Aquila Resources Inc.

Aquila Resources Inc.

February 16, 2011 06:00 ET

Aquila and HudBay Commence Exploration Under Strategic Alliance-HudBay Funds Private Placement

TORONTO, ONTARIO--(Marketwire - Feb. 16, 2011) - AQUILA RESOURCES INC. (TSX:AQA)(FRANKFURT:JM4A) ("Aquila" or the "Company") today announced that it has completed a C$2 million private placement of common shares with HudBay Minerals Inc. ("HudBay") (TSX:HBM)(NYSE:HBM) pursuant to the previously announced Exploration Alliance Agreement with HudBay. The Company also announced that it has acquired and commenced exploration on a mineral property that will be included in the Exploration Alliance with HudBay and initially funded by HudBay. 

New Exploration Alliance Property

Aquila and HudBay have commenced exploration for nickel, copper, and other metals in the Upper Peninsula of Michigan. A Geotech VTEM heliborne survey has been flown over a target area of prospective mafic and ultramafic rocks. Under the terms of the Exploration Alliance, the first $2 million in exploration expenditures will be funded by HudBay in order to earn an initial 50% interest in an alliance property. The parties are currently considering other properties to be explored under the terms of the Exploration Alliance.

The Upper Peninsula is considered prospective for the target metals as it hosts the Eagle nickel-copper deposit owned by Kennecott Eagle Minerals (a U.S. subsidiary of Rio Tinto PLC). The Eagle deposit has been permitted and is under construction.

$2 Million Private Placement

The C$2 million private placement was completed under the terms of the Exploration Alliance Agreement announced October 15, 2010. After completion of the private placement of common shares, HudBay now owns 2,226,514 of Aquila common shares or 16.92% of the outstanding common shares. The private placement was completed at the volume weighted average price for the 20 trading days ended February 7, 2011.. No fees or commission were paid in conjunction of the placement, which is subject to the final approval of the TSX.

About Aquila

Aquila is focused on generic growth of shareholder value through: 

  1. Back Forty Project
  Pursuant to the terms of the previously announced joint venture with HudBay, Aquila currently holds a 49% interest and HudBay holds a 51% interest in the Back Forty Project, an advanced exploration stage zinc-gold property in Michigan's Upper Peninsula. HudBay can increase its interest to 65% by completing a feasibility study and submitting a permit application for the project. Three drills are currently active at the project, along with advanced engineering, environmental and other pre-permitting activities.
  1. Exploration Alliance
  The Exploration Alliance with HudBay is focused on base metals in the Upper Peninsula of Michigan and elsewhere as agreed by the parties. HudBay has the right to earn up to a 65% interest in the alliance projects by funding a feasibility study and making permitting applications, after funding the first $2 million in project expenditures.
  1. Aquila Gold Properties
  Aquila has commenced work on gold properties in the Upper Peninsula – the Michigan Gold Project - where it owns 100% of the applicable mineral rights. Initial drill results have been encouraging and additional drilling will be completed. Aquila intends to expand its 100% owned gold portfolio with an emphasis on advanced stage exploration properties.

Thomas O. Quigley is the Qualified Person for Aquila as described in National Instrument 43-101 responsible for contents of this release.

More information about Aquila and the Back Forty Project, including updated drilling information, can be found on the Company's website at

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, labour 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: 84,894,850

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