Mr. Barry Hildred reports
AQUILA RESOURCES UPDATES MINERAL RESOURCE ESTIMATE AT BACK FORTY DEPOSIT, MICHIGAN
Aquila Resources Inc. has released an updated mineral resource estimate for its wholly owned Back Forty gold-zinc deposit in Michigan. The 2018 mineral resource estimate was completed by P&E Mining Consultants Inc. of Brampton, Ont.
The 2018 mineral resource estimate replaces the mineral resource estimate that was first disclosed in an Aquila news release dated Feb. 3, 2013, and subsequently included in a technical report completed by Tetra Tech Inc. with an effective date of July 23, 2014, which is available under Aquila's SEDAR profile.
The 2018 mineral resource estimate incorporates the results of an additional 22 diamond drill holes completed in 2015 through 2017. The additional drill holes, which were primarily designed to target inferred mineral resources, successfully increased the global tonnage as well as the contained metal inventories within the measured and indicated mineral resource categories. The 2018 mineral resource estimate also incorporates updated mineral resource modelling and mineral resource determinations based on updated net smelter return (NSR) calculations and revised cut-off values. The updated NSR calculations incorporated updated metal pricing, recovery information and product specifications which were derived from recently completed metallurgical testwork as well as revised terms related to smelting, refining and transportation. In-pit and out-of-pit mineral resource quantities were determined based on the generation of optimized pit shells to determine the optimum profitable open-pit configuration and incorporated updated pit slope information derived from additional geotechnical data.
Highlights of the 2018 mineral resource estimate include a 10-per-cent increase in tonnage in the measured and indicated mineral resource categories versus the 2013 mineral resource estimate, a 12-per-cent increase in contained zinc and a 4-per-cent increase in contained gold. Contained silver, copper and lead also increased versus the 2013 mineral resource estimate.
The 2018 mineral resource estimate is based on a drill hole database consisting of 741 boreholes totalling 128,670 metres of drilling, including the additional 22 new holes. This updated mineral resource estimate does not incorporate an additional 28 holes that were drilled related to geotechnical investigations, metallurgical purposes and exploration, including drilling on the mineralized zone discovered in 2016 that is located approximately 500 metres southwest of the proposed open pit.
"The 2018 mineral resource estimate confirms our view that the Back Forty deposit continues to be one of the highest-quality zinc and gold development stories in the mining sector," said Barry Hildred, Aquila's chief executive officer. "This estimate will form the basis for a feasibility study on Back Forty that is in its final stages. In the coming months, we will also announce details of an exploration drilling program at Back Forty that will seek to further define the underground potential of the deposit, where mineralization remains open at depth."
The 2018 mineral resource estimate is summarized in the associated table. P&E considers the mineralization of Back Forty to be potentially amenable to open-pit and out-of-pit (underground) extraction. The 2018 mineral resource estimate will be fully documented in a technical report prepared by P&E to be filed on SEDAR within 45 days of this press release.
BACK FORTY MINERAL RESOURCE ESTIMATE AS OF FEB. 6, 2018
Area Metallurgy Class NSR Cut-off Tonnes Gold Gold Silver Silver Zinc Zinc Copper Copper Lead Lead
type $/tonne (1,000) g/t koz g/t koz % mlb % mlb % mlb
In pit floatable Meas 21 6,797 1.75 381 18.4 4,027 3.45 516.5 0.38 56.4 0.16 23.4
Ind 21 3,768 1.58 191 25.2 3,056 3.15 261.7 0.24 19.9 0.39 32.8
M&I 21 10,565 1.68 572 20.9 7,083 3.34 778.2 0.33 76.3 0.24 56.2
Inf 21 71 1.01 2 30.7 70 2.98 4.7 0.14 0.2 0.37 0.6
leachable Meas 22 553 5.61 100 34.8 618 0.19 2.4 0.05 0.6 0.13 1.5
Ind 22 1,777 2.15 123 39.6 2,263 0.41 16.1 0.03 1.3 0.29 11.5
M&I 22 2,330 2.97 223 38.5 2,881 0.36 18.5 0.04 1.9 0.25 13.0
Inf 22 378 3.62 44 40.1 487 0.38 3.2 0.06 0.5 0.52 4.3
total Meas 21+22 7,350 2.04 481 19.7 4,645 3.20 518.8 0.35 57.0 0.15 24.9
Ind 21+22 5,545 1.76 314 29.8 5,319 2.27 277.8 0.17 21.2 0.36 44.3
M&I 21+22 12,895 1.92 795 24.0 9,964 2.80 796.6 0.28 78.2 0.24 69.2
Inf 21+22 448 3.21 46 38.6 557 0.79 7.9 0.07 0.7 0.49 4.9
Out of pit floatable Meas 70 556 1.79 32 26.8 480 5.32 65.2 0.33 4.0 0.41 5.0
Ind 70 3,059 1.84 180 26.2 2,577 4.23 285.4 0.51 34.3 0.30 20.3
M&I 70 3,615 1.83 213 26.3 3,057 4.40 350.7 0.48 38.4 0.32 25.3
Inf 70 544 2.96 52 37.5 656 1.38 16.6 0.62 7.5 0.39 4.6
leachable Meas 70 37 7.38 9 74.3 89 0.31 0.3 0.12 0.1 0.11 0.1
Ind 70 77 3.85 9 47.3 117 0.32 0.5 0.15 0.2 0.13 0.2
M&I 70 114 5.01 18 56.1 206 0.32 0.8 0.14 0.3 0.13 0.3
Inf 70 137 5.93 26 81.0 356 0.42 1.3 0.16 0.5 0.49 1.5
total Meas 70 593 2.14 41 29.8 569 5.01 65.5 0.32 4.1 0.39 5.1
Ind 70 3,135 1.88 190 26.7 2,694 4.14 286.0 0.50 34.6 0.30 20.5
M&I 70 3,729 1.93 231 27.2 3,262 4.28 351.5 0.47 38.7 0.31 25.7
Inf 70 680 3.56 78 46.2 1,011 1.19 17.8 0.53 8.0 0.41 6.1
Total floatable Meas 21+70 7,353 1.75 414 19.1 4,507 3.59 581.7 0.37 60.5 0.18 28.4
Ind 21+70 6,827 1.69 371 25.7 5,633 3.64 547.1 0.36 54.2 0.35 53.1
M&I 21+70 14,180 1.72 785 22.2 10,140 3.61 1,128.8 0.37 114.7 0.26 81.5
Inf 21+70 615 2.74 54 36.7 726 1.57 21.2 0.57 7.7 0.38 5.2
leachable Meas 22+70 590 5.72 109 37.3 707 0.20 2.6 0.05 0.7 0.12 1.6
Ind 22+70 1,854 2.22 132 39.9 2,380 0.41 16.7 0.04 1.6 0.29 11.7
M&I 22+70 2,444 3.07 241 39.3 3,087 0.36 19.3 0.04 2.2 0.25 13.4
Inf 22+70 514 4.24 70 51.0 842 0.39 4.5 0.09 1.0 0.51 5.8
total Meas 21+22+70 7,943 2.04 522 20.4 5,214 3.34 584.3 0.35 61.2 0.17 30.0
Ind 21+22+70 8,680 1.80 504 28.7 8,013 2.95 563.8 0.29 55.8 0.34 64.9
M&I 21+22+70 16,623 1.92 1,026 24.7 13,227 3.13 1,148.1 0.32 116.9 0.26 94.9
Inf 21+22+70 1,129 3.42 124 43.2 1,568 1.03 25.7 0.35 8.7 0.44 11.0
(1) Mineral resources are estimated as of Feb. 6, 2018.
(2) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of
mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political,
marketing, or other relevant issues.
(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 resources in this report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum
(CIM) Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on
Reserve Definitions and adopted by the CIM council.
(5) Metallurgical-type oxide (all gold domains and leachable gossans) is leachable, while all other metallurgical types
are floatable.
(6) The mineral resource estimate was based on metal prices of $1,375 (U.S.)/ounce gold, $22.27 (U.S.)/ounce silver,
$1.10 (U.S.)/pound zinc, $3.19 (U.S.)/pound copper and $1.15 (U.S.)/pound lead.
Assays and quality assurance/quality control
Verification of gold, silver, copper, zinc and lead assay database was performed by P&E against original laboratory electronically issued certificates from ALS Chemex, Vancouver, B.C., Accurassay Laboratories, Thunder Bay, Ont., Inspectorate America Corp., Sparks, Nev., and Minerals Processing Corp., Carney, Mich. A total of approximately 60 per cent of the wireframe constrained assays were checked. Unchecked assays were due to laboratory certificates not being made available to P&E.
P&E also validated the mineral resource estimate database by checking for inconsistencies in analytical units, duplicate entries, interval, length or distance values less than or equal to zero, blank or zero-value assay results, out-of-sequence intervals, intervals or distances greater than the reported drill hole length, inappropriate collar locations, survey and missing interval and coordinate fields. Some very minor errors were noted and corrected. P&E believes that the corrected database is suitable for a mineral resource estimate.
All samples submitted for analysis were analyzed for gold, silver, copper, lead and zinc. A variety of laboratory test procedures were used over a period from 2002 to 2017. In general, a minimum of 250 g of the crushed reject was split using a Jones riffle and then pulverized to more than 90 per cent minus 150 mesh. At ALS in Vancouver all samples were analyzed for gold by fire assay with AA finish (code Au-AA25) on 30 g charges. The lower and upper detection limits for this package were 10 parts per billion to 100 parts per million, respectively. Higher-grade samples were rerun with a gravimetric finish upon request. All samples were also analyzed using a multielement package (code ME-ICP61). ME-ICP61 consisted of a four-acid digestion, mineralized grade inductively coupled plasma (ICP) package with overlimit samples reassayed for copper, lead, zinc and silver by four-acid digestion followed by AA (code AA62). A limited number of samples were analyzed for mercury by aqua regia digestion and flameless AA spectrometry (Hg-CV41 with detection limits of 0.01 to 100 ppm), and for total sulphur by Leco furnace and infrared spectroscopy (code S-IR08 with detection limits of 0.01 to 50 per cent). All remaining pulps and coarse rejects were returned to the project warehouse facilities in Michigan.
Qualified persons
The 2018 resource estimate was based on information and data supplied by Aquila, and was undertaken by Yungang Wu, PGeo, and Eugene Puritch, PEng, FEC, CET, of P&E Mining Consultants Inc. of Brampton, Ont., both independent qualified persons as defined by National Instrument 43-101. They have reviewed and are responsible for the technical information presented in this news release.
About Aquila Resources Inc.
Aquila Resources is a development-stage company with strategic assets in the Great Lakes region. The company is currently focused on advancing permitting activities for its 100-per-cent-owned high-grade polymetallic Back Forty project in Michigan.
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