A U.S. judge from Michigan has reversed a decision by state regulators allowing Aquila Resources’ (TSX: AQA; US-OTC: AQARF) proposed gold, zinc and copper mine to go ahead.
The ruling revokes the wetlands permit for the Back Forty project in Lake Township, north of Menominee. It comes after opponents to the project challenged the permit issued in 2018 by the Michigan Department of Environment, Great Lakes and Energy (EGLE).
“The ruling raises valid concerns about the potential impacts on groundwater and surface water, including the Lower Menominee River,” department spokesman Hugh McDiarmid Jr. told local media.
Aquila’s application did not provide sufficient information on potential damage to wetlands near the river, which runs along the Michigan-Wisconsin line, Judge Daniel Pulter said in a decision released earlier this week. It also failed to show there were no feasible alternative locations for the mine, he said.
The Toronto-based miner said the judge’s decision was based mostly on what the company believes is a misunderstanding of the information concerning the potential for indirect wetlands impacts associated with the project.
The ruling, Aquila noted, establishes a permitting approach that “markedly departs” from wetland permits issued for other mining projects in the Great Lakes region.
During the 31 months since the Wetlands Permit was issued, Aquila said it had worked constructively with EGLE to satisfy specific conditions named in the permit and has limited direct impacts in regulated wetlands to only 11.2 acres.
“Obviously, we are disappointed by the Judge’s decision,” President and CEO Barry Hildred said in a news release. “The company is evaluating its alternatives, which include the submission of an updated permit application or appealing the decision to the EGLE environmental review panel.”
Back Forty, Aquila’s flagship project, contains approximately 1.1 million ounces of gold and 1.2 billion pounds of zinc in the measured and indicated category.
The company has two other exploration projects: the Reef Gold project located in Marathon County, Wisconsin and the Bend project in Taylor County, Wisconsin.
News of the permit denial on Jan. 5 sent Aquila’s shares down 2.5¢ or 19.21% to close at 10.5¢. At presstime in Toronto the company’s shares were trading at 10¢. Over the last year Aquila has traded in a range of 7¢ and 22¢ per share. The junior has about 338 million common shares outstanding for a market cap of about $34 million.