Aquila Announces Updated Mineral Resource Estimate for Back Forty

Aquila Announces Updated Mineral Resource Estimate for Back Forty 
TORONTO, ONTARIO -- (Marketwire) -- 02/04/13 -- Aquila Resources Inc.
(TSX:AQA)(OTCQX:AQARF)(FRANKFURT:JM4A) ("Aquila" or the "Company") is
pleased to provide an updated mineral resource estimate for the Back
Forty Project in the Upper Peninsula of Michigan. Aquila holds a 49%
joint venture interest in Back Forty and Hudbay Minerals Inc.
(TSX:HBM)(NYSE:HBM) holds a 51% interest and is the current operator.
The updated mineral resource estimate includes data from an
additional 78 drill holes. The open pit measured and indicated
resource is 9.65 million tonnes with improved metal grades over the
previous mineral resource estimate, which was prepared in 2010. The
estimate also defined 5.49 million measured and indicated tonnes and
2.18 million inferred tonnes of underground resource not evaluated in
the preliminary economic assessment ("PEA") that was completed in
April 2012 (see "Preliminary Economic Assessment Technical Report on
the Back Forty Deposit, Menominee County, Michigan, U.S.A." dated
April 26, 2012, available at www.sedar.com). The mine plan in the PEA
contemplated that 7.54 million tonnes of the measured and indicated
resource would be mined, after applying dilution and recovery
allowances.  
Aquila's president and CEO Tom Quigley stated, "We are very pleased
with the new resource estimation. The combined open pit and
underground resource provides significant tonnage with improved
grades for evaluation in future economic studies. We now have an
updated geologic model of the deposit that represents our increased
understanding of the complexities and robustness of the resource,
which will be increasingly useful to us as we evaluate future plans
for Back Forty." 
Updated Resource Estimate Highlights(i) 


 
 - OPEN PIT RESOURCE:             9,647,498 tonnes (Measured + Indicated)   
                                                                            
   Au (oz)                 Ag (oz)      Cu (lbs)      Pb (lbs)      Zn (lbs)
   640,663               6,961,880    72,268,562    36,224,539   525,542,537
                                                                            
 - UNDERGROUND RESOURCE:          5,486,549 tonnes (Measured + Indicated)   
       
                                                                     
   Au (oz)                 Ag (oz)      Cu (lbs)      Pb (lbs)      Zn (lbs)
   346,572               4,949,933    38,158,127    38,073,823   496,130,862
                                                                            
                                  2,184,246 tonnes (Inferred)               
                                                                            
   Au (oz)                 Ag (oz)      Cu (lbs)      Pb (lbs)      Zn (lbs)
   142,351               1,823,307    18,026,223    15,903,291   103,702,673
                                                                            
 - GLOBAL RESOURCE:               15,134,047 tonnes (Measured + Indicated)  
                                                                            
   Au (oz)                 Ag (oz)      Cu (lbs)      Pb (lbs)      Zn (lbs)
   987,236              11,911,813   110,426,690    74,298,362 1,021,673,399
                                                                            
                                  2,336,734 tonnes (Inferred)               
                                                                            
   Au (oz)                 Ag (oz)      Cu (lbs)      Pb (lbs)      Zn (lbs)
   155,885               1,992,763    18,649,843    17,205,532   113,328,043
                                                                            
                                                                            
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Open Pit(ii)                                                                
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                               Au      Ag                                NSR
Category           Tonnes   (ppm)   (ppm)  Cu (%)  Pb (%)  Zn (%)  ($/tonne)
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Meas.           4,720,716    2.24   26.77    0.55    0.13    3.49     141.88
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Ind.            4,926,783    1.90   18.30    0.14    0.21    1.49      92.41
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Meas. + Ind.    9,647,498    2.07   22.45    0.34    0.17    2.47     116.62
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Inf.              152,488    2.76   34.56    0.19    0.39    2.86     143.31
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Underground(iii)                                                            
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                               Au      Ag                                NSR
Category           Tonnes   (ppm)   (ppm)  Cu (%)  Pb (%)  Zn (%)  ($/tonne)
----------------------------------------------------------------------------
Meas.           1,982,087    1.97   28.56    0.29    0.31    5.04     141.22
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Ind.            3,504,462    1.96   27.78    0.33    0.32    3.57     117.79
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Meas. + Ind.    5,486,549    1.97   28.06    0.32    0.32    4.10     126.27
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Inf.            2,184,246    2.03   25.96    0.37    0.33    2.15     101.89
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Global Resource                                                             
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                               Au      Ag                                NSR
Category           Tonnes   (ppm)   (ppm)  Cu (%)  Pb (%)  Zn (%)  ($/tonne)
----------------------------------------------------------------------------
Meas.           6,702,803    2.16   27.30    0.47    0.18    3.95     141.68
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Ind.            8,431,244    1.92   22.24    0.22    0.26    2.36     102.96
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Meas. + Ind.   15,134,047    2.03   24.48    0.33    0.22    3.06     120.11
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Inf.            2,336,734    2.07   26.53    0.36    0.33    2.20     104.60
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(i) Mineral resources are not mineral reserves and do not have
demonstrated economic viability. NSR cut-off values were based on
metal price assumptions of US$0.96 per pound zinc, US$3.65 per pound
copper, US$1.01 per pound lead, US$1456.36 per troy ounce gold and
US$27.78 per troy ounce silver. Metallurgical recoveries were
determined and applied for each of the meta
llurgical domains
determined for the deposit. 
(ii) 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." 
(iii) 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." 
The updated resource was compiled by Tetra Tech of Golden, Colorado
with input by Aquila's technical team, and incorporated the results
of an additional 78 drill holes from the previously calculated
resource prepared in 2010. In addition to incorporating recent
drilling, the updated resource includes a new geological model of the
deposit with increased detail on the geologic boundaries of the Back
Forty deposit from both a geological and geo-metallurgical
standpoint. 
The updated mineral resource expanded on and incorporated parameters
derived from the April 26, 2012 PEA that utilized the 2010 mineral
resource. The PEA contemplated mining 7,536,000 tonnes of mineral
resources from an open pit. The updated open pit mineral resource
consists of 9,647,498 tonnes of measured and indicated resources
utilizing a NSR cut off averaging US$27.75 per tonne. The updated
resource also quantifies mineralization outside of the open pit shell
utilizing an underground NSR cut off averaging US$66.45 per tonne. 
The updated mineral resource is independent of the PEA completed in
April 2012, and economic parameters developed in that PEA have not
been evaluated to reflect the new updated resource. 
Breakdown of Resource by Metallurgical Type 
The mineral resources estimated in this update consist of flotation
metallurgical type mineralization producing base metal concentrates
and hydrometallurgical or leaching metallurgical type mineralization
producing a gold silver dore product. A breakdown of these
metallurgical types is shown below. 


 
----------------------------------------------------------------------------
Open Pit - Flotation                                                        
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Category            Tonnes  Au (ppm)  Ag (ppm)    Cu (%)    Pb (%)    Zn (%)
----------------------------------------------------------------------------
Meas. + Ind.     8,080,204      1.67     18.92      0.38      0.16      2.91
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Inf.               109,716       2.6     30.76      0.22      0.44      3.91
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Open Pit Gold Silver -                                                      
Hydrometallurgical                                                          
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Category            Tonnes  Au (ppm)  Ag (ppm)    Cu (%)    Pb (%)    Zn (%)
----------------------------------------------------------------------------
Meas. + Ind.     1,567,295      4.11     40.62      0.12      0.23      0.21
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Inf.                42,772      3.18     44.33       0.1      0.25      0.19
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Underground - Flotation                                                     
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Category            Tonnes  Au (ppm)  Ag (ppm)    Cu (%)    Pb (%)    Zn (%)
----------------------------------------------------------------------------
Meas. + Ind.     5,129,941      1.79     26.24      0.33      0.31      4.36
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Inf.             2,022,586      1.94     24.38      0.40      0.33      2.31
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Underground Gold Silver -                                                   
Hydrometallurgical                                                          
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Category            Tonnes  Au (ppm)  Ag (ppm)    Cu (%)    Pb (%)    Zn (%)
----------------------------------------------------------------------------
Meas. + Ind.       356,607      4.52     54.27       0.1      0.42      0.35
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Inf.               161,660      3.13     45.75      0.08      0.34      0.25
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Mineral Resource Estimate Disclosure 
Ordinary Kriging Estimation: Ordinary kriging (OK) by Datamine(R) was
used to estimate the Back Forty resources. The estimate was
constrained to be within interpreted geologic domain wireframes.
Specific gravity was assigned to lithologic zones by regression
equations using sulfur and iron content. Gold, silver, lead and zinc
values were capped at levels based on interpreted composite
statistics and cumulative frequency plots. Variography was used to
define anisotropy of mineralization and search parameters within each
lithologic zone. Mineral classification of measured, indicated and
inferred was defined by a strategy of three kriging passes using
increasing search ranges. 
Mineralization offering reasonable prospects for economic extraction
by open pit were determined using the Lerchs-Grossman optimizing
algorithm which evaluates the profitability of each resource block
based on its NSR value. Optimization parameters were based on cost
parameters derived in the April PEA as well as updated metallurgical
recoveries and updated metal prices. Metal grades were estimated
using an ordinary kriging estimator for each mineral domain. 
Block model grade estimates were validated by comparison with nearest
neighbor and inverse distance squared methodogies and visual
comparison of composites and drill hole data with resource block
data. 
Open Pit Cut Off: Cut off values based on metallurgical type for the
open pit mineral resources were US$25 for flotation and US$39 for
hydrometallurgical or leaching. Average cut off values for the open
pit mineral resources were US$27.75. 
Outside of Pit (Underground) Cutoff: Cut off values based on
metallurgical type for the underground mineral resources were
US$65.50 for the flotation and US$79.50 for the hydrometallurgical
type. Average cut off values for an underground mining scenario were
US$66.45. 
Net Smelter Return Estimation: The Back Forty is a poly-metallic
deposit with each metal contributing to the value of the
mineralization. The mineral resources are therefore reported by
utilizing a calculated net smelter return ("NSR"). The NSR
calculations were based on the metal grades and metallurgical type
designation. Key inputs for the NSR estimation include metal prices,
metallurgical parameters (process recovery and product specification
by metallurgical type) and concentrate and dore terms (which took
into account cost estimates including smelter terms, refining costs,
penalties, transportation, insurance, and marketing). 
NSR values for the 2013 resource were calculated in a similar manner
as they were in the PEA dated April 26, 2012. Notable changes in the
NSR calculation include updated metal prices utilizing a three year
trailing average, and updated metallurgical recoveries and
concentrate/dore specs. The NSR Value takes into consideration values
from lead as opposed to copper in two mineral domains (Tuff Zone
massive sulfide and associated stringer zone) as well as value from
copper in a mineral domain where only gold and silver were previously
considered (Pinwheel Gossan). 
Updated Metallurgical Recoveries: Metallurgical recoveries were
estimated for a total of 13 metallurgical domains. Six of these
domains reflect sulfide-rich flotation ores and seven represent
sulfur- poor, gold-silver leach ores. The estimated recoveries were
developed utilizing both past and recent metallurgical testing and
reflect the best estimate of recovered metals for each individual and
discrete metallurgical domain. These recoveries do not take into
account 'blending' certain metallurgical zones in an open pit mining
scenario. However, the detailed metallurgical domaining of the
deposit and associated recoveries allows for development of a more
selective mining plan with respect to both open pit and underground
mining scenarios. 
Resource Disclosure: Because the updated mineral resource estimate
does not constitute a material change, a 43-101 technical report will
not be completed. Additional details about the updated resource will
be available on the Company's website. Mineral resources for the
deposit were classified according to the CIM Definition Standards for
Mineral Resources and Mineral Reserves by Rex Bryan, Ph.D., an
appropriate independent qualified person for the purpose of National
Instrument 43-101. 
About Aquila Resources Inc. 
Aquila Resources Inc. (TSX:AQA)(OTCQX:AQARF)(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. The Company is led by an experienced
management team that has identified significant ore deposits over the
last 30 years. For more information please visit
www.AquilaResources.com. 
Thomas O. Quigley is the Qualified Person for Aquila Resources as
described in National Instrument 43- 101 and is responsible for the
contents of this release. 
This press release contains 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". Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. Such factors include, among others,
risks related to international operations; risks related to joint
venture operations; actual results of current exploration activities;
changes in project parameters as plans continue to be refined, future
prices of resources; possible variations in reserves, grade or
recovery rates, accidents, labor disputes and other risks of the
mining industry; and delays in obtaining governmental approvals or
financing or in the completion of development or construction
activities. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there
may be other factors that cause actions, events or results to differ
from those anticipated, estimated or intended. There can be no
assurance that forward-looking statements will prove to be accurate,
as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should not
place undue reliance on forward- looking statements. 
Shares Outstanding: 90,945,168
Contacts:
Aquila Resources Inc. (Toronto)
Robin Dunbar
CFO
416-203-1404
rdunbar@aquilaresources.com 
Aquila Resources Inc. (U.S.)
Thomas O. Quigley
President
906-352-4024
tquigley@aquilaresources.com
www.AquilaResources.com
 
 
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