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Post by
invidious1on Aug 16, 2021 1:01pm
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Osisko Makes Big New Investment in Proposed Back Forty Mine
Osisko Makes Big New Investment in Proposed Back Forty Mine A subsidiary of Osisko Gold Royalties Ltd. has agreed to immediately release $2.4 million to support Aquila Resources’ Back Forty mine project in Menominee County, Michigan.
The announcement came today (Aug. 16) in a news release posted by Aquila to a Canadian regulatory database (sedar.com). Earlier this year, Aquila abandoned its existing permits for the Back Forty mine, choosing instead to pursue a completely new project, starting with a design document and a feasibility study to demonstrate the project’s financial viability.
The feasibility study is expected to be completed by the end of the year, after which the company will need to apply for new permits from the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE).
“This agreement demonstrates Osisko Gold Royalty’s strong support for the Back Forty Project and enables Aquila to continue advancing the optimized feasibility study,” said Aquila President & CEO Guy Le Bel, in the news release. “I am pleased with the progress our team is making on the feasibility study, which will demonstrate reduced environmental impact and a longer mine life for the benefit of all stakeholders.”
The cash infusion comes at an opportune time for Aquila. The company reported just days ago that it had negative working capital of $2.1 million dollars as of June 30, 2021. “Negative working capital” means that a company’s liabilities exceed the assets it can convert to cash in the upcoming year.
The latest Osisko investment indicates that the company believes Aquila Resources can still complete the Back Forty project, despite repeated legal and regulatory setbacks.
Osisko has now invested $17.6 million in the Back Forty project, according to public documents and prior news releases from Aquila Resources. The money is an advance payment on future production at the mine and is tied to milestones that must be achieved by Aquila before the money is released. Osisko’s total commitment was $55 million when the deal was announced in November, 2017.