October 2021 Newsletter
October 6, 2021
Dear WRPC Member and Friends of the Menominee River,
After 18 years and an investment of over $100 million there is no mine next to the Menominee River and significant, ongoing resistance to any mining in the future. The permits Aquila Resources needs to begin mining have either been overturned, withdrawn, or rendered obsolete because the mine plans have changed to include underground as well as open pit mining.
“Sham permitting” has brought Aquila to the verge of bankruptcy
The entire permitting process for the proposed Back Forty Project has been based upon a lie. Aquila applied for an open pit mine and denied any plans for an underground mine. At the same time they were telling their investors that they were planning for a combined open pit and underground mine. Now that the wetland permit has been overturned, they are finally admitting that they are planning for a combined open pit and underground mine. When mining companies deceptively apply for a less stringent permit for a mine operation smaller than the one it actually plans, this is called “sham permitting.” Faced with the costs of going through a new permitting process, investors refused to risk any more money into a failed project.
Gold Resource Corporation to the Rescue?
On September 7, 2021, Aquila Resources announced that it has agreed to be acquired by the Denver-based Gold Resource Corporation (GORO). The letter of agreement states that GORO will acquire all outstanding shares of Aquila for $ 30.9 million (Canadian) worth of GORO stock. Current Aquila shareholders will own 14.9 percent of GORO if the deal is finalized. However, the deal is not yet final. The closing of the transaction will take place in the fourth quarter of 2021.”Of course,” notes filmmaker/author Mark Doremus, “Aquila is an asset only if GORO can get the proposed Back Forty mine up and running, despite widespread public opposition to the project.” (https://keweenawnow.blogspot.com/2021/09/mine-operator-plans-to-buy-aquila-and.html). To view clips of the Back 40 film, go to www.back40film.com/clips.html
Does GORO’s acquisition “materially de-risk” the financing and development of the Back Forty Project for Aquila shareholders?
According to Barry Hildred, former President and CEO, now Executive Chair of Aquila Resources, GORO’s acquisition of Aquila will provide a “free cash flow” from GORO’s Don David Gold Mine in Mexico so that Aquila shareholders will not have to provide the near-term equity financing that would otherwise be required to advance the Back Forty Project through the final stagtes of permitting and engineering. This mindset completely ignores the growing social opposition to the project that has successfully brought the permitting process to a standstill and brought Aquila to the verge of bankruptcy.
Dale Burie to GORO: “Be assured…..this battle will continue…
“Although Aquila had decided to take this opportunity to offer themselves to Gold Resource Corporation, this does not change the complexion of the threat to the Menominee River,” said Dale Burie, spokesperson for the Coalition to SAVE the Menominee River. “The Coalition 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. (https://www.miningjournal.net/news/front-page-news/2021/09/aquila-resources-acquired-company-still-developing-back-forty-mine-project/
GORO has NOT conducted “due diligence” regarding Aquila’s false and misleading claims about the permitting of the Back Forty Project
During a September 8 conference call about GORO’s acquisition of Aquila Resources, Mr. Allen Palmiere, the President and CEO of GORO stated: “The key takeaway on this particular project [referring to the Back Forty Project] is that it has, in fact been fully permitted before.” This statement reveals GORO’s failure to perform “due diligence” regarding Aquila’s false claims about its permits. In its March 31, 2020 quarterly report Aquila falsely claimed that it had received the four key permits required to begin construction and operation of the Back Forty Project. In fact, Aquila never received a Dam Safety Permit. According to Michigan’s Department of Environment, Great Lakes and Energy (EGLE): “Aquila is not authorized to begin construction of the mine and will not be able to proceed until all permits, including the Dam Safety Permit have been approved by EGLE (EGLE Media Office, December 12, 2019).
At the time Aquila claimed to have received the four key permits for the Back Forty Project, only one of five required permits had been both “issued” and deemed “effective,” and that was the NPDES Permit (National Pollution Discharge Elimination System Permit), involving water discharge to the Menominee River. An “issued permit” is not considered “effective” until all pre-mine construction conditions have been met. Furthermore, no permit exists until the entire process, including any contested cases have been decided Even then, any contested case decision can be reviewed by an Environmental Review Panel.
Allen Palmiere: “We fully anticipate that this project is going to be relatively easy to permit.”
Based upon Aquila’s false representation of its permitting failures and lack of a social license to operate, GORO has told its shareholders that they anticipate the beginning of production at the Back Forty Project in late 2024. As long as GORO refuses to acknowledge the reasons for Aquila’s failure to obtain the necessary mining permits after 18 years, they will face the same fate as Aquila and there will be no mine next to the Menominee River.
Membership Renewal Reminder
If the date of your mailing label is anytime before 10/21, it means your annual membership is due ($15 for regular or $5 for senior/low income). Thank you for your support in our efforts to protect our precious waters.
Stay tuned,
Al Gedicks, Executive Secretary
