Letter From The President
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.
Thomas O. Quigley
President and Chief Executive Officer