Back Forty Admin, Author at Back Forty Mine

AQUILA RESOURCES ENTERS INTO ARRANGEMENT AGREEMENT WITH GOLD RESOURCE CORPORATION

Highlights

Aquila Resources, Inc. has entered into a definitive arrangement agreement with Gold Resource Corporation (GORO):
- Provision for the acquisition by GORO of all the issued and outstanding common shares of Aquila; and
- Upon closing of the Transaction, the existing GORO and Aquila shareholders will own approximately 85.1% and 14.9%, respectively, of the combined company on a fully diluted basis.

TORONTO–(BUSINESS WIRE)–

Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) is pleased to announce that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Gold Resource Corporation (“GORO”) (NYSE American: GORO) providing for the acquisition by GORO of all the issued and outstanding common shares of Aquila by way of a plan of arrangement under the Business Corporations Act (Ontario) (the “Transaction”).

As announced by Aquila on September 7, 2021, pursuant to the Transaction GORO will, through a wholly-owned subsidiary, acquire all the issued and outstanding Aquila shares for 0.0399 of a GORO share per Aquila share (the “Exchange Ratio”). Based upon the 20-day volume-weighted average price (“VWAP”) of GORO’s shares on the NYSE American stock exchange on September 3, 2021, being the last trading day prior to the date of the announcement of the Transaction, the Exchange Ratio represents a 29% premium to the 20-day VWAP of Aquila’s shares on the Toronto Stock Exchange as of such date.

Upon closing of the Transaction, the existing GORO and Aquila shareholders will own approximately 85.1% and 14.9%, respectively, of the combined company on a fully diluted basis.

Barry Hildred, Executive Chair of Aquila, commented, “We believe strongly that the Transaction outlined in the Arrangement Agreement provides significant benefits to Aquila shareholders. GORO has a strong balance sheet, it owns a consistently profitable mine in the Americas, and it has a highly accomplished technical and operating team. As such, this Transaction materially de-risks the financing and development of the Back Forty Project for the benefit of our stakeholders.”

Guy Le Bel, President & CEO of Aquila, added, “The new Gold Resource Corporation will be a multi-jurisdictional, diversified precious and base metal producer with an attractive growth profile underpinned by the Back Forty Project. We look forward to closing the Transaction in short order.”

Strategic Rationale for the Transaction

As previously announced on September 7, 2021, the benefits of the Transaction to GORO and Aquila shareholders include the following:

Enhanced Market Presence and Re-Rating Potential. GORO currently benefits from inclusion in the VanEck Junior Gold Miners ETF (the “GDXJ”) and from an average daily trading volume of approximately 1 million shares, trailing three months. The Transaction is intended to result in the Back Forty Project being placed into production on a more accelerated basis, funded by cash flow generation, thus elevating the combined company to intermediate producer status. Following the completion of the Transaction, GORO is expected to continue to be included in the GDXJ and to benefit from an enhanced capital markets profile in the United States and Canada, as well as increased trading liquidity and broadened appeal to global index, resource, and generalist investors. This offers the potential for a re-rating to a multiple more in line with other intermediate gold producers.

Enhanced Project and Jurisdictional Diversification. Each of GORO and Aquila is currently a single-asset, single-jurisdiction company. Through the Transaction, GORO and Aquila shareholders will have the opportunity to participate in the ongoing growth of a multi-jurisdictional, diversified precious and base metal producer with exposure to gold, silver, zinc, copper and lead through GORO’s producing Don David Gold Mine in Oaxaca, Mexico and Aquila’s Back Forty Project in Menominee County, Michigan.

Growth Profile and Financial Strength of Combined Company. The combined company is expected to benefit from a peer leading growth profile, a robust balance sheet with no debt and cash of US$30.2 million at June 30, 2021, free cash flow generation from its Don David Gold Mine and the synergies that generally accrue from scale in the areas of general and administrative expenses, from less duplication of salaries, wages and other public company expenses, improved concentrate sales and marketing and supply chain efficiencies.

Materially De-Risks the Financing and Development of the Back Forty Project for Aquila Shareholders. Benefitting from the free cash flow generated by the Don David Gold Mine, Aquila shareholders will not be diluted by a near-term equity financing that would otherwise be required to advance the Back Forty Project through the final stages of permitting and engineering. GORO is supportive of Aquila’s project development plans including continuing working towards an optimized Feasibility Study. The combined Company’s position of financial strength is also expected to result in an improved ability to access required additional financing to fund the Back Forty Project’s construction capital expenditures.

All-Stock Transaction Enables Aquila Shareholders to Maintain Upside Exposure. Through their ownership in the combined company, Aquila shareholders will maintain exposure to the value that is expected to be unlocked as the Back Forty Project is advanced towards construction and production. Despite being a proven gold producer, GORO currently trades at only approximately 2.5 times free cash flow from operations. Aquila shareholders will participate in the anticipated re-rating of GORO from a one mine company in Mexico to a two-mine company with jurisdictional diversification.

Experienced Management Team. The combined company will benefit from GORO’s and Aquila’s technical and operational teams’ expertise in polymetallic open pit and underground mines. The GORO executive team has a demonstrated record of success in developing and operating mining projects in the Americas.

Demonstrated Consistent Dividend History. Post-Transaction, GORO intends to continue to pay dividends in accordance with its past practice. GORO has made consistent dividend payments to its investors for more than ten years.

Transaction Summary

The Transaction will require the approval of (i) 66⅔ percent of the votes cast by Aquila shareholders and (ii) a simple majority of the votes cast by the minority shareholders (excluding shareholders whose votes are required to be excluded pursuant to Multilateral Instrument 61 – 101) at a special meeting of shareholders (the “Aquila Shareholder Meeting”). The Aquila Shareholder Meeting is scheduled to be held on November 17, 2021. The Transaction is also subject to approval by the Ontario Superior Court of Justice (Commercial List) and applicable stock exchange approvals. The Transaction does not require the approval of GORO’s shareholders.

In addition to shareholder, court and regulatory approvals, the Transaction is also subject to the satisfaction of certain other closing conditions that are customary for a transaction of this nature, and each of GORO and Aquila has provided appropriate interim period covenants regarding the operation of its business in the ordinary course. The Arrangement Agreement includes customary deal protection provisions pursuant to which Aquila has agreed not to solicit any other acquisition proposal (subject to customary fiduciary out rights), has agreed to grant GORO the right to match any superior proposal, and will pay a termination fee of US$1,000,000 to GORO if the Arrangement Agreement is terminated in certain circumstances.

Details of the Transaction and the Arrangement Agreement will be set out in the management information circular to be prepared and mailed to Aquila shareholders in connection with the Aquila Shareholder Meeting.

Subject to all conditions precedent to completion of the Transaction being met, the Transaction is expected to close in late November 2021. In connection with the closing of the Transaction, Aquila will apply to have its shares delisted from the Toronto Stock Exchange.

Support for the Transaction from Key Aquila Stakeholders

Each of Orion Mine Finance and Hudbay Minerals Inc., which hold 28.3% and 10.4%, respectively, of the issued and outstanding Aquila shares, has entered into a voting support agreement with GORO pursuant to which they have agreed to vote their Aquila shares in favour of the Transaction. In addition, all of the directors and officers of Aquila holding approximately 1.9% of the issued and outstanding Aquila shares in aggregate have also executed a voting support agreement.

Osisko Bermuda Limited, which is a wholly-owned subsidiary of Osisko Gold Royalties Ltd, and a party to gold and silver stream agreements with Aquila relating to the Back Forty Project, has also reiterated that it considers GORO to be an approved purchaser under those agreements, and that it is supportive of the Transaction.

Board Approvals

The Arrangement Agreement has been unanimously approved by the boards of directors of both GORO and Aquila. The Aquila board’s approval of the Arrangement Agreement was based in part on the unanimous recommendation of a special committee of independent directors of Aquila which was appointed to consider the Transaction. The board of Aquila has received an opinion from PI Financial Corp. that based upon and subject to the assumptions, limitations, and qualifications set forth therein, the consideration to be received by Aquila shareholders pursuant to the Transaction is fair, from a financial point of view, to Aquila shareholders.

Advisors

Goodmans LLP is Aquila’s Canadian legal advisor and Scotiabank and PI Financial Corp. are Aquila’s financial advisors.

ABOUT AQUILA

Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) is a development‐stage company focused on high grade polymetallic projects in the Upper Midwest, USA. Aquila’s experienced management team is currently advancing pre-construction activities for its flagship 100%‐owned gold and zinc‐rich Back Forty Project in Michigan.

The Back Forty Project is a volcanogenic massive sulfide deposit with open pit and underground potential located along the mineral‐rich Penokean Volcanic Belt in Michigan’s Upper Peninsula. Back Forty contains approximately 1.1 million ounces of gold and 1.2 billion pounds of zinc in the Measured & Indicated Mineral Resource classifications, with additional exploration upside. An optimized Feasibility Study for the Project is underway.

Additional disclosure of Aquila’s financial statements, technical reports, material change reports, news releases and other information can be obtained at www.aquilaresources.com or on SEDAR at www.sedar.com.

ABOUT GOLD RESOURCE CORPORATION

Gold Resource Corporation is a gold and silver producer, developer, and explorer with its operations centered on the Don David Gold Mine in Oaxaca, Mexico. Under the direction of a new board and senior leadership, the Company focus is to unlock the significant upside potential of its existing infrastructure and large land position surrounding the mine, to close the acquisition of Aquila Resources Inc., and to develop the Back Forty Project in Michigan, USA. For more information, please visit GRC’s website, located at www.goldresourcecorp.com and read the Company’s 10-K for an understanding of the risk factors involved.

Cautionary statement regarding forward-looking information

This press release may contain certain forward-looking statements. 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”. In particular, this news release contains forward-looking information pertaining to the following: statements regarding the Transaction, including with respect to the benefits of the Transaction and expectations regarding the combined company (including its growth profile and resource profile, the development of the Back Forty Project, cash flow generation from the Don David Gold Mine, and its market presence and re-rating potential and expectations regarding the payment of dividends); the timing of key Transaction milestones and closing; the ability of GORO and Aquila to satisfy the conditions to and to complete the Transaction; and expectations regarding the impact of the Transaction on GORO and Aquila including in respect of anticipated financial and operating results, strategy and business, and on stakeholders in general. 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, including but not limited to: the satisfaction of the conditions precedent to the closing of the Transaction (including the obtaining of all shareholder, court, and regulatory approvals); risks associated with the Transaction and acquisitions generally; the Arrangement Agreement may be terminated in certain circumstances; Aquila will incur costs even if the Transaction is not completed; all necessary approvals and consents may not be obtained; uncertainty regarding the ability of the parties to complete all Transaction milestones on the intended timing; inherent risks of mining exploration, development and production operations; economic factors affecting the Company and/or GORO; the integration of the businesses of the Company and GORO; political conditions and the regulatory environment in the United States and Mexico; and the scope, duration, and impact of the COVID-19 pandemic on the Company and GORO as well as the scope, duration and impact of government action aimed at mitigating the pandemic; and other related risks and uncertainties, including, but not limited to, risks and uncertainties disclosed in Aquila’s filings on its website at www.aquilaresources.com and on SEDAR at www.sedar.com. Aquila undertakes no 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.

Guy Le Bel, President & CEO
Tel: 450.582.6789
glebel@aquilaresources.com

David Carew, VP Corporate Development & Investor Relations
Tel: 647.943.5677
dcarew@aquilaresources.com

Source: Aquila Resources Inc.

by Back Forty Admin

AQUILA RESOURCES ANNOUNCES CLOSING OF BEND AND REEF PROPERTY SALE

Highlights

Sale of Bend and Reef properties for a total consideration of $7,000,000 CAD:
- Upfront cash consideration of $2.1 million, $1 million was advanced as a deposit in June 2021 and the remaining $1.1 million was paid at closing; and
- A non-interest bearing promissory note of GL in the principal amount of $4.9 million shall become due and payable by GL on the earlier of: (i) December 31, 2022 or (ii) immediately prior to the completion of an initial public offering or other transaction that results in the shares of GL (or of a successor entity) being listed on a stock exchange as freely tradeable securities.

TORONTO–(BUSINESS WIRE)–

Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) is pleased to announce that it has closed the previously announced transaction (the “Transaction”) to sell its Bend and Reef properties in Wisconsin to Green Light Metals Inc. (“GL”). All dollar amounts are reported in Canadian dollars.

Total consideration of $7,000,000 payable to Aquila consists of:

Upfront cash consideration of $2.1 million, of which $1 million was advanced as a deposit upon the execution of the letter of intent with respect to the Transaction in June 2021 and the remaining $1.1 million was paid at closing; and
A non-interest bearing promissory note (“Promissory Note”) of GL in the principal amount of $4.9 million. The Promissory Note shall become due and payable by GL on the earlier of: (i) December 31, 2022 (the “Maturity Date”); or (ii) immediately prior to the completion of an initial public offering or other transaction that results in the shares of GL (or of a successor entity) being listed on a stock exchange as freely tradeable securities (a “Go-Public Transaction”).

If the Promissory Note becomes due and payable on a Go-Public Transaction, then the Promissory Note shall be satisfied by way of:

$900,000 in cash; and
The issuance of that number of GL shares equal to $4 million divided by the price per share at which GL shares are issued in the Go-Public Transaction financing.

If GL does not complete a Go-Public Transaction prior to the Maturity Date, then the Promissory Note shall be satisfied by way of the issuance of that number of GL shares equal to $4.9 million divided by the price per share at which GL issued shares in its most recently completed financing prior to the Maturity Date.

In connection with the Transaction, GL and Aquila also entered into an investor rights agreement pursuant to which, among other things, Aquila received the right to participate in future equity financings completed by GL as well as nomination rights in respect of one member of GL’s board of directors, in each case subject to Aquila continuing to maintain a specified ongoing ownership interest in GL.

Barry Hildred, Aquila’s Executive Chair, is an investor in GL and Chair of the GL board of directors. As such, Mr. Hildred did not participate in the Transaction on behalf of Aquila and recused himself from voting on the Transaction as a member of Aquila’s board of directors.

ABOUT AQUILA

Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) is a development-stage company focused on high grade polymetallic projects in the Upper Midwest, USA. Aquila’s experienced management team is advancing pre-construction activities for its flagship 100%‐owned gold and zinc-rich Back Forty Project in Michigan.

The Back Forty Project is a volcanogenic massive sulfide deposit with open pit and underground potential located along the mineral-rich Penokean Volcanic Belt in Michigan’s Upper Peninsula. Back Forty contains approximately 1.1 million ounces of gold and 1.2 billion pounds of zinc in the Measured & Indicated Mineral Resource classifications, with additional exploration upside. An optimized Feasibility Study for the Project is underway.

Cautionary statement regarding forward-looking information

Guy Le Bel, President & CEO
Tel: 450.582.6789
glebel@aquilaresources.com

David Carew, VP Corporate Development & Investor Relations
Tel: 647.943.5677
dcarew@aquilaresources.com

Source: Aquila Resources Inc.

by Back Forty Admin

AQUILA RESOURCES TO BE ACQUIRED BY GOLD RESOURCE CORPORATION TO FORM DIVERSIFIED NORTH AMERICAN PRECIOUS AND BASE METALS PRODUCER

Highlights

Binding Letter of Agreement with Gold Resource Corporation proposing acquisition of Aquila Resources’ issued and outstanding shares:
- GORO will acquire all the issued and outstanding Aquila shares for 0.0399 of a GORO share per Aquila share; and
- Upon closing of the Transaction, the existing GORO and Aquila shareholders will own approximately 85.1% and 14.9%, respectively, of the combined company on a fully diluted basis.

TORONTO–(BUSINESS WIRE)–

Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) is pleased to announce that it has entered into a binding letter agreement (the “Letter Agreement”) with Gold Resource Corporation (“GORO”) (NYSE American: GORO) setting out certain key terms of a proposed acquisition by GORO of all the issued and outstanding common shares of Aquila by way of a plan of arrangement under the Business Corporations Act (Ontario) (the “Transaction”).

Pursuant to the Transaction, which is subject to the entering into of a definitive arrangement agreement (the “Arrangement Agreement”), GORO will acquire all the issued and outstanding Aquila shares for 0.0399 of a GORO share per Aquila share (the “Exchange Ratio”). Based upon the 20-day volume-weighted average price (“VWAP”) of GORO’s shares on the NYSE American stock exchange on September 3, 2021, being the last trading day prior to the date of the Letter Agreement, the Exchange Ratio represents a 29% premium to the 20-day VWAP of Aquila’s shares on the Toronto Stock Exchange as of such date. The Exchange Ratio represents consideration of C$0.09 per Aquila share (the “Per Share Price”), reflecting a premium of 12.5%, based upon the closing prices of the Aquila shares and the GORO shares on September 3, 2021. The Per Share Price implies an aggregate acquisition price for 100% of the outstanding Aquila shares of approximately C$30.9 million.

Upon closing of the Transaction, the existing GORO and Aquila shareholders will own approximately 85.1% and 14.9%, respectively, of the combined company on a fully diluted basis.

Strategic Rationale for the Transaction

Barry Hildred, Executive Chair, commented, “We believe strongly that this Transaction provides substantial immediate and long-term benefits to Aquila shareholders. The business combination with GORO, a proven operator of a cash flowing mine in the Americas, materially de-risks the financing and development of the Back Forty Project. The Transaction also allows our shareholders to maintain exposure to the value that is created as Back Forty advances towards production.”

Guy Le Bel, President & CEO, added, “We share Allen’s vision for the combined company which, as a growth-oriented, multi-jurisdictional, diversified precious and base metal producer, will be well-positioned to create value for all shareholders.”

Commenting on the entering into of the Letter Agreement, Allen Palmiere, President and Chief Executive Officer of GORO, said: “This proposed business combination offers an attractive opportunity to the shareholders of both GORO and Aquila. By combining our complementary assets, we will enhance our mineral inventory and add jurisdictional diversification to our project portfolio. The combined company will become a new intermediate gold producer following the commencement of production at Aquila’s Back Forty Project, and its shareholders can look forward to the potential of a company that is expected to benefit from a peer leading growth profile, underpinned by a healthy balance sheet and strong cash flow capable of supporting the development of the Back Forty Project. We look forward to entering into the Arrangement Agreement with Aquila and successfully completing the Transaction.”

Further details of the benefits of the Transaction to Aquila and GORO shareholders include the following:

Immediate and Significant Premium to Aquila Shareholders. Based on the 20-day VWAPs of the GORO shares and the Aquila shares, the Transaction offers an immediate and significant premium to Aquila’s shareholders of 29%.

Enhanced Market Presence and Re-Rating Potential. GORO currently benefits from inclusion in the VanEck Junior Gold Miners ETF (the “GDXJ”) and from an average daily trading volume of approximately 1 million shares, trailing three months. The Transaction is intended to result in the Back Forty Project being placed into production on a more accelerated basis, funded by cash flow generation, thus elevating the combined company to intermediate producer status. Following the completion of the Transaction, GORO is expected to continue to be included in the GDXJ and to benefit from an enhanced capital markets profile in the United States and Canada, as well as increased trading liquidity and broadened appeal to global index, resource, and generalist investors. This offers the potential for a re-rating to a multiple more in line with other intermediate gold producers.

Enhanced Project and Jurisdictional Diversification. Each of GORO and Aquila is currently a single-asset, single-jurisdiction company. Through the Transaction, GORO and Aquila shareholders will have the opportunity to participate in the ongoing growth of a multi-jurisdictional, diversified precious and base metal producer with exposure to gold, silver, zinc, copper and lead through GORO’s producing Don David Gold Mine in Oaxaca, Mexico and Aquila’s Back Forty Project in Menominee County, Michigan. It is anticipated that Aquila’s previously announced sale of its Bend and Reef exploration properties will be completed prior to the completion of the Transaction.

Growth Profile and Financial Strength of Combined Company. The combined company is expected to benefit from a peer leading growth profile, a robust balance sheet with no debt and cash of US$30.2 million at June 30, 2021, free cash flow generation from its Don David Gold Mine and the synergies that generally accrue from scale in the areas of general and administrative expenses, from less duplication of salaries, wages and other public company expenses, improved concentrate sales and marketing and supply chain efficiencies.

Materially De-Risks the Financing and Development of the Back Forty Project for Aquila Shareholders. Benefitting from the free cash flow generated by the Don David Gold Mine, Aquila shareholders will not be diluted by a near-term equity financing that would otherwise be required to advance the Back Forty Project through the final stages of permitting and engineering. GORO is supportive of Aquila’s project development plans including continuing working towards an optimized Feasibility Study. The combined Company’s position of financial strength is also expected to result in an improved ability to access required additional financing to fund the Back Forty Project’s construction capital expenditures.

All-Stock Transaction Enables Aquila Shareholders to Maintain Upside Exposure. Through their ownership in the combined company, Aquila shareholders will maintain exposure to the value that is expected to be unlocked as the Back Forty Project is advanced towards construction and production. Despite being a proven gold producer, GORO currently trades at only approximately 2.5 times free cash flow from operations. Aquila shareholders will participate in the anticipated re-rating of GORO from a one mine company in Mexico to a two-mine company with jurisdictional diversification.

Experienced Management Team. The combined company will benefit from GORO’s and Aquila’s technical and operational teams’ expertise in polymetallic open pit and underground mines. The GORO executive team has a demonstrated record of success in developing and operating mining projects in the Americas.

Demonstrated Consistent Dividend History. Post-Transaction, GORO intends to continue to pay dividends in accordance with its past practice. GORO has made consistent dividend payments to its investors for more than ten years.

Support for the Transaction from Key Aquila Stakeholders

Aquila’s largest shareholder, Orion Mine Finance (“Orion”), which holds 28.6% of the issued and outstanding Aquila shares, has confirmed to GORO that it is supportive of the Transaction. Subject to its review of the proposed Arrangement Agreement, Orion has indicated its intention to enter into a voting support agreement in favor of the Transaction, on terms to be agreed between GORO and Orion, contemporaneously with the execution of the Arrangement Agreement. The Letter Agreement also provides for the delivery of voting support agreements by each of Aquila’s directors and officers at such time (together with the aforementioned Orion agreement, the “Support Agreements”).

Osisko Bermuda Limited, a wholly-owned subsidiary of Osisko Gold Royalties and which is a party to gold and silver stream agreements with Aquila relating to the Back Forty Project, has also confirmed that it considers GORO to be an approved purchaser under those agreements, and that it is supportive of the proposed Transaction.

Board Approvals

The Letter Agreement has been unanimously approved by the boards of directors of both GORO and Aquila. The Aquila board’s approval of the Letter Agreement was based in part on the unanimous recommendation of a special committee of independent directors of Aquila which was appointed to consider the Transaction.

Arrangement Agreement and Transaction Approvals

The Letter Agreement provides for a period of up to 45 days of exclusive negotiations by Aquila with GORO (the “Exclusivity Period”) with a view to entering into a mutually acceptable Arrangement Agreement, and provides that the Arrangement Agreement will reflect the Exchange Ratio and other economic terms set out in the Letter Agreement. The Arrangement Agreement will contain customary representations and warranties, covenants, closing conditions and deal protection mechanisms for a transaction of this nature, including a break fee payable by Aquila to GORO equal to 4.0% of the total Transaction value in the event of termination of the Arrangement Agreement under certain circumstances.

The entering into of the Arrangement Agreement is subject to certain conditions set out in the Letter Agreement, including (i) the satisfaction of each of GORO and Aquila with its respective ongoing due diligence investigations, (ii) the receipt by Aquila’s board of directors of an opinion that the consideration proposed to be received by the Aquila shareholders pursuant to the Transaction is fair, from a financial point of view, to the Aquila shareholders, (iii) the approval of the Arrangement Agreement by the boards of directors of each of GORO and Aquila, and (iv) the entering into of the Support Agreements and certain other arrangements with third parties under certain of Aquila’s material contracts on a basis acceptable to GORO. The Letter Agreement also provides that if the Arrangement Agreement is not entered into, Aquila or GORO will reimburse the other party for certain of its expenses incurred in connection with the proposed Transaction depending on the circumstances.

The Transaction will require the approval of at least 66⅔% of the votes cast in person or by proxy at a special meeting of Aquila shareholders. The Transaction is also subject to Ontario court approval and the receipt of applicable regulatory approvals. The parties anticipate that the Aquila special shareholder meeting and the closing of the Transaction will take place in the fourth quarter of 2021. The Transaction will not require the approval of GORO’s shareholders.

Advisors

Goodmans LLP is Aquila’s Canadian legal advisor and Scotiabank is Aquila’s financial advisor.

Conference Call and Live Webcast

Management of GORO will host a conference call and live webcast at 10:00 a.m. Toronto time / 8:00 a.m. Denver time on September 8, 2021 to discuss the Transaction. Please use the following information to access the call and/or webcast:

There are two ways to join the conference call.

To join the conference via webcast, please click on the following link:
https://www.webcaster4.com/Webcast/Page/2361/42777.

To join the call via telephone please use one of the following dial-in details:
Participant Numbers:
Toll Free: 844-602-0380
International: 862-298-0970

Replay Number: Toll Free: 877-481-4010
International: 919-882-2331
Replay Passcode: 42777

Please connect to the conference call at least 10 minutes prior to the start time using one of the connection options listed above.

ABOUT AQUILA

ABOUT GOLD RESOURCE CORPORATION

Gold Resource Corporation is a gold and silver producer, developer, and explorer with its operations centered on the Don David Gold Mine in Oaxaca, Mexico. Under the direction of a new board and senior leadership, the company’s focus is to unlock the significant upside potential of its existing infrastructure and large land position surrounding the mine. For more information, please visit GORO’s website, located at www.goldresourcecorp.com and read the company’s Form 10-K for an understanding of the risk factors associated with its business.

Cautionary statement regarding forward-looking information

This press release may contain certain forward-looking statements. 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”. In particular, this news release contains forward-looking information pertaining to the following: statements regarding the proposed Transaction (including with respect to the satisfaction of conditions to the entering into of the Arrangement Agreement, the terms and conditions of the Arrangement Agreement and Support Agreements, and the receipt of shareholder, court and regulatory approvals for the Transaction); the potential strategic benefits of the Transaction and expectations regarding the combined company (including its growth profile and resource profile, the development of the Back Forty Project, cash flow generation from the Don David Gold Mine, and its market presence and re-rating potential and expectations regarding the payment of dividends); and timing expectations for all of the foregoing. 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, including but not limited to: the ability of the Company and GORO to negotiate the Arrangement Agreement and the satisfaction of the conditions precedent to the execution of the Arrangement Agreement (including the satisfaction of each of GORO and Aquila with their respective due diligence investigations, the approval of the Arrangement Agreement by the boards of directors of each of GORO and Aquila, and the execution of the Support Agreements); the satisfaction of all conditions precedent to closing the Transaction (including the obtaining of all shareholder, court, and regulatory approvals); inherent risks of mining exploration, development and production operations; economic factors affecting the Company and/or GORO; the integration of the businesses of the Company and GORO; political conditions and the regulatory environment in the United States and Mexico; and the scope, duration, and impact of the COVID-19 pandemic on the Company and GORO as well as the scope, duration and impact of government action aimed at mitigating the pandemic; and other related risks and uncertainties, including, but not limited to, risks and uncertainties disclosed in Aquila’s filings on its website at www.aquilaresources.com and on SEDAR at www.sedar.com. Aquila undertakes no 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.

Guy Le Bel, President & CEO
Tel: 450.582.6789
glebel@aquilaresources.com

David Carew, VP Corporate Development & Investor Relations
Tel: 647.943.5677
dcarew@aquilaresources.com

Source: Aquila Resources Inc.

by Back Forty Admin

AQUILA RESOURCES ANNOUNCES LETTER OF INTENT FOR SALE OF ITS BEND AND REEF PROPERTIES

Highlights

Total consideration of $7,000,000 payable to Aquila will consist of:
- Cash consideration of $3,000,000, of which $1,000,000 will be advanced immediately as a deposit (the “Deposit”); and
- Shares in Newco with an estimated value on completion of the go-public transaction of $4,000,000.

TORONTO–(BUSINESS WIRE)–

Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) is pleased to announce that it has entered into a non-binding letter of intent (the “LOI”) to sell its interest in the Bend and Reef exploration properties located in Wisconsin, USA to a private company (“Newco”) (the “Transaction”). Subject to necessary approvals, Newco intends to list on the TSX Venture Exchange (the “TSX-V”) concurrent with the closing of the Transaction. All dollar amounts are reported in Canadian dollars.

Total consideration of $7,000,000 payable to Aquila will consist of:

Cash consideration of $3,000,000, of which $1,000,000 will be advanced immediately as a deposit (the “Deposit”); and
Shares in Newco with an estimated value on completion of the go-public transaction of $4,000,000.

Guy Le Bel, President & CEO of Aquila, commented, “We are very pleased to have reached an agreement in principle to monetize our non-core Wisconsin assets. The Transaction provides Aquila with immediate cash without diluting Aquila shareholders. It also provides us with meaningful upside exposure to an exciting new exploration focused company with the resources to explore the Bend and Reef properties as Aquila focuses on the development of Back Forty.”

Completion of the Transaction is subject to certain conditions including, but not limited to, the completion of definitive documentation, completion of financing by Newco, listing of Newco on the TSX-V and receipt of all necessary third-party consents and approvals, including the approval of the TSX-V. In the event the Transaction does not close, Aquila will return the Deposit in shares of Aquila (subject to the receipt of all necessary approvals of the Toronto Stock Exchange) or in cash, depending on the circumstances.

ABOUT AQUILA
Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) is a development‐stage company focused on high grade polymetallic projects in the Upper Midwest, USA. Aquila’s experienced management team is currently advancing pre-construction activities for its flagship 100%‐owned gold and zinc‐rich Back Forty Project in Michigan.

Cautionary statement regarding forward-looking information

View source version on businesswire.com: https://www.businesswire.com/news/home/20210601005209/en/

Guy Le Bel, President & CEO
Tel: 450.582.6789
glebel@aquilaresources.com

David Carew, VP Corporate Development & Investor Relations
Tel: 647.943.5677
dcarew@aquilaresources.com

Source: Aquila Resources Inc.

by Back Forty Admin

AQUILA RESOURCES - BACK FORTY UPDATE

Highlights

Key objectives of optimized Feasibility Study identified
Not proceeding with appeal of the January 2021 Administrative Law Judge denial of prior issuance of Wetlands Permit
Not proceeding with the contested case of the amended Mining Permit
Withdrawal of the Dam Safety Permit application
The company is maintaining its Air Permit and NPDES Permit

TORONTO, ON – May 11, 2021 – Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the
“Company”) is pleased to provide an update on its Back Forty Project in Michigan.

Optimized Feasibility Study

In March 2021, Aquila engaged Osisko Technical Services (“OTS”) to lead an optimized feasibility study (the “Feasibility Study”) for the Back Forty Project. Aquila is leveraging OTS’ combined engineering, permitting, construction and operating expertise to unlock value and advance the Back Forty Project through its next phase of development.

A key objective of the optimized Feasibility Study is to reflect feedback from the Michigan Department of Environment, Great Lakes & Energy (“EGLE”) and the local community since the original Back Forty permits were issued. By incorporating the underground mine plan in the Feasibility Study and modifying the Project footprint, the Company expects to demonstrate substantially reduced surface impact, including wetland impacts, and a longer mine life for the benefit of all stakeholders.

Current Feasibility Study activities are focused on:

Evaluating open pit configurations and surface infrastructure layouts that avoid direct impact to regulated wetlands;
Progressing underground mine planning including ore delivery scheduling, ventilation, and confirming the location of the box cut;
Updating the mineral resource estimate using current metal prices and Net Smelter Return calculations; and
Preparing samples for additional metallurgical tests to support a simplified process flowsheet and enhanced gold recoveries.

Subject to securing additional funding, the Company’s objective is to complete the Feasibility Study in Q4 2021.

Guy Le Bel, President & CEO, commented, “We are committed to advancing the Back Forty Project with a collaborative approach that integrates feedback from the community. Our goal is to design, build and operate a 21st century mine in sync with American values of safety, quality work, leading-edge technology, and environmentally responsible mineral extraction. The resulting mine will offer over a decade of net benefits to local and regional communities while being protective of the environment.”

Permitting

The Feasibility Study design will build on the substantial technical and environmental work that Aquila has completed since the submission of the original permit applications and the completion of the 2018 open pit feasibility study. Given the enhancements to the Project and the ability to demonstrate substantially reduced environmental impact by incorporating the underground mine plan, Aquila believes the most efficient path to shovel-ready status is to focus efforts on successfully permitting the optimized Feasibility Study design.

As such, the Company has determined not to proceed with its appeal of the January 2021 decision by an Administrative Law Judge to deny the prior issuance of the Wetlands Permit. The Feasibility Study team is focused on a design seeking to avoid direct impacts to wetlands. Even if a Wetlands Permit is required, Aquila expects that it will be able to secure a re-issued permit from EGLE based on the fieldwork already completed under the existing Wetlands Permit and progress on the groundwater modeling that would be used to support any estimates of indirect wetland impacts.

The Company has also determined not to proceed with the contested case of the amended Mining Permit. As the amended Mining Permit only contemplates the open pit portion of the Project, there is no benefit to continuing to dedicate resources to a permit under which the Company does not plan to proceed. Following the completion of the Feasibility Study, the Company will submit an application for a Mining Permit that reflects the optimized design, including the underground mine plan. Should a Wetlands Permit and Dam Safety Permit be required, the Company will submit applications for these permits concurrent with the Mining Permit application. A key benefit of this approach is that it should facilitate a consolidated review process and, compared to a sequential process, compress the timeline to permit issuances.

The Company is maintaining its Air Permit and National Pollutant Discharge Elimination System (NPDES) Permit in good standing and will proceed with timely renewals of these permits, as required.

ABOUT AQUILA

Aquila has two other exploration projects: Reef Gold Project located in Marathon County, Wisconsin and the Bend Project located in Taylor County, Wisconsin. Reef is a gold-copper property and Bend is a volcanogenic massive sulfide occurrence containing copper and gold. Additional disclosure of Aquila’s financial statements, technical reports, material change reports, news releases and other information can be obtained at www.aquilaresources.com or on SEDAR at www.sedar.com.

For further information, please contact:

Guy Le Bel, President & CEO
Tel: 450.582.6789
glebel@aquilaresources.com

Barry Hildred, Executive Chair
Tel: 647.943.5672
bhildred@aquilaresources.com

David Carew, VP Investor Relations
Tel: 647.943.5677
dcarew@aquilaresources.com

Source: Aquila Resources Inc.

Cautionary statement regarding forward-looking information

View source version on businesswire.com: https://www.businesswire.com/news/home/20210511005481/en/

by Back Forty Admin

MICHIGAN STATE SENATE ADOPTS SR 16 - SUPPORT FOR MINING

Highlights

Through bipartisan support and an unanimous vote, SR 16 was adopted by the Michigan Senate on April 28, 2021. The resolution to expresses support for mining and the mining industry and encourages the Governor, state agencies, local governments, members of the public, and labor organizations to support mining by taking certain actions.

Aquila PR April 29 2021 Michigan Mining Resolution SR 16 Adoption

by Back Forty Admin

AQUILA RESOURCES PROVIDES CORPORATE UPDATE

Highlights

Appealed the Judge’s Wetlands Permit decision to the EGLE permit review panel
Received an outpouring of local support from senior leadership in Michigan
Will continue to work with EGLE to finalize the Back Forty groundwater model in support of a revised application seeking a reissuance of the Wetlands Permit
Will undertake optimization studies to assess Project opportunities
Evaluating financing alternatives with support from key stakeholders

TORONTO–(BUSINESS WIRE)–

Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) is pleased to provide an update on its strategy to advance its Back Forty Project in Michigan’s Upper Peninsula following the January 4, 2021 decision by an Administrative Law Judge (“Judge”) denying the prior issuance of a wetland/stream/floodplain permit (“Wetlands Permit”). The Michigan Department of Environment, Great Lakes, and Energy (“EGLE”) issued the Wetlands Permit to the Company in June 2018 following years of environmental baseline work and a thorough review process including comment periods and public hearings and review by the U.S. Environmental Protection Agency. Aquila believes that the Judge’s decision was based largely on a strict interpretation of the administrative completeness of the permit application rather than a specific view on the Project itself. As Aquila has been proactive in addressing the initial permit conditions since the issuance of the Wetlands Permit, the Company believes the Judge’s decision only represents a temporary setback for the Project.

Barry Hildred, President & CEO of Aquila, commented, “While we were disappointed by the Judge’s decision, we have a high level of confidence that there is a clear path to successfully permitting the Back Forty Project, regardless of the outcome of our appeal. Our relationship with EGLE is strong and we have made good progress addressing the conditions in the original Wetlands Permit. Given the current uncertain economic climate, we believe that projects like Back Forty are even more critical to providing the jobs and community support that Michigan needs, while at the same time protecting the environment.”

Appeal to EGLE Environmental Review Panel

Aquila has appealed the Judge’s decision to the EGLE environmental review panel (“Panel”). EGLE will convene a three-person panel of experts with relevant experience within 45 days. The Panel will then hear arguments and is expected to render a decision later in 2021. The Panel has the authority to adopt, remand, modify, or reverse, in whole or in part, the Judge’s decision. The decision of the Panel will become the final decision of EGLE.

Through its appeal, at a minimum, Aquila is seeking to clarify certain aspects of the decision to facilitate further permitting efforts for the Back Forty Project. The Judge found Aquila’s Wetlands Permit application to be administratively incomplete due to alleged lack of an agreed upon groundwater model and lack of reliable identification of potential indirect wetland impacts related to groundwater drawdown caused by pit dewatering. The Judge’s determination that the Project is not in the public interest and that Aquila’s alternatives analysis was inadequate was largely based on the same alleged lack of information about indirect wetland impacts. As such, even though Aquila has been working with EGLE to satisfy permit conditions requiring further data collection and groundwater modeling to validate previous conclusions regarding indirect impacts, the Judge found that the statute required Aquila to provide all of the information before a permit could be issued.

Notably, the Company believes that there is nothing in the decision that would prevent Aquila from obtaining a Wetlands Permit for the same or a similar mine plan.

While the appeal is in process, the Company requested, and has been granted, a stay of proceedings of the contested case related to the amended Mining Permit.

The Back Forty Project Continues to Receive Strong Support from Local Leadership

Aquila is pleased to highlight the support that the Back Forty Project has received locally.

A delegation of Upper Peninsula lawmakers including Sens. Ed McBroom and Wayne Schmidt, and Reps. Greg Markkanen, Beau LaFave, and Sara Cambensy expressed their support for responsible mining and the Back Forty Project in a joint statement:

Mining has been a critical component of the Upper Peninsula way of life for generations. Our state has enacted some of the most stringent mining and environmental regulations in the world to ensure that Michigan mines must operate as good stewards and valued parts of our local communities.

Through a rigorous process with EGLE, this permit was rightly approved, and we remain hopeful that the department will work with Aquila to address this wrongful rejection of the permit…. We vow to work together in stressing the importance of this project and reasonable regulations overall, as one U.P., to ensure that one judge’s decision is not the policy position advanced in Michigan. Our communities want and support mining in the U.P. now as in the past generations.

In a letter to the Company dated January 20, 2021, Tony Retaskie, Executive Director of the Upper Peninsula Construction Council (“UPCC”), a group made up of over 250 quality construction contractors located across the Upper Peninsula of Michigan, stated:

On behalf of the U.P. Construction Council, I’m sorely disheartened by the rejection of your Wetlands Permit Application.

Our Labor/Management Council, made up of nearly 3,500 members, fully supports responsible mining such as what Aquila Resources proposes with the Back Forty Project. We realize the positive economic spiral this project would create for the Upper Peninsula. With an initial capital investment of $250 million and a life of mine payroll estimated to exceed $280 million, the Back Forty Mine would directly and indirectly create hundreds of jobs, including construction hires, paying solid, family sustaining wages. The Project will also contribute greatly to Michigan and local budgets as a major tax and royalty payer.

Mined products, as you know, are everywhere in our daily lives, from beauty products, to transportation and cell phones. The UPCC would prefer these products be mined here, where we have some of the strongest mine regulations there are.

Although we are disappointed with the judge’s decision, we urge you to continue your efforts to advance the Project to the operations phase and we pledge our support for the Back Forty Project.

The Company will Continue to Work with EGLE to Secure a Reissued Permit

It has always been the Company’s intention to satisfy the original Wetlands Permit conditions and Aquila has made significant progress over the last two years in this respect. In particular, data collection and interpretation related to the groundwater model is substantially complete. In parallel with its appeal, Aquila will continue to work closely with EGLE to reach consensus on the groundwater model. Once EGLE has accepted the Company’s model, EGLE will be in a position to evaluate a revised permit application and reissue the Wetlands Permit.

Project Optimization Studies

As the Company works through the appeal and continues its collaboration with EGLE in support of a revised Wetlands Permit application, the Company will conduct optimization studies that will seek to evaluate areas of opportunity identified in the Company’s 2020 Preliminary Economic Assessment. These include opportunities to increase gold recoveries in light of improved metal prices and optimizing the mine plan to enhance economics and reduce the open pit strip ratio. Fortunately, once EGLE has accepted the foundational groundwater model, the model can be applied in the context of any potential improvements to the Project.

Financing Update

Over the past several weeks, Aquila management has had numerous discussions with its key stakeholders including Osisko Gold Royalties Ltd. The stakeholders have reaffirmed their support for the Project and they share Aquila’s view that while the Judge’s decision represents a temporary setback, the Back Forty Project will be successfully permitted and built.

Aquila is working with its key stakeholders and its financial advisor to secure capital that will enable the Company to advance the above initiatives as well as to fund exploration activities at its Reef and Bend projects in Wisconsin.

About Aquila

Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) is a development-stage company focused on high grade and gold-rich projects in the Upper Midwest, USA. Aquila’s experienced management team is focused on advancing pre-construction activities for its 100%-owned gold and zinc-rich Back Forty Project in Michigan.

Aquila’s flagship Back Forty Project is an open pit volcanogenic massive sulfide deposit with underground potential located along the mineral-rich Penokean Volcanic Belt in Michigan’s Upper Peninsula. Back Forty contains approximately 1.1 million ounces of gold and 1.2 billion pounds of zinc in the Measured & Indicated Mineral Resource classifications, with additional upside potential.

Cautionary statement regarding forward-looking information

View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005290/en/

Barry Hildred
Aquila Resources Inc.
Tel: 647.943.5672
Email: bhildred@aquilaresources.com

Guy Le Bel
Aquila Resources Inc.
Tel: 450.582.6789
Email: glebel@aquilaresources.com

David Carew
Aquila Resources Inc.
Tel: 647.943.5677
Email: dcarew@aquilaresources.com

Source: Aquila Resources Inc.

by Back Forty Admin

AQUILA RESOURCES ANNOUNCES ORGANIZATIONAL CHANGES

– Aquila Resources Announces Organizational Changes –

TORONTO–(BUSINESS WIRE)–

Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) is pleased to announce the appointment of Guy Le Bel as President & CEO of Aquila, effective February 1, 2021. Barry Hildred will transition to the role of Executive Chair of the Board of Directors. The Board has appointed Ted Munden, outgoing Chair of the Board of Directors, to the position of Lead Director.

“My focus as Executive Chair will be supporting Guy as he drives the Back Forty Project and our exploration projects in Wisconsin through their next phase of development,” said Barry Hildred. “I look forward to working closely with Guy on strategic initiatives, capital raising, and stakeholder relations.”

Guy Le Bel brings more than 35 years of experience in business and project development, strategic and financial planning, and permitting in the Americas to Aquila. Most recently, he was CEO and CFO of Golden Queen Mining Ltd. until its acquisition in 2020 by Falco Resources Ltd. Mr. Le Bel was previously Vice President, Evaluations for Capstone Mining Corp. and Vice President, Business Development for Quadra/FNX Mining Ltd. Mr. Le Bel also held business advisory, strategy and planning, business valuation, and financial planning management roles at BHP Billiton Base Metals, Rio Algom Ltd, and Cambior Inc., together with independent consultation mandates across the industry. He provides extensive experience across base and precious metals industries in the Americas. Mr. Le Bel has held board positions in numerous junior exploration and mining companies since 2007 and currently serves on the Board of Pembridge Resources plc. and Kintavar Exploration Inc. Mr. Le Bel holds an MBA Finance from Ecole des Hautes Études Commerciales (Montreal), a Master Applied Sciences, Mining Engineering from the University of British Columbia and a B.Sc. Mining Engineering from Université Laval. He is a Professional Engineer (O.I.Q.).

“The Board thanks Barry for his leadership and ongoing commitment to Aquila,” said Lead Director Ted Munden. “Since joining the Company as President & CEO in 2013, Barry has been instrumental in recapitalizing the Company, completing the repurchase of the Back Forty Project from Hudbay Minerals, successfully closing two streaming deals, and advancing the Back Forty Project through the permitting and study phase. We welcome Guy as President & CEO and look forward to benefitting from his significant technical and financial experience.”

“I am excited to join the Aquila team,” said Guy Le Bel. “l see tremendous potential in Aquila’s portfolio of high grade, polymetallic assets and look forward to unlocking their value for the benefit of all stakeholders.”

About Aquila

Cautionary statement regarding forward-looking information

View source version on businesswire.com: https://www.businesswire.com/news/home/20210126006026/en/

Barry Hildred
Aquila Resources Inc.
Tel: 647.943.5672
Email: bhildred@aquilaresources.com

Guy Le Bel
Aquila Resources Inc.
Tel: 450.582.6789
Email: glebel@aquilaresources.com

David Carew
Aquila Resources Inc.
Tel: 647.943.5677
Email: dcarew@aquilaresources.com

Source: Aquila Resources Inc.

by Back Forty Admin

AQUILA RESOURCES PROVIDES PERMITTING UPDATE

– Judge overturns Back Forty Wetlands Permit –

TORONTO–(BUSINESS WIRE)– Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) announces that on January 4, 2021, an Administrative Law Judge (“Judge”) for the Michigan Office of Administrative Hearings and Rules issued a decision denying the prior issuance of a wetland/stream/floodplain permit (“Wetlands Permit”) for its Back Forty Project in Michigan.

By way of background, petitioners earlier filed an administrative contested case challenge to the issuance of the Wetlands Permit by the Michigan Department of Environment, Great Lakes, and Energy (“EGLE”). The Wetlands Permit was issued by EGLE on June 4, 2018 following years of environmental baseline work and a thorough review process including comment periods and public hearings. The Judge convened an evidentiary hearing in June 2019, which ended in January 2020. In his January 4, 2021 decision, the Judge determined that Aquila’s groundwater model does not provide a reliable identification of wetland impacts and therefore found the permit application to be administratively incomplete. The Judge also determined that Aquila did not provide a complete assessment of potential alternatives to its proposed plan.

The Company strongly disagrees with the Judge’s decision, which is based in significant part on what the Company believes is a misunderstanding of the information concerning the potential for indirect wetlands impacts associated with the Back Forty Project. The decision establishes a permitting approach that markedly departs from wetland permits issued for other mining projects in the Great Lakes region. Aquila worked for several years with EGLE staff during the permitting process to address the complex technical issues associated with estimating potential indirect wetland impacts, landing on an approach that complied with federal U.S. Army Corps guidelines for estimating and permitting such impacts for mining projects.

The Wetlands Permit was issued with specific conditions that must be satisfied prior to the commencement of construction and operations, including a condition that required EGLE to accept an updated groundwater model. During the 31 months since the Wetlands Permit was issued, Aquila has been working constructively with EGLE to satisfy the conditions, and the Company planned to complete the updated groundwater model in 2021. The Company will continue to work with EGLE and believes it will successfully resolve the issues cited in the Judge’s decision.

Barry Hildred, President & CEO of Aquila, commented, “Obviously, we are disappointed by the Judge’s decision. The Company is evaluating its alternatives, which include the submission of an updated permit application or appealing the decision to the EGLE environmental review panel. Aquila has worked diligently to limit impacts to surrounding wetlands and is only directly impacting 11.2 acres of regulated wetlands. Having reviewed the decision, we believe that Aquila will be able to resolve the cited issues and remain confident that Back Forty will be a safe, disciplined operation that promotes and supports local community socio-economic development and is protective of the environment.”

Michigan State Circuit Court Dismisses Challenge to Back Forty Mining Permit

Aquila is pleased to announce that on December 22, 2020, the Ingham County Circuit Court in the State of Michigan upheld the final decision of EGLE to issue the Back Forty Mining Permit after a lengthy contested case hearing initiated by two petitioners. Subsequent to its issuance by EGLE, the Mining Permit was upheld by the Judge and an environmental review panel made up of technical experts from various fields.

The Mining Permit is one of four foundational State permits required for the commencement of construction and operations at Back Forty. In addition to the Mining Permit, regulators in Michigan have previously granted an Air Permit, Wetlands Permit, and a Water Discharge Permit for the Back Forty Project.

About Aquila

Cautionary statement regarding forward-looking information

View source version on businesswire.com: https://www.businesswire.com/news/home/20210105005530/en/
Barry Hildred, CEO
Aquila Resources Inc.
647.943.5672
bhildred@aquilaresources.com

David Carew, Director of Corporate Development & Investor Relations
Aquila Resources Inc.
647.943.5677
dcarew@aquilaresources.com

Source: Aquila Resources Inc.

by Back Forty Admin

WETLANDS PERMIT CONTESTED CASE RULING

FINAL DECISION AND ORDER

January 4, 2021

Back Forty Admin

TORONTO, ON – May 11, 2021 – Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the
“Company”) is pleased to provide an update on its Back Forty Project in Michigan.

TORONTO–(BUSINESS WIRE)–

About Aquila

– Aquila Resources Announces Organizational Changes –

TORONTO–(BUSINESS WIRE)–

About Aquila

– Judge overturns Back Forty Wetlands Permit –

ABOUT US | OPERATIONS | COMMUNITY | ENVIRONMENT | MEDIA

Back Forty Mine - E807 Gerue Street, Stephenson, MI 49887(906) 753-9602info@GRC-USA.com

Back Forty Admin

TORONTO, ON – May 11, 2021 – Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) is pleased to provide an update on its Back Forty Project in Michigan.

TORONTO–(BUSINESS WIRE)–

About Aquila

– Aquila Resources Announces Organizational Changes –

TORONTO–(BUSINESS WIRE)–

About Aquila

– Judge overturns Back Forty Wetlands Permit –

ABOUT US | OPERATIONS | COMMUNITY | ENVIRONMENT | MEDIA

Back Forty Mine - E807 Gerue Street, Stephenson, MI 49887(906) 753-9602info@GRC-USA.com

TORONTO, ON – May 11, 2021 – Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the
“Company”) is pleased to provide an update on its Back Forty Project in Michigan.