HudBay Minerals Inc has reached and operating agreement with Aquila Resources Inc. that will boost its stake in the Back Forty project west of Stephenson, Mich.
Under the agreement announced Wednesday, HudBay will hold a 51-per-cent interest and Aquila a 49-per-cent stake in the silver-gold-copper-zinc project.
HudBay has the option to increase its holding to 65 per cent by funding and completing a feasibility study and permit applications, Aquila said.
HudBay could then boost its stake by another 10 per cent if Aquila decides not to fund its portion of development capital within 90 days of receiving the mine's permits.
“The execution of the operating agreement and completion of the preliminary economic assessment are the next steps in the progression of the Back Forty project towards making a construction decision,” said Aquila president and chief executive officer Thomas Quigley in a release.
HudBay will operate the Back Forty joint venture while Aquila provides technical support. The assets will be transferred into a limited liability company based in Michigan.
The agreement comes as part of a joint venture reached between the companies in August, 2009.
HudBay Minerals has a 16.92-per-cent stake in Aquila.