STEPHENSON — Aquila Resources Inc., based in Toronto, announced on Tuesday that it is to be acquired by Gold Resource Corporation.

Aquila’s board of directors unanimously voted to accept a letter of agreement with the corporation whereby the Denver-based GRC will acquire all the issued and outstanding common shares of Aquila Resources Inc., which is developing the Back Forty Mine in Menominee County. GRC indicated that production on the mine is expected to occur in late 2024.

GRC’s Don David Mine in Mexico has been producing gold, silver, copper, lead and zinc for over 10 years, Aquila said. GRC is also a U.S.-based company with shares publicly traded on the New York Stock Exchange.

Aquila said its shareholders will benefit through their continued ownership in the combined company and from the positive cash flow along with the financial support GRC brings to the table as a “growth-oriented, base and precious metal producer.”

The complete transaction will transpire over the next few months. Aquila’s local team will continue to work in its current roles as the company develops the Back Forty Mine, officials said.

The acquisition, according to Aquila, “materially de-risks” the financing and development of the Back Forty Project for Aquila shareholders. Due to the free cash flow generated by the Don David Gold Mine, Aquila shareholders will not be diluted by a near-term equity financing that would otherwise be required to advance the Back Forty Project through the final stages of permitting and engineering, officials said.

­­Gold Resource Corporation, it said, is supportive of Aquila’s project development plans, including continuing working toward an optimized feasibility study for the Back Forty Project.

“The combined company’s position of financial strength is also expected to result in an improved ability to access required additional financing to fund the Back Forty Project’s construction capital expenditures,” Aquila said in a news release.

Aquila’s management team is currently advancing pre-construction activities for its flagship 100%-owned gold- and zinc-rich Back Forty Project, which is a volcanogenic massive sulfide deposit with open pit and underground potential located along the mineral-rich Penokean Volcanic Belt in the Upper Peninsula.

Back Forty contains around 1.1 million ounces of gold and 1.2 billion pounds of zinc in the Measured & Indicated Mineral Resource classifications, officials said, with additional exploration upside.

The Back Forty Mine, which would be located on the banks of the Menominee River in Lake Township, has encountered resistance from the community, including the Menominee Indian Tribe of Wisconsin, which according to the website, No Back 40 Mine, has indicated it wants to protect its place of origin, sacred sites, wildlife, water and the environment for future generations.

Another group, the Coalition to SAVE the Menominee River, Inc., also opposes the mine, saying it would contaminate the environment. Coalition spokesman Dale Burie said in an email, “Although Aquila Resources has decided to take this opportunity to offer themselves to Gold Resources, this does not change the complexion of the threat to the Menominee River. Aquila is in financial trouble with their stock price as low as less than a nickel per share. This is simply a move to sidestep bankruptcy.

“The Coalition to SAVE the Menominee River and their affiliates continue to stand strong with our staff of attorneys to protect this large waterway to the Great Lakes. Be assured that this battle has gone on for 20 years and will continue to go on until these speculative mining organizations give up on ever getting close to the Menominee River.

Christie Mastric can be reached at 906-228-2500, ext. 250. Her email address is cbleck@miningjournal.net.