Back Forty Project Saved from Bankruptcy by Osisko Gold Royalties Ltd.
Aug
21
2021
(August 16, 2021) Osisko’s $2.4 million cash infusion into the Back Forty mine project is a desperate attempt to shore up the financial and political mismanagement of this project. The $2.4 million infusion comes just days after the company reported “negative working capital” of $2.1 million “due to permitting and legal activities at its Back Forty Project.” In other words, Aquila’s strategy of cost-cutting by submitting incomplete and scientifically fraudulent permit applications has led to its permits being overturned or withdrawn entirely. In order to avoid admitting their failure to secure the necessary permits after investing over $100 million in the project and that they have lied about their plans for underground mining, they have announced new project plans for a combined open pit and underground mine operation which will require far more capital than the $2.4 million infusion.
Even then, Osisko suspended the original “Equity Financing Condition” for the $2.4 million “Fourth Deposit” that wasn’t supposed to be released until Aquila raised at least $6 million in new investment. Having failed to attract other investors, Osisko deferred the Equity Financing Condition until Aquila requires the fifth deposit of $5 million. However, the other condition for the release of the fifth deposit is the successful completion of the permit process for five permits that will take several years, require far larger capital outlays than the $2.4 million infusion and face legal challenges by a determined environmental and Indigenous resistance movement. Osisko has now invested $17.6 million in a worthless hole in the ground. Most investors would stop digging an even deeper financial hole.
