previously, Mr. Hildred was founder of The Equicom Group, a company specializing in

strategic financial and investor relations services for Canadian public companies. In 2007, The Equicom

Group was acquired by the TMX Group where. Mr. Hildred is currently Chairman of Aldridge Minerals

Inc., a development stage mining company focused on advancing its Yenipazar gold and polymetallic

VMS deposit in Turkey. He is also the Treasurer and a Director of The Children’s Aid Foundation.

ROBIN DUNBAR, CFO, DIRECTOR

Mr. Dunbar is responsible for corporate development and finance. He obtained a Masters of Business

Administration from Dalhousie University. Mr. Dunbar is based in the Toronto office and is also the

President of Mustang Minerals Corp. and has been a Director since its inception in 1996. Prior to that, Mr.

Dunbar was Vice-President, Corporate Banking of Dai-Ichi Kangyo Bank (Canada).

EDWARD MUNDEN, DIRECTOR

Mr. Munden is a Director of Capital House Corporation, a private investment company that provides

and/or arranges funding and managerial assistance to a portfolio of technology software, energy and

mining companies. Mr. Munden is a professional engineer and holds a Bachelor of Science degree in

geological engineering and a Masters of Business Administration from Queen's University.

WILLIAM J. WEST, DIRECTOR

Mr. West has been the President of West Minerals Inc. of Warren, OH, since 1995. Prior to that, he was

Vice President of Oglebay Norton. Mr. West received his BA in Geology from the University of Miami and

his Masters of Business Administration from Case Western Reserve University, Cleveland, Ohio.

Page 12: Aquila Resources Inc. Investor Packet